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29 June 2016
Upstate New York Couple Indicted in Tax Fraud SchemeRead the Press Release
A federal grand jury yesterday returned a four count indictment in the Western District of New York charging two business owners with conspiracy to defraud the United States and filing a false tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney William J. Hochul Jr for the Western District of New York.
According to the indictment, Lizhong “Tony” Shen and Xiaojie “Lucy” Shun, jointly operated BTL International Company Ltd., a tour and travel service company located in Niagara Falls, New York, between April 2004 and November 2009. The defendants were married at the time but, in 2009, they separated and Shen stopped working for BTL International. In January 2011, Shun ceased operation of BTL International and began operating another tour and travel service company, Niagara Falls Universal Inc.
For the tax years 2008 and 2009, Shen and Shun failed to properly report income generated by BTL International to the IRS on both corporate and personal tax returns. Both defendants also signed their 2009 personal tax return knowing the return included incorrect information. Shen and Shun reported income in the amount of $22,880 but it is alleged they knowingly received a significantly higher income.
In addition, Shun is charged with corruptly endeavoring to obstruct the due administration of the internal revenue laws. The indictment charges that, from April 2010 through April 2013, Shun provided inaccurate information to the accounting firm preparing the 2011 tax return for Niagara Falls Universal, the 2010 and 2011 personal tax returns for the couple and the 2012 tax return for herself.
The defendants face a maximum prison term of five years on the charge of conspiracy to defraud the United States and three years for each charge of filing a false return. Shun faces an additional three year term in prison for the charge of corruptly endeavoring to obstruct the due administration of the internal revenue laws. Both defendants also face a term of supervised release and monetary penalties.
An indictment merely alleges that crimes have been committed. Defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Hochul commended special agents of the IRS- Criminal Investigation Division, under the direction of Special Agent in Charge Shantelle P. Kitchen, who are investigating the case, and Assistant U.S. Attorney Trini E. Ross and Thomas F. Koelbl of the Tax Division, who are prosecuting the case.
United States Attorney, Boys and Girls Club, HIDTA, Ripken Foundation Announce Badges for Baseball in Roanoke ValleyRead the Press Release
ROANOKE, VIRGINIA – In cooperation with officials from the Washington/Baltimore HIDTA, the Cal Ripken Senior Foundation [CRSF] and the Boys and Girls Club of Southwest Virginia, United States Attorney John P. Fishwick Jr. announced today the launching of Badges for Baseball in the Roanoke Valley.
“This program is about more than just baseball, it’s about building trust between our community and law enforcement,” United States Attorney Fishwick said today. “If we can strengthen the relationship the community has with law enforcement, through mentorship, through relationship building and use baseball as a conduit to strengthen that trust, it’s a huge first step in the right direction for Roanoke.”
Badges for Baseball is a juvenile crime prevention program created by the Cal Ripken Sr. Foundation in partnership with the United States Department of Justice. The program’s goals are to pair police and children together to play and learn.
“We want to build relationships with the community but also teach the fundamental lessons of the program, including respect, teamwork and communication,” United States Attorney Fishwick added. “We are very excited to partner with the Cal Ripken Sr. Foundation, the Washington/Baltimore HIDTA and the Boys and Girls Club to bring such a wonderful opportunity to so many deserving children in Roanoke.”
Badges for Baseball is a nationwide initiative run by the Cal Ripken Sr. Foundation in 177 communities in 18 states, including communities in Virginia such as Fredericksburg, Newport News and Richmond. The program has impacted more than 25,500 youth with the help of 1,365 law enforcement officers and professional youth mentors.
U.S. Attorney’s Office Reaches Agreement with Mclean Hospital to Resolve Disability Access IssuesRead the Press Release
BOSTON – The U.S. Attorney’s Office has reached an agreement with The McLean Hospital in resolve accessibility issues in McLean’s Gunderson Residence program. The agreement comes after the U.S Attorney’s Office received a complaint alleging that McLean Hospital turned away prospective patients in wheelchairs because it could not accommodate them at the Gunderson Residence.
“I want to commend McLean Hospital for its eagerness to make the Gunderson Residence accessible to those with mobility-related disabilities,” said United States Attorney Carmen M. Ortiz. “The Hospital’s cooperation demonstrates how much society can achieve when it prioritizes giving disabled individuals full access to all services, including medical care.”
Under the terms of the settlement, McLean will bring the Gunderson Residence’s common areas into compliance with the 2010 ADA Standards for Accessible Design. Additionally, McLean agrees to provide alternative equivalent housing arrangements to patients who qualify for the Gunderson Residence but who are unable to use stairs because of a mobility-related disability. McLean will also train its staff in these new policies.
As soon as it became aware of the complaint, McLean Hospital worked with the U.S. Attorney’s Office to resolve its disability access issue.
The ADA requires places of public accommodation, including hospitals, to provide individuals with disabilities equal access to facilities. More information on the ADA is available at www.ADA.gov.
This case was handled by Special Assistant U.S. Attorney Gregory Dorchak of Ortiz’s Civil Rights Unit.
Two Ordered to Federal Prison for Bank Fraud Scheme at Zapata National BankRead the Press Release
LAREDO, Texas - Petra Del Bosque and Anita Arredondo, both 55 and from Zapata, have been sentenced following their convictions related to a long-running bank fraud scheme targeting Zapata National Bank (ZNB), announced United States Attorney Kenneth Magidson. Arredondo and Del Bosque pleaded guilty in February and January 2015, respectively.
Today, U.S. District Judge Marina Garcia Marmolejo handed both women a 36-month prison sentence, each to be followed by five years of supervised release. The court also ordered they owe restitution in the amount of $615,681.15.
Judge Marmolejo found that neither defendant had been truthful with the court in accounting for the whereabouts of the remainder of the stolen money. Arredondo and Del Bosque had returned some money at the time of their arrests and later submitted expenditure reports to the court purporting to show how they had spent the remaining funds. However, Judge Marmolejo did not find their reports credible and there is nearly $200,000 in unaccounted for stolen funds.
Del Bosque is a former employee of Zapata National Bank (ZNB), while Arredondo worked for a Zapata-based construction company as a clerk in the accounts payable department and had responsibility for issuing company checks.
For two years, Arredondo issued numerous false company checks made payable to contractors who had not performed the work that was the alleged basis for the checks.
Arredondo admitted to endorsing the false checks by forging the signatures of the contractors and then delivering the checks to Del Bosque at ZNB. Del Bosque led ZNB bank tellers to believe she was cashing the checks on behalf of the contractors who were unable to come to the bank themselves and that she would deliver the funds from the cashed checks. However, she actually pocketed the money and split the proceeds of the fraud with Arredondo.
Both have admitted that the loss as a result of the scheme totals more than $800,000.
Both were previously ordered into custody where they will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI investigated. Assistant U.S. Attorney (AUSA) Robert S. Johnson and former AUSA Sanjeev Bhasker prosecuted the case.
Two Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Home Foreclosure AuctionsRead the Press Release
Two Georgia real estate investors pleaded guilty today for their roles in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia, the Department of Justice announced today.
Michael Stock and Jon Stovall Jr. each admitted that they agreed with other real estate investors to refrain from bidding against one another at public real estate foreclosure auctions in exchange for payoffs. Stock admitted to participating in the conspiracy in Fulton and DeKalb counties from as early as August 2009 until at least November 2011, and Stovall admitted to participating in Fulton County from as early as October 2008 until at least January 2012. Additionally, Stock and Stovall admitted to conspiring to use the mail to carry out a scheme to defraud homeowners and mortgage holders.
According to court documents filed today in the U.S. District Court for the Northern District of Georgia, the conspirators agreed not to compete against each other at public real estate foreclosure auctions, artificially suppressed the prices of properties sold at these auctions, and made and received payoffs from each other. As a result, the conspirators seized money that otherwise would have gone to pay off the mortgage and other secured debt holders, and, in some cases, to the previous owner of the foreclosed home.
“These defendants conspired to take money that rightfully belonged to homeowners and lenders,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division. “Those homeowners and lenders have a right to expect that the properties will be sold in free and competitive auctions. The Antitrust Division will continue to partner with our colleagues at the FBI to aggressively pursue conduct designed to disrupt that process.”
“Foreclosure auction fraud in Georgia remains a focus for the FBI investigators and federal prosecutors within the Antitrust Division of the U.S. Department of Justice. By the very nature of this criminal act, the bank, and more importantly, the home owner in financial distress, are the victims that these federal laws were created to protect. The FBI will continue to provide investigative assets toward these matters in order to keep the level playing field that the law intended regarding these auctions.”
Including the individuals pleading today, 20 defendants have been charged in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area. Eighteen of those have either pleaded guilty or agreed to plead guilty.
These charges have been filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia, in connection with the president’s Financial Fraud Enforcement Task Force. The president established the task force 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 about the task force, please visit www.StopFraud.gov. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.
Tax Fraudster Sentenced to PrisonRead the Press Release
PHILADELPHIA – Today, defendant Ronald Allen, 61, of Lansdale, was sentenced to 18 months imprisonment, which he was ordered by U.S. District Court Judge Paul S. Diamond to start serving immediately, and further ordered to pay a $120,000 fine.
The defendant pleaded guilty to an Information charging one count of subscribing a false income tax return. The evidence showed that for the years 2008 through 2012, the gross receipts that the defendant reported in his corporate income tax returns were understated by the following amounts: $150,000, $150,000, $256,248, $351,416, and $307,666. During those same years, the defendant understated the net profits that he reported in his individual returns by precisely the same amounts. Between the years 2008 and 2012, the defendant saved approximately $248,328 in unpaid taxes and collected approximately $36,863 in undeserved tax refunds.
The case was investigated by the IRS-Criminal Investigations, and is being prosecuted by Assistant United States Attorney Kevin Brenner.
St. James Resident Pleads Guilty to Felony Violation for Selling Migratory BirdsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ROYLEY A. FOLSE, JR., age 69, a resident of St. James Parish, pled guilty yesterday to a felony violation for selling migratory game birds.
According to court documents, from June 2010 to December 2011, FOSLE illegally bartered and sold for cash four yellow-crowned night herons and sixty-two white ibis, which are migratory birds protected under the Migratory Bird Treaty Act (MBTA).
FOLSE faces a maximum term of imprisonment of two years, a maximum fine of $2,000, and a maximum term of supervised release of one year. U.S. District Judge Stanwood Duval set sentencing for October 5, 2016.
U.S. Attorney Polite praised the work of the Louisiana Department of Wildlife and Fisheries and the United States Fish and Wildlife Service in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Siouxland Tri-State Gathering Brings Together Three U.S. Attorneys and Area Law EnforcementRead the Press Release
SIOUX CITY, IA – Today the United States Attorneys for the Northern District of Iowa and the Districts of Nebraska and South Dakota met in Sioux City with 60 federal, state and local law enforcement partners with the goal of strengthening relationships among the offices and to develop a greater awareness of the dynamics and challenges facing the tri-state region now and into the future. This is a first of a kind executive meeting joining the three offices with fellow law enforcement partners.
The meeting was held at the 185th Air Refueling Wing located at the Sioux Gateway Airport. The Wing Commander, Colonel Larry Christensen, welcomed the attendees and provided them with a detailed briefing of the unit’s worldwide mission.
A recent successful prosecution involving multiple jurisdictions presented a good example of the importance of having pre-existing, effective collaborative relationships among federal, state and local law enforcement partners. Assistant U.S. Attorney Forde Fairchild led a panel discussion touching on the jurisdictional issues during the prosecution of Jamal Dean and his brother. The brothers conspired to rob two local drug dealers both living in Iowa. They had traveled from Nebraska to Sioux City and back to rob the drug dealers at gun point.
Evidence at Jamal Dean’s sentencing hearing revealed that while an Iowa arrest warrant was pending, he was a passenger in a car that was stopped by a Sioux City police officer. Dean exited the vehicle and began firing a number of rounds at the officer, one of which struck him in the head. After this shooting, Dean fled but was captured in Texas traveling south just 70 miles from the Mexican border. Evidence at sentencing also revealed Dean had also assaulted a woman and shot two other men, before shooting the officer. Dean was sentenced to life in prison.
Joining in the panel discussion were representatives from the Sioux City Police Department, Woodbury County Attorney and Sheriff’s Office and the United States Marshal Service. The panel emphasized the need to have pre-existing, effective working relationships across federal, state and local law enforcement before a serious incident occurs, and stressed the need for information sharing among all partners, at all levels.
U.S. Attorney for the Northern District of Iowa Kevin W. Techau reinforced his mantra as it related to the Dean prosecution noting, “We work best—federal, state and local law enforcement—when we work together.”
United States Attorney for the District of South Dakota Randolph J. Seiler stated following the meeting, “Successful prosecutions are the result of working shoulder to shoulder with our law enforcement partners. Cooperation and collaboration between federal, state, local, and tribal law enforcement are critical elements in our efforts to deliver justice.”
United States Attorney for the District of Nebraska Deborah R. Gilg agreed stressing the importance of interagency cooperation.
The daylong meeting included a round table discussion on drug trafficking, guns and violent crimes, cybercrime/national security, and human trafficking. Representatives from the Drug Enforcement Administration, Federal Bureau of Investigation, and Homeland Security Investigations were joined during the roundtable by state and local task force members. Criminal trending was discussed and jurisdictional issues were clarified. The day ended with a presentation on global narcoterrorism and the threat to the United States by the Executive Director of the High Intensity Drug Trafficking Area (HIDTA) located in Kansas City.
At the end of the day, the three United States Attorneys thanked the participants for joining the meeting noting that they believed the goal of strengthening inter-agency relationships and developing a greater awareness of the challenges facing the tri-state region were achieved. Future meeting of the partners will be planned.
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Serial Armed Robber Sentenced to 26 Years in Federal PrisonRead the Press Release
DALLAS — A Dallas man, Jerry Ware, who admitted that he and his accomplice, Kevin Howard, committed the armed robberies of five 7-Eleven/RaceTrac stores in Dallas in October 2014, was sentenced today by U.S. District Judge Ed Kinkeade to serve 312 months (26 years) in federal prison, announced U.S. Attorney John Parker of the Northern District of Texas.
Ware, 27, pleaded guilty in July 2015 to two counts of using, carrying, brandishing and discharging a firearm during or in relation to a crime of violence. Co-defendant Howard, 23, also of Dallas, pleaded guilty in April 2016 to one count of the same offense. In Howard’s plea agreement, the parties agree that the appropriate term of imprisonment in his case is 300 months, if the Court accepts the plea agreement. His sentencing is set for October 5, 2016.
According to documents filed in the case, the two committed five armed robberies in Dallas on October 24, 2014, and into the early morning hours of October 25, 2014, at the following locations:
October 24, 2014, 11:51 p.m. 7-Eleven store 2223 S. Beckley
October 25, 2014, 12:10 a.m. RaceTrac store 8124 Forest Lane
October 25, 2014, 12:35 a.m. 7-Eleven store 9320 Skillman
October 25, 2014, 12:50 a.m. 7-Eleven store 10340 Forest Lane
October 25, 2014, 1:20 a.m. 7-Eleven store 14801 Coit Road
All of these five robberies were committed in essentially the same manner, including Ware’s use and brandishing of the silver loaded firearm to threaten and force the store clerks to comply with his demands, while Howard stayed in the car as the getaway driver.
Howard also admitted that after this robbery spree, on October 28, 2014, he, on his own, committed the armed robbery of a 7-Eleven store at 10340 Forest Lane – the same store he and Ware robbed on October 25, 2014. Howard entered the store, brandished a loaded firearm, and demanded the cash-register money from the clerk. Minutes after the robbery, officers with the Dallas Police Department identified and arrested him. Inside the car, pursuant to a search warrant, law enforcement found the clothing Howard used in the robbery and the firearm, a loaded, chrome-colored Jimenez Arms, Model JA Nine, 9mm pistol.
The case was investigated by the Federal Bureau of Investigation and the Dallas Police Department. Deputy Criminal Chief Assistant U.S. Attorney Lisa J. Dunn is prosecuting the case.
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Second City Official Charged in Music Festival ExtortionRead the Press Release
BOSTON - The City of Boston’s Chief of Staff of Intergovernmental Affairs, Timothy Sullivan, was arrested this morning after a federal grand jury indicted him in connection with the extortion of a music festival production company operating on City Hall Plaza.
Sullivan, 36, of Dorchester, was indicted in a two-count federal indictment charging him with conspiracy to extort a company and extortion of that company. In May 2016, Kenneth Brissette, 52, of Boston was indicted on extortion of the same company.
Brissette was indicted for extorting a company which had already contracted with a non-union company to provide workers for a September 2014 music festival. It is alleged that between July and September 2014, while the company was awaiting the issuance of certain permits and approvals required for its music festival, Brissette and Sullivan repeatedly advised the company that it would need to hire members of Local 11 to work at the music festival. Local 11 had attempted to obtain work from the company since March 2013. The company told Brissette and Sullivan that it had already entered into a contract with a non-union company and hired all of its labor. Nevertheless, Brissette and Sullivan allegedly insisted that half of the company’s labor force consist of union members, although they ultimately agreed that eight members of Local 11 would suffice. As a result of these City officials’ demands three days before the music festival the company entered into a contract with Local 11 for eight additional laborers and one foreman. Shortly thereafter, the City of Boston issued the necessary permits.
Today’s indictment is a superseding indictment, which added two counts against Sullivan and one more count against Brissette.
The charge of extortion provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. The charge of conspiracy to extort provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Jonathan Mellone, Special Agent in Charge of the New York Region of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation; and Nikitas Splagounias, Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Laura J. Kaplan and Kristina Barclay of Ortiz’s Criminal Division.
The details contained in the Indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
San Juan County Residents Facing Federal Health Care Fraud ChargesRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez and Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso announced the filing of health care fraud charges against two San Juan County residents.
Cory Werito, 32, of Farmington, N.M., and Rosita Toledo, 46, of Kirtland, N.M., are charged in a ten-count indictment that was filed on June 15, 2016. Werito and Toledo were arrested on June 28, 2016, by Deputy U.S. Marshals and made their initial appearances on the indictment in federal court in Farmington yesterday afternoon. Both remain in custody pending arraignment and detention hearings, which are scheduled for June 30, 2016, in federal court in Albuquerque, N.M.
The indictment includes nine health care fraud charges against Werito and Toledo and one aggravated currency structuring charge against Werito only. The health care fraud charges stem from the defendants’ role in creating and operating a medical transportation company, CW Transport, a New Mexico company located in Farmington that provided non-emergency medical transportation to Arizona Medicaid recipients. The indictment alleges that over the course of two years between 2011 and 2013, CW Transport collected more than $1.9 million in Medicaid reimbursements from an Arizona-based Medicaid agency by submitting more than 18,000 claims for reimbursement, the vast majority of which were wholly or substantially false and fraudulent.
Count 10 of the indictment, the aggravated currency structuring charge, alleges that Werito conducted financial transactions involving the proceeds of the health care fraud in a manner that avoided the filing of Currency Transaction Reports (CTRs). CTRs are reports which must be filed by financial institutions on transactions involving more than $10,000 during any business day and are used by law enforcement authorities to undercover a broad range of illegal activities including money laundering. According to the indictment, from Aug. 2011 to July 2013, Werito conducted at least 200 cash withdrawals, each for several thousands of dollars but less than $10,000 and totaling at least $800,000, to avoid the filing of CTRs.
The indictment includes forfeiture provisions seeking an order requiring Werito and Toledo to forfeit to the United States at least $1,959,405, the proceeds allegedly derived from the health care fraud alleged in Counts 1 through 9 of the indictment.
If convicted, Werito and Toledo face up to ten years of imprisonment on each of the ten counts of the indictment. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The Albuquerque office of HSI investigated the case with assistance from the FBI, U.S. Marshals Service, San Juan County Sheriff’s Office, the Arizona Health Care Cost Containment System and New Mexico Office of the Attorney General. Assistant U.S. Attorney Jeremy Peña is prosecuting the case.
Werito Toledo Indictment
Roswell Man Sentenced to Prison for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – James Hill, 34, of Roswell, N.M., was sentenced today in federal court in Las Cruces, N.M., to 46 months in prison followed by three years of supervised release for his methamphetamine trafficking conviction. Hill also was ordered to forfeit $5,100.00 to the United States.
Hill was arrested in Sept. 2015, on a criminal complaint charging him with possession of methamphetamine with intent to distribute from Sept. 3 through 10, 2015, in Chaves County, N.M. According to the complaint, on Sept. 3, 2015 and Sept, 10, 2015, Hill sold a total of 191 grams of methamphetamine to undercover law enforcement agents during two separate transactions.
Hill was subsequently indicted on Dec. 17, 2015, and charged with distribution of methamphetamine on Sept. 3, 2015 and Sept. 10, 2015. The indictment included forfeiture provisions requiring Hill to forfeit the proceeds of his criminal conduct to the United States.
On Feb. 19, 2016, Hill pled guilty to the indictment and admitted that he sold methamphetamine to an undercover law enforcement agent in the following quantities: approximately 83.9 grams on Sept. 3, 2015, and approximately 103.9 grams on Sept. 10, 2015.
This case was investigated by the Las Cruces office of the DEA and the New Mexico State Police. Assistant U.S. Attorney Randy M. Castellano prosecuted the case.
Rochester Man Sentenced for Bank RobberyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that Maximilion Broadnax, 31, of Rochester, NY, who was convicted of robbing the Chase Bank at 900 Dewey Avenue in Rochester, was sentenced to eight years in prison by U.S. District Judge David G. Larimer.
Assistant U.S. Attorney Charles E. Moynihan, who handled the prosecution of the case, stated that on May 22, 2015, Broadnax’s co-defendant, Tiffany Hogan, entered the Chase Bank just after it opened and passed the bank teller a note drafted by Broadnax. The note demanded money and stated that nobody would be hurt if the teller complied. After receiving a specific amount of United States currency, Hogan left the bank and got into a white minivan in which Broadnax was waiting and the two drove away from the location.
Hogan and Broadnax were arrested later that same day at 17 Second Street in Rochester by members of the Rochester Police Department who were looking for Broadnax in connection with his involvement in stolen vehicles. While taking Broadnax into custody, officers saw that Broadnax’s pants fell down and a large amount of United States currency fell out.
Tiffany Hogan was also convicted of bank robbery and sentenced to 96 months in prison.
Today’s sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Adam S. Cohen, Special Agent in Charge, as well as the Town of Greece Police Department, under the direction of Chief Patrick Phelan, and the Rochester Police Department, under the direction of Chief Michael Ciminelli.
Robinson Resident Sentenced on Methamphetamine Related ChargesRead the Press Release
A Robinson, Illinois, man was recently sentenced to federal prison on methamphetamine related charges, James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today.
On June 27, 2016, Michael L. Goff, 36, of Robinson, Illinois, was sentenced to 168 months in federal prison, to be followed by five years of supervised release after imprisonment. Goff had previously pleaded guilty to three counts in a federal indictment.
Count 1 charged that from May 2015 to September 1, 2015, in Crawford and Richland Counties, the state of Indiana, and elsewhere, Goff conspired to knowingly and intentionally distribute methamphetamine. The total amount involved in the conspiracy was fifty (50) grams or more of methamphetamine (Ice). Count 2 charged that from August 30, 2015 to September 1, 2015, in Crawford County, Goff knowingly and intentionally possessed with the intent to distribute five (5) grams or more of methamphetamine (Ice). Count 3 charges that on August 31, 2015, in Richland County, Goff knowingly and intentionally possessed with the intent to distribute methamphetamine.
The investigation in this case was conducted by the Robinson, Illinois, Police Department, the Crawford County Sheriff’s Office, and the Richland County Sheriff’s Office. The Crawford County State’s Attorney’s Office also assisted in the investigation of this case.
The case is being handled by Assistant United States Attorney George Norwood.
Resident of Montana and Nevada Charged in Stolen Identity Tax Fraud SchemeRead the Press Release
A federal grand jury in the District of Montana returned an indictment on May 18, which was unsealed yesterday, charging a resident of Montana and Nevada with one count of corrupt interference with the internal revenue laws, 10 counts of theft of government money and six counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael W. Cotter of the District of Montana.
According to the indictment, from approximately April 2010 through at least September 2014, Steven D. Pjevach, filed false and fraudulent income tax returns using names and social security numbers that he obtained by posting false help-wanted advertisements on Craigslist. As part of his scheme, Pjevach opened and caused to be opened bank accounts in other individuals’ names to receive the fraudulently obtained tax refunds. Pjevach provided false information to these individuals about the reason why he was using their bank accounts and advised one of these individuals to disregard bank correspondence that advised this individual that his bank account was being used to obtain tax refunds.
If convicted, Pjevach faces a statutory maximum sentence of three years in prison on the charge of corrupt interference with the internal revenue laws, 10 years in prison for each count of theft of government money and a mandatory sentence of two years in prison for each count of aggravated identity theft, which will be in addition to any other term of imprisonment he receives. He also faces supervised release, a fine and restitution.
An indictment merely alleges that crimes have been committed. Defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Cotter commended special agents of Internal Revenue Service-Criminal Investigation, who investigated the case and Trial Attorney John T. Mulcahy of the Tax Division and Assistant U.S. Attorney Chad C. Spraker of the District of Montana, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Raytown Man Indicted for Stealing $86,000 from Two ChurchesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Raytown, Mo., man who worked or volunteered at two area churches was indicted by a federal grand jury today for embezzling more than $86,000 from those parishes.
David Townley, 59, of Raytown, was charged in a 14-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Tuesday, June 28, 2016. That indictment was unsealed and made public today upon Townley’s arrest and initial court appearance.
Nativity of Mary
The federal indictment alleges that Townley engaged in a scheme to defraud Nativity of Mary church and school in Independence, Mo., from 2007 through 2013.
Townley was employed by the Nativity of Mary church and school as the business manager from December 2006 through June 2013. Townley handled the payroll and had access to both cash and check collections/donations, and school tuition payments. From 2011 through 2013, Townley allegedly skimmed money from cash tuition payments made by parents. Townley allegedly wrote unauthorized checks, including payroll checks, to himself from the account at Nativity of Mary.
Townley is charged with three counts of wire fraud related to this embezzlement scheme.
Sacred Heart of Guadalupe
The federal indictment alleges that Townley stole $47,705 from Sacred Heart of Guadalupe church in Kansas City, Mo., in a fraud scheme that lasted from 2006 through 2013.
Townley was a volunteer at Sacred Heart of Guadalupe from 2002 through 2013. Townley was in charge of paying the church’s bills, making quick book entries, reporting to the financial committee and filing the church’s tax returns. From 2006 through 2013, Townley allegedly negotiated unauthorized checks payable to himself and checks payable to other entities. These checks, totaling approximately $47,705, were deposited into Townley’s personal bank account.
Townley is charged with three counts of mail fraud related to this embezzlement scheme.
Tax Evasion
The indictment charges Townley with eight counts of tax evasion. According to the indictment, Townley evaded paying federal income taxes from 2006 through 2013.
During those years, according to the indictment, Townley had taxable income that ranged from $54,633 to $115,721. Townley allegedly attempted to conceal his true sources of income at Nativity of Mary and Sacred Heart of Guadalupe.
The indictment also contains a forfeiture allegation, which would require Townley to forfeit to the government any property derived from the proceeds of the alleged violations, including $86,297.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the U.S. Secret Service and IRS-Criminal Investigation.
Prior Felon from Carlsbad Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Travis Hayslip, 36, of Carlsbad, N.M., pled guilty today in federal court in Las Cruces, N.M., to violating the federal firearms laws under a plea agreement in which he admitted igniting the fire that destroyed the Quality Inn Hotel in Carlsbad on March 9, 2016. Under the terms of his plea agreement, Hayslip will be sentenced to 30 months in federal prison followed by three years of supervised release. Hayslip will also be required to pay $2.4 million in restitution to Choice Hotels for the damage he caused to the hotel.
Hayslip was arrested on March 31, 2016, by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) on a federal arson charge. According to the criminal complaint, on March 9, 2016, a fire was ignited and caused an estimated $2 million in damages to the Quality Inn, a hotel that was under construction at 4106 National Parks Highway in Carlsbad in Eddy County, N.M. The complaint alleges that Hayslip walked through a part of the hotel that was under construction and lit a piece of debris with a lighter. Hayslip was subsequently indicted on April 26, 2016, on the same charge.
During today’s proceedings, Hayslip pled guilty to a felony information charging him with being a felon in possession of a firearm. In entering the guilty plea, Hayslip admitted that on March 16, 2016, in Eddy County, he possessed a firearm despite his prior felony conviction for theft in Arizona. Hayslip also acknowledged that he was responsible for the arson that occurred on March 9, 2016, at Choice Hotels in Carlsbad, and is therefore liable for $2.4 million in restitution for the damage caused by the fire.
Hayslip remains in federal custody pending a sentencing hearing which has yet to be scheduled.
Special Agents from the Las Cruces office and the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives and members of ATF’s National Response Team worked jointly with the Carlsbad Fire Department, the Carlsbad Police Department, the Pecos Valley Drug Task Force, the Office of New Mexico Fire Marshal, the Office of the New Mexico State Fire Investigator, and Gilbert Police Department K9 Handler, to follow leads, investigate the fire scene, interview witnesses and suspects, and analyze available surveillance footage. Assistant U.S. Attorneys Marisa Lizarraga and John Balla of the U.S. Attorney’s Las Cruces Branch Office are prosecuting the case.
Philadelphia Man Charged with Importing GBL from ChinaRead the Press Release
PHILADELPHIA - Anthony Guerriero, 41, of Philadelphia, Pennsylvania, was charged by indictment today with one count of importation of a controlled substance analogue, and one count of importation of a List I chemical, announced United States Attorney Zane David Memeger. According to the indictment, Guerriero illegally imported 8.16 liters of gamma-hydroxybutyric acid (“GBL”), a controlled substance analogue and an illegal List I chemical, into the United States from China
If convicted of all charges, Guerriero faces a maximum statutory sentence of 40 years in prison, a possible fine, a special assessment of $200, and three years of supervised release.
The case was investigated by Immigration and Customs Enforcement Homeland Security Investigations (“HSI”), U.S. Customs and Border Protection, and members of HSI’s Philadelphia Border Enforcement Security Task Force, including the Pennsylvania Attorney General’s Office’s Bureau of Narcotics Investigations, the Delaware County Criminal Investigations Division, and ICE’s Enforcement and Removal Operations. The case is being prosecuted by Assistant United States Attorney James A. Petkun.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Parkersburg man sentenced to over 12 years in Federal prison for possessing child pornographyRead the Press Release
CHARLESTON, W.Va. – A Parkersburg man was sentenced today to 12 and a half years in federal prison for a child pornography crime, announced Acting United States Attorney Carol Casto. Kevin Wayne Davis, 49, previously pleaded guilty to possessing over 600 images and videos of child pornography. After Davis is released from prison, he will be on supervised release for 25 years and will also be required to register as a sex offender.
Davis admitted that on November 5, 2014, he possessed images and videos of prepubescent minors engaged in sexual acts. The exceptionally large collection of images and videos was contained on his computers and multiple media devices found at his residence in Parkersburg. Investigators discovered that Davis was using peer-to-peer file sharing programs to download, receive, and distribute child pornography. The investigation also revealed that Davis engaged in a pattern of sexually abusing and sexually exploiting minors from 1998 through 2013.
“This is a significant sentence and it reflects the serious nature of crimes against children,” said Acting United States Attorney Carol Casto. “Perpetrators need to be aware that possessing child pornography carries severe consequences. Anyone who puts children in danger should know that we will continue working with our law enforcement partners to aggressively prosecute sexual predators.”
The Parkersburg Police Department, the West Virginia Internet Crimes Against Children Task Force, the West Virginia State Police, and the Wood County Sheriff’s Department conducted the investigation. Assistant United States Attorney Lisa G. Johnston is in charge of the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
This case was prosecuted as part of an ongoing initiative of the United States Attorney’s Office to combat child sexual exploitation and abuse in the Southern District of West Virginia.
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Palm Bay Man Sentenced to More Than Twelve Years for Drug Trafficking and Firearm OffensesRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza has sentenced John Dwayne Riley (39, Palm Bay) to 12 years and 6 months in federal prison for possessing more than 500 grams of cocaine with the intent to distribute it, and for possessing a firearm in furtherance of that drug-trafficking crime. A federal jury found him guilty on April 5, 2016. Additionally, Riley has an extensive criminal history that includes convictions for attempted robbery and for drug-trafficking crimes.
According to evidence presented at trial, on June 17, 2015, probation officers with the Florida Department of Corrections went to Riley’s house in response to an anonymous tip that he was dealing drugs. The officers observed powder cocaine inside a car in Riley’s garage, and they also found approximately one kilogram of individually packaged powder cocaine in one of Riley’s kitchen cabinets. During the execution of a search warrant later that evening, officers from the Palm Bay Police Department discovered an additional 5 grams of individually packaged heroin in another kitchen cabinet and 59 grams of individually packaged crack cocaine in the car. Riley also had several items of drug paraphernalia, and the pans in his kitchen sink contained fresh crack cocaine residue. Officers found $1,000 in cash in Riley’s pocket, and they recovered a loaded handgun from where Riley had been seated on his living room sofa.
This case was investigated by the Palm Bay Police Department, the Drug Enforcement Administration, and the Florida Department of Corrections. It was prosecuted by Assistant United States Attorney Embry J. Kidd.
Oroville Man Sentenced to 10 Years in Prison for Child Exploitation OffenseRead the Press Release
SACRAMENTO, Calif. — United States District Judge John A. Mendez sentenced Jan Alan Shafer, 65, of Oroville, to 10 years in prison, to be followed by a lifetime term of supervised release, for attempted travel with intent to engage in sex with a minor, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, for more than two years, Shafer engaged in conversations of a sexual nature via email and an internet instant messenger service with an adult who was posing as a 10-year-old boy from Alabama. During their email exchanges, Shafer received images of child pornography, including sexually explicit images of prepubescent children. Shafer also expressed his intent to visit or move to Alabama to meet the 10-year-old boy and to engage in sexual conduct. On October 30, 2014, agents arrested Shafer at the Greyhound bus station in Oroville before he boarded a bus to Alabama.
On March 1, 2016, Shafer pleaded guilty to one count of attempted travel with intent to engage in sex with a minor.
This case was the product of an investigation by the Federal Bureau of Investigation and the Butte County Sheriff’s Office. Assistant United States Attorneys Brian A. Fogerty, André M. Espinosa, and Rosanne Rust prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
New Orleans Woman Pleads Guilty to one Count of Health Care FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ZELLISHA DEJEAN, age 37, of New Orleans, pled guilty today to one count of health care fraud.
On April 21, 2016, DEJEAN was charged along with 13 other defendants in a 31-count Superseding Indictment charging approximately $30,252,906 in Medicare fraud. According to court documents, DEJEAN worked as an RN for ABIDE. Her duties included assessing the status of her patients, initiating a plan of care, evaluating patient needs, providing comprehensive nursing care, among other things.
DEJEAN faces a maximum term of imprisonment of ten years, a $250,000 fine, and three years of supervised release following imprisonment. U.S. District Judge Susie Morgan set sentencing for January 26, 2017.
U.S. Attorney Polite praised the work of the Special Agents of the Federal Bureau of Investigation in investigating this matter. Assistant U.S. Attorneys Patrice Harris Sullivan, Sharan Lieberman, Hayden Brockett and Andre Lagarde are in charge of the prosecution.
New Orleans Man Sentenced to 3 Years in Prison for Failing to Register as Sex OffenderRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DONALD GEORGE BUTLER, JR., age 52, of New Orleans, was sentenced today after previously pleading guilty to failing to register as sex offender, in violation of federal law.
U.S. District Judge Sarah S. Vance sentenced BUTLER to 37 months imprisonment.
According to court documents, BUTLER was convicted of sexual battery in New Orleans in 1997 and, as a result, was required to register as a sex offender for the rest of his life. After being released from prison in 2009, BUTLER moved to Texas without notifying the appropriate authorities. Consequently, in 2010, BUTLER was charged with, and pleaded guilty to, failing to register as a sex offender in the Western District of Texas. Upon his release from federal custody in about November 2012, BUTLER moved back to Louisiana without notifying law enforcement authorities in either Texas or Louisiana. BUTLER lived in Louisiana, without notifying any law enforcement authorities, until he was located by Inspectors with the United States Marshal’s Service in July 2014.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
U.S. Attorney Polite praised the work of the United States Marshal’s Service in investigating this matter. Assistant United States Attorney Jordan Ginsberg is in charge of the prosecution.
New Jersey Man Pleads Guilty to Helping Disguise Foreign Contributions during 2012 Presidential ElectionRead the Press Release
A Paramus, New Jersey, man pleaded guilty today to helping to funnel $80,000 in campaign contributions from a foreign source to the joint fundraising committee of the President of the United States during the 2012 presidential election, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey.
Bilal Shehu, 48, pleaded guilty before U.S. District Judge Madeline Cox Arleo of the District of New Jersey to an information charging him with knowingly and willfully making foreign contributions and donations in connection with the 2012 presidential election and to a fundraising and political campaign committee of the president, aggregating $25,000 or more during a calendar year. Sentencing has been scheduled for Oct. 5, 2016.
Pursuant to his plea agreement, Shehu, a U.S. citizen living in New Jersey, admitted that in September 2012, he received approximately $80,000 from a foreign source and provided it to a joint fundraising committee—including the authorized campaign committee of the president—in an effort to disguise the true origin of the money and so that a foreign national could attend a campaign event on Oct. 8, 2012, in San Francisco. Federal law prohibits foreign nationals from making contributions to federal candidates or fundraising committees. In late September 2012, Shehu received an $80,000 wire transfer into his New Jersey-based bank account from a foreign bank account, knowing that he was to provide it to the joint fundraising committee, he admitted. Shehu admitted that in early October 2012, he flew to San Francisco and attempted to gain entry into the San Francisco fundraising event with the foreign national, who was denied entry but was allowed to be photographed with the president.
No one on the joint fundraising committee has been accused of any wrongdoing and the committee has fully cooperated in the investigation leading to today’s guilty plea.
The FBI investigated the case. Trial Attorneys Charles Walsh and Peter Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mark J. McCarren of the District of New Jersey’s Special Prosecutions Division are prosecuting the case.
New Hampshire Man Sentenced to 48 Months in Prison for September 2015 Bank Robbery in ManchesterRead the Press Release
Concord, N.H.—Emily Gray Rice, United States Attorney for the District of New Hampshire, announced that Jordan Caruso, 41, previously of Manchester, New Hampshire, was sentenced today for the robbery of a Bank of America branch location in September 2015. Senior United States District Judge Steven J. McAuliffe sentenced Caruso to prison for 48 months. Caruso was also sentenced to three years of supervised release that will begin after he is released from prison, restitution to the bank, and a mandatory $100 special assessment.
According to the indictment, statements made in court, and other public records in the case, on September 28, 2015, Caruso robbed a Bank of America branch location at 1000 South Willow Street, Manchester, New Hampshire. Although not actually armed, Caruso disguised himself with a hat, sunglasses, and tape on his nose and approached the teller with a demand note stating “I gotta gun, no die packs, money now, don’t play with me.” The teller complied, providing Caruso approximately $3,411 in bank funds. Caruso then fled the bank, discarding his disguise and retrieving his parked vehicle from a nearby location. Law enforcement was able to identify Caruso from bank and other surveillance with the assistance of several civilian resources. He was arrested about ten days later in Connecticut. A federal indictment charging Caruso with bank robbery in violation of Title 18, United States Code, Section 2113(a), was returned on December 16, 2015, and Caruso pleaded guilty on February 3, 2016.
The case was investigated by the Manchester Police Department with assistance from the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Charles L. Rombeau.
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Naples Man Sentenced to More Than Five Years for Distributing Child PornographyRead the Press Release
Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell has sentenced Travis John Jenner (38, Naples) to five years and six months in federal prison for distributing child pornography. He pleaded guilty on January 5, 2016.
According to court documents, on May 19, 2015, Jenner distributed child pornography over the Internet to an undercover detective in Canada. A child sex crimes detective from the Ontario Provincial Police (OPP) encountered Jenner on a website where he was advertising an opportunity to “view some young females.” When the OPP officer responded to the ad, Jenner redirected the officer to a chat site where he was the “owner” of the room and multiple other users were present. Jenner informed the users, including the undercover officer, that he would share photos of two young girls. He stated that one of the girls is “…15 in pics and 18 now,” and the other is “…16/17 in pics, 19 now.” Jenner identified both girls by name and shared multiple images of them engaging in sexually explicit conduct. He also told the officer that he knew one of the girls and had chatted online with her for two years. He identified that girl by name and email address.
On July 23, 2015, agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations executed a search warrant at Jenner’s residence and seized his laptop computer. A preliminary forensic review of this computer revealed several images of the identified minor engaging in sexually explicit conduct, including the images that had been distributed to the undercover OPP officer.
During an interview, Jenner admitted to knowing one of the minor victims and having an online relationship with her. He stated that during the relationship he had received numerous images of the girl engaging in sexually explicit conduct and/or posing in a lewd and lascivious manner. In addition, he admitted to creating an online account that he had used to distribute the sexually explicit images of the minor. Jenner admitted that he had become obsessed with the minor, and that he continued to view and distribute her images after the relationship had ended.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in cooperation with the Ontario Provincial Police Child Sex Crimes Unit. It was prosecuted by Assistant United States Attorney Yolande G. Viacava.
Morgan County Man Pleads Guilty to Sexual Exploitation of a ChildRead the Press Release
BIRMINGHAM – A Morgan County man pleaded guilty Tuesday in federal court to sexual exploitation of a child for videotaping a 13-year-old girl undressing and stepping into a shower, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Alabama Law Enforcement Agency Secretary Stan Stabler.
DUSTY RAY WILHOITE, 35, entered his guilty plea before U.S. District Judge Karon O. Bowdre. The judge scheduled Wilhoite’s sentencing for Dec. 7 in Huntsville.
According to Wilhoite’s plea agreement with the government, he produced the video in 2011. The mother of Wilhoite’s victim found the camera memory card containing the explicit images in 2013 and notified law enforcement.
The maximum penalty for sexual exploitation of a child is 30 years in prison and a $250,000 fine.
The FBI and ALEA investigated the case, which Assistant U.S. Attorney Jacquelyn Hutzell is prosecuting.
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Monmouth County, New Jersey, Man Admits Possessing, Distributing Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Long Branch, New Jersey, man today admitted using his computer to possess and distribute images of child sexual abuse via a peer-to-peer file-sharing network, U.S. Attorney Paul J. Fishman announced.
Donald Haring, 61, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with possession and distribution of child pornography.
According to documents filed in this case and statements made in court:
Haring admitted that he knowingly used a computer from his home to share images and videos of child sexual abuse with other members of a publicly-available, peer-to-peer file-sharing network. Haring also admitted to possessing at least three videos and 600 images of child sexual abuse on his computer and other electronic devices.
Haring faces a maximum potential penalty of 20 years in prison, a minimum penalty of five years in prison, a fine of $250,000, and up to a lifetime of supervised release. Sentencing is scheduled for Oct. 7, 2016.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Charles M. Moriarty, Esq.
Medical Device Company Agrees to Pay $8 Million to Resolve Claims It Paid Illegal Kickbacks to PhysiciansRead the Press Release
CHARLOTTE, N.C. – Minneapolis-based Cardiovascular Systems, Inc. (CSI), has agreed to pay $8 million to resolve allegations that it paid illegal kickbacks to induce physicians to use the company’s medical devices, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
Derrick L. Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General for the region including North Carolina joins U.S. Attorney Rose in making today’s announcement.
According to allegations contained in filed court documents, CSI executed a kickback scheme to induce the use of its medical devices by doctors. The government alleges that CSI violated the False Claims Act by providing marketing and other practice development services to physicians utilizing CSI’s devices to perform atherectomies. Atherectomy is a procedure that clears blockages restricting blood circulation in arteries. The government alleges that CSI developed and distributed marketing materials to promote physicians utilizing CSI’s devices to referring physicians; coordinated meetings between utilizing physicians and referring physicians; and developed and implemented business expansion plans for utilizing physicians. The government alleges that CSI engaged in these activities to induce doctors to begin to use or continue to use CSI’s devices.
“Doctors are expected to provide medical advice and treatment options that benefit patients, not their own practice,” said U.S. Attorney Rose. “A Company cannot reward physicians for using its medical devices over those of competitors. The type of kickback scheme alleged in this case compromises good medical care and can lead to inefficient use of limited healthcare resources. My office is committed to preventing medical device manufacturers from improperly influencing physicians’ medical judgment. We will thoroughly investigate any such allegations,” Rose added.
Today’s settlement resolves a civil complaint filed in July 2013 by whistleblower Travis Thams, a former employee of CSI. Mr Thams filed the allegations against CSI under the qui tam provisions of the False Claims Act, which permit private parties to file suit on behalf of the government and obtain a portion of the government’s recovery.
In addition to its settlement with the Justice Department, CSI has also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services - Office of Inspector General, requiring the company to engage in significant compliance efforts over the next five years, including engaging an independent review organization.
“Medical device companies engaging in kickbacks to boost profits undermine physicians’ medical judgment and drive up health care costs for everyone,” said Special Agent in Charge Jackson. “Our agency will continue to work with our law enforcement partners to investigate and recover Medicare money that was improperly paid.”
This settlement was the result of a coordinated effort by the U.S. Attorney=s Office Western District of North Carolina and HHS-OIG.
The lawsuit is captioned United States, ex rel. Thams v. Cardiovascular Systems, Inc. Case No. 3:13-cv-404. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Massachusetts Man Pleads Guilty to Firearm ChargeRead the Press Release
CONCORD, N.H. – Scott McNutt, 57, pleaded guilty in United States District Court for the District of New Hampshire to a federal indictment charging him with one count of possession of a firearm by a prohibited person in violation of federal law, announced United States Attorney Emily Gray Rice.
On November 28, 2014, the defendant was stopped for a traffic violation and found in possession of a stolen firearm. McNutt was prohibited from possessing a firearm or ammunition because he was previously convicted of felony possession of a Class A substance with intent to distribute, a crime punishable by imprisonment for a term exceeding one year.
McNutt’s plea agreement includes a binding stipulated sentence of 12 months’ incarceration. A sentencing hearing has been scheduled for October 11, 2016 in front of Chief United States District Judge Joseph LaPlante. At that time, the Court will decide whether to accept the plea agreement and impose the agreed-upon period of incarceration.
The case was investigated by the Exeter, New Hampshire Police Department and the Bureau of Alcohol Tobacco and Firearms. The case is being prosecuted by Assistant United States Attorney Georgiana L. Konesky.
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Manhattan U.S. Attorney Announces Charges Against Members of the Honduran National Police for Drug Trafficking and Related Firearms OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Mark Hamlet, Special Agent in Charge of the Special Operations Division of the United States Drug Enforcement Administration (“DEA”), announced that six members of the Pólicia National de Honduras, i.e., the Honduran National Police, were charged today in Manhattan federal court in a Superseding Indictment with conspiring to import cocaine into the United States and related firearms offenses. The six defendants are Ludwig Criss Zelaya Romero, Mario Guillermo Mejia Vargas, Juan Manuel Avila Meza, Carlos Jose Zavala Velasquez, Victor Oswaldo Lopez Flores, and Jorge Alfredo Cruz Chavez. The case is pending before U.S. District Judge Lorna G. Schofield, before whom co-defendant Fabio Porfirio Lobo, the son of former Honduran president Porfirio Lobo Sosa, pled guilty to a related drug-trafficking crime on May 16, 2016.
Manhattan U.S. Attorney Preet Bharara said: “Today, we charge six officers of the Honduran National Police with participating in a massive drug trafficking conspiracy that allegedly flooded the United States with cocaine. As alleged, through bribes to public officials and leaked information about ongoing investigations and law enforcement checkpoints, these defendants agreed to ensure the safe passage of tons of cocaine through the jungles of Honduras on their way to American cities. We thank the DEA for their work in this important drug enforcement investigation.”
According to the allegations contained in the Superseding Indictment[1], other court filings, and statements made during court proceedings:
Between approximately 2004 and approximately 2014, multiple drug-trafficking organizations in Honduras and elsewhere worked together, and with support from the defendants and others, to receive multi-hundred-kilogram loads of cocaine sent to Honduras from Venezuela and Colombia via air and maritime routes, and to transport the drugs westward in Honduras toward the border with Guatemala and eventually to the United States. For protection from official interference, and in order to facilitate the safe passage through Honduras of multi-hundred-kilogram loads of cocaine, drug traffickers paid bribes to public officials – including certain members of the Pólicia National de Honduras – for access to information about ongoing investigations, military and law enforcement checkpoints, and planned narcotics interdictions. The Honduran government recently declared an “emergency situation” with respect to the Pólicia National de Honduras, and established a Special Commission with authority to investigate corruption and dismiss or suspend members of the National Police, among other sanctions. As of the filing of this Superseding Indictment, the Special Commission has sanctioned several members of the Pólicia National de Honduras.
The defendants were members of the Pólicia National de Honduras who participated in and supported the drug-trafficking activities of, among others, Lobo. In approximately early 2014, Lobo agreed to provide security and logistical support for the transportation through Honduras of a purported multi-ton load of cocaine that Lobo believed belonged to Mexico’s Sinaloa Cartel and would be imported into the United States. Lobo agreed to provide this assistance on the understanding that he would receive a financial stake in the cocaine worth over $1 million in profits. In or about June 2014, Lobo introduced two individuals that he understood to be Mexican drug traffickers to the six defendants. During a meeting, the defendants displayed a map of Honduras and illustrated law enforcement checkpoints and a planned route for the cocaine. During the same meeting, the defendants each also agreed to accept a bribe in the amount of approximately $100,000, and to pay their subordinates a total of approximately $200,000 in additional bribes, in order to provide armed security for the cocaine as it transited Honduras before being imported into the United States.
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Zelaya Romero, 39, Mejia Vargas, 46, Avila Meza, 45, Zavala Velasquez, 44, Lopez Flores, 43, and Cruz Chavez, 39, have each been charged with: (1) conspiring to import cocaine into the United States, and (2) conspiring to use and carry firearms during and in relation to, and to possess firearms in furtherance of, the cocaine-importation conspiracy. Zelaya Romero is also charged with using and carrying machine guns and destructive devices during and in relation to, and possessing machine guns and destructive devices in furtherance of, the cocaine-importation conspiracy charged in the Superseding Indictment. If convicted, Zelaya Romero faces a mandatory minimum sentence of 40 years in prison and a maximum term of life in prison, and the remaining defendants face a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison. The defendants remain at large.
Lobo, who was arrested in the Republic of Haiti on May 20, 2015, and arrived in the United States on May 21, 2015, pled guilty before Judge Schofield on May 16, 2016, to conspiring to import cocaine into the United States. Lobo is scheduled to be sentenced on September 15, 2016, and faces a mandatory minimum sentence of 10 years in prison and a maximum term of life in prison.
The potential mandatory minimum and maximum sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the Special Operations Division of the DEA, and the U.S. Department of Justice’s Office of International Affairs, for their ongoing assistance.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III, Matthew J. Laroche, and Michael D. Lockard are in charge of the prosecution.
The charges in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment, and the description of the Superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Manchester Man Sentenced for Attempt to Traffic Crack CocaineRead the Press Release
CONCORD, N.H. – Juan A. Pichardo Mendez, 35, of Manchester, New Hampshire, was sentenced to 37 months in prison for charges stemming from his attempted possession of crack cocaine with the intent to distribute, reports United States Attorney Emily Gray Rice.
On August 1, 2014, Pichardo Mendez attempted to take possession of a box shipped from the Dominican Republic to a residential address in Manchester. The box was intercepted by Customs and Border Protection Agents in Puerto Rico when it passed through a Federal Express terminal at an airport. The agents found packages concealed in the flaps of the box that contained crack cocaine.
The Customs and Border Protection Agents sent the box on to Homeland Security Investigation agents in Manchester. On August 1, 2014, a Homeland Security Special Agent posing as a Federal Express employee delivered the box to the Manchester address. A man who lived at the premises accepted the delivery. At that point, other Homeland Security agents interviewed the man. He admitted accepting the box for Pichardo Mendez, who was waiting to hear when the box arrived. In the agents’ presence, the man sent a message to Pichardo Mendez that the box had arrived. Pichardo Mendez arrived at the premises shortly after he received the message, but before he retrieved the package he learned investigators were there and he left the area. Further investigation revealed evidence indicating that Pichardo Mendez had tracked the package from the time it was shipped from the Dominican Republic.
On May 20, 2015, a federal grand jury indicted Pichardo Mendez for attempted possession of crack cocaine with the intent to distribute and unlawful use of a communication facility for tracking the box over the internet. Pichardo Mendez pleaded guilty to both charges on March 16, 2016.
This case was investigated by Homeland Security Investigations. It was prosecuted by Assistant United States Attorneys Debra M. Walsh and Mark S. Zuckerman.
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Local Couple Indicted in Tax SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.--U.S. Attorney William J. Hochul, Jr. and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced today that a federal grand jury has returned a four count indictment charging Lizhong (Tony) Shen and Xiaojie (Lucy) Shun with conspiracy to defraud the government and subscribing to a false tax return. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
In addition, Lucy Shun is charged with corrupt endeavor to obstruct and impede the due administration of the Internal Revenue Service which is punishable by three years in prison and a $100,000 fine.
Assistant U.S. Attorney Trini E. Ross and Tax Division Attorney Thomas F. Koelbl, who are handling the case, sated that according to the indictment, between April 2004 and November 2009, the defendants, who were married at the time, jointly operated BTL International Company, Ltd., a tour and travel service company located in Niagara Falls, NY. In 2009, the defendants separated and Tony Shen stopped working for BTL International. In January 2011, Lucy Shun ceased operation of BTL International and began operating Niagara Falls Universal, Inc., also a tour and travel service company.
For the tax years 2008 and 2009, Shen and Shun failed to properly report income generated by BTL International to the Internal Revenue Service on both corporate and personal tax returns.Both defendants also signed their 2009 personal tax return knowing the return included incorrect information. Shen and Shun reported income in the amount of $22,880 but it is alleged they knowingly received a significantly higher income.
Furthermore, from April 2010 through April 2013, Lucy Shun provided inaccurate information to the accounting firm preparing the 2011 tax return for Niagara Falls Universal, the 2010 and 2011 personal tax return for the couple and the 2012 tax return for Lucy Shun.
The indictment is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge.
Leader of child exploitation ring sentencedRead the Press Release
Indianapolis – The Leader of Operation Bulldog was sentenced to 85 years for conspiracy to trafficking child pornography announced Josh J. Minkler, U.S. Attorney and Leslie Caldwell, Department of Justice, Criminal Division.
Domminich Shaw, 35, a citizen of the U.K., was sentenced by U.S. District Judge William T. Lawrence of the Southern District of Indiana, who ordered that he also serve a lifetime of supervised release. Shaw pleaded guilty on Oct. 22, 2015, to 26 counts, including conspiracy to advertise child pornography and conspiracy to receive and distribute child pornography. He was indicted by a grand jury in Indianapolis on Feb. 23, 2011, and was extradited from the United Kingdom on Dec. 20, 2014.
Shaw is a repeat offender who was convicted in the U.K. of “indecent assault” on four different females under 13.
According to the court records, Shaw created and administered a website that contained child pornography involving infants and toddlers. This website allowed Shaw and other co-conspirators to distribute and advertise to each other images and videos, and send one another related messages, so that the child pornography would be shared with other members. Shaw participated on the website under aliases, including “Nepi” and several variations of that word. The word “nepi” is associated with nepiophilia, the sexual attraction to babies, toddlers and very young children.
This case is part of Operation Bulldog, in which nine individuals have been convicted in the Southern District of Indiana.
- David Ryan Bostic, Life
- Javahn Algere, 144 months
- Jeremy Labrec, 330 months
- Richard Szulborski, 180 months
- Christopher Reid, 420 months
- Justin Manz, 60 months
- Nicholas King, 96 months
“It does not matter where you are in the world, if you exploit a child in this district, the United States Attorney’s Office will find you, identify you, arrest you and prosecute you. Defendant Shaw will have 85 years for that message to sink in” said Minkler.
The FBI’s Indianapolis Division and London’s Metropolitan Police Service investigated the case. Trial Attorney Austin M. Berry of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Senior Litigation Counsel Steven DeBrota of the Southern District of Indiana prosecuted the case. The Criminal Division’s Office of International Affairs provided assistance in this matter.
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 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.justice.gov/psc.Leader of Charlotte-Area Heroin Distribution Cell Is Sentence to 36 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced late yesterday the leader of a Charlotte area heroin distribution cell to 432 months in prison, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Jose Ivan Hernandez, 34, of Mexico, was also ordered to serve five years of supervised release after he is released from prison.
Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office, Chief Kerr Putney of the Charlotte Mecklenburg Police Department, and Chief Rob Merchant of the Pineville Police Department join U.S. Attorney Rose in making today’s announcement.
According to filed court documents, evidence presented at the defendant’s trial and yesterday’s sentencing hearing, in or about 2013, Hernandez was managing a heroin distribution cell in Charlotte for a drug trafficking organization that imported heroin from Mexico into the United States. Court records show that Hernandez received the drugs in packages shipped from California via U.S. Postal Service and that he was responsible for the trafficking of least 10 kilograms of heroin.
According to trial evidence, as the head of the cell, Hernandez oversaw all aspects of the local drug operation, including the packaging of the heroin into balloons and its distribution, depositing drug proceeds into multiple funnel accounts and wiring the money to various places. As leader of the cell, Hernandez was also responsible for “collecting” on drug debts. For example, when Hernandez did not receive payment for a drug shipment fast enough, he sent the recipient of the heroin multiple threatening texts, warning that, “They are going to mess you up. They have people on the way and they’re going to go for you,” and that “They’re going to your house soon.”
In handing down the lengthy prison term, Judge Whitney said that Hernandez was at a senior point in the drug business, and described his drug trafficking activity as “extensive” and “crossing borders.” Judge Whitney also noted the need to specifically deter Hernandez from future crimes, given his threatening text messages, and the need for general deterrence.
In February 2016, a federal jury found Hernandez guilty of one count of conspiracy to distribute and to possess with intent to distribute heroin and one count of money laundering conspiracy. He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
DEA, CMPD and Pineville PD handled the investigation. Assistant U.S. Attorneys Elizabeth Greene, Kimlani Ford and Taylor Phillips of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Lancaster Man Sentenced for Theft of Social Security BenefitsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul, Jr. announced today that Kevin Quinn, of Lancaster, NY, who was convicted of theft of social security retirement benefits, was sentenced to three years probation to include 12 months of home incarceration by U.S. District Court Judge Lawrence J. Vilardo. The defendant was also ordered to pay $134,213 in restitution to the Social Security Administration.
Assistant U.S. Attorney Stephanie Lamarque, who handled the case, stated that the defendant failed to notify the Social Security Administration of his father’s death in 1996 as well as his mother’s death in 1998. As a result, social security checks continued to be issued and deposited into a joint savings account in the name of Quinn’s parents. The defendant used the ATM card for the account, withdrew money, and spent it. Quinn stole a total of $134,213 between March 18, 1996 and March 3, 2014.
The sentencing is the result of an investigation by the Social Security Administration, the Office of the Inspector General, under the direction of Special Agent in Charge John Grasso.
KCK Man Sentenced to 25 Years for $1 Million Meth Conspiracy in St. Joseph, Four-State AreaRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Kan., man was sentenced in federal court today for his role in a large-scale conspiracy that distributed more than 15 kilograms of methamphetamine in St. Joseph, Mo., and across a four-state region.
Anselmo Salazar, also known as “Crazy Eyes,” 49, of Kansas City, Kan., was sentenced by U.S. Chief District Judge Greg Kays to 25 years in federal prison without parole.
On Dec. 2, 2015, Salazar was found guilty of participating in a conspiracy to distribute methamphetamine from Jan. 1, 2009, to Nov. 12, 2013. Salazar was also found guilty of participating in a money-laundering conspiracy that involved financial transactions of the proceeds of illegal drug-trafficking.
In 2010, the Buchanan County Drug Strike Force and the Drug Enforcement Administration initiated an investigation into a drug-trafficking organization distributing methamphetamine in northwest Missouri, northeast Kansas, southern Iowa and Nebraska.
Salazar is among 24 defendants charged in a Nov. 15, 2013, federal indictment. Salazar, along with co-defendants Carlos Alberto Yanez, 33, of Lee’s Summit, Mo., and Marvin Carl Rogers, 54, of Gladstone, Mo. were the primary sources of supply for methamphetamine for the entire organization. Yanez has been sentenced to four years and seven months in federal prison without parole. Rogers has been sentenced to 16 years and 10 months in federal prison without parole.
Yanez and Salazar obtained methamphetamine in up to pound quantities and then delivered the methamphetamine to co-defendant Shannon Martinez (also known as “Big Homie”), 38, of St. Joseph, and another man charged in a separate case. Martinez, in turn, sold the methamphetamine to others to distribute. Martinez has been sentenced to 15 years in federal prison without parole.
On Oct. 11, 2011, Salazar was arrested after a traffic stop in Platte County, Mo. Salazar, who was was driving Yanez’s vehicle, was in possession of 42 one-pound bundles of marijuana, 25 grams of cocaine and 80 grams of methamphetamine. Salazar was on his way to deliver the methamphetamine to St. Joseph for Yanez, and to pick up cash payment for the delivered methamphetamine.
Salazar was ordered to forfeit to the government a money judgment of $680,800, which was received in exchange for the unlawful distribution of methamphetamine, based on a conservative purchase price of $1,850 an ounce (for 50 percent pure methamphetamine) and the distribution of 23 pounds of methamphetamine by Salazar and others.
This case is being prosecuted by Assistant U.S. Attorneys Bruce Rhoades and Patrick C. Edwards. It was investigated by the Buchanan County Drug Strike Force, the Drug Enforcement Administration, the FBI, the Kansas City, Mo., Police Department, the St. Joseph, Mo., Police Department and the Buchanan County, Mo., Sheriff’s Department.
KC Man Indicted for $3.3 Million Investment Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was indicted by a federal grand jury today for engaging in a nearly $3.3 million fraud scheme against a victim who invested more than $8.6 million in his companies.
John Clifford Williams, 65, of Kansas City, was charged in a 14-count indictment returned by a federal grand jury in Kansas City, Mo.
Today’s indictment alleges that Williams formed approximately 20 companies to perpetuate a fraudulent investment scheme between July 2005 and May 2014. Williams raised more than $8.6 million from his victim investor, identified in the indictment as “JM.” Williams fraudulently spent or diverted nearly $3.3 million of those funds for his own personal use during the nine-year investment fraud scheme, the indictment says.
Williams convinced JM to invest more than $2.6 million in an entity named Energy Operations, the indictment says, which Williams established to offer investors revenues derived from certain mineral rights concessions for gold and manganese mines in Central America. Williams allegedly claimed he intended to extract gold and manganese from mines located in Panama and Peru.
According to the indictment, JM travelled with Williams to Panama to visit some of the mines purportedly controlled by Energy Operations. After JM’s visit to Panama, Williams asked JM to make additional equity investments in Energy Operations. Unbeknownst to JM, the indictment says, all of the trips to Panama, including all travel expenses for Williams, the consultants and JM, were paid for with JM’s investment funds. JM never authorized Williams to use investment funds to pay for travel expenses or to pay himself a salary in connection with the investment in Energy Operations.
Williams raised $5.5 million from JM for another entity named American Hydraulic Power, LLC, the indictment says, which Williams founded to develop and commercialize an energy-efficient technology. Williams told JM the technology licensed from the EPA would allow for large commercial vehicles, such as delivery vehicles and trucks, to store energy generated by hydraulic braking systems. Williams further stated the stored energy would allow vehicles to run more efficiently by storing energy instead of relying alone on hydrocarbon- powered engines.
American Hydraulic Power entered into an agreement with a multinational automotive engineering firm to develop and commercialize the hydraulic braking technology. Williams agreed to raise additional capital to pay for the costs of developing the hydraulic braking system and he told JM he had other investors willing to invest. In reality, the only investor Williams secured was JM. American Hydraulic Power quickly ran out of money, stopped paying the engineering firm, and ceased all operations in early 2014. FEV (a company in Michigan that manufactures small engines) incurred a loss of approximately $17 million for work performed on behalf of American Hydraulic Power due to Williams’ misrepresentations.
Williams raised $5,000 from JM in connection with an investment to develop an island off the coast of Panama (Bona Island), the indictment says, and $36,000 for Namasta, which Williams claimed was an investment to gain access to a large bank account in the Netherlands that would ultimately secure additional funding for American Hydraulic Power.
Instead of using JM’s funds as Williams claimed for these investments, the indictment says, Williams misappropriated and diverted $3,299,953 for his own personal expenses, household expenses, travel expenses, his daughter’s wedding expenses and other expenses incurred by family members. This accounted for more than 38 percent of the total funds raised by Williams.
Williams allegedly used $1.1 million of the funds he misappropriated from JM to pay for a variety of personal expenses, including payments of at least $67,500 to his domestic partner for household expenses and other financial obligations, transferring approximately $32,000 of investor funds to bank accounts that he shared with his daughter, and paying $10,000 for his daughter’s wedding. Williams allegedly used at least $437,500 of the funds he misappropriated from JM to pay for such personal expenses as credit card bills, restaurant and grocery bills, healthcare expenses, holiday gifts and entertainment expenses.
In addition to using JM’s funds to support his lifestyle, the indictment says, Williams diverted JM’s investment money to fund other projects he promoted in the Democratic Republic of the Congo, Central America, and elsewhere. Williams allegedly diverted over $1.6 million of JM’s investment funds to pay for several projects unrelated to the investments. Williams allegedly transferred $124,000 of JM’s funds to a California-based water engineering firm. He allegedly diverted an additional $307,000 of JM’s money to Namasta. He allegedly spent $100,000 of JM’s funds to invest in a fraudulent scheme halted by the Securities Exchange Commission in 2013. Williams allegedly diverted $309,500 to Gargoyles, a company that was convicted of securities and mail fraud in an FBI investigation in Maryland in 2011.
Today’s indictment charges Williams with 10 counts of wire fraud and four counts of money laundering.
The indictment also contains a forfeiture allegation, which would require Williams to forfeit to the government any property derived from the alleged offenses, including $3.2 million.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the FBI.
Justice Department and Consumer Financial Protection Bureau Reach Settlement with BancorpSouth Bank to Resolve Allegations of Mortgage Lending DiscriminationRead the Press Release
Settlement Provides Over $10 Million in Monetary Relief Including Loan Subsidies and Compensation for Alleged Victims
The Justice Department and the Consumer Financial Protection Bureau (CFPB) announced a settlement agreement today to resolve allegations that BancorpSouth Bank violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA) by using policies and practices that unlawfully discriminated against African Americans and other residents of predominantly minority communities in the Memphis, Tennessee, area, as well as parts of neighboring Mississippi and Arkansas.
The department and the CFPB alleged that BancorpSouth was illegally “redlining” predominantly minority neighborhoods in the Memphis Metropolitan Statistical Area. Redlining is a discriminatory practice by banks or other financial institutions to deny or avoid providing credit services to a consumer because of the racial demographics of the neighborhood in which the consumer lives. BancorpSouth also allegedly discriminated against African-American applicants in the underwriting and pricing of certain mortgage loans and implemented a policy or practice that required its employees to treat applications differently based on race or other prohibited characteristics.
The settlement agreement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the Northern District of Mississippi. Under the terms of the settlement, BancorpSouth agreed to pay nearly $7 million in relief for impacted individuals and neighborhoods; invest at least $800,000 in advertising, outreach and community partnership efforts; pay a $3 million civil penalty and amend its policies, standards and training to ensure compliance with fair lending obligations.
“When banks discriminate on the basis of race, they violate our civil rights laws and threaten the foundation of a fair economy,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Civil Rights Division will continue to enforce our nation’s fair lending laws to ensure that qualified applicants and borrowers can access credit and invest in their financial future without facing unlawful barriers.”
“Race-based lending practices have no place in the credit market,” said U.S. Attorney Felicia C. Adams of the Northern District of Mississippi. “The U.S. Attorney’s Office for the Northern District of Mississippi will work diligently with the Department of Justice to ensure that impermissible racially-based lending practices are not used to wrongfully deny qualified applicants’ credit.”
“BancorpSouth’s discrimination throughout the mortgage lending process harmed the people who were overcharged or denied their dream of homeownership based on their race, and it harmed the Memphis minority neighborhoods that were redlined and denied equal access to affordable credit,” said CFPB Director Richard Cordray. “Today’s action is a reminder that redlining and overt discrimination are not yet remnants of the past, and that federal enforcement is needed to bring real relief to communities and individuals. The Consumer Bureau and the Department of Justice will continue working together to root out discrimination in the marketplace and ensure consumers receive fair and equal treatment under the law.”
The complaint alleges that from at least 2011 to 2013, BancorpSouth engaged in redlining and thereby failed to serve the credit needs of predominantly minority neighborhoods in the region. In addition to redlining, the complaint alleges that BancorpSouth’s Community Banking Department loan officers were granted substantial discretion in determining whether to approve or deny a mortgage loan – a process called underwriting – and had limited standards in place to ensure that loan officers consistently priced mortgage loans in the same manner or used the same criteria. Such wide flexibility in loan underwriting and pricing resulted in the bank’s denying African-American applicants for mortgage loans at significantly higher rates than white applicants with similar credit profiles. It also resulted in the bank charging African-American borrowers higher interest rates than similarly-situated white borrowers. The complaint alleges that these consumers were denied and charged higher interest rates because of their race, and not because of their creditworthiness or other objective criteria related to borrower risk.
The complaint also alleges that BancorpSouth’s Mortgage Department implemented a discriminatory loan policy or practice of requiring its employees to deny applications from minorities more quickly than similarly-situated white applicants and to not provide credit assistance to “borderline” applicants that other applicants may have received. In an audio recording of a BancorpSouth meeting held in 2012, a manager told loan officers and processors that applications from minorities and others whom the bank viewed as “protected class members” must be “turned down” within 21 days, while white applicants were not subject to this shorter time frame. During this meeting, BancorpSouth employees made several racially insensitive comments followed by laughter.
BancorpSouth’s discriminatory conduct was further evidenced through testing. In 2013, the CFPB conducted matched-pair testing in six different BancorpSouth branches in Mississippi, Tennessee and Alabama to determine whether BancorpSouth treated individuals who inquired about loans differently based on race. The testing results indicated that loan officers in BancorpSouth’s Mortgage Department treated African-American testers less favorably than similarly-situated white testers.
Under the terms of the proposed settlement, BancorpSouth will invest $4 million in a loan subsidy fund to increase the amount of credit the bank extends to majority minority neighborhoods in the Memphis Metropolitan Statistical Area. In order to make residential mortgage loans available to residents of minority neighborhoods that were not adequately served by BancorpSouth, the bank will further invest at least $800,000 in advertising, outreach and community partnership efforts and open a new full-service branch or loan processing office in a predominantly minority neighborhood. To compensate borrowers harmed by its discriminatory pricing and underwriting policies and practices, BancorpSouth will establish a $2.78 million settlement fund and extend credit offers to unlawfully denied applicants. The settlement will also require BancorpSouth to amend its pricing and underwriting policies; further develop strong internal standards to ensure compliance with fair lending obligations; and provide fair lending training to its employees, senior management and board of directors. The bank must also pay a $3 million civil money penalty to the CFPB.
The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the Civil Rights Division has provided over $1.4 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and Servicemembers Civil Relief Act. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
The Civil Rights Division, the U.S. Attorney’s Office of the Northern District of Mississippi and the CFPB are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit www.stopfraud.gov.
A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be found on the Justice Department’s website at http://www.justice.gov/fairhousing.
BancorpSouth Complaint
BancorpSouth Proposed Consent Order
Jury Finds Philadelphia Doctor Guilty of Running Pill Mill and Causing A Death Through Illegal DistributionRead the Press Release
PHILADELPHIA – A federal jury, late yesterday, found William J. O’Brien III, a doctor of osteopathic medicine, guilty of causing a death through the illegal distribution of a controlled substance and a number of other charges related to the operation of a “pill mill,” announced United States Attorney Zane David Memeger.
“The illegal prescribing of opioid pain medications has led to an epidemic of overdose deaths and heroin addiction throughout the country,” said Memeger. We are pleased that the jury saw through Dr. O'Brien's clown act at trial and concluded that for the sake of profit he distributed opioid pain killers for no legitimate medical purpose, and that he caused the death of a patient through his illegal prescribing practices.”
"We are thankful the jury saw the obvious - that the defendant is a dangerous person exploiting his medical license to operate as a drug dealer," said Special Agent-in-Charge Nick DiGiulio, with HHS-OIG. "We look forward to the day he receives a long prison term. The Department of Health and Human Services Office of Inspector General will continue to work with our partners to protect HHS programs and the beneficiaries from harm."
"The defendant’s behavior and the resulting harm inflicted on our communities is nothing short of disgraceful," said FBI Special Agent-in-Charge William Sweeney. "Our communities are facing a crisis involving prescription and opioid abuse which is only made worse by insiders, like the defendant, who used his degree and position of trust to benefit himself by victimizing vulnerable individuals. He was an integral player in this drug distribution conspiracy. Amid an unprecedented opioid epidemic, the defendant deliberately breached his solemn oath to ‘do no harm,’ and instead dispensed oxycodone and methadone like candy – which he knew would end up on the street – even contributing to a death. I am grateful for the hard work and professionalism demonstrated by the agents and prosecutors who conducted this investigation, and I encourage the public to report any concerns regarding prescription abuse to law enforcement.”
Specifically, the jury returned guilty verdicts on two counts of conspiracy to distribute controlled substances; one count of distribution of controlled substances resulting in death; 117 counts of distribution of controlled substances, that is, oxycodone, methadone, and amphetamines; money laundering conspiracy; conspiracy to commit bankruptcy fraud; and making false statements under oath in a bankruptcy proceeding. The defendant was acquitted of four counts of distribution of controlled substances. A sentencing hearing is scheduled for October 5, 2016. Defendant O’Brien faces a mandatory minimum sentence of 20 years in prison with a maximum sentence of life. The co-conspirators, all of whom pleaded guilty, face substantial prison terms and fines, and are subject to criminal forfeiture proceedings.
Charged in the conspiracy with O’Brien were members of the Pagans Motorcycle Club. The trial evidence showed that between March 2012 and January 2015, O’Brien dispensed, and his coconspirators unlawfully obtained for resale, approximately 378,914 pills which contained 10 mg, 15 mg or 30 mg of oxycodone; and approximately 160,492 methadone pills. The estimated street value of the controlled substances sold by the conspiracy was estimated at approximately $5 million. O’Brien generated for himself an estimated $2 million in cash proceeds from the drug trafficking conspiracy.
As proven at trial, O’Brien conspired with members or associates of the Pagans to distribute large quantities of dangerous and addictive controlled substances for profit. O’Brien and his co-conspirators developed a scheme whereby so-called “patients” were recruited, would pay O’Brien $200 cash, and would receive medically unnecessary prescriptions for controlled substances for resale. With cash-paying “patients,” O’Brien could conceal money from creditors and the United States Bankruptcy Court where he had filed for Chapter 11 protection for his company WJO, Inc., a group of medical practices which he owned. After filling the prescriptions they got from O’Brien, the “patients” would turn the pills over to the co-conspirators who would sell the pills to drug dealers. Certain controlled substances, such as oxycodone (30 mg), were in high demand. One oxycodone 30 mg pill could sell for $25 on the street.
Distribution of Controlled Substances Resulting in Death
The jury found O’Brien guilty of intentionally distributing, outside the usual course of professional practice and for no legitimate medical purpose, controlled substances to a particular individual that resulted in that individual’s death. Defendant O’Brien wrote prescriptions for oxycodone, methadone, and cyclobenzaprine, a muscle relaxer, to Joseph Ennis, 36, of Bucks County, after Mr. Ennis had initially sought treatment from the defendant following a car accident. On December 17, 2013, O’Brien prescribed oxycodone and methadone without a legitimate medical purpose, which combined with the cyclobenzaprine, led to Mr. Ennis’ death. Mr. Ennis died five days later on December 22, 2013 from the combination of these substances.
Conspiracy to Engage in Money Laundering and Bankruptcy Fraud
The trial evidence showed that O’Brien generated at least approximately $20,000 per week in illegal cash proceeds from his drug dealing activities. He did not record the cash receipts in his bank account or in the books of his company “Bill O’Brien LLC.” O’Brien directed employees to shred the “cash slips” at the end of each business day. On a daily basis, O’Brien transported thousands of dollars in cash in his briefcase from his office to the residence that he shared with codefendant Elizabeth Hibbs, who was his former wife. O’Brien and Hibbs, who were married in January 2010, officially divorced on October 15, 2012. The decree and order of divorce filed in the Court of Common Pleas for Philadelphia County cited “irretrievable breakdown” as the cause for the dissolution of the marriage. Notwithstanding an “irretrievable breakdown” in their relationship, defendants O’Brien and Hibbs lived together, worked together, and by all outward appearances, appeared to continue to act as husband and wife.
Hibbs, who pleaded guilty, deposited the illicit cash proceeds into various bank accounts, at different banks, and into safety deposit boxes titled in her name or held jointly with one of her daughters. This elaborate mechanism concealed the fact that the source of the cash was O’Brien’s illegal drug distribution operation.
As the trial evidence showed, O’Brien filed for bankruptcy protection for WJO, Inc. in November 2010. Hibbs, who was married to O’Brien when the bankruptcy petition was filed, was, at various times, the Chief Operating Officer and the Chief Executive Officer for WJO, Inc. In July of 2012, O’Brien and Hibbs were fired from WJO, Inc., by the Trustee appointed by the United States Bankruptcy Court. O’Brien and Hibbs diverted assets from WJO, Inc. to their personal accounts and to accounts controlled by them. In addition, O’Brien and Hibbs concealed other assets from the Trustee and from creditors of WJO, Inc. Both also knowingly made a false statement under oath during the bankruptcy proceedings.
The case was investigated by the Federal Bureau of Investigation, the Food and Drug Administration Office of Criminal Investigations, and the Department of Health and Human Services Office of the Inspector General. It is being prosecuted by Assistant United States Attorneys Mary Beth Leahy and David E. Troyer.
Indictment: Car Stop on I-70 in Shawnee County Yielded 34 Pounds of MethRead the Press Release
TOPEKA, KAN. - A Mexican man was indicted Wednesday on charges that he was stopped in Shawnee County with 34 pounds of methamphetamine in his car, Acting U.S. Attorney Tom Beall said.
Luis Manuel Mojarro-Lopez, 33, a citizen of Mexico, is charged with one count of possession with intent to distribute methamphetamine. An affidavit filed in the case alleges that on June 18 the defendant was driving a 2007 Ford Mustang when a Kansas Highway Patrol trooper pulled him over for running a stop sign on the I-70 eastbound exit ramp at Wanamaker.
A search of the vehicle turned up 34 pounds of methamphetamine hidden in a false compartment behind the rear seat. Investigators learned Mojarro-Lopez was being paid $2,000 to drive the vehicle from Los Angeles to Kansas City, Kan. He was told to call his contact for further directions after he arrived in Kansas City, Kan.
If convicted, he faces a penalty of up to 20 years in federal prison and a fine up to $1 million. The Kansas Highway Patrol and the Drug Enforcement Administration investigated. Special Assistant U.S. Attorney Skip Jacobs is prosecuting.
OTHER GRAND JURY INDICTMENTS
Christopher Lee Evans, 30, who is currently in federal custody, is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Sept. 11, 2015, in Shawnee County, Kan. The indictment alleges he possessed a .25 mm Titan pistol despite being prohibited from having a gun because of a conviction in 2008 in Shawnee County District Court on an aggravated burglary charge.
If convicted, he faces a penalty of up to 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Greg Hough is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Indictment Unsealed Against Former Cranberry Twp. Man Considered to be a FugitiveRead the Press Release
PITTSBURGH - A former resident of Cranberry Twp, Pa., has been indicted by a federal grand jury in Pittsburgh on charges of tax violations, United States Attorney David J. Hickton announced today.
The 17-count indictment, returned on Oct. 14, 2014 and unsealed on June 24, 2016, named Valeriy Vahil as the sole defendant. Vahil is a fugitive.
According to the 17-count indictment presented to the court, Vahil, between April 2009 and October 2012, failed to collect and pay over to the IRS quarterly federal income tax and F.I.C.A. (Social Security) taxes for wages of employees of his company, Absolut Service Company, a contract labor company operated out of his Cranberry Twp. residence. Vahil also filed a false quarterly Employer’s Federal tax return and assisted his return preparer in filing a false quarterly Employer’s Federal tax return.
Anyone with information regarding Vahil’s whereabouts is asked to call IRS-CI Special Agent Kevin Petrulak at 412-404-9555.
The law provides for a maximum total sentence of 81 years in prison, a fine of $4,250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The Internal Revenue Service-Criminal Investigation Division, assisted by the Department of Homeland Security, the Department of Labor-Office of Attorney General, and the Federal Bureau of Investigation, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Indianapolis man sentenced for Southside robberiesRead the Press Release
Indianapolis – United States Attorney Josh J. Minkler announced today the sentencing of an Indianapolis man for two counts of robbery and two counts of brandishing a firearm in the furtherance of a crime of violence. Robert E. Fox, 35, was sentenced to 435 months (over 36 years) by U. S. District Judge Jane Magnus-Stinson.
“Protecting our neighborhoods from violent crime is a top priority of my office,” said Minkler. “Those who see fit to terrorize and carry guns illegally will be held accountable and should plan to spend time in federal prison.”
Fox was convicted in federal court in February 2016, for robbing a White Castle Restaurant in the 2100 Block of Shelby Street in May 2014, and a Speedway Gas Station in the 2300 block of East Prospect Street in August 2014. In both robberies, he entered the businesses and demanded money from the clerks pointing a handgun at patrons inside.
This case was jointly investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Indianapolis Metropolitan Police Department.
“I would like to recognize the dedicated work of the Indianapolis Metropolitan Police Department on this case, in conjunction with ATF’s Achilles Task Force,” stated Acting ATF Special Agent in Charge Brad Earman. “Cooperation with our law enforcement partners acts as a multiplier in our efforts to remove violent criminals from our communities and make our neighborhoods safer.”
According to Assistant United States Attorneys Matthew Lasher and Michelle Brady who prosecuted this case for the government, Fox must serve three years of supervised release following his sentence.
Guatemalan Man Arrested at Rainbow BridgeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Abraham Horlando Ramirez-Ramirez, 32, of Guatemala, was arrested and charged by complaint for re-entering the United States after being deported. The charges carries a maximum penalty of two years in prison.
Assistant U.S. Attorney Scott S. Allen, who is handling the case, stated that according to the complaint, on June 25, 2016, at approximately 10:50 a.m., the defendant was riding in a vehicle along with three others. The vehicle accidentally made a wrong turn, and entered a lane bound for Canada at the Rainbow Bridge Port of Entry. After being refused entry into Canada, the vehicle approached the Rainbow Bridge Port of Entry in Niagara Falls, NY.
During a primary inspection, Customs and Border Protection officers determined that Ramirez has been living unlawfully in Maryland for several years. This is the third time the defendant was found to be unlawfully in the United States, having been previously deported in 2009 and 2011.
The defendant made an initial appearance this afternoon before U.S. Magistrate Judge Michael J. Roemer and is being held.
The complaint is the culmination of an investigation by U.S. Customs and Border Protection, under the direction of Acting Director of Field Operations Rose Hilmey.
The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.
Four Convicted in Health Care Fraud SchemeRead the Press Release
HOUSTON – A Houston federal jury has returned guilty verdicts against four defendants on all counts as charged in a $6 million fraudulent Medicare billing scheme, announced U.S. Attorney Kenneth Magidson. Giam Nguyen, D.O., 46, of Houston, Benjamin Martinez, M.D., 35, of Dallas, Donovan Simmons, M.D., 43 of Austin, and Anna Bagoumian, 43 of Glendale, California, were convicted late yesterday following an eight-day trial and approximately 13 hours of deliberation.
The scheme involved fraudulent billing for diagnostic testing done at three different clinics from September 2008 to May 2010. Patients were paid to come to the clinics and the clinics then billed for tests that were either not performed or not medically necessary.
Zavan Pogosyan, 38, of Glendale, California, managed three clinics in Houston located at 2110 Jefferson Street, 6892 Southwest Freeway and 2112 Pease. He hired Nguyen, who was the only doctor working at the clinics, according to testimony. Pogosyan hired Martinez and Simmons to travel to Houston once a month to review patient files at the clinic located on Pease Street.
Patients were brought to the clinics by recruiters/marketers like Frank Montgomery, 66, of Houston, who were paid by the clinics for each patient they delivered. Seryan Mirzakhanyan, 40, Edvard Shakhbazyan, 32, both of Glendale, California, paid the marketers for the patients as did Pogosyan and Bagoumian.
Mirzakhanyan and Montgomery testified about receiving the cash payments. The court also heard that Bagoumian participated in shredding all of the patient and business records of the Jefferson clinic.
Some of the Medicare beneficiaries also testified as to being paid approximately $100 to go to the clinics. They had primary care physicians, but they reported that they were not referred to the clinics by their physicians nor did they receive any of the test results.
A law enforcement agent told the jury he reviewed patient files seized during the searches of the Pease and Southwest Freeway clinics and reported that 730 of the 1229 patients reported their chief complaint as back pain. Nevertheless, those patients were given ultrasounds of their kidneys, abdomens, thyroids, carotid arteries as well as allergy tests and anorectal tests. His testimony also revealed that not one of the files contained a plan of treatment or any indication that the test results were discussed with the patient.
Further, an expert witness told the jury that the anorectal manometry and EMG of the anal or urethral sphincter test results in the patient files were physiologically impossible and therefore could not have been done. He also said there was no medical justification in any of the files to do either of the tests.
The court also heard that Simmons had admitted being paid $40,000 for reviewing 20-30 patient files in less than four hours. Bagoumian received checks totaling $183,000 and cashed every one of them, according to testimony.
Mirzakhanyan, Pogosyan, Shakhbazyan and Montgomery pleaded guilty prior to trial and await sentencing.
Simmons and Bagoumian were found guilty of conspiracy to defraud Medicare, while all four were convicted of health care fraud. Nguyen, Martinez and Simmons were also found guilty of money laundering. Each of these convictions carry a maximum 10-year prison sentence. The jury convicted Bagoumian of conspiracy to pay and receive kickbacks for which she faces another five years in prison.
U.S. District Judge Lynn N. Hughes presided over the trial and has set sentencing for Oct. 3, 2016.
Multiple agencies conducted the investigation to include The Texas Attorney General’s Office – Medicaid Fraud Control Unit, IRS - Criminal Investigation, FBI, Department of Health and Human Services - Office of Inspector General. Assistant U.S. Attorney (AUSA) Al Balboni and Special AUSA Rodolfo Ramirez prosecuting the case.
Former U.S. Navy Seaman Pleads Guilty to Federal Child Porn Indictment at End of First Day of TrialRead the Press Release
In San Antonio, 23-year-old former U.S. Navy Seaman James Tyler George chose to stop his trial yesterday afternoon and plead guilty to all nine federal child pornography charges announced United States Attorney Richard L. Durbin, Jr.
George pleaded guilty to six counts of production of child pornography, one count of receipt of child pornography, one count of possession of child pornography and one count of transfer of obscene materials to minors. As a result, George faces up to 30 years in federal prison for each production charge; up to 20 years in federal prison for the receipt and possession charges; and, up to ten years in federal prison for the transfer of obscene materials charge.
Statements and testimony offered during the day of trial revealed that George, while stationed at Joint Base San Antonio -- Lackland in 2014, used the Internet to search, find, receive and trade child pornography. Furthermore, George persuaded six female minors to send him sexually explicit photographs of themselves. George also sent those female minors sexually explicit photos of himself.
Testimony also revealed that the mother of one of the minor females contacted the online Navy tip hotline after discovering a sexually explicit photo on her daughter’s phone that George had sent. When he sent the photo, the minor female had just turned 15. On August 19, 2014, Naval authorities searched George’s barrack and seized three phones and a couple of data cards.
George, who remains in federal custody, is scheduled to be sentenced on October 11, 2016, before Senior United States District Judge David A. Ezra in San Antonio.
This investigation was conducted by the Naval Criminal Investigative Service (NCIS). Assistant U.S. Attorney Sarah Wannarka is prosecuting this case on behalf of the Government.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the 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.
Former Samsung America Director Sentenced to 75 Months in Prison for Embezzling More Than $1 MillionRead the Press Release
NEWARK, N.J. – A former director of Samsung America Inc.’s Korea Export Department was sentenced today to 75 months in prison for his role in a scheme to embezzle more than $1 million from the company from 2002 through 2007, U.S. Attorney Paul J. Fishman announced.
John Y. Lee, a/k/a “Yong Kook Lee,” 53, of West New York, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of wire fraud and one count of subscribing to false individual income tax returns. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
During his plea hearing, Lee admitted his role in an elaborate scheme to embezzle funds from Samsung America, a Ridgefield Park-based global trading and investment company and American subsidiary of the Korean conglomerate Samsung Corp.
Lee admitted that in September 2000, he created a fictitious entity that he called the Engelhard Supple (sic) Co. to make it appear as though that entity was actually Engelhard Corp., a provider of metal refining services based in Iselin, New Jersey. Lee admitted creating numerous false financial documents, including invoices, purchase orders and payment applications that made it appear that Samsung Corning Precision Glass Ltd., a joint venture involving the Samsung Corporation and Corning Inc., had ordered services from Engelhard. In fact, no real services had been ordered or provided. Lee simply submitted these fraudulent documents to Samsung America to induce Samsung America to wire money directly into a bank account Lee controlled.
In an effort to conceal his fraudulent conduct, Lee sent false documents to Samsung America’s accounting department. In his plea agreement, Lee admitted that the loss to the company was between $1 million and $2.5 million. He also acknowledged that he signed and filed a 2006 Individual Income Tax Return that failed to include $339,138 he had embezzled from Samsung America in 2006.
In addition to the prison term, Judge Wigenton sentenced Lee to three years of supervised release and ordered him to pay to Samsung America Inc. restitution of $1,693,271.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and investigators from the N.J. Division of Criminal Justice, under the direction of Acting N.J. Attorney General Christopher S. Porrino, with the investigation leading to today’s sentencing.
The government is represented by Special Assistant U.S. Attorney Stephanie Raney of the U.S. Attorney’s Office’s General Crimes Unit.
Defense Counsel: Paul Brickfield Esq., River Edge, New Jersey
Former Postal Employee to Serve Year in Prison for Theft of MailRead the Press Release
Oklahoma City, Oklahoma – Today, JEFFREY LEMON, JR., 30, from Oklahoma City, was sentenced by United States District Judge David L. Russell to serve twelve months in a federal prison for theft of mail by a Postal Service employee, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
A federal grand jury indicted Lemon on September 1, 2015, alleging that he stole money orders deposited in the mail by Postal Service customers. Lemon pled not guilty and went to trial on December 1, 2015. According to evidence presented at trial, Lemon was an employee at the U.S. Post Office in Warr Acres, Oklahoma. Evidence showed that between March 2015 and June 2015, Lemon stole money orders deposited in the mail by Postal Service customers at the Warr Acres Post Office and cashed them for his benefit. The jury found him guilty on 17 counts of theft of mail by a postal service employee. Judge Russell dismissed one count during the course of trial.
At a sentencing hearing today, Judge Russell sentenced Lemon to serve twelve months in prison, followed by two years of supervised release upon completion of his prison term. He was also ordered to pay $11,803.65 in restitution to the United States Postal Service, which had previously reimbursed Lemon’s victims for their losses.
This case was the result of an investigation by the United States Postal Service Office of Inspector General. The case was prosecuted by Assistant U.S. Attorney Jessica L. Perry and Assistant U.S. Attorney Brandon Hale.
Former Pharmaceutical Employee Admits Role in Scheme to Obtain Medically Unnecessary Prescription Compound MedicationRead the Press Release
NEWARK, N.J. – A former pharmaceutical employee today admitted accepting thousands of dollars in exchange for obtaining and filling her own medically unnecessary prescriptions for compounded medication and creams, causing losses of $250,971, U.S. Attorney Paul J. Fishman announced.
Stephanie Naar, 27, of St. Louis, Missouri, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging her with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Naar, a former employee of a New Jersey pharmaceutical company, admitted that in February 2015, she was recruited by an individual identified in the information as “co-conspirator #1 (CC-1),” a former employee of the same pharmaceutical company, to assist a marketing business identified in the information as “Company A.” Company A was paid by various compounding pharmacies for referring beneficiaries whose insurance plans would pay for compounded medication, such as pain creams, scar creams and vitamins.
CC-1 offered Naar “commission” payments in return for compounded medication, creams and vitamins that Naar obtained at specific specialty pharmacies and were billed to her employer’s prescription drug benefit plan. In furtherance of the scheme, Naar received a preprinted prescription form with compounded medications and creams from CC-1, took the forms to her doctor, and asked her doctor to prescribe those medications.
Afterwards, the compounded prescription products were sent to Naar from a pharmacy outside her home state. On March 26, 2015, Naar received a $3,565 check from Company A, which was a percentage of the amount paid by Naar’s employer to the compounding pharmacy for filling the prescription.
During the spring, summer and fall of 2015, Naar refilled her compounded self- prescriptions on forms provided by CC-1 and Company A at certain specific compounding pharmacies selected by Company A, and in return, received commission checks and wire transfers from Company A. Altogether she received $22,445 for her role in the conspiracy.
Naar also admitted that during the Fall of 2015, CC-1 directed her to a “telemedicine doctor” referred to in the information as “co-conspirator #2 (CC-2),” a doctor with whom Naar had no preexisting relationship, for the purpose of obtaining medically unnecessary compounded pain cream so that Company A would provide her continued monetary reimbursements. CC-2 was located in New York and was not licensed in Missouri.
Naar faces a statutory maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct 4, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and U.S. Department of Defense, Defense Criminal Investigative Service, Office of Inspector General, under the direction of Special Agent in Charge Craig Rupert, with the ongoing investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Melissa L. Jampol of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Thomas J. Matthes, St. Louis
Former Onslow County Sheriff’s Deputy Sentenced to 78 Months for Receipt of Child PornographyRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today, Senior United States District Judge James C. Fox sentenced JON JAMES THOMAS, 46, of Jacksonville, North Carolina, to 78 months imprisonment, followed by a lifetime of supervised release. The Court also ordered THOMAS to register as a sex offender.
THOMAS was named in an Indictment filed on October 15, 2015. On January 4, 2016, THOMAS pled guilty to one count of Receipt of Child Pornography.
In May 2015, the North Carolina State Bureau of Investigation in Raleigh, initiated an online investigation related to the distribution and receipt of child pornography (CP) through the Gnutella network, a peer-to-peer (P2P) file sharing network. Agents identified and captured the Internet
Protocol address (IP address) of a host computer offering to distribute multiple images of CP. As the investigation continued, agents made a direct connection to the identified host computer between May 11, 2015, and May 13, 2015, and downloaded 12 files depicting CP. A subpoena was issued to an internet service provider to identify the subscriber assigned to the captured IP address. The subscriber identified was THOMAS of Jacksonville, North Carolina. Further investigation identified THOMAS as a deputy with the Onslow County Sheriff’s Office in Jacksonville.
Based on the investigation, a search warrant was obtained and executed on THOMAS’ residence on May 13, 2015. Agents located and seized two computers at which time the defendant provided an unprotected statement to authorities. Specifically, THOMAS acknowledged searching for files containing CP through the use of a P2P program. Lastly, THOMAS indicated that a “couple of hundred” files, both images and videos, were stored on his computer.
Forensic examination of the defendant’s computer revealed at least 600 images and 1,040 videos which depicted CP. Furthermore, forensics recovered 112 deleted images from the defendant’s computer.
Investigation of this case was conducted by the North Carolina State Bureau of Investigations (SBI). Assistant United States Attorney Ethan Ontjes represented the government.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.