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Friday 13 May 2016
Two Key Players in Illegal Online Pharmacy Scheme Sentenced to PrisonRead the Press Release
A former police officer and a technology consultant who distributed hundreds of thousands of narcotic pills and other prescription drugs via an illegal internet pharmacy were sentenced to prison today, announced U.S. Attorney Annette L. Hayes. CRAIG GREER, 43, of Hollywood, Florida, was sentenced to 60 months in prison. KEVIN KOGAN, 48, of Cedar Park, Texas, was sentenced to 30 months in prison. At the sentencing hearing U.S. District Judge Richard A. Jones said the conspiracy “pumped into our community an enormous amount of drugs…impacting people you will never see but whose lives and families you destroyed by feeding their addiction.”
GREER is a former police officer, who worked to promote the internet pharmacy scheme. GREER sent spam emails promoting the online pharmacy and made sure long-time customers got their drugs even if they did not have a valid prescription. In prior versions of the scheme, GREER used his history as a police officer to lull some doctors into thinking the online pharmacy operated within the law. GREER was also involved in overseas online pharmacies affiliated with lead defendant Juan Gallinal. In addition to the prison term, GREER was sentenced to three years of supervised release, including 250 hours of community service and a money judgment of $88,635.
KOGAN set up the websites and servers for the online pharmacy, and attempted to hide the conspiracy’s databases from investigators. KOGAN not only handled the technology side of the operation, he lied to investigators, destroyed evidence and provided fraudulent information in response to a grand jury subpoena. Records show he moved a critical company database to a server overseas in an effort to frustrate the law enforcement investigation. In addition to the 30 month prison term, KOGAN was sentenced to three years of supervised release, including 150 hours of community service and a money judgment of $155,660.
The internet pharmacy distributed drugs to some 200 customers in Washington State between 2009 and 2012. The pharmacy shipped hundreds of thousands of pills of hydrocodone, phentermine, alprazolam (Xanax) and codeine (Tylenol 4) to people across the country who did not have valid prescriptions for the narcotics. The conspiracy brought in more than $9 million in revenue from the sale of pills during the three year scheme. The pharmacy operated four internet sites through which they solicited customers and allowed customers in Washington State to order drugs. According to the indictment, the conspiracy would continue to refill prescriptions even if no valid prescription existed. In some instances the conspirators simply looked for a physician in the same geographic area as the customer, with a similar sounding name and filled the prescription using the physician’s DEA number without the physician’s knowledge. The pharmacy charged as much as ten times the usual price for the medications.
The conspirators laundered the proceeds of their sales through a brick-and-mortar pharmacy in Florida called Discount Pharmacy of Pines. In June 2012, the DEA seized the websites, computers, and drug inventory associated with the illegal pharmacy.
All but one of the defendants who were indicted in May 2014 have pleaded guilty and are awaiting sentencing:
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The originator of the scheme, JUAN GALLINAL, 48, of Pembroke Pines, Florida is a former police officer from Virginia. He is scheduled for sentencing in October 2016.
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JORDAN TRUXELL, 26, of Davie, Florida served as the registered agent for Discount Pharmacy dba frontierpharmacies.com. He is scheduled for sentencing June 3, 2016.
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THOMAS BROOKE, 54, of Cooper City, Florida was the bookkeeper for Discount Pharmacy was sentenced March 18 to five years in prison.
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ALI LOVINS, 44, of Cooper City, Florida is a registered nurse and was the office manager for Discount Pharmacy. LOVINS was sentenced March 4, 2016 to three years in prison.
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JERRY DELMAN, 83, of Miami, Florida, a pharmacist who ostensibly oversaw the prescriptions going out the door to customers is being evaluated for a medical condition that could impact his ability to participate in a trial.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The case was investigated by the Portland Tactical Diversion Squad which is comprised of the Drug Enforcement Administration (DEA) and the Portland Police Bureau. Substantial investigative assistance was provided by the Food and Drug and Administration (FDA) – Florida, and DEA Miami Field Division.
The case is being prosecuted by Assistant United States Attorneys Mike Lang, Francis Franze-Nakamura and Brian Werner.
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Two Chicago Residents Charged with Defrauding Commerce BankRead the Press Release
BOSTON – Two Chicago residents were arrested and charged on May 11, 2016, in connection with defrauding banks out of $1.5 million in an airplane and car loan scheme.
James Dusten Miller, 29, and Latoya Monique James, 35, were charged in a complaint with conspiracy to commit bank fraud and bank fraud, and conspiracy to commit money laundering and money laundering. Miller and James were arrested yesterday in Chicago and detained pending a detention hearing tomorrow in U.S. District Court in Chicago.
According to the criminal complaint, beginning in January 2014 through January 2016, Miller and James, along with at least two other co-conspirators, obtained and attempted to obtain multiple fraudulent airplane and car loans from banks in multiple states, including Massachusetts. In order to commit these frauds, Miller, James, and their co-conspirators allegedly used false and stolen identities. In one instance, Miller, James, and their co-conspirators obtained a fraudulent airplane loan for $382,500 from Commerce Bank in Worcester by using at least one stolen identity. Miller and James laundered the proceeds of the airplane loan through several bank accounts created in the name of a fictitious entity. The proceeds were then allegedly distributed into financial accounts controlled by the defendants and their co-conspirators, and used to purchase items such as luxury cars and a watch. In total, Miller, James and their co-conspirators obtained or attempted to obtain more than $1.5 million in fraudulent loan proceeds.
The charges of bank fraud and conspiracy to commit bank fraud each provide for a sentence of no greater than 30 years in prison, five years of supervised release and a fine of $1 million or twice the gross gain or loss, whichever is greater. The charges of money laundering and conspiracy to commit money laundering provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater. 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; Michael J. Anderson, Special Agent in Charge of the Federal Bureau of Investigation, Chicago Field Division; Scott L. Cruse, Special Agent in Charge of the Federal Bureau of Investigation, Oklahoma City Division; and Todd Damiani, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Karin M. Bell, Chief of Ortiz’s Worcester Branch Office.
The details contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Timeshare Telemarketing Fraudster Sentenced to 97 Months in Federal PrisonRead the Press Release
DALLAS — A Florida man who was convicted for his role in a resort timeshare telemarketing scheme that victimized at least 5000 individuals, many of whom were over age 55, was sentenced today, announced U.S. Attorney John Parker of the Northern District of Texas.
Rani F. Khoury, 41, of Apopka, Florida, was sentenced today by U.S. District Judge Sidney A. Fitzwater to 97 months in federal prison, following his guilty plea in July 2015 to one count of conspiracy to commit mail fraud and wire fraud. Judge Fitzwater also ordered Khoury to pay $1,583,252.28 in restitution and forfeit real estate in Orlando, Florida, as well as a 2010 Mercedes Benz.
Ten defendants were charged in the case; all were convicted, and seven have now been sentenced. For instance, earlier this year, Fabien C. Fleifel, 45, of Winter Springs, Florida, who was convicted at trial last summer on one count of conspiracy to commit mail fraud, wire fraud, and bank fraud; 19 counts of mail fraud telemarketing; and six counts of wire fraud telemarketing, was sentenced to 14 years in federal prison and ordered to pay more than $1.3 million in restitution jointly and severally with co-defendants.
Khoury conspired with others to make unsolicited interstate telephone calls to owners of resort timeshare properties to induce them into paying fees associated with the bogus sale of their property. Khoury and others opened bank accounts and entered into merchant account agreements to process and collect funds raised in the scheme, and they set up phony mailing addresses to collect funds mailed in by timeshare owners. Khoury also hired and trained telemarketers to work in boiler rooms he set up. These telemarketers were instructed to call timeshare owners using scripted sales pitches that falsely represented, for example, that a bona fide buyer was interested in buying their property, that the buyer had paid money into an escrow account, and that the buyer was ready to close on the property. The telemarketers falsely advised timeshare owners that they would receive all the funds from the sale within days, they must pay a one-time fee to cover the title search and other closing costs, and they would be refunded all fees paid if the sale did not close within 90 days.
After the conspirators obtained money from the timeshare owners, they made additional false and fraudulent statements to lull them and to keep them from investigating the transactions, complaining to law enforcement, or requesting charge backs to their credit cards.
During Khoury’s participation in the conspiracy, victims incurred approximately $10,887,684 in losses.
The case was investigated by the U.S. Postal Inspection Service and the Orlando Police Department. Assistant U.S. Attorneys C.S. Heath and Joseph M. Revesz are prosecuting.
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Texas Man Sentenced to Life in Federal Prison for Interstate Transportation of a Minor with Intent to Engage in Criminal Sexual ActivityRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Shilo Watts, age 40 of New Braunfels, Texas, was sentenced today to life in federal prison without the possibility of parole on one count of Interstate Transportation of a Minor with the Intent to Engage in Criminal Sexual Activity. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.
According to court records, in October of 2012, special agents with the Homeland Security Office in San Antonio, Texas, began investigating the sexual abuse of a minor Marshallese male living in Northwest Arkansas by the defendant, Shilo Watts. Based on this investigation, Homeland Security agents were able to determine that Watts had lived in the Marshall Islands for several years and had helped bring several young Marshallese males to the United States. Those males were contacted by law enforcement and interviewed. An interview of one of the minors revealed that Watts began sexually abusing him when he was in the Marshall Islands and continued after he relocated to the United States. Specifically, the minor stated that between 2008 and 2012 when he was living in Springdale, Arkansas, Watts would drive up from his home in Texas and pick-up the minor and other Marshallese boys and transport them from Springdale to his or his family’s residence in New Braunfels, Texas. The minor stated that during one such trip in 2009 when he was 14 years of age, Watts sexually abused him after transporting him from Springdale, Arkansas to New Braunfels, Texas. Shilo Watts was indicted by a federal grand jury on October 28, 2015 and pleaded guilty to the charge on January 6, 2016.
“The lifetime sentence imposed on Watts sends a clear message that there are serious consequences for those who exploit children in any way,” said Special Agent in Charge, Shane Folden, HSI San Antonio. “Targeting crimes of this nature is a high priority for HSI. We will continue to dedicate HSI resources nationwide to identify and bring to justice these individuals."
This case was investigated by Homeland Security Investigations and the Springdale Police Department. Assistant United States Attorney Dustin Roberts prosecuted the case for the United States.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Tennessee Man Convicted for Romney Tax Return Fraud and Extortion SchemeRead the Press Release
Michael Mancil Brown was found guilty late yesterday by a federal jury sitting in Nashville for engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant United States Attorney Jack Smith of the U.S. Attorney’s Office for the Middle District of Tennessee and Special Agent in Charge Todd Hudson of the U.S. Secret Service’s Nashville Field Office.
Brown, 37, of Franklin, Tennessee, was convicted of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion.
According to testimony at trial, evidence recovered from a computer seized from the home of Brown in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers LLP and others by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010.
Brown was found guilty of participating in the scheme in which a letter delivered in August 2012 to the offices of PricewaterhouseCoopers in Franklin demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns. The letter also invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account.
As part of that scheme, similar letters were delivered to the offices of the Democratic and Republican parties in Franklin and caused similar statements to be posted to Pastebin.com.
A sentencing hearing will be scheduled for a date likely in August. The defendant faces up to twenty years in prison on the charges of wire fraud, up to five years in prison on the charges of extortion, fines of up to $250,000, and orders of restitution to victims.
This case was investigated by the U.S. Secret Service’s Nashville Field Office with assistance from the FBI’s Nashville Division. The case is being prosecuted by U.S. Department of Justice Senior Counsel Anthony V. Teelucksingh and Assistant U.S. Attorney Byron Jones of the Middle District of Tennessee.
Tennessee Man Convicted for Romney Tax Return Fraud and Extortion SchemeRead the Press Release
Michael Mancil Brown was found guilty yesterday by a federal jury sitting in Nashville, for engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant United States Attorney Jack Smith of the United States Attorney’s Office for the Middle District of Tennessee and Todd Hudson, Special Agent in Charge of the U.S. Secret Service, Nashville Field Office.
Brown, 37, of Franklin, Tenn., was convicted of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion.
According to testimony at trial, evidence recovered from a computer seized from Brown’s home in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers, LLP and others, by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010.
Brown was found guilty of participating in the scheme in which a letter delivered in August 2012 to the offices of PricewaterhouseCoopers in Franklin, Tenn., demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns. The letter also invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account.
As part of that scheme, similar letters were delivered to the offices of the Democratic and Republican parties in Franklin and caused similar statements to be posted to Pastebin.com.
“The success of this prosecution is due to the excellent online investigative skill and computer forensic analysis demonstrated repeatedly by the United States Secret Service in this era of increasingly high tech criminal conduct,” said First Assistant United States Attorney Jack Smith. “Hackers, aspiring hackers and identity thieves are identified, caught, prosecuted and convicted because of the work and determination of the Secret Service to stay ahead of people who abuse new technology to commit age-old crimes of fraud and extortion.”
A sentencing hearing will be scheduled for a date likely in August. The defendant faces up to twenty years in prison on the charges of wire fraud, up to five years in prison on the charges of extortion, fines of up to $250,000, and orders of restitution to victims.
This case was investigated by the Nashville Field Office of the U.S. Secret Service with assistance from the Nashville Resident Agency of the FBI. The case is being prosecuted by U.S. Department of Justice Senior Counsel Anthony V. Teelucksingh and Assistant U.S. Attorney Byron Jones of the Middle District of Tennessee.
Telemarketer Sentenced for Role in Multi-Million Dollar ScamRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today that Ms. Chedna Charles, 27, of Orlando, FL, was sentenced in federal court this morning on one count of conspiracy to commit mail and wire fraud in connection with telemarketing. Charles was sentenced to 18 months in prison, to be followed by two years of supervised release. Charles was also ordered to pay $7,650.00 in restitution, a $300 fine, and a $100 special assessment.
The investigation determined that Charles was a telemarketer for National Solutions and related companies located in Orlando, Florida. National Solutions defrauded consumers across the continent using the fictitious names, Bluescape Timeshares International, Country Wide Timeshares, Countrywide Timeshares MA, Landmark Timeshares, Propertys Direct, Quicksale Propertys, Sun Property Networks, Sun Property’s, Universal Propertys, VIM Timeshares, Propertys DRK, Quick Sale Advisers, Quick Sale International, City Resorts, Resort Advisers, American Timeshares, Exit Week, and Resort Advisors International. These companies targeted owners of timeshares throughout the United States and Canada. In various court filings related to the National Solutions scam, the government has alleged that the overall scam bilked over 2,500 consumers out of at least $6 million, including eight victims in the Southern District of Illinois.
This prosecution is one of nearly one-hundred timeshare resale fraud prosecutions brought in the Southern District of Illinois over the past four years. The case is part of an ongoing investigation by the Midwest Region Office of the Federal Trade Commission and the St. Louis Field Office of the Chicago Division of the United States Postal Service. The prosecution of this case was handled by Assistant United States Attorneys Bruce Reppert, Scott Verseman, and William Coonan.
St. Thomas Man Charged with Firearm OffensesRead the Press Release
St. Thomas, USVI – Anthony Williams, Sr., 47, of St. Thomas, Virgin Islands, made his initial appearance May 12, 2016, before U.S. Magistrate Judge RuthMiller after being charged in a one-count indictment with possession of a firearm by a convicted felon, United States Attorney Ronald W. Sharpe announced. Williams was released on a $25,000 unsecured bond, electronic monitoring and a curfew.
According to the Indictment filed on January 14, 2016, Williams was found in possession of a 9mm caliber Taurus pistol on the grounds of the University of the Virgin Islands, St. Thomas campus. He was previously convicted in the District Court for the Middle District of North Carolina for conspiracy to possess with intent to distribute marijuana, possession of a firearm during drug trafficking and possession in commerce of a stolen firearm.
Under federal law, if convicted of possession of a firearm by a convicted felon Williams faces a maximum sentence of 10 years in prison and a $250,000 fine.
United States Attorney Sharpe reminds the public that an Indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
This case is the result of a joint investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Virgin Islands Police Department. It is being prosecuted by Assistant United States Attorney Nelson Jones.
Springfield Latin Kings Leader Pleads Guilty to Cocaine Distribution and Firearm ChargeRead the Press Release
BOSTON – The former “enforcer” of the Massachusetts Latin Kings gang pleaded guilty today in U.S. District Court in Springfield to distributing cocaine and a federal firearm charge.
Bienvenido Nuñez, 38, of Springfield, Mass., pleaded guilty today to being a felon in possession of a firearm and distributing cocaine. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Aug. 19, 2016.
In October 2014, an investigation was initiated in an effort to disrupt and dismantle the Latin Kings’ criminal activity in Springfield and Holyoke. According to court documents, members and associates of the Latin Kings were engaged in the distribution of narcotics. In addition, disputes with rival gangs over criminal activity and drug turf were on the rise and resulted in serious crimes of violence, including armed assaults with firearms and murder. The investigation led to the arrest of 12 alleged Latin Kings members, including Nuñez, in connection with drug and firearms offenses in November 2015.
As alleged in court documents, Nuñez held the position of “enforzador,” or “enforcer,” of the Massachusetts chapter of the Latin Kings gang at the time of his arrest on Nov. 9, 2015. Nuñez pleaded guilty today to distributing seven grams of cocaine in Chicopee on Aug. 4, 2015, and to possessing a .40 caliber Beretta pistol on the day of his arrest.
The charge of distribution of cocaine provides for a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $1 million. The charge of being a felon in possession of a firearm provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Katharine A. Wagner of Ortiz’s Springfield Branch Office.
South Antelope Woman Charged with AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that a South Antelope, South Dakota, woman has been indicted by a federal grand jury for Assault with a Dangerous Weapon and Assault Resulting in Substantial Bodily Injury.
Aprielle Poitra, age 20, was indicted on April 13, 2016. She appeared before U.S. Magistrate Judge Mark A. Moreno on May 9, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction of Assault with a Dangerous Weapon is up to ten years in custody and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. The maximum penalty upon conviction of Assault Resulting in Substantial Bodily Injury is up to five years in custody and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
It is alleged that on March 18, 2016, Poitra unlawfully assaulted an individual with a knife and that said assault resulted in substantial bodily injury.
The charge is merely an accusation and Poitra is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Kirk Albertson is prosecuting the case.
Poitra was released on bond pending trial. A trial date has not been set.
Software Company Ceo and Former Adjunct Columbia Business School Professor Sentenced in Manhattan Federal Court for Multi-Million Dollar Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York announced today that GREGORY RORKE was sentenced to two years in prison for his scheme to defraud investors in his company, Navagate, Inc. (“Navagate”), of more than $3 million dollars. RORKE pled guilty on May 7, 2015, to one count of securities fraud and one count of wire fraud before U.S. District Court Judge Katherine Polk Failla, who also imposed today’s sentence.
U.S. Attorney Preet Bharara said: “As he admitted, Gregory Rorke lied to investors while soliciting their investments in his company. He overstated his own net worth and the tax liabilities of the company. Today, Rorke, a former professor at Columbia Business School, learned an important lesson in business ethics, as he was sentenced to two years in prison for his crimes.”
According to the Complaint, Indictment, other documents filed in the case, and statements made in open court:
From at least December 2009 through October 2014, RORKE engaged in a fraudulent scheme to mislead investors into making investments in a convertible debt offering (the “Navagate Offering”) in his company, Navagate. RORKE, a former adjunct professor at Columbia Business School, was the co-founder, chief executive, and principal owner of Navagate. RORKE solicited investments and was involved in the daily management and operation of Navagate.
RORKE solicited investor contributions to the Navagate Offering based on materially false and fraudulent misrepresentations. In particular, RORKE signed and provided to investors a personal guarantee supported by a financial statement. The financial statement falsely indicated that Rorke personally had at least $12 million in assets, including more than $1 million in cash, more than $5 million in “readily marketable securities” and a home worth more than $1 million. In truth, and as RORKE well knew, the majority of the pledged assets did not belong to RORKE.
In addition, in order to obtain access to funds invested by Navagate investors and maintained in an escrow account, RORKE signed a notarized affidavit indicating that he had paid monies owed to the Internal Revenue Service in satisfaction of Navagate’s tax liabilities. In truth, the tax liabilities had not been paid, remained outstanding, and were actually increasing.
As a result of his fraudulent scheme, RORKE raised approximately $3 million in investor money from more than 30 investors.
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In addition to the two-year prison term, RORKE, 63, of Manhattan and Bronxville, New York, was sentenced to three years of supervised release.
Mr. Bharara praised the work of the FBI and also thanked the Securities and Exchange Commission, which has brought civil actions against the defendant.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Andrea M. Griswold and Michael J. Ferrara are in charge of the prosecution.
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Seven Persons Charged with Methamphetamine OffensesRead the Press Release
Six southern Illinois residents and one Cape Girardeau man 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.
Kyle E. Easterly, 29, and Charles W. Yearian, a/k/a "Chucky," 29, Randall J. Riley, 42, Lucas L. Holland, 29, and Ivan Weaver, 24, all of Murphysboro, Elizabeth A. Stell, a/k/a "Beth Bramlett," "Elizabeth Albritton," 45, of Dongola, and Devonce C. Patterson, a/k/a "George," "Little Buddy, 22, of Cape Girardeau, are all charged in a superseding indictment charging conspiracy to manufacture and distribute methamphetamine. Easterly and Yearian are also charged with one count of possession of pseudoephedrine knowing that it would be used to manufacture methamphetamine. The indictment alleges that the offenses occurred between April 2015 and March 2016, in Jackson and Perry Counties. Easterly, Yearian, Holland, and Stell have appeared in federal court and are currently being held without bond pending a July 11, 2016, jury trial. Riley, Weaver, and Patterson are scheduled to make their initial appearances in federal court on May 16, 2016.
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 in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Murphysboro Police Department, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Union County Sheriff’s Office and Jackson County State’s Attorney’s Office also assisted in the investigation.
Seven Charged with Distributing Heroin Near Schools and Playgrounds in DubuqueRead the Press Release
Seven men have been charged with distributing heroin in Dubuque in early 2016. The charges are contained in two indictments filed yesterday in United States District Court in Cedar Rapids. All seven men were previously charged in separate federal Complaints filed in April.
One indictment alleges Derrick Jermaine Brown (a/k/a “Big D”), D’Anthony Lamont Moore (a/k/a “Lil D”), Antwain Deshaun Spratt (a/k/a “T”), Tywone Derrel Matthews, and Jeffery Donta Hitchcock (a/k/a “Buddha”) conspired to distribute fentanyl and 100 grams of heroin near Jackson Park and Prescott Elementary School in Dubuque. That indictment also charges various counts of distribution of heroin against each defendant, and one count of possession with intent to distribute heroin by Brown, Moore, and Matthews. If convicted of the conspiracy charge, Brown, Moore, Spratt, Matthews, and Hitchcock each face a mandatory minimum sentence of five years’ imprisonment, a possible maximum sentence of 80 years’ imprisonment, a $10,000,000 fine, a $100 special assessment, and up to a lifetime term of supervised release following any imprisonment.
The second indictment alleges Antrell Desherron Lewis (a/k/a “Lucky” and “Star”) and Antoine Tavares Mitchell (a/k/a “Nephew”) conspired to distribute heroin near Jackson Park and Prescott Elementary School in Dubuque. It also alleges one count of distribution of heroin by each defendant, and possession with intent to distribute heroin by Mitchell. If convicted of the conspiracy charge, Lewis and Mitchell face a mandatory minimum sentence of one year imprisonment, a possible maximum of 40 years’ imprisonment, a $2,000,000 fine, a $100 special assessment and up to a lifetime term of supervised release following any imprisonment.
If convicted of the various distribution and possession with intent to distribute charges, the defendants would face additional punishments.
All seven men previously appeared in federal court following their arrests in April and early May. Brown, Moore, Spratt, Matthews, Lewis, and Mitchell were all held without bond. Hitchcock appeared in Chicago, Illinois, and was ordered returned to the Northern District of Iowa in custody pending further proceedings. Initial appearances for the defendants on the indictments have not yet been set.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the Dubuque Drug Task Force and Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Cedar Rapids Police Department; the Linn County Sheriff's Office; the Marion Police Department; the Iowa City Police Department; and the Iowa Division of Narcotics Enforcement, and is being prosecuted by Assistant United States Attorney Dan Chatham.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number for Brown, Moore, Spratt, Matthews, and Hitchcock is 16-CR-01018-LTS.
The case file number for Lewis and Mitchell is 16-CR-01017-LTS.
The case file numbers for the previously filed Complaints are:
Derrick Brown – 16-MJ-102
Antoine Spratt – 16-MJ-103
Tywone Matthews – 16-MJ-104
Antrell Lewis – 16-MJ-106
D’Anthony Moore – 16-MJ-107
Jeffery Hitchcock – 16-MJ-113
Antoine Mitchell – 16-MJ-117
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Rocky Mount Man Sentenced to 240 Months for Firearm and Drug ChargesRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court, United States District Judge Terrence W. Boyle sentenced DARION DEVON JOHNSON, 35, to 240 months imprisonment, followed by 3 years of supervised release.
DARION DEVON JOHNSON was named in a seven count Indictment filed on May 20, 2015 charging him with various firearm and drug offenses. On October 29, 2015, JOHNSON pled guilty to Possession of a Firearm by a Felon and Distribution of a quantity of Cocaine Base (Crack).
According to the investigation, On April 11, 2013, JOHNSON made a sale of a .22 caliber rifle and a quantity of cocaine base which was captured on audio and video surveillance. Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Carrie Randa represented the government.
Ringleader Sentenced to over 12 Years in Prison for $6.6 Million Broward Securities Fraud SchemeRead the Press Release
Thomas A. Guerriero, 39, of Deerfield Beach was sentenced to 151 months’ imprisonment by United States District Court Judge Beth Bloom for orchestrating a $6.6 million securities fraud scheme. Guerriero was also ordered to pay $6.6 million in restitution and will serve three years of supervised release, upon his release from incarceration.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Guerriero and eight other South Florida residents were indicted on criminal charges, for operating a Broward County telemarketing scheme (“a boiler room”) that targeted investors throughout the country and ultimately defrauded them out of $6.6 million dollars. On February 29, 2016, Guerriero pled guilty to conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code Section 1349.
According to the court record, including the defendant’s plea, Guerriero was the president and owner of a Deerfield Beach, Florida company, Oxford City Football Club, Inc. (“Oxford City”). Guerriero led a group of sales people whom he personally trained. Guerriero and his sales team solicited investors throughout the United States to buy stock shares of Oxford City, a corporation that claimed to manage a portfolio involving sports, education, media, and real estate businesses. Guerriero and his co-conspirators sold stock directly from the company in private placement offerings.
From July 2013 through July 2015, Guerriero and his group conspired to misappropriate investor money for their personal benefit by making material false statements regarding the Oxford City stock. Guerriero and his group used high-pressure, strong-armed tactics to intimidate and coerce individuals to invest in Oxford City. Over the course of the scheme, Guerriero and his team caused over 150 individuals to buy shares of Oxford City restricted stock for approximately $6.6 million dollars. Many of the victims targeted by Guerriero and his co-conspirators were elderly. Many of the victims lost their life’s savings as a result of the fraudulent scheme.
Mr. Ferrer commended the investigative efforts of the FBI. This case was prosecuted by Assistant U.S. Attorneys Roger Cruz and Michelle Alvarez, and Trial Attorneys Kevin B. Hart and Rebecca Ryan from the Antitrust Division of the Department of Justice.
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.
Removed Alien Sentenced to Time Served for Illegally Re-entering U.S.Read the Press Release
PITTSBURGH - An illegal alien found in Allegheny County, Pennsylvania, has been sentenced to time served on his conviction of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
United States District Judge Mark Hornak imposed the sentence on Jamie Parra-Serrano, 38, formerly from Mexico.
According to the information presented to the court, Jamie Parra-Serrano, an illegal alien, was removed from the United States by United States Immigration and Customs Enforcement on Aug. 24, 2012. Jamie Parra-Serrano was located in Allegheny County on Oct. 20, 2015.
Assistant United States Attorney Paul E. Hull prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the U.S. Immigration and Customs Enforcement for the successful prosecution of Jamie Parra-Serrano in this case.
Phenix City Doctor Arrested for Unlawful Distribution of Prescription Drugs and Money LaunderingRead the Press Release
Montgomery, Ala. – Dr. Robert M. Ritchea, 53, of LaGrange, Georgia, was arrested yesterday after being indicted by a federal grand jury, announced George L. Beck, Jr, United States Attorney for the Middle District of Alabama. Dr. Ritchea, who maintains a family medical practice in Phenix City, Alabama, is charged with drug distribution and money laundering offenses. Those charges stem from Dr. Ritchea’s operating a “pill mill,” which is a medical clinic created to dispense controlled substances inappropriately, unlawfully, and for non-medical reasons.
Specifically, the indictment charges Dr. Ritchea with writing prescriptions for Schedule II pain medications—such as hydrocodone and methadone—knowing that the patients receiving the prescriptions had no legitimate medical need for the medications. Additionally, according to the indictment, Dr. Ritchea used the proceeds of his pill mill to purchase Schedule II pain medication—specifically, hydromorphone and hydrocodone—directly from a drug manufacturer. With these pills, Dr. Ritchea was able to fill his patients’ unlawful and unnecessary prescriptions, without using a pharmacy.
If convicted, Dr. Ritchea faces a maximum sentence of 20 years’ imprisonment on each count. He also faces substantial monetary penalties and restitution.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
This case was investigated by the Drug Enforcement Administration’s Tactical Diversion Squad and the Internal Revenue Service’s Criminal Investigations Division. The Opelika, Alabama Police Department, Chambers County, Alabama Drug Task Force, the Auburn, Alabama Police Department, the Federal Bureau of Investigation, the Alabama Law Enforcement Agency, the Russell County, Alabama Sheriff’s Office, and the Lawrence County, Alabama Sheriff’s Office all assisted in the investigation. Assistant United States Attorneys Jonathan S. Ross and Rand N. Neeley are prosecuting the case.
Pensacola Tax Preparer Found Guilty of Filing False Tax ReturnsRead the Press Release
PENSACOLA, FLORIDA – Yesterday, Chief U.S. District Court Judge M. Casey Rodgers announced the court’s guilty verdict against Justin T. Phan, 51, of Pensacola, for filing false tax returns. Earlier this year, the court held a bench trial on a three-count Indictment charging Phan with filing false tax returns. Sentencing is scheduled before Chief Judge Rodgers on August 19, 2016, at 1:00 p.m. The court’s verdict was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
Phan owned and operated the business Global Travel and Tours on Mobile Highway in Pensacola, Florida. As a part of the business, Phan prepared income tax returns for individuals in the local Vietnamese community. Phan also sold airline tickets, prepared immigration documents, and transferred money outside the United States for his customers.
During the course of the four-day bench trial, the government proved that Phan prepared and filed false tax returns for himself for tax years 2008, 2009, and 2010. As a part of his tax returns, Phan falsely claimed that this total income for the respective years was $14,317, $23,948, and $23,649. However, the government showed that Phan’s total income for each of the years was in excess of $100,000. As a result of his false tax returns, Phan kept from paying in excess of $100,000 in taxes.
The charges were the result of an investigation by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Tiffany H. Eggers.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Old Saybrook Resident Indicted for Tax EvasionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation in New England, announced that on May 3, 2016, a federal grand jury in New Haven returned an indictment charging DAVID ADAMS, 55, of Old Saybrook, with tax evasion and filing a false tax return. ADAMS, who was arrested on a federal criminal complaint on April 14, 2016, appeared today before U.S. Magistrate Judge Robert A. Richardson in Hartford and entered a plea of not guilty to the charges in the indictment.
As alleged in the indictment, ADAMS sold an online floral business in 2002, which accounted for a significant portion of $6,269,960 in taxable income he claimed on his 2002 tax return. Although ADAMS represented to the IRS on or about August 8, 2003, that he was enclosing payment of $1,250,000, no such payment was enclosed and such tax was still outstanding as of June 2011.
The indictment further alleges that on or about June 7, 2011, ADAMS sold his partnership interest in another online floral business and received $4,708,419.20 wired into his personal bank account as part of the net proceeds owed to him as a result of the sale. Although he knew that he owed substantial taxes on that amount, ADAMS engaged in a number of affirmative acts to conceal and attempt to conceal this income in order to evade the assessment of a tax including: (1) hiring an accountant to prepare his 2011 taxes and then failing to give accountant complete, accurate information by failing to disclose the $4,708,419.20 in income ADAMS received in 2011; (2) providing the accountant with false information about ADAMS’s estimated tax payments for the year, telling the accountant that he had paid $220,000 when in fact, ADAMS knew he had only paid $100,000 in estimated taxes for 2011; (3) causing the accountant to prepare his 2011 tax return with false and fraudulent information; and (4) representing to an IRS revenue officer who was responsible for collecting ADAMS’s delinquent tax payments and securing ADAMS’s overdue tax returns, that he had hoped to have funds to pay down his back tax liability (including tax liability associated with the 2002 sale), but that nothing had been “panning out.” ADAMS failed to disclose to the revenue officer that he had received $4,708,419.20 in cash less than three weeks earlier.
The indictment charges ADAMS with one count of tax evasion, an offense that carries a maximum term of imprisonment of five years, and one count of filing a false tax return, an offense that carries a maximum term of imprisonment three years.
ADAMS owes approximately $4.6 million in back taxes, interest and penalties for tax years 2002, 2006, 2007, 2008, 2009, 2011, and 2012.
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 has been investigated by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Susan L. Wines.
North Carolina Man Pleads Guilty to Using Force Against Muslim Woman to Obstruct Her Free Exercise of Religion on an AirplaneRead the Press Release
ALBUQUERQUE – Gill Parker Payne, 37, of Gastonia, North Carolina, pleaded guilty today in the District of New Mexico to one count of using force or threat of force to intentionally obstruct a Muslim woman, identified as K.A., in the free exercise of her religious beliefs.
According to court documents, on Dec. 11, 2015, Payne and K.A. were on board a Southwest Airlines flight from Chicago to Albuquerque, New Mexico. K.A. was wearing a religious headscarf, known as a hijab. Payne was seated several rows behind K.A. on the airplane, and did not know her. Payne admitted that he saw that K.A. was wearing a hijab and was aware that it is a religious practice of Muslim women to wear a headscarf.
Payne further admitted that shortly before landing, but while still in-flight, he walked up the aisle to where K.A. was sitting and stopped next to her seat. Payne proceeded to tell K.A. to take off her hijab, stating something to the effect of, “Take it off! This is America!” Payne then grabbed the back of the hijab and pulled it all the way off, leaving K.A.’s entire head exposed. As a result, K.A. felt violated and quickly pulled the hijab back up and covered her head again.
“No matter one’s faith, all Americans are entitled to peacefully exercise their religious beliefs free from discrimination and violence,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Using or threatening force against individuals because of their religion is an affront to the fundamental values of this nation, and the Civil Rights Division will continue to be vigilant in protecting the religious liberties guaranteed to all Americans.”
“This prosecution sends a clear message to anyone who contemplates the use of threats or intimidation to interfere with the right of individuals, including members of our Muslim community, to express their faith without fear,” said U.S. Attorney Damon P. Martinez of the District of New Mexico. “The U.S. Attorney’s Office is committed to protecting the religious rights of Muslims in New Mexico by aggressively prosecuting those who wish to perpetrate hate crimes against them.”
“All Americans, regardless of their differences, deserve to be treated with respect,” said Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division. “As the lead agency for enforcing federal civil rights laws, the FBI will continue to hold accountable those individuals whose intolerant acts harm others. I would like to thank the FBI staff in Albuquerque and Charlotte, North Carolina, for their work on this case, as well as the U.S. Justice Department's Civil Rights Division, the U.S. Attorney's Office and Albuquerque Aviation Police.”
A sentencing hearing has not yet been set.
This case is being investigated by the FBI’s Albuquerque Division. The case is being prosecuted by Assistant U.S. Attorney Margaret Vierbuchen of the District of New Mexico and Fara Gold of the Civil Rights Division’s Criminal Section.
North Carolina Man Pleads Guilty to Using Force Against Muslim Woman to Obstruct Her Free Exercise of Religion on an AirplaneRead the Press Release
Gill Parker Payne, 37, of Gastonia, North Carolina, pleaded guilty today in the District of New Mexico to one count of using force or threat of force to intentionally obstruct a Muslim woman, identified as K.A., in the free exercise of her religious beliefs.
According to court documents, on Dec. 11, 2015, Payne and K.A. were on board a Southwest Airlines flight from Chicago to Albuquerque, New Mexico. K.A. was wearing a religious headscarf, known as a hijab. Payne was seated several rows behind K.A. on the airplane, and did not know her. Payne admitted that he saw that K.A. was wearing a hijab and was aware that it is a religious practice of Muslim women to wear a headscarf.
Payne further admitted that shortly before landing, but while still in-flight, he walked up the aisle to where K.A. was sitting and stopped next to her seat. Payne proceeded to tell K.A. to take off her hijab, stating something to the effect of, “Take it off! This is America!” Payne then grabbed the back of the hijab and pulled it all the way off, leaving K.A.’s entire head exposed. As a result, K.A. felt violated and quickly pulled the hijab back up and covered her head again.
“No matter one’s faith, all Americans are entitled to peacefully exercise their religious beliefs free from discrimination and violence,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Using or threatening force against individuals because of their religion is an affront to the fundamental values of this nation, and the Civil Rights Division will continue to be vigilant in protecting the religious liberties guaranteed to all Americans.”
“This prosecution sends a clear message to anyone who contemplates the use of threats or intimidation to interfere with the right of individuals, including members of our Muslim community, to express their faith without fear,” said U.S. Attorney Damon P. Martinez of the District of New Mexico. “The U.S. Attorney’s Office is committed to protecting the religious rights of Muslims in New Mexico by aggressively prosecuting those who wish to perpetrate hate crimes against them.”
“All Americans, regardless of their differences, deserve to be treated with respect,” said Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division. “As the lead agency for enforcing federal civil rights laws, the FBI will continue to hold accountable those individuals whose intolerant acts harm others. I would like to thank the FBI staff in Albuquerque and Charlotte, North Carolina, for their work on this case, as well as the U.S. Justice Department's Civil Rights Division, the U.S. Attorney's Office and Albuquerque Aviation Police.”
A sentencing hearing has not yet been set.
This case is being investigated by the FBI’s Albuquerque Division. The case is being prosecuted by Assistant U.S. Attorney Margaret Vierbuchen of the District of New Mexico and Fara Gold of the Civil Rights Division’s Criminal Section.
Payne Plea Agreement
Payne Information
Naperville Man Charged with Violently Forcing Women to Engage in ProstitutionRead the Press Release
CHICAGO — A Naperville man has been arrested for allegedly forcing women to engage in commercial sex acts and brutally abusing them if they wouldn’t comply with his orders.
BENJAMIN BIANCOFIORI used the promise of financial security to entice women into performing commercial sex acts on his behalf, according to a criminal complaint filed in U.S. District Court in Chicago. Biancofiori ran his sex-trafficking operation primarily out of his townhouse in Naperville, the complaint states. The complaint alleges that Biancofiori often beat and punched the women, and that he arranged for one of his victims to be returned to him at gunpoint after she tried to run away. Biancofiori kept a vast majority of the proceeds earned by the women, the complaint states.
Biancofiori, 36, was arrested Wednesday in Colorado. The complaint charges him with one count of sex trafficking by means of force, fraud and coercion. An initial appearance in federal court in Chicago has not yet been scheduled.
The complaint states that once Biancofiori enticed the victims to work for him, he would post their information in commercial sex advertisements on Backpage.com. He then arranged for the women to travel to meet clients at various locations in the Chicago area, the complaint states. Biancofiori recruited one of his victims through an online messaging service on Facebook, according to the complaint.
For the past several weeks Biancofiori has been traveling in the western U.S., according to the complaint. Biancofiori allegedly advertised one of his victims on Backpage.com while in Phoenix and Denver in March.
The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation; and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division. Substantial assistance was provided by the U.S. Attorney’s Office for the District of Colorado, the Denver office of the FBI, the Carol Stream Police Department and the Naperville Police Department.
The sex trafficking charge carries a minimum sentence of 15 years in prison and a maximum sentence of life in prison.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Abigail Peluso and Erika Csicsila.
Missouri Woman Pleads Guilty to Sex Trafficking ConspiracyRead the Press Release
On May 12, 2016, Robin Thompson, a twenty-five year old Park Hills, Missouri, woman pled guilty in federal district court, in East St. Louis, Illinois, to one count of Conspiracy to Commit Sex Trafficking of Minor and by Force, Fraud, or Coercion, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Thompson is scheduled for sentencing on September 15, 2016, before the Honorable Michael J. Reagan, at which time she faces a maximum sentence of life in prison, not more than 5 years of supervised release after her prison term, a mandatory special assessment of $100, and restitution.
Facts presented in court revealed that during a six week period in June and July 2015, Thompson took part in a venture with her husband, co-defendant Marcus Dewayne Thompson, which involved the recruitment, transportation, and advertisement of a minor female from Illinois for commercial sex acts in Florida, Georgia and Louisiana.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Daniel T. Kapsak.
Missouri Man Guilty of Sex Trafficking A Minor and ConspiracyRead the Press Release
On May 13, 2016, Marcus Dewayne Thompson, a twenty-eight year old Park Hills, Missouri, man pled guilty in federal district court, in East St. Louis, Illinois, to one count of Conspiracy to Commit Sex Trafficking of a Minor and by Force, Fraud, or Coercion, and one count of Sex Trafficking of a Minor and by Force, Fraud, or Coercion, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Thompson is scheduled for sentencing on September 29, 2016, before the Honorable Michael J. Reagan, at which time he faces a sentence of fifteen years to life in prison, not more than 5 years of supervised release after his prison term, a mandatory special assessment of $200, and restitution.
Court proceedings revealed that during a six week period in June and July 2015, Thompson orchestrated a venture with his wife, co-defendant Robin Thompson, which involved the recruitment, transportation, and advertisement of a minor female from Illinois for commercial sex acts in Florida, Georgia, and Louisiana.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Daniel T. Kapsak.
Mexican Cartel Leader Edgar Valdez-Villareal Pleads Guilty to Cocaine TraffickingRead the Press Release
U.S. Attorney Kenneth A. Polite announced that EDGAR VALDEZ-VILLAREAL, a/k/a “La Barbie,” a United States Citizen who rose to be a high-level leader of Mexico’s Beltran-Leyva Cartel, has pled guilty to charges of conspiracy to distribute and distribution of cocaine in the Eastern District of Louisiana during 2001. VALDEZ-VILLAREAL pled guilty today in the Northern District of Georgia to the Eastern District of Louisiana charges pursuant to Rule 20 of the Federal Rules of Criminal Procedure. VALDEZ-VILLAREAL is in federal custody since his extradition to the United States from Mexico.
VALDEZ-VILLAREAL’s guilty plea to the Eastern District of Louisiana resulted from an investigation by the Drug Enforcement Administration where VALDEZ-VILLAREAL arranged and supervised the transportation of approximately 33 kilograms of cocaine hydrochloride to New Orleans from Mexico in 2001. Two other individuals, CESAR PENA-GIRON and GABRIEL BENAVIDEZ were indicted and pled guilty in 2002 in connection with this investigation and seizure of the 33 kilograms of cocaine.
VALDEZ-VILLAREAL faces a minimum term of ten years imprisonment and a maximum term of life imprisonment, followed by at least five years supervised release, and a maximum fine of $10,000,000. There is also a mandatory $100.00 special assessment for each count associated with this guilty plea.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration for their work investigating this matter. Assistant United States Attorney William J. Quinlan, Jr. is in charge of the prosecution.
Massachusetts Man Pleads Guilty to Tax Fraud for Failing to Report IncomeRead the Press Release
A West Bridgewater, Massachusetts, man pleaded guilty today to one count of filing a false individual income tax return, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
According to court documents, Keith Eaton, 51, did not file federal individual income tax returns with the Internal Revenue Service (IRS) for the years 1998 through 2003. In 2004, the IRS assessed Eaton more than $280,000 in taxes, interest and penalties for the years 1998 through 2001.
From November 2004 to April 2008, Eaton was employed at a heating and air conditioning company in Brockton, Massachusetts. Each year, the company provided Eaton with Forms 1099 reflecting his compensation. Despite receiving these Forms 1099 reporting significant earnings, Eaton did not file timely individual income tax returns with the IRS for years 2004 through 2008. In November and December 2009, Eaton filed Forms 1040 for himself for the years 2000 through 2008 in which he falsely reported receiving no income for any of those years.
In or about November 2008, Eaton began operating Eaton Mechanical LLC, a heating and air conditioning business. In an attempt to thwart the IRS’s effort to collect his back taxes, Eaton caused checks from the business bank account to be made payable to himself and then cashed the checks. Eaton used the cash to pay his personal expenses, including his mortgage. Finally, despite having sufficient income from the operation of his business to require him to file income tax returns, Eaton failed to file individual income tax returns for the years 2009 through 2012.
U.S. District Court Judge William Young for the District of Massachusetts scheduled Eaton’s sentencing for Sept. 14. Eaton faces a statutory maximum sentence of three years in prison and a maximum fine of $250,000. Under the terms of the plea agreement, Eaton is required to pay restitution for his unpaid tax liabilities for the years 1998 through 2012.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation who investigated the case and Trial Attorneys Brittney Campbell and Kenneth Vert of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
M&T Bank Agrees to Pay $64 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
M&T Bank Corp. (M&T Bank) has agreed to pay the United States $64 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today. M&T Bank is headquartered in Buffalo, New York.
“Mortgage lenders that fail to follow FHA program rules put taxpayer funds at risk and increase the chances of borrowers losing their homes,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to hold lenders accountable for knowingly submitting ineligible loans for FHA insurance.”
“M&T Bank bypassed its responsibility to originate and underwrite mortgages in accordance with the standards required by the FHA,” said First Assistant U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “This case demonstrates that when a financial institution takes such a detour, we will work to ensure that it does not bypass the consequences of that conduct.”
During the time period covered by the settlement, M&T Bank participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that M&T Bank failed to comply with certain FHA origination, underwriting and quality control requirements. As part of the settlement, M&T Bank admitted to the following facts: Between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s quality control requirements. Prior to 2010, M&T Bank failed to review all Early Payment Default (EPD) loans, which are loans that become 60 days past due within the first six months of repayment. Between 2006 and 2011, M&T also failed to review an adequate sample of FHA loans, as required by HUD.
Additionally, M&T created a quality control process that allowed it to produce preliminary major error rates that were significantly lower (sometimes below one percent) than what the rate would have been if M&T had calculated its preliminary major error rate by dividing the number of loans with preliminary major errors by the number of loans reviewed to determine what percent of loans contained a preliminary major error.
M&T Bank also failed to adhere to HUD’s self-reporting requirements. While M&T Bank identified numerous FHA insured loans with “major errors” between 2006 and 2011, M&T Bank did not report a single loan to HUD until 2008, and thereafter self-reported only seven loans to HUD. As a result of M&T’s conduct and omissions, HUD insured hundreds of loans approved by M&T that were not eligible for FHA mortgage insurance under the Direct Endorsement program and that HUD would not otherwise have insured. HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
* * *
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and the value of private citizen assistance, including whistleblowers, in pursuing lenders that violate the rules,” said Inspector General David A. Montoya of the Department of Housing and Urban Development.
“It is critically important that FHA-approved lenders comply with HUD’s underwriting standards and originate mortgages that borrowers can sustain,” said HUD General Counsel Helen Kanovsky. “We are pleased M&T Bank worked with the Department of Justice and HUD to arrive at an agreeable settlement that protects FHA’s insurance fund.”
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by a former employee of M&T Bank, Keisha Kelschenbach. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The share to be awarded in this case has not yet been determined.
The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and the U.S. Attorney’s Office for the Western District of New York.
The lawsuit is captioned U.S. ex rel. Kelschenbach v. M&T Bank Corp, 13-CV-0280(S) (W.D.N.Y.).
M&T Bank Agrees to Pay $64 Million to Resolve Alleged False Claims Act Liability Arising from Fha-Insured Mortgage LendingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—The Department of Justice and the United States Attorney’s Office announced today that M&T Bank Corp. (M&T Bank) has agreed to pay the United States $64 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements. M&T Bank is headquartered in Buffalo.
“In some instances, M&T Bank deviated from its responsibility to originate and underwrite mortgages in accordance with the standards required by the FHA,” said First Assistant U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “This case demonstrates that when a financial institution takes such a detour, we will work to ensure that it does not bypass the consequences of that conduct.”
“Mortgage lenders that fail to follow FHA program rules put taxpayer funds at risk and increase the chances of borrowers losing their homes,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to hold lenders accountable for knowingly submitting ineligible loans for FHA insurance.”
During the time period covered by the settlement, M&T Bank participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that M&T Bank failed to comply with certain FHA origination, underwriting and quality control requirements. As part of the settlement, M&T Bank admitted to the following facts: between January 1, 2006, and December 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s quality control requirements. Prior to 2010, M&T Bank failed to review all Early Payment Default (EPD) loans, which are loans that become 60 days past due within the first six months of repayment. Between 2006 and 2011, M&T also failed to review an adequate sample of FHA loans, as required by HUD.
Additionally, M&T created a quality control process that allowed it to produce preliminary major error rates that were significantly lower (sometimes below one percent) than what the rate would have been if M&T had calculated its preliminary major error rate by dividing the number of loans with preliminary major errors by the number of loans reviewed to determine what percent of loans contained a preliminary major error.
M&T Bank also failed to adhere to HUD’s self-reporting requirements. While M&T Bank identified numerous FHA insured loans with “major errors” between 2006 and 2011, M&T Bank did not report a single loan to HUD until 2008, and thereafter self-reported only seven loans to HUD. As a result of M&T’s conduct and omissions, HUD insured hundreds of loans approved by M&T that were not eligible for FHA mortgage insurance under the Direct Endorsement program and that HUD would not otherwise have insured. HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and the value of private citizen assistance, including whistleblowers, in pursuing lenders that violate the rules,” said Inspector General David A. Montoya of the Department of Housing and Urban Development.
“It is critically important that FHA-approved lenders comply with HUD’s underwriting standards and originate mortgages that borrowers can sustain,” said HUD General Counsel Helen Kanovsky. “We are pleased M&T Bank worked with the Department of Justice and HUD to arrive at an agreeable settlement that protects FHA’s insurance fund.”
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by a former employee of M&T Bank, Keisha Kelschenbach. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The share to be awarded in this case has not yet been determined.
The settlement is the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and Assistant U.S. Attorney Kathleen Lynch, U.S. Attorney’s Office for the Western District of New York.
Leader Admits Scheme to Fraudulently Obtain over $1.4 Million in Unemployment BenefitsRead the Press Release
Baltimore, Maryland – Diameter Akala, age 43, of Silver Spring, Maryland, Washington, D.C. and New York, pleaded guilty today to a scheme to fraudulently obtain over $1.4 million in unemployment benefits.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robin Blake, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Postal Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service - Washington Division.
According to his plea agreement, from 2012 to 2015, Akala and his co-conspirators caused the Maryland Department of Labor, Licensing and Regulation (DLLR) and the Pennsylvania Department of Labor and Industry (DLI), which administered the unemployment insurance benefit programs in their respective states, to issue fraudulent unemployment benefits in the names of individuals by submitting false applications for monetary benefits. Akala enlisted his friends and family members to join him in the scheme.
Members of the conspiracy obtained the personally identifying information (PII) of individuals, including Maryland residents. Akala filed false documentation with DLLR and DLI in the names of fictitious companies, falsely stating that the fictitious companies employed and paid wages to actual individuals. In fact, no unemployment insurance taxes were ever paid to DLLR or DLI in the names of the fictitious companies. Akala, electronically and by phone, filed claims in Maryland and Pennsylvania for unemployment benefits in his own name and the names of other individuals, falsely claiming that they previously worked for those fictitious companies. Akala used the PII of individuals who had given permission to have their information used, as well as many who did not. Akala offered money to co-conspirators in exchange for PII.
Akala and other members of the conspiracy used residential mailing addresses of co-conspirators in Maryland, New York, the District of Columbia, Pennsylvania and Virginia to register and receive correspondence for the fictitious companies, and apply for and receive unemployment benefits in the form of prepaid debit cards. In exchange for the use of their addresses, the co-conspirators received funds obtained through the fraud, typically in the form of a fraudulently obtained prepaid debit card. Members of the conspiracy regularly contacted DLLR and DLI, falsely representing themselves either to be a representative of one of the fictitious companies or an individual entitled to unemployment benefits. Akala moved between different states in order to retrieve correspondence addressed to fictitious companies and individuals, including prepaid debit cards issued by DLLR and DLI.
Co-conspirators Wilfred Mendez, Tawana McClain, Ferny Alexander Moreno Puente, Wilfredo Torres and his half-brother, Eric Gonzalez, admitted that they agreed to have Akala file fraudulent unemployment claims in their names. Mendez, Moreno Puente and Torres also provided the personal identification information and/or addresses of other individuals to file additional false claims in the names of those individuals, and others. The co-conspirators used the fraudulently obtained unemployment benefits prepaid debit cards that were either mailed to them, or provided to them by Akala, at ATMs or stores in order to withdraw and use the funds. Some of the cards were in their names, but some of the cards were in the names of other individuals. Generally, the conspirators kept a portion of the fraudulently obtained funds for themselves and provided the remainder to Akala. Torres also allowed his business address to be used to file fraudulent unemployment benefit claims and when the unemployment benefits debit cards arrived, he either used them or distributed them to co-conspirators.
During the course of the conspiracy the actual loss was approximately $1,468,463.80 in fraudulently obtained unemployment benefits. As part of his plea agreement, Akala will be required to pay restitution and forfeiture in that amount.
Akala faces a maximum sentence of 20 years in prison for conspiracy to commit wire fraud and a mandatory minimum of two years in prison, consecutive to any other sentence, for aggravated identity theft. U.S. District Judge Ellen L. Hollander has scheduled sentencing for Akala on August 4, 2016, at 10:00 a.m.
Wilfred Mendez, age 21, of Bronx, New York; Eric Gonzalez, age 34, of Alexandria, Virginia; Tawana McClain, age 51, of Washington, D.C.; Ferny Alexander Moreno Puente, age 26, of Gaithersburg, Maryland; and Wilfredo Torres, age 36, of Alexandria, Virginia, previously pleaded guilty to their roles in the scheme. Mendez has agreed to the entry of an order to pay restitution and forfeiture of $195,422; Torres and Gonzalez have each agreed to the entry of an order to pay restitution and forfeiture of $173,185.32; Moreno Puente has agreed to the entry of an order to pay restitution and forfeiture of $268,911; and McClain has agreed to the entry of an order to pay restitution and forfeiture of $205,613. U.S. District Judge Ellen L. Hollander has scheduled sentencing for Mendez on July 18, 2016, for McClain and Gonzalez on July 15, 2016, and for Moreno Puente and Torres on July 14, 2016.
Co-conspirators Dulce Oleo, age 38, of the Bronx, New York; Yaw Bempa-Boateng, age 35, of Silver Spring, Maryland; and Carmen Benitez, age 29, of Scranton, Pennsylvania, previously pleaded guilty to their roles in the scheme and await 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 Department of Labor – OIG and U.S. Postal Inspection Service for their work in the investigation, and praised the Maryland Department of Labor, Licensing and Regulation and the Pennsylvania Department of Labor and Industry for their assistance in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Sean R. Delaney, who is prosecuting the case.
Kenner Man Charged with Mail TheftRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ARTHUR RESPERT, age 25, of Kenner, was charged today in a three-count Indictment for theft of mail.
According to the Indictment, RESPERT was employed at Air General, Inc. and worked at the New Orleans International Airport. From on or about October 24, 2014 to September 3, 2015, RESPERT stole letters and other packages addressed to individuals across the United States.
If convicted, RESPERT faces a maximum term of imprisonment of five years, a maximum fine of $250,000, a maximum term of supervised release of up to three (3) years, and a mandatory $100 special assessment, as to each of the three counts of mail theft.
U.S. Attorney Polite reiterated that an Indictment is merely a charge, and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of United States Postal Service, Office of Inspector General, in investigating this matter. Assistant U.S. Attorney Sharan E. Lieberman is in charge of the prosecution.
Kenel Man Convicted of Aggravated Sexual Abuse and Other Domestic Violence ChargesRead the Press Release
United States Attorney Randolph J. Seiler announced that Denny Johnson, age 31, of Kenel, South Dakota, was found guilty of two Counts of Aggravated Sexual Abuse by Force, Assault with a Dangerous Weapon, Domestic Assault by an Habitual Offender, and Simple Assault, as a result of a federal jury trial in Aberdeen, South Dakota. The jury returned the guilty verdict on May 12, 2016, after deliberating for approximately 3 hours.
Johnson was found not guilty of three additional counts of Aggravated Sexual Abuse and one count of Kidnapping.
The convictions carry a maximum penalty of up to life in custody and/or fines of up to $1,005,000, up to life of supervised release, and $410 in special assessments to the Federal Crime Victims Fund.
Johnson was indicted by a federal grand jury on June 17, 2014.
The convictions stemmed from incidents between December 29, 2013, and January 10, 2014, when Johnson, who had been in a tumultuous and violent relationship since early 2000 with the victim, began to physically and emotionally abuse her. Johnson brought the victim home from her shift at work around 12:30 in the morning. Upon arriving home, Johnson began yelling at her because he had been watching her at work and saw her interacting with a co-worker.
As Johnson was displaying hostility, the victim began to gather her belongings so she could leave. She put her clothes in a suit case and headed out of the house. As she opened the door to leave, Johnson suddenly slammed the door shut, told her she was not leaving, grabbed her by her jacket collar, jerked her to the floor, and assaulted her. As she was lying on the floor, Johnson began to repeatedly kick her on the small of her back, as he knew she had been previously injured in that area.
The victim was able to get up and attempted to escape. Johnson again grabbed her by the jacket, but this time he cut it off of her with a large army knife he had grabbed, and chased her into his bedroom with the knife still in his hand. He also began throwing household items at her, striking her on the forehead.
Johnson retrieved her suitcase, opened it, and started taking her clothing out and cutting it with the knife. The victim tried escape out a window, but she was so nervous she could not unlock the window. Johnson returned and began walking towards her and menaced her with the knife, which was still in his hand. The victim was in a fetal position, and Johnson verbally abused her as she pleaded with him. He used the knife to cut her clothes off. After removing her undergarments with the knife, he threw her to the ground. Thereafter, he threw the knife at her, sticking it in the floor beside her, and he told her to kill herself because he could not do it. The victim refused, stating she had her children to live for so she would not kill herself.
Johnson retrieved the knife, and kicked her as she tried to crawl from him. When she cried out, he told her to be quiet or he would kill her. Johnson urinated on the victim. After urinating on her, Johnson told her that she stunk and ordered her to get into the shower. He turned on the cold water only and forced her to stay under the water as he poured shampoo, liquid hand soap, dish soap, a bottle of Mr. Clean, and some Clorox on her head and face. He tried to dilute her with cleaning chemicals. The victim was pleading with him to stop, but Johnson grabbed a mop bucket with dirty water in it and dumped that on her as well. Following this, he ordered her out of the shower and told her to go to a bedroom. Johnson made sure that she did not have any clothes. Johnson came into the room and raped the victim in several ways. During the sexual abuse, he hit her in the face, held a knife to her throat, and continued to menace her.
This case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
A presentence investigation was ordered and a sentencing date was set for August 15th. The defendant was remanded to the custody of the U.S. Marshals Service.
Justice Department Settles Immigration-Related Discrimination Claim Against Netjets ServicesRead the Press Release
The Justice Department announced today that it has reached an agreement with NetJets Services Inc. (NetJets), a business that provides private aviation services based out of Columbus, Ohio. The agreement resolves allegations that NetJets violated the anti-discrimination provision of the Immigration and Nationality Act (INA) by discriminating against work-authorized immigrants.
The Justice Department’s investigation found that NetJets improperly required newly hired, work-authorized non-U.S. citizens to present specific documents to prove their employment eligibility that they did not require of similarly-situated U.S. citizens. The investigation further found that existing employees who were legal permanent residents were subjected to unnecessary post-employment reverification of their employment eligibility because of their immigration status and that employees who had become naturalized U.S. citizens after they were hired were required to present more and different documents than necessary to establish their citizenship status. The INA’s anti-discrimination provision prohibits employers from discriminating based on citizenship, immigration status, or national origin when verifying an employee’s employment authorization.
Under the settlement agreement, NetJets must pay a $41,480 civil penalty, train its human resources staff on the anti-discrimination provision of the INA and be subject to monitoring by the Justice Department for a period of two years.
“It is the responsibility of each employer to ensure that its human resources staff understand and implement proper hiring practices to avoid violating anti-discrimination laws,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Civil Rights Division commends NetJets for its cooperation during the investigation and its commitment to implement remedial measures.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits, among other things, citizenship, immigration status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices in employment eligibility verification; retaliation; and intimidation. The case was handled by Trial Attorney Pablo A. Godoy of the Civil Rights Division’s OSC.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they have been subjected to: different documentary requirements based on their citizenship status, immigration status or national origin; or discrimination based on their citizenship status, immigration status or national origin in hiring, firing or recruitment or referral, should contact OSC’s worker hotline for assistance.
NetJets Settlement Agreement
Jury Finds St. Francis Man Guilty of Assault with a Dangerous Weapon and Related ChargesRead the Press Release
United States Attorney Randolph J. Seiler announced that Michael Lee Long, Jr., age 33, of St. Francis, South Dakota, was found guilty of Assault with a Dangerous Weapon, Simple Assault, Prohibited Person in Possession of a Firearm, and Using a Firearm During and Relation to a Crime of Violence following a three-day jury trial in Pierre, South Dakota. The verdict was returned on May 12, 2016.
The charges carry a mandatory minimum of 10 years up to life in custody and/or a $250,000 fine, five years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Long was indicted by a federal grand jury on October 14, 2015.
The conviction stems from an incident that occurred on May 17, 2015, when Long accosted three people in parked car at a convenience store in Rosebud. As Long stood next to the open front passenger door pointing a handgun at the victim in the passenger seat, the driver of the vehicle put the car in reverse in an effort to get away. Long was knocked down by the open door and fired at the vehicle before it departed the parking lot. The driver of the vehicle was the daughter of the front-seat passenger. The daughter’s boyfriend was also in the vehicle, seated in the back seat. They were not injured. A shell casing was subsequently located in the parking lot of the store and a bullet fragment was removed from the front of the vehicle. The handgun, a Glock .40 caliber pistol, was also recovered and matched to the shell casing and bullet fragment.
Long was previously convicted of Domestic Abuse in Rosebud Sioux Tribal Court in 2011, making it illegal for him to possess a firearm. As a result of the verdict, Long will forfeit ownership of the firearm to the United States.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the South Dakota Division of Criminal Investigation. Assistant U.S. Attorneys Kirk Albertson and Meghan Dilges prosecuted the case.
A presentence investigation was ordered and a sentencing date was set for August 1, 2016.
Long was remanded to the custody of the U.S. Marshals Service pending sentencing.
Jury Convicts Festus Man of Assaulting Deputy MarshalRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced that Wednesday afternoon, May 11, 2016, a federal jury in East St. Louis found William J. Mabie, 55, of Festus, Missouri, guilty of assault on a federal officer. Sentencing before the Honorable Richard H. Mills has been scheduled for June 9, 2016.
"There are more than 900,000 law enforcement officers serving in communities across the United States, the highest number ever recorded. Each year, nearly 60,000 assaults against law enforcement officers resulting in approximately 16,000 injuries are reported." noted Acting United States Attorney Porter. "My office will always take swift and decisive action to deter those who think they can prey on our men and women in law enforcement. This verdict was especially pleasing as it occurred during National Police Week, a time when all of us should take a moment to reflect and thank the men and women of law enforcement for the tremendous job they do of keeping us all safe."
Evidence at trial showed that on March 12, 2015, while a prisoner in the custody of the United States Marshal Service, Mabie assaulted a Deputy United States Marshal in the Federal Courthouse for the Southern District of Illinois. The case was investigated by the Federal Bureau of Investigation and prosecuted by Special Assistant United States Attorney Shane Kelbley.
Irvine Engineer Named in New Indictment Alleging Theft of Trade Secrets from Two Medical Device CompaniesRead the Press Release
SANTA ANA, California – A federal grand jury has issued a superseding indictment that charges an Irvine engineer with stealing and possessing trade secrets belonging to two former employers, both of which develop and manufacture medical devices used to treat cardiac and vascular ailments.
Wenfeng Lu, 43, of Irvine, was named in a 12-count superseding indictment returned by a grand jury on Wednesday.
The indictment alleges that Lu stole the confidential and proprietary trade secrets from two different medical device companies with research facilities in Irvine, where Lu worked from January 2009 until he was arrested in 2012.
During this time, Lu travelled to the People’s Republic of China (PRC) multiple times – sometimes soon after allegedly downloading trade secrets from an employer’s computer and emailing information to his personal email account. Lu was arrested as he prepared to board a plane to the PRC in November 2012, according to court documents. Lu appeared “to be in the process of setting up a company with other individuals in the PRC to manufacture medical devices,” an FBI agent wrote in an affidavit previously filed in this case.
“Intellectual property theft poses a grave threat to businesses and the employees who depend on those businesses for their livelihoods,” said United States Attorney Eileen M. Decker. “Moreover, when the stolen material is destined for foreign entities seeking to compete with American businesses, as it was in this case, IP theft also threatens the security of our nation. This is one of the reasons that my Office now prosecutes IP crimes out of a National Security Division.”
Lu was initially indicted in this case in December 2012. That indictment included allegations related only to one of the companies’ trade secrets. The new indictment incorporates the allegations related to four trade secrets owned by the other.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The case against Lu has been assigned to United States District Judge, who previously had scheduled a trial for June 21. Lu is scheduled to be arraigned on the superseding indictment on June 13.
Each of the 12 felony counts alleging the theft and possession of trade secrets carries a statutory maximum sentence of 10 years in federal prison and a fine of up to $5 million.
This case was investigated by the Federal Bureau of Investigation.
Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Ostby in Billings on May 9, 2016 and entering pleas of Not Guilty were:
- JAMES EVERETT KAMMINGA, JR., a 33-year-old resident of Billings, appeared on charges of possession with intent to distribute methamphetamine, and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, KAMMINGA faces life in prison, $10,000,000 in fines, and 5 years supervised release. The case was investigated by the HIDTA Task Force. PACER Case Reference. 16-50
- ZACHARY JAMES LOZIER, a 32-year-old resident of Billings, appeared on charges of illegal receipt of a firearm by a person under indictment, and possession of stolen firearms. If convicted of the most serious charge contained in the indictment, LOZIER faces 10 years in prison, $250,000 in fines, and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 15-67
Appearing before U.S. Magistrate Johnston in Great Falls on May 5, 2016 and entering pleas of Not Guilty were:
- LOIS ANN POTTER, a 57-year-old resident of Box Elder, appeared on charges of harboring a fugitive, and false statements to federal law enforcement. If convicted of the most serious charge contained in the indictment, POTTER faces 5 years in prison, $250,000 in fines, and 3 years supervised release. The case was investigated by the United States Marshals Service. PACER Case Reference. 16-29
Appearing before U.S. Magistrate Johnston in Great Falls on May 3, 2016 and entering pleas of Not Guilty were:
- SHELLY DAWN PYEATT a 46-year-old resident of Melrose, appeared on charges of misappropriation of postal funds, and issuance of money orders without payments. If convicted of the most serious charge contained in the indictment, PYEATT faces 10 years in prison, $250,000 in fines, and 3 years supervised release. The case was investigated by the United States Postal Service Office of Inspector General. PACER Case Reference. 16-13
Appearing before U.S. Magistrate Ostby in Billings on April 29, 2016 and entering pleas of Not Guilty were:
- RANDY SCOTT LAEDEKE, a 59-year-old resident of Billings, appeared on charges of wire fraud. If convicted of the charge contained in the indictment, LAEDEKE faces 20 years in prison, $250,000 in fines, and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 16-33
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Indictment Charges Allentown Man with Producing Child PornographyRead the Press Release
PHILADELPHIA - Ruben Cotto, Jr., 28, of Allentown, PA, was charged yesterday by Indictment with the production and attempted production of child pornography as well as the distribution and possession of child pornography, announced United States Attorney Zane David Memeger.
If convicted, the defendant faces a mandatory minimum sentence of 15 years in prison with a maximum possible sentence of life, a possible fine, up to a lifetime of supervised release, a $300 special assessment, and an additional $15,000 special assessment.
The case was investigated by the Office of the Pennsylvania Attorney General, the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Sherri A. Stephan.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Illegal Alien to Federal Prison for Meth ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was sentenced May 10, 2016, to six years in federal prison.
Jose Mejia-Fraijo, 23, from Mexico but residing in Sioux City, Iowa, received the prison term after a January 25, 2016, guilty plea to conspiracy to distribute methamphetamine.
At the guilty plea, Mejia-Fraijo admitted his involvement in a conspiracy that distributed at least 500 grams of actual (pure) methamphetamine from September 2015 through November 2015. Mejia-Fraijo further admitted to obtaining the methamphetamine from sources in Colorado for further distribution in Sioux City, Iowa.
Mejia-Fraijo was sentenced in Sioux City by United States District Court Judge Leonard T. Strand. Mejia-Fraijo was sentenced to 72 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a two-year term of supervised release after the prison term. There is no parole in the federal system. Mejia-Fraijo is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-4088.
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Honduran Man Sentenced for Illegal Reentry After DeportationRead the Press Release
CONCORD, NEW HAMPSHIRE –United States Attorney Emily Gray Rice announced today that Alex Velasquez-Avila, of Honduras, pleaded guilty to illegally reentering the United States after having been previously deported and was sentenced to time served. Velasquez-Avila was arrested on March 3, 2016.
In October of 2015, a Deportation Officer developed information which indicated that the defendant, Honduran national Alex Velasquez-Avila, was present in the United States after having been deported on one previous occasion. On February 2, 2016 the Deportation Officer recognized Velasquez-Avila as he exited the Two Guys Food Market on Union Street in Manchester, New Hampshire.
The Deportation Officer approached Velasquez-Avila and identified himself as a U.S. Immigration Officer. A brief verbal conversation was conducted in Spanish with the defendant who confirmed that his name was Alex Velasquez-Avila and that he was illegally present in the U.S. without any immigration documents. The defendant was then taken into ICE custody for being illegally present in the U.S. and transported to the ICE-ERO office in Manchester, New Hampshire for administrative processing. Subsequent fingerprint analysis identified the defendant as having been previously deported.
The case was investigated by the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement, and prosecuted by Assistant U.S. Attorney Alfred Rubega.
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Heroin Dealer Sentenced to 10 Years in PrisonRead the Press Release
NORFOLK, Va. – Christopher Salkey, 27, of Suffolk, was sentenced today to 120 months in prison for conspiracy to distribute heroin and possessing a firearm as a convicted felon.
Salkey pleaded guilty on Oct. 28, 2015. According to court documents, in the summer of 2012 up to May 2015, the defendant conspired with his father and two co-conspirators to distribute heroin in Suffolk and Portsmouth. Each week Salkey (who has a previous conviction for selling narcotics) and his father would receive a significant quantity of heroin to which they would add a cutting agent and then cap it up for distribution. During the course of the conspiracy it is estimated they distributed at least eight kilograms of heroin. On May 20, 2015, the Suffolk Police Department and federal agents from the Drug Enforcement Administration (DEA) executed a search warrant at Salkey’s residence in Suffolk where they recovered heroin and packaging material used for distribution. Additionally, agents also discovered a marijuana grow operation with 129 marijuana plants. Law enforcement later learned Salkey had hidden two firearms in the residence, which agents later recovered.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge for the DEA’s Washington Field Division, made the announcement after sentencing by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorneys William D. Muhr and V. Kathleen Dougherty are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15cr135.
Hammond Men Indicted for Participation in Drug Related Homicides and in Drug Overdose DeathRead the Press Release
U.S. Attorney Kenneth A. Polite announced that BARON SMITH, a/k/a “Gee Gee,” age 36, and CALVIN ALEXANDER, a/k/a “Payday,” a/k/a “Cardee,” age 30, both of Hammond, have been charged in a Second Superseding Indictment with participating in the October 9, 2015 double murder of QUNADELL BEARD and ELLIOT SMITH, which took place in Tangipahoa Parish. This Second Superseding Indictment added CALVIN ALEXANDER to the murder charges that were already pending against BARON SMITH and also charges ALEXANDER with distributing heroin in February 2015, which led to the overdose death of ERIC FERRARA.
The Grand Jury charged both SMITH and ALEXANDER with first degree murder for their participation in these murders. Both were charged with violating Title 18, United States Code, Section 924(j), which relates to the illegal discharge of a firearm during the course of a drug trafficking crime resulting in death of another person. They were also charged with conspiracy to use a facility of interstate commerce to commit a murder for hire, in violating Title 18, United States Code, Section 1958. The Second Superseding Indictment also includes other violations of the federal drug laws and obstruction of justice charges. If convicted both ALEXANDER and SMITH face a mandatory life sentence. ALEXANDER could face the death penalty, however the Attorney General has not yet decided if the government will seek the death penalty in this case.
Both defendants are currently in federal custody and have been detained without bond.
U.S. Polite indicated that these are simply charges and that all defendants are presumed innocent until proven guilty in court.
U.S. Attorney Polite praised the work of the United States Drug Enforcement Administration with assistance from Hammond Police Department and Tangipahoa Parish Sheriff’s Office. Assistant U.S. Attorney Jonathan L. Shih is in charge of the prosecution.
Guatamalan Man Sentenced for Illegal Reentry After DeportationRead the Press Release
CONCORD, NEW HAMPSHIRE –United States Attorney Emily Gray Rice announced today that Hilmar Chavez-Sanchez, of Guatemala, pleaded guilty to illegally reentering the United States after having been previously deported and was sentenced to time served. Chavez-Sanchez was arrested on March 3, 2016.
On February 15, 2016, an ICE-ERO Deportation Officer received a duty call from a New Hampshire State Police Trooper who stated that that he had stopped a vehicle for speeding on I-93. The vehicle was occupied by five individuals, three of whom refused to provide identification or answer the Trooper’s questions.
Two ICE-ERO officers traveled to the scene to provide assistance. Upon arriving, they observed the New Hampshire State Trooper in a foot pursuit of the defendant. The Trooper pursued the defendant for approximately 150 to 200 yards before apprehending him to discover that the defendant was not in possession of a valid driver license. The defendant was then transported to the Rockingham County Department of Corrections.
A search incident to arrest led to the discovery of a Guatemalan drivers’ license in the name of Hilmar Chavez-Sanchez. The ICE-ERO officers were able to determine that Chavez-Sanchez had been previously deported in 2009 and again in 2011.
Chavez-Sanchez will again be deported.
The case was investigated by the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement and prosecuted by Assistant U.S. Attorney Alfred Rubega.
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Fugitive from Justice Sentenced to Federal Prison on Meth Conspiracy, Possession of Firearm and Failure to Appear ConvictionsRead the Press Release
A man who conspired to distribute methamphetamine, possessed a firearm in furtherance of drug trafficking and fled prosecution was sentenced May 10, 2016, to more than 13 years in federal prison.
Somsock Senlouangrat, 45, from Tacoma, Washington, received the prison term after a January 11, 2016, guilty plea to conspiracy to distribute methamphetamine, possession of a firearm in furtherance of drug trafficking and failure to appear.
At the guilty plea, Senlouangrat admitted that in September 2003, he and Daosadeth Keophounsouk were stopped by law enforcement in Monona County, Iowa. At the time, Senlouangrat and Keophounsouk were transporting approximately two pounds of methamphetamine from California to Minnesota for further distribution. Also located in the vehicle was a Smith and Wesson handgun Senlouangrat had purchased for their protection during the transport of methamphetamine. Senlouangrat further admitted to absconding from pretrial supervision sometime during November 2003 until his apprehension by the United States Marshals Service on June 19, 2015 in Tacoma, Washington.
Senlouangrat was sentenced in Sioux City by United States District Court Judge Leonard T. Strand. Senlouangrat was sentenced to 160 months’ imprisonment. A special assessment of $300 was imposed. He must also serve a four-year term of supervised release after the prison term. There is no parole in the federal system. Senlouangrat is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-4001 and 03-4106.
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Former Makah Tribal Leader Sentenced to Prison for Embezzlement of Tribal FundsRead the Press Release
A former member of the Makah Tribal Council was sentenced today in U.S. District Court in Tacoma to six months in prison for embezzlement of tribal funds, announced U.S. Attorney Annette L. Hayes. RYLAND CHAD BOWECHOP, 38, of Bellingham, Washington pleaded guilty in February 2016, admitting that between June of 2010 and July 2014 he used a Makah tribal credit card for his personal expenses including cash advances at casinos. At sentencing U.S. District Judge Ronald B. Leighton noted that this was a serious offense committed by a Tribal leader who was supposed to be looking out for the best interest of the tribe.
“Not only did this defendant steal $30,000 from his own tribe, but he betrayed the trust of the people he was supposed to serve,” said U. S. Attorney Annette L. Hayes. “The loss of funds is significant, but can be remedied. The loss of trust has impacts that are much harder to repair.”
According to the plea agreement and other records in the case, BOWECHOP was elected to the Makah Tribal Council in 2009 after working in the Tribal Planning Department for many years. As a Councilmember, BOWECHOP was provided a credit card to pay for his Council-related travel expenses. BOWECHOP illegally used the card for personal expenses and to withdraw cash at casinos. The amount of fraudulent charges is estimated to be $30,000. BOWECHOP is required to pay $30,000 in restitution to the tribe.
The case was investigated by the FBI and the Neah Bay Department of Public Safety. The case was prosecuted by Assistant United States Attorney J. Tate London.
Former Inland Empire Insurance Agent Sentenced to Federal Prison for Submitting Fraudulent Loan Applications to Pay for PremiumsRead the Press Release
RIVERSIDE, California – An Upland man who pleaded guilty to federal bank fraud and tax charges for submitting fraudulent loan applications in a scheme that caused nearly $6 million in losses has been sentenced to one year and one day in federal prison.
Derek Richard Brewart, 53, a former licensed insurance agent and owner of Hamilton Brewart Insurance Agency (HBIA) in Upland, was sentenced Wednesday afternoon by United States District Judge Jesus G. Bernal. In addition to the prison term, Judge Bernal ordered Brewart to pay $5,926,430 in restitution to the victim, Universal Bank of West Covina. As part of the sentence, Brewart is also required to work with the Internal Revenue Service to determine the amount owed in unpaid taxes.
Brewart pleaded guilty in February 2015 to two charges – bank fraud and filing a false tax return. As part of the scheme, Brewart secured loans from Universal Bank in his clients’ names without their knowledge or authorization. HBIA brokered the sale of insurance from various carriers who wrote general liability, earthquake, malpractice, worker’s compensation and other policies. Because of the significant cost of these policies, HBIA clients sometimes sought loans so they could pay the premiums associated with the policies over a period of time.
Over the course of about four years, Brewart submitted fraudulent loan applications to Universal Bank to secure premium financing loans. The loans were submitted on behalf of HBIA clients, who did not know that Brewart was submitting the applications. The proceeds of the loans were used to pay HBIA’s expenses.
In some cases, Brewart took premium payments from clients and never obtained insurance for them.
“This defendant used his insurance expertise to engage in a scheme that violated the trust given to him as a licensed agent and cost a local bank nearly $6 million,” said United States Attorney Eileen M. Decker. “His clients trusted him to protect their assets, but he repaid them by placing their assets at risk for his own financial gain.”
When he pleaded guilty, Brewart also admitted that he filed false tax returns for tax years 2010 and 2011. As part of his guilty plea, Brewart admitted that he failed to report to the Internal Revenue Service approximately $785,922 of the income he received for the two years.
The investigation into Brewart’s fraudulent scheme and tax fraud violations was jointly conducted by the Federal Bureau of Investigation, the California Department of Insurance and IRS Criminal Investigation.
Former IRS Revenue Agent Sentenced to 30 Months in Prison for Accepting BribeRead the Press Release
A former Internal Revenue Service Revenue Agent was sentenced today in U.S. District Court in Seattle to 30 months in prison and three years of supervised release for accepting a $20,000 bribe, announced U.S. Attorney Annette L. Hayes. PAUL G. HURLEY, 43, of Seattle, was convicted in February 2016 following a three day trial. At sentencing U.S. District Judge John C. Coughenour said that in 35 years on the bench, this was his first bribery case. He called HURLEY’s crime, “a tremendous breach of public trust.”
“The American public entrusts public officials to carry out their duties in an honorable way. Revenue agents, such as this defendant, conduct taxpayer audits, demand records, conduct interviews, and have the power to assess additional federal taxes,” said U.S. Attorney Annette L. Hayes. “When that power is used to line the pockets of those public officials it is a breach of trust of the highest order.”
According to testimony at trial and records filed in the case, in the summer of 2015 HURLEY was randomly assigned to audit the corporate taxes of Have a Heart Compassion Care, Inc., a medical marijuana dispensary. In a meeting at one of the dispensary locations, HURLEY presented the owner of the dispensary with the findings of the audit. HURLEY indicated to the business owner that he had ‘saved the owner millions’ during the audit and that he lived paycheck to paycheck. HURLEY asked the business owner for $20,000. The business owner and his attorney reported the bribe request to the FBI. Working with law enforcement, the business owner met twice with HURLEY and in recorded conversations delivered cash in marked bills.
At the trial, prosecutors noted that HURLEY had written on the audit paperwork that the business owner had no money to pay on his tax bill following the audit, even as HURLEY sought $20,000 to personally benefit from his work as a public employee.
HURLEY had been a revenue agent with the IRS since 2009 and resigned from the service after the conduct was discovered.
The case was investigated by the FBI and by the Treasury Inspector General for Tax Administration (“TIGTA”).
The case was prosecuted by Assistant United States Attorneys Justin W. Arnold and Francis Franze-Nakamura.
Former IRS Revenue Agent Pleads Guilty to Aggravated Identity Theft of Taxpayer InformationRead the Press Release
ATLANTA - Creshika C. Wise, a former Internal Revenue Service (IRS) Revenue Agent who impersonated a taxpayer in order to steal over $470,000, has pleaded guilty to a charge of aggravated identity theft.
It is outrageous for an IRS employee to use her position to steal a citizen’s identity so she could steal taxpayer funds,” said U.S. Attorney John Horn. “Citizens count on the honesty and integrity of thousands of IRS employees every day to safeguard their private information, and breaches of this trust will be prosecuted and punished.”
“As our voluntary system of tax administration relies heavily upon the public’s confidence in a fair tax system, IRS employees must conduct themselves with the highest level of integrity and their conduct must be above reproach. Our message is loud and clear: the Treasury Inspector General for Tax Administration (TIGTA) will vigorously investigate and recommend criminal prosecution for any IRS employee who violates the public trust,” said to J. Russell George, Inspector General, TIGTA.
According to U.S. Attorney Horn, the charges and other information presented in court: Creshika Wise worked for the IRS from 2008 until the spring of 2016, when she resigned after her arrest in this case. While with the IRS, she served as a revenue agent. In August 2013, Wise was assigned to audit the 2011 tax return of two married taxpayers who had significantly underpaid their 2011 federal income tax. In September 2013, Wise and the taxpayers’ accountant met, and agreed that the taxpayers owed $758,846, plus interest, to the IRS. Wise came up with a plan to steal most or all of that money.
The day after she met with the accountant, Wise placed in the IRS file for the audit a fictitious IRS Form 4549, “Income Tax Examination Changes” for the taxpayers. This form is used by revenue agents to document changes to tax liability arrived at through the audits they conduct. Wise falsified the form by dramatically understating the tax due to the IRS, reducing it from $758,846 to $282,363, and also by forging the accountant’s signature.
A few days later, Wise opened up a new checking account, in the name “Creshika C. Wise sole prop d/b/a U.S. Treasury and Accounting Service.” In October, 2013, Wise emailed the taxpayer from her official IRS email account, and asked him to wire the funds the taxpayers owed the IRS to her newly opened bank account. Wise’s email provided the routing and account number for the account, which she described as belonging to “U.S. Treasury and Accounting Services.” Wise’s email did not disclose to the taxpayer that she personally, rather than the IRS, was actually the owner of the account.
The taxpayer never wired the funds as requested by Wise, as he had already mailed a check to the IRS for the full amount due. Wise received the check, and processed it for credit to the taxpayers’ account. However, Wise did not abandon her scheme.
Wise knew she had altered the IRS’s records to reflect a tax due of $282,363, rather than the agreed upon $758,846. She also knew that when the IRS processed the check, the system would generate a refund check for any excess – here, over $470,000 – and mail it to the taxpayers’ address of record. Wise turned her attention to getting the large check she knew would be coming to the taxpayers, and preparing to negotiate it herself.
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On 10/21/2013, Wise opened a new UPS mailbox in her own name at a UPS Store location. Soon afterward, Wise caused the taxpayers’ address to be changed in the IRS computer system from their correct address to that of Wise’s newly opened UPS mailbox, causing IRS correspondence to the taxpayers to be misdirected.
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On 12/2/2013, impersonating the taxpayers, Wise filled out an online application for a new joint checking account in their names with a local bank. On 12/10/13, Wise faxed the signature card, which she had created by forging the signatures of the taxpayers and using the husband’s social security number, to the bank.
- On 12/20/2013, Wise called the bank to inquire whether the account was ready to be used. This call was recorded and preserved by the bank. In the call, Wise identified herself by name as one of the taxpayers, the wife, and provided the taxpayer’s correct social security number to confirm that identity. Posing as the taxpayer, Wise said that it was important the account be opened quickly, because she was expecting a large check from the IRS.
Wise’s scheme to take most or all of the money owed by the taxpayers to the IRS was unsuccessful, in that neither the taxpayers nor the IRS suffered any monetary loss.
Sentencing for Creshika C. Wise, 31, of Fairburn, Georgia, is scheduled for August 3, 2016, at 2:00 p.m. before U.S. District Judge Amy Totenberg.
This case is being investigated by the Treasury Inspector General for Tax Administration.
Assistant United States Attorney Alana R. Black is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
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Former Federal Customs Official Sentenced to over 3 Years in Federal Prison in Scheme to Pay Bribes to Obtain Benefits for ImmigrantsRead the Press Release
LOS ANGELES – A former official with U.S. Customs and Border Protection (CBP), who went on to operate an immigration consulting service, has been sentenced to 37 months in federal prison for participating in a scheme to pay bribes to other government employees to obtain “Green Cards” and citizenship for immigrants.
George Wu, 63, of Pico Rivera, who worked as a CBP officer until early 2012, and then operated Great Eastern Immigration Services, was sentenced late yesterday by United States District Judge Michael W. Fitzgerald.
Wu was found guilty in August 2015 of paying bribes in an effort to obtain citizenship and legal permanent resident status for several immigrants. A federal jury convicted Wu of conspiracy and five counts of bribery of a public official.
Wu, another immigration consultant named Michael Bui, and others solicited money from immigrants in exchange for help in obtaining benefits from U.S. Citizenship and Immigration Services (USCIS) that included lawful permanent residence and citizenship. Some of the money paid by the immigrants was used to pay bribes to public officials in exchange for granting immigration benefits.
“This defendant attempted to corrupt our nation’s immigration system by offering bribes in exchange for benefits,” said United States Attorney Eileen M. Decker. “It is critical to our national security that our nation’s immigration system functions properly and free from corruption such as this defendant’s.”
During the trial, prosecutors presented evidence that Wu received and paid bribe money on behalf of immigrants. The overall conspiracy involved at least seven immigrants, one of whom was allowed to pass an English proficiency exam even though she could not speak English.
In the first case, an attorney who also works as an immigration consultant paid Wu $15,000, and Wu subsequently paid Bui $10,000, a portion of which was intended for bribery payments, to secure assistance with a citizenship application. In the second case, Wu paid the attorney a total of $15,000, again a portion of which was intended for bribes, for assistance in securing legal permanent resident status – commonly called a Green Card – for an immigrant. And in the third case, Wu paid a total of $3,000 to an official with USCIS – an official who was acting in an undercover capacity as part of the investigation – for help in obtaining a Green Card for an immigrant.
Bui pleaded guilty in May 2015 to conspiracy and bribery, and he was sentenced yesterday afternoon by Judge Fitzgerald to serve one year and one day in prison.
The case against Wu and Bui was part of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations Office of Professional Responsibility and the Federal Bureau of Investigation. The investigation into corruption involving government officials and immigration consultants has resulted in charges against 11 defendants. Seven of those defendants – including Wu and Bui – have now been convicted, including:
• Attorney Kwang Man “John” Lee, who pleaded guilty in March to three counts of bribery and admitted, among other things, paying tens of thousands of bribes to a Senior Immigrations Services Officer with USCIS and arranging sham marriages to secure Green Cards for clients;
• James Dominguez, a former special agent with U.S. Immigration and Customs Enforcement (ICE), who pleaded guilty to making false statements to ICE investigators when he lied about accessing immigration files and providing information to an immigration lawyer; and
• Paul Lovingood, a former official with USCIS, who pleaded guilty to accepting an illegal gratuity from an immigration lawyer after adjudicating a petition for lawful permanent residence filed on behalf of one of the attorney’s clients.
Former Executive Director of Contractors Association Sentenced to 42 Months in Jail for Mail Fraud and Tax OffensesRead the Press Release
HONOLULU -- Raymond Fujii, 68, a resident of Kailua, Hawaii, was sentenced today by Chief U.S. District Judge J. Michael Seabright to 42 months in federal prison for engaging in a mail fraud scheme involving the embezzlement of $1,483,800, and failing to report that income on his federal tax returns. In addition to the 42 month term of imprisonment, Fujii was ordered to pay $1,234,713 in restitution to the victim organization and the Internal Revenue Service. Fujii pled guilty to mail fraud and filing a false federal income tax return on January 27, 2016.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to information produced to the court, from 1997 through 2014, Fujii used his position to embezzle money from the Painting and Decorating Contractors Association of Hawaii ("PDCA"), and the Painting Industry of Hawaii Trade Promotion and Charity Fund ("TP&C"), a trust fund that promotes the local painting industry. Fujii, who was executive director of the former and administrator of the latter, organized and directed board meetings, and prepared minutes of meetings and financial statements for both organizations. Fujii also was an authorized signatory on the bank accounts for both entities.
During court proceedings, Fujii admitted writing checks to a company that he owned, either forging or fraudulently obtaining the signatures of directors on the checks, and then depositing the money in his personal account. Fujii obtained a total of $1,483,800, but failed to report the money on his federal or State of Hawaii income tax returns. The failure to report the income resulted in tax losses to the federal and state governments of $315,829 and $135,565, respectively. Following the discovery of the offense, Fujii sold his personal residence and used the funds to repay $564,915 to the PDCA.
During today’s sentencing proceedings, Chief Judge Seabright noted that Fujii’s conduct was a "naked betrayal" of the painting association’s trust, and that Fujii had obtained the money tax-free by not reporting it on his income tax returns.
The case was investigated by the Internal Revenue Service, Criminal Investigation, and the Department of Labor Office of Management Labor Standards, and was prosecuted by Assistant U.S. Attorney Larry Tong.
Former DMV Employee Pleads Guilty to Conspiring to Commit BriberyRead the Press Release
SACRAMENTO, Calif. — Andrew Kimura, 31, of Sacramento, pleaded guilty today to two counts of conspiracy to commit bribery, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Kimura was an employee of the California Department of Motor Vehicles, working in Sacramento as a Licensing-Registration Examiner. He processed applications for Class A and Class B commercial driver’s licenses (CDLs) and Class C noncommercial driver’s licenses.
According to the plea agreement, between April 2013 and July 2015, Kimura received money from various brokers in order to provide CDLs for individuals who had not taken or passed the necessary DMV examinations. Kimura then accessed the DMV’s database to alter records indicating those individuals had passed certain tests. As a result, the individuals were able to obtain CDLs without having taken or passed the requisite written or behind-the-wheel driving tests. Additionally, Kimura also altered DMV records to provide for renewal of various CDLs in exchange for money from brokers.
This case is the product of an investigation by the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the California DMV. Assistant United States Attorney Todd A. Pickles and Rosanne Rust are prosecuting the case.
Emma Klem, another DMV employee, and Kulwinder Dosanjh Singh, a broker, previously pleaded guilty to conspiracy to commit bribery as part of the same investigation in United States v. Klem, 2:15-cr-139 GEB, and United States v. Kulwinder Dosanjh, 2:15-cr-146 GEB, respectively. No sentencing date has been set for them.
Co-defendants Robert Turchin, Mangal Gil, and Pavitar Dosangh Singh are awaiting trial. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Kimura is scheduled to be sentenced by United States District Judge Garland E. Burrell Jr. on August 12, 2016. Kimura faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.