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Wednesday 11 May 2016
Bay Area Fraudster Convicted of Duping Investers Out of More Than $3 MillionRead the Press Release
SAN FRANCISCO- A federal jury convicted Marc Christopher Harmon today of conspiracy to commit wire fraud and five counts of wire fraud, announced United States Attorney Brian J. Stretch, Federal Bureau of Investigation Acting Special Agent in Charge Bertram Fairries, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
Harmon, 43, of San Leandro, Calif., was charged, along with co-conspirator Jason George Rivera, Jr., 37, of Danville, Calif., in a scheme to defraud multiple investors of more than $3 million between October 2008 and January 2011. In an indictment filed July 3, 2014, Harmon and Rivera were accused of using a Nevada corporation known as Executive Members Management Group, or EMMG, as a vehicle to defraud investors. The scheme involved promises that EMMG would purchase or trade collateralized mortgage obligations (CMOs) using funds provided by the investors, or would invest their funds in other lucrative transactions. Rivera and Harmon convinced victims to invest substantial sums of money, by promising, among other things, high rates of returns by participating in exclusive trading markets overseas and funding short-term loans for banks.
The evidence at trial demonstrated that Harmon’s role in the conspiracy was to recruit investors to EMMG. Harmon made many false representations to induce the investors to invest. These false representations included representations about Rivera and Harmon’s investment expertise, connections, history, and success; about the historical returns generated by the particular investment programs for which investments were being solicited; about future returns expected, promised, or guaranteed by these transactions; about the “blocked” nature of the transactions, wherein their funds would be held in something like an escrow account, would never leave EMMG’s account, and thus would be entirely safe; about the short time periods for payout (days, weeks, or a month, generally); and about how Rivera and Harmon would only be paid after the transactions returned a profit for the customers. In reality, there were no actual investment programs overseas, and both defendants simply spent investors’ money as it came in, and then lied about it for months and months afterwards.
On July 3, 2014, a grand jury returned an indictment charging defendants with eight counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. Rivera also was charged with two counts of tax evasion, in violation of 26 U.S.C. § 7201.
On July 29, 2015, Rivera pleaded guilty to the conspiracy to commit wire fraud charge and the two tax evasion counts. The government dismissed two counts of fraud, as it related to Harmon and the jury convicted Harmon of each of the remaining charges. Harmon now faces a maximum statutory penalty of 20 years in prison, a fine of $250,000, forfeiture, and restitution for the conspiracy charge and for each of the five wire fraud counts. However, any sentence following conviction would be imposed by the Court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The guilty verdict followed a one-week jury trial before the Honorable Richard Seeborg, U.S. District Judge. The trial got off to a shaky start when Harmon failed to appear on the first day and Judge Seeborg issued a warrant for his arrest. FBI and IRS agents were prepared for his possible failure to appear, and Harmon was arrested and in custody within 20 minutes of Judge Seeborg issuing the arrest warrant. Harmon remains in custody pending his sentencing scheduled for August 23, 2016, before Judge Seeborg.
Assistant U.S. Attorneys Benjamin Kingsley and Shailika Kotiya are prosecuting the case with the assistance of Jessica Meegan. The prosecution is the result of an investigation by the FBI and IRS, Criminal Investigation.
Australian Extradited to the United States Pleds Guilty to Failure to Surrender for Prison SentenceRead the Press Release
Jeremiah Dorai Jacob, 36, an Australian citizen, formerly from Columbia, Illinois, pled guilty to Failure to Surrender for Service of a Sentence, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. The offense carries a maximum sentence of up to ten years imprisonment; 3 years supervised release, a $250,000 fine, and a $100 mandatory special assessment. Sentencing is scheduled for September 9, 2016.
Jeremiah Jacob had previously been prosecuted and on August 31, 2012, he was sentenced to serve fourteen months imprisonment in the Bureau of Prisons for the offense of failure to register a security and was ordered to pay restitution to victims of his offense in the amount of $241,630.95. On September 13, 2012, the defendant requested permission to travel to Australia to work to earn additional funds to pay restitution to the victims of his offense. On September 13, 2012, the District Court granted the defendant's motion to travel to Australia but ordered the defendant to return to the United States of America prior to March 15, 2013 to begin serving his federal prison sentence. He failed to return to the United States to serve his prison sentence. Jeremiah Dorai Jacob was arrested in Australia on June 19, 2014, pursuant to the United States' request for extradition and has been detained pending these proceedings.
The prosecution is the result of an investigation conducted by the Postal Inspection Service and the U.S. Marshals Service. The prosecution was being handled by Assistant U.S. Attorney Norman R. Smith.
Ansonia Man Sentenced to 57 Months in Federal Prison for Trafficking Prescription NarcoticsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMES COSTANZO, 38, of Ansonia, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 57 months of imprisonment, followed by three years of supervised release, for trafficking prescription narcotics. He also was ordered to pay a $5,000 fine.
According to court documents and statements made in court, in May 2013, the Drug Enforcement Administration’s New Haven Tactical Diversion Squad and the Ansonia Police Department initiated an investigation into COSTANZO, who had been identified as an illegal distributor of narcotic pharmaceuticals. The investigation, which included multiple controlled purchases of oxycodone and the use of electronic surveillance, revealed that COSTANZO sold prescription narcotics to numerous customers from his Dwight Street residence. The investigation further revealed that Brian Earl of North Haven supplied COSTANZO with large quantities of oxycodone and other prescription narcotics, and also sold drugs to his own customers.
COSTANZO and Earl were arrested on January 23, 2014. At the time of his arrest, COSTANZO possessed a 9mm handgun that was loaded with hollow-point ammunition, and $439 in cash. A subsequent search of his residence revealed approximately 600 oxycodone pills, four firearms, ammunition, approximately $5,500 in cash, and more than 50 stored-value cards.
On February 27, 2015, COSTANZO pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, oxycodone and oxymorphone, and one count of knowingly engaging in a monetary transaction involving criminally derived property.
When he pleaded guilty, COSTANZO admitted that he used more than $72,000 in funds derived from his illegal drug enterprise to purchase a residence located at 85 Dwight Street.
COSTANZO has forfeited the Dwight Street property, as well as a residence located at 21 Winchester Street in Waterbury, a 2005 Mercedes Benz ML350, a 2000 Ford F150, and approximately $42,613.
COSTANZO has been detained since his arrest.
Brian Earl pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, oxycodone and oxymorphone. On July 17, 2015, he was sentenced to 37 months of imprisonment.
This investigation was conducted by the DEA’s New Haven Tactical Diversion Squad, the Ansonia Police Department and the Fairfield Police Department. The Tactical Diversion Squad includes participants from the New Haven, Hamden, Greenwich, Shelton, Bristol, Vernon and Wilton Police Departments.
The case was prosecuted by Assistant U.S. Attorneys David X. Sullivan and Michael E. Runowicz.
Altoona Man Charged with Possession of Child PornographyRead the Press Release
JOHNSTOWN, Pa. – A resident of Altoona, Pa. was indicted on May 11, 2016, by a federal grand jury in Johnstown on a charge of possession of child pornography, United States Attorney David J. Hickton announced today.
The indictment named Timothy Hufford, 55, as the sole defendant.
According to the indictment presented to the court, on August 18, 2015, he knowingly possessed pictures and videos in individual computer graphic files which were produced using prepubescent minors engaging in sexually explicit conduct. The computer graphic files were shipped or transported in interstate or foreign commerce.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, Pennsylvania State Police and Altoona Police Department conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who sexually exploit children and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
50 Members of La Asociación Ñeta Prison Gang Indicted for Violating the RICO Act in Puerto RicoRead the Press Release
A federal indictment was unsealed today in the District of Puerto Rico charging 50 members of La Asociación ÑETA with racketeering, drug trafficking and murder, announced U.S. Attorney Rosa Emilia Rodríguez-Vélez for the District of Puerto Rico. The defendants include the leadership of the enterprise, its drug trafficking network and members who perpetrated murders in furtherance of the enterprise. This prosecution is the product of an FBI investigation into the drug trafficking and violent activities perpetrated by members of the gang known as La Asociación ÑETA.
According to the indictment, the defendants are charged with being part of La Asociación ÑETA, a prison gang that operates in the prisons of the Puerto Rico Department of Corrections and Rehabilitation (PRDCR). La Asociación ÑETA is a criminal organization that engages in drug trafficking and murder. The main purpose of the organization is to make money. Inmates originally formed La Asociación ÑETA as a means to advocate for their rights within the PRDCR. The enterprise, however, evolved into a criminal organization that engaged in drug trafficking and murder within the prisons of the PRDCR. The enterprise makes money by introducing multi-kilogram quantities of drugs into the PRDCR prisons for profit and by engaging in murders for hire.
The indictment alleges that members and associates of La Asociación ÑETA introduced and distributed multi-kilograms of cocaine, marijuana and heroin into the prisons of the PRDCR. They were able to introduce this contraband into the prisons with the help of corrupt PRDCR Correctional Officers, civilians who worked inside of the prison system, people who visited inmates and persons who - from outside the prisons - threw drugs into the facilities ,known as pitcheos, which were caught by members of the enterprise. Members of the enterprise and their associates also introduced cellular telephones into the prisons and charged a fee to other inmates for using the same. Members of the enterprise would use cellular phones to engage in drug trafficking and murder.
Specifically, the indictment alleges that people who were not incarcerated would hire La Asociación ÑETA to kill persons who were serving time in the prisons of the PRDCR. La Asociación ÑETA participated in the murders for pecuniary gain. Murders perpetrated by the organization include those of Mario Montañez-Gómez aka Emme on Aug. 27, 2014, and Alexis Rodríguez-Rodríguez aka Alexis El Loco on Nov. 6, 2014.
The defendants are: Avelino Millán-Machuca aka Papito Machuca/El Fuerte/Viejo/Gordo; Fernando García-Marquez aka Fernan Sandwich/Emparedado/ Fernan/Carlos Vega; Cynthia González-Landrau aka La Cana/La Princesa/La Presidenta; Rolando Millán-Machuca aka Rolo; Alex Piñero-Sotomayor aka Cigüeña/Pájaro; Miguel Rivera-Calcaño aka Guelo/ Kikirimiau; Roberto Casado-Berríos aka Bobe/Bobel; Iván Ayala-Hernández aka Bambani/Bambo; Giordano Santana-Meléndez aka Viejo Ten; Carlos Báez-Figueroa aka Carlitos Guaynabo; José Trinidad-Jorge aka Trini; Ángel Bermúdez-Cartagena aka Apache/El Doctor; José Cintrón-Mojica aka Jowito; Victor Solano-Moreta aka Caballo; José Castoire-Sánchez; Luis Ayuso-Walker aka Buringo; Juan Lozada-Delgado aka Chino San Lorenzo; Aníbal Miranda-Montañez aka Jowy; Freddie Sánchez-Martínez aka Casco; Ángel Cruz-Barrientos aka Diego/Cloche; Alex Miguel Cruz-Santos aka Alex Cuquito; José J. Folch-Colón aka Joel Folch/Gordo Folch; Billy Andino-De Jesús aka Billy Cupey/Billy El Calvo; Luis Rojas-Llanos aka Cachorro/Kchorro; Juan J. Claudio-Morales aka Claudio Canales/Claudio El Gordo; Eduardo Rosario-Orangel aka Barba/Cholón; George Torres-Rodríguez aka Gordo Comerio; Luis H. Quiñonez-Santiago aka Hiram; Augusto Christopher-Lind aka Bengie Loiza; José L. Nieves-Torres; Luis D. Ramos-Báez aka Danny Power; Orlando Ruiz-Acevedo aka Gordo Ponce; Raul D. Rosario-Maldonado aka Davi/Davo; Juan R. Cruz-Santana aka Roldán; José Marrero-Figueroa aka Tito San José; Ramón Morales-Sáez aka Moncho/Monchi; Carlos Santiago-Rivera aka Black/Blacky/El Negro; David González-De León aka Bebe Cupey; José Díaz-López aka Culo De Pollo; Osvaldo Torres-Santiago aka Bombilla/Baldo/Baldito; José Velázquez-Maldonado aka Batata; Roberto Martínez-Rivera aka Matatan; José Sánchez-Laureano aka Veterano; José González-Gerena aka Perpetua; Francisco Torres-Rodríguez aka Kino; Andrés Del Valle-Ortega aka Randy/Andy Caimito; José R. Andino-Morales aka Gladiola; Jesús P. O’neill-Gómez aka Pastor; Ángel I. Díaz-Santiago; and Pedro Fontanez-Pérez.
Assistant U.S. Attorney Victor O. Acevedo-Hernández for the District of Puerto Rico is in charge of the prosecution of the case. The FBI and the Puerto Rico Department of Corrections collaborated during the investigation.
“I want to acknowledge the dedication and commitment of the FBI and the Department of Corrections agents and officials who participated in this substantial investigation which resulted in today’s arrests,” said U.S. Attorney Rodríguez-Vélez. “This success of this operation shows the continued teamwork of federal law enforcement and our state and local partners to reduce gang violence inside the prisons in Puerto Rico. The U.S. Attorney’s Office will zealously prosecute these defendants and bring them to justice.”
“Even prison walls were not enough to stop the brazen acts of this violent gang,” said Special Agent in Charge Douglas A. Leff of the FBI’s San Juan Division. “In reality, their conduct is more accurately described as that of an international mafia than a prison gang. Their network reached throughout Puerto Rico and the continental United States. This enabled them to order hits on rival gang members, corrupt two sworn officers and to move large quantities of drugs and other contraband, effectively turning their prison into a gang-controlled housing project. The dismantlement of this criminal enterprise was achieved through the tireless investigation of our case agents and partners with the U.S. Attorney’s Office, U.S. Marshals Service, Puerto Rico Department of Corrections and Rehabilitation and the Police of Puerto Rico.”
If convicted, the defendants face up to life in prison. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
50 Members of La Asociacion Ñeta Prison Gang Indicted for Violating the RICO Act in Puerto RicoRead the Press Release
SAN JUAN, Puerto Rico – A federal indictment was unsealed today in the District of Puerto Rico charging fifty (50) members of La Asociación ÑETA with racketeering, drug trafficking, and murder, announced Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. The defendants include the leadership of the enterprise, its drug trafficking network, and members who perpetrated murders in furtherance of the enterprise. This prosecution is the product of an FBI investigation into the drug trafficking and violent activities perpetrated by members of the gang known as La Asociación ÑETA.
Pursuant to the indictment, the defendants are charged with being part of La Asociación ÑETA, a prison gang that operates in the prisons of the Puerto Rico Department of Corrections and Rehabilitation (“PRDCR”). La Asociación ÑETA is a criminal organization that engages in drug trafficking and murder. The main purpose of the organization is to make money. Inmates originally formed La Asociación ÑETA as a means to advocate for their rights within the PRDCR. The enterprise, however, evolved into a criminal organization that engaged in drug trafficking and murder within the prisons of the PRDCR. The enterprise makes money by introducing multi-kilogram quantities of drugs into the PRDCR prisons for profit, and by engaging in murders for hire.
The indictment alleges that members and associates of La Asociación ÑETA introduced and distributed multi-kilograms of cocaine, marijuana, and heroin into the prisons of the PRDCR. They were able to introduce this contraband into the prisons with the help of corrupt PRDCR Correctional Officers, civilians who worked inside of the prison system, people who visited inmates, and persons who - from outside the prisons - threw drugs into the facilities (known as “pitcheos”), which were caught by members of the enterprise. Members of the enterprise and their associates also introduced cellular telephones into the prisons and charged a fee to other inmates for using the same. Members of the enterprise would use cellular phones to engage in drug trafficking and murder.
Specifically, the indictment alleges that people who were not incarcerated would hire La Asociación ÑETA to kill persons who were serving time in the prisons of the PRDCR. La Asociación ÑETA participated in the murders for pecuniary gain. Murders perpetrated by the organization include those of Mario Montañez-Gómez, a/k/a “Emme” on August 27, 2014, and Alexis Rodríguez-Rodríguez, a/k/a “Alexis El Loco,” on November 6, 2014.
The defendants are: Avelino Millán-Machuca, a.k.a. “Papito Machuca/El Fuerte/Viejo/Gordo;” Fernando García-Marquez, a.k.a. “Fernan Sandwich/Emparedado/ Fernan/Carlos Vega;” Cynthia González-Landrau, a.k.a. “La Cana/La Princesa/La Presidenta;” Rolando Millán-Machuca, a.k.a. “Rolo;” Alex Piñero-Sotomayor, a.k.a. “Cigüeña/Pájaro;” Miguel Rivera-Calcaño, a.k.a. “Guelo/ Kikirimiau;” Roberto Casado-Berríos, a.k.a. “Bobe/Bobel;” Iván Ayala-Hernández, a.k.a. “Bambani/Bambo;” Giordano Santana-Meléndez, a.k.a. “Viejo Ten;” Carlos Báez-Figueroa, a.k.a. “Carlitos Guaynabo;” José Trinidad-Jorge, a.k.a. “Trini;” Ángel Bermúdez-Cartagena, a.k.a. “Apache/El Doctor;” José Cintrón-Mojica, a.k.a. “Jowito;” Victor Solano-Moreta, a.k.a. “Caballo;” José Castoire-Sánchez; Luis Ayuso-Walker, a.k.a. “Buringo;” Juan Lozada-Delgado, a.k.a. “Chino San Lorenzo;” Aníbal Miranda-Montañez, a.k.a. “Jowy;” Freddie Sánchez-Martínez, a.k.a. “Casco;” Ángel Cruz-Barrientos, a.k.a. “Diego/Cloche;” Alex Miguel Cruz-Santos, a.k.a. “Alex Cuquito;” José J. Folch-Colón, a.k.a. “Joel Folch/Gordo Folch;” Billy Andino-De Jesús, a.k.a. “Billy Cupey/Billy El Calvo;” Luis Rojas-Llanos, a.k.a. “Cachorro/Kchorro;” Juan J. Claudio-Morales, a.k.a. “Claudio Canales/Claudio El Gordo;” Eduardo Rosario-Orangel, a.k.a. “Barba/Cholón;” George Torres-Rodríguez, a.k.a. “Gordo Comerio;” Luis H. Quiñonez-Santiago, a.k.a. “Hiram;” Augusto Christopher-Lind, a.k.a. “Bengie Loiza;” José L. Nieves-Torres; Luis D. Ramos-Báez, a.k.a. “Danny Power;” Orlando Ruiz-Acevedo, a.k.a. “Gordo Ponce;” Raul D. Rosario-Maldonado, a.k.a. “Davi/Davo;” Juan R. Cruz-Santana, a.k.a. “Roldán;” José Marrero-Figueroa, a.k.a. “Tito San José;” Ramón Morales-Sáez, a.k.a. “Moncho/Monchi;” Carlos Santiago-Rivera, a.k.a. “Black/Blacky/El Negro;” David González-De León, a.k.a. “Bebe Cupey;” José Díaz-López, a.k.a. “Culo De Pollo;” Osvaldo Torres-Santiago, a.k.a. “Bombilla/Baldo/Baldito;” José Velázquez-Maldonado, a.k.a. “Batata;” Roberto Martínez-Rivera, a.k.a. “Matatan;” José Sánchez-Laureano, a.k.a. “Veterano;” José González-Gerena, a.k.a. “Perpetua;” Francisco Torres-Rodríguez, a.k.a. “Kino;” Andrés Del Valle-Ortega, a.k.a. “Randy/Andy Caimito;” José R. Andino-Morales, a.k.a. “Gladiola;” Jesús P. O’neill-Gómez, a.k.a. “Pastor;” Ángel I. Díaz-Santiago; and Pedro Fontanez-Pérez.
Assistant U.S. Attorney Victor O. Acevedo-Hernández is in charge of the prosecution of the case. The Federal Bureau of Investigation (FBI) and the Puerto Rico Department of Corrections collaborated during the investigation.
“I want to acknowledge the dedication and commitment of the FBI and the Department of Corrections agents and officials who participated in this substantial investigation which resulted in today’s arrests,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “This success of this operation shows the continued teamwork of federal law enforcement and our state and local partners to reduce gang violence inside the prisons in Puerto Rico. The United States Attorney’s Office will zealously prosecute these defendants and bring them to justice.”
“Even prison walls were not enough to stop the brazen acts of this violent gang,” said Douglas A. Leff, Special Agent in Charge of the FBI, San Juan Division. “In reality, their conduct is more accurately described as that of an international mafia than a prison gang. Their network reached throughout Puerto Rico and the continental United States. This enabled them to order hits on rival gang members, corrupt two sworn officers, and to move large quantities of drugs and other contraband, effectively turning their prison into a gang-controlled housing project. The dismantlement of this criminal enterprise was achieved through the tireless investigation of our case agents and partners with the United States Attorney’s Office, United States Marshals Service, Puerto Rico Department of Corrections and Rehabilitation, and the Police of Puerto Rico.”
If convicted, the defendants face up to life in prison. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
22 Defendants Charged Federally with Collectively Receiving over $13 Million from USDA by Fraudulently Trading Food Stamps for CashRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Karen Citizen-Wilcox, Special Agent in Charge, U.S. Department of Agriculture, Office of Inspector General (USDA-OIG), Pam Bondi, Florida Attorney General, Jeff Atwater, Florida Chief Financial Officer, Mike Carroll, Secretary, Florida Department of Children and Families, Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcements Homeland Security Investigations (ICE-HSI), Troy Walker, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), Miami Regional Operations Center, U.S. Marshal Amos Rojas Jr. for the United States Marshals Service’s (USMS) Regional Fugitive Task Force, Miami Field Office, Juan J. Perez, Director, Miami Dade Police Department (MDPD), Rodolfo Llanes, Chief, Miami Police Department (MPD), Ric Bradshaw, Sheriff, and Palm Beach County Sheriff’s Office (PBSO), announce the filing of federal charges against 22 retail store owners or operators in connection with schemes to illegally redeem food stamp benefits in exchange for cash. The indictments allege that the retailers received more than $13 million in federal payments for transactions in which they did not provide any food, a fraud scheme commonly known as “food stamp trafficking.” Stores and vendors allegedly took illicit profits from the fraudulent transactions with food stamp recipients. In addition to the federal indictments, 6 individuals have been charged by the Office of Statewide Prosecution for their alleged receipt of additional illegal payments during the course of their participation in fraudulent food stamp schemes. This joint operation resulted in the largest combined financial fraud loss for a food stamp trafficking takedown in history.
“When individuals defraud governmental programs, they steal taxpayer funded benefits that are intended to feed the families and children in our communities who are most in need,” stated United States Attorney Wifredo A. Ferrer. “The U.S. Attorney’s Office and our federal law enforcement partners are committed to working with our state and local allies to investigate and prosecute individuals that commit fraudulent schemes for illicit personal financial gain.”
“These flea market retailers are charged with having taken advantage of a provision in the SNAP program designed to provide locally sourced fresh produce and meat to low income families who otherwise would likely have no option for such food items. Instead of operating within the confines of the rules and regulations for farmers' market vendors, these retailers created an illegal benefits exchange system that defrauded the American taxpayer and denied healthy foods to needy children and their families. Thousands of SNAP recipients are believed to have exchanged their EBT benefits for cash at the Opa-Locka Hialeah Flea Market. The flea market retailers, who are alleged to have orchestrated this trafficking scheme, pocketed millions in "fees" which they charged for converting food assistance benefits into cash. Any retailer who chooses to defraud taxpayers through such trafficking schemes will continue to be aggressively investigated and prosecuted by USDA-OIG and its law enforcement partners," stated Karen Citizen-Wilcox, Special Agent in Charge, USDA-OIG.
“Food stamp trafficking is a serious crime tantamount to stealing from the hardworking taxpayers in our state,” said Attorney General Bondi. “These retailers and operators thought they had devised the perfect scheme to steal from the government, but thanks to the great work by my Office of Statewide Prosecution, U.S. Attorney Wifredo A. Ferrer, and our local, state and federal law enforcement agencies, we have stopped the scheme, charged the defendants for their alleged conduct and will hold them accountable in a court of law.”
“To steal from public programs designed to help our neighbors in their greatest time of need is to steal from every taxpayer in Florida, and I’m glad to see that those who participate in the fraudulent schemes will be brought to justice,” said Chief Financial Officer Jeff Atwater. “This partnered investigation displays our shared commitment to aggressively fighting fraud in Florida, and our collective work continues.”
“Our department is committed to not only administering the food assistance program but also protecting its integrity so we can ensure Florida families have the resources they need to get them back on their feet,” said Mike Carroll, Secretary, Florida Department of Children and Families. “Today’s indictments demonstrate the strength of our partnerships and that any individuals stealing from the system will be brought to justice.”
“We utilize our very broad authorities and capabilities to partner with other agencies to disrupt and dismantle these criminal organizations to protect the taxpayer and intended recipients of the programs,” said Robert C. Hutchinson, Acting Special Agent in Charge of HSI Miami. “This is yet another example of the success of this teamwork.”
“Every Florida taxpayer is a potential victim in food stamp fraud cases.” said FDLE Commissioner Rick Swearingen. “I appreciate the work of our local, state and federal partners to bring these individuals to justice.”
City of Miami Police Department Chief Rodolfo Llanes, stated “Fraud affects all our communities in a negative manner. This case exemplified how EBT fraud is so prevalent in our jurisdiction. The Miami Police Department is very proud of its role in this case while working with our state and federal partners in order to bring this case to a successful conclusion.”
The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is a federally funded, national program established by the United States government to alleviate hunger and malnutrition among lower income families. The United States Department of Agriculture (USDA) administers SNAP through its agency, the Food and Nutrition Service (FNS). FNS is responsible for the authorization and disqualification of retail food establishments participating in the redemption of SNAP benefits.
In Florida, SNAP is administered by the State of Florida Department of Children and Families (DCF). DCF is responsible for overall program administration, as well as approving, denying or revoking assistance for recipients. FNS and the State of Florida share jointly in the cost of administering the SNAP. In 1998, DCF changed the format of SNAP benefits in Florida from a traditional paper coupon system to an Electronic Benefit Transfer (EBT) card system. Recipients use the EBT card, which contains an embedded magnetic strip, to purchase approved food items from participating retailers. Retailers must apply to and be approved by FNS to participate in the program. Authorized retailers use a point-of-sale (POS) terminal that checks the EBT card information and deducts the cash value of the purchase from the customer’s SNAP benefit balance. SNAP reimbursements are paid to retailers through electronic funds transfers. Retailers bill the government in return for providing approved food items. SNAP retailers, including the defendants, receive instruction regarding the requirements and regulations of the food stamp program, such as that only eligible food items can be exchanged for EBT benefits and that a retailer may never exchange EBT benefits for cash or non-food items.
According to the indictments listed below, the defendants owned and/or operated stores in the Southern District of Florida that were authorized to accept SNAP. The defendants received instruction regarding the requirements and regulations of the food stamp program. The defendants allegedly exchanged EBT benefits for cash, in violation of the food stamp program rules. The defendants and/or their co-conspirators/employees swiped the recipient’s EBT card at a POS machine for an inflated amount, and paid the recipient, in cash, a reduced percentage of the value of food stamp benefits charged on the card. The defendants would realize a guaranteed, significant profit from each fraudulent transaction. In most situations, the recipient did not actually receive any food or eligible items in return for their food stamp benefits. As a result of unlawful cash transactions, the defendants fraudulently obtained more than $13 million dollars in EBT deposits for transactions in which the stores did not provide food.
1. United States v. Karla Rodriguez Diaz and Luis Marzo Machado, Case No. 16-20324-CR-Gayles
According to the indictment, Karla Rodriguez Diaz, 28, of Hialeah, owned a food stand business, Opa Locka Fruit and Produce Market, LLC (“Opa Locka Fruit and Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Diaz applied for, and obtained, authorization to participate in SNAP. Diaz was the sole authorized signatory on the company’s bank accounts. Luis Marzo Machado, 30, of Hialeah, is married to Diaz. Machado originally opened the business, but soon transferred ownership to Diaz, though he continued to work at the business. Between August 2014 and May 2016, Diaz and Machado were involved in a scheme in which they exchanged food stamp benefits for cash. From August 2014 through March 2016, Diaz and Machado fraudulently redeemed over $2,400,000 in EBT food stamp benefits.
2. United States v. Pedro Sanchez Barrero and Antonia Barrero, Case No. 16-2621-MJ-Simonton
According to the criminal complaint, Pedro Sanchez Barrero, 26, of Miami, Florida, the owner of a food stand business Pedro Produce, Inc. (“Pedro Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Pedro Barrero applied for and obtained authorization to participate in SNAP. From March 2016 through May 2016, Pedro Barrero and Antonia Barrero, 48, of Miami, Florida, were involved in a scheme in which they exchanged food stamp benefits for cash and fraudulently redeemed approximately $2 million in EBT food stamp benefits.
3. United States v. Diocenila Castro, Case No. 16-20319-CR-Moreno
According to the indictment, Diocenila Castro, 49, of Miami, owned a food stand business, Castro Produce, Corp. (“Castro Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Castro applied for and obtained authorization to participate in SNAP. Between November 2014 and May 2016, Castro was involved in a scheme in which she exchanged food stamp benefits for cash. From November 2014 through March 2016, Castro fraudulently redeemed over $1,500,000 in EBT food stamp benefits.
4. United States v. Matias Jose Ramirez and Jorge Saladrigas Milian, Case No. 16-20306-CR-Williams
According to the indictment, Matias Jose Ramirez, 37, of Miami and Jorge Saladrigas Milian, 56, of Opa-Locka, owned food stand businesses, Ramirez Produce, Corp. (“Ramirez Produce”) and Jorge Produce, Corp. (“Jorge Produce”), located at 12704 NW 42nd Avenue, in Opa-Locka, Florida. Ramirez and Milian applied for, and obtained, authorization to participate in SNAP. From at least as early as April 2014 and continuing through March 2016, Ramirez and Milian were involved in a scheme in which they exchanged food stamp benefits for cash. From April 2014 until March 2016, Ramirez and Milian fraudulently redeemed approximately $1.5 million in EBT food stamp benefits.
5. United States v. Reinaldo Arteaga and Luisdian Hernandez Gonzalez, Case No. 16-20307-CR-Middlebrooks
According to the indictment, Reinaldo Arteaga, 62, of Miami Gardens owned a produce stand, Arteaga Produce, Corp. (“Arteaga Produce”), located at 12705 NW 42nd Avenue, in Opa Locka, Florida. Arteaga applied for, and obtained, authorization to participate in SNAP. Between August 2014 and May 2016, Arteaga and Luisdian Hernandez Gonzalez, 22, of Miami, were involved in a scheme in which they illegally exchanged food stamp benefits for cash, by swiping EBT cards at Arteaga Produce. From August 2014 through March 2016, Arteaga and Gonzalez fraudulently redeemed over $1,200,000 in EBT food stamp benefits which were deposited into a bank account controlled by Arteaga.
Luisdian H. Gonzalez was also charged in Case No. 16-20321-CR-Gayles for his alleged involvement in a separate food stamp fraud scheme.
6. United States v. Zulfiqar Mithavayani and Jamal Al-Hawa, Case No. 16-20284-CR-Altonaga
According to the indictment, Zulfiqar Mithavayani, 51, of Miramar, owned a convenience store, ABC Food Market, located at 163 Northwest 14th Street in Miami, Florida. Mithavayani applied for and obtained authorization to participate in SNAP. Mithavayani and Jamal Al-Hawa, 60, of Davie, were involved in a scheme in which they illegally sold food stamp benefits in exchange for cash. Since March 2013, Mithavayani and Al-Hawa redeemed and caused to be redeemed over $1,100,000 in EBT food stamp benefits, over $1,000,000 more than the average convenience store in Florida during this period.
7. United States v. Maikel Manuel Riviaux, Case No. 16-20305-CR-Moore
According to the indictment, Maikel Manuel Riviaux, 42, of Hialeah, owned a seafood market, Pucho Fish Market, located at 2060 NW Opasar Locka Boulevard, in Opa Locka, Florida. Between December 2014 and May 2016, Riviaux and his co-conspirators were involved in a food stamp fraud scheme. From May 2015 through March 2016, Riviaux redeemed approximately $1,000,000 in EBT food stamp benefits which were deposited into bank accounts which he controlled. Riviaux and his co-conspirators used point of sale machines to swipe the recipient’s EBT cards at both Pucho Fish Market at 2060 NW Opa Locka Boulevard, in Opa Locka, Florida and at the Opa Locka Flea market located at 12705 NW 42nd Avenue in Opa Locka, Florida.
8. United States v. Jose Antonio Gonzalez and Noraida Pi Figueroa, Case No. 16-20304-CR-Gayles
According to the indictment, Jose Antonio Gonzalez, 45, of Miami Gardens owned a seafood delivery route business, Los Corticos Fish Corpation (“Los Corticos”), located at 3310 NW 171st Terrace, in Miami Gardens, Florida. Gonzalez applied for, and obtained, authorization to participate in SNAP. Between May 2015 and May 2016, Gonzalez and Noraida Pi Figueroa, 40, of Miami Gardens, were involved in a scheme in which they exchanged food stamp benefits for cash. From May 2015 through March 2016, Gonzalez and Figueroa fraudulently redeemed approximately $1,000,000 in EBT food stamp benefits.
9. United States v. Rafael Gonzalez Cuellar and Luis Casola Rojas, Case No. 16-20322-CR-Altonaga
According to the indictment, Rafael Gonzalez Cuellar, 54, of Opa Locka owned a food stand business, Cuellar Produce, Corp. (“Cuellar Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Cuellar applied for, and obtained, authorization to participate in SNAP. Between January 2015 and May 2016, Cuellar and Luis Casola Rojas, 43, of Hialeah, were involved in a scheme in which they exchanged food stamp benefits for cash. From January 2015 through March 2016, Cuellar fraudulently redeemed over $900,000 in EBT food stamp benefits.
Luis Casola Rojas was also charged in Case No. 16-20323-CR-Moore for his alleged involvement in a separate food stamp fraud scheme.
10. United States v. Katia Nunez Landerio, Case No. 16-20283-CR-Gayles
According to the indictment, Katia Nunez Landeiro, 35, of Miami, owned a food stand business, Katy Produce, Corp. (“Katy’s Produce”), located at 12704 NW 42nd Avenue, in Opa-Locka, Florida. Landeiro applied for, and obtained, authorization to participate in SNAP. Between July 2014 and March 2015, Landeiro was involved in a scheme in which she exchanged food stamp benefits for cash. Reyes fraudulently redeemed over $700,000 in EBT food stamp benefits.
11. United States v. Idaysi Landeiro Reyes and Javier Gallardo Gonzalez, Case No. 16-20309-CR-Scola
According to the indictment, Idaysi Landeiro Reyes, 47, of Miami Gardens, owned a food stand business, Landeiro Produce, Corp. (“Landeiro Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Reyes applied for and obtained authorization to participate in SNAP. Reyes and Javier Gallardo Gonzalez, 47, of Miami Gardens, were involved in a scheme in which they exchanged food stamp benefits for cash. From July 2015 through March 2016, Reyes fraudulently redeemed and caused to be redeemed over $600,000 in EBT food stamp benefits.
12. United States v. Nelson Chico and Luisdian H. Gonzalez, Case No. 16-20321-CR-Gayles
According to the seven-count indictment, Nelson Chico, 59, of Hialeah owned a produce stand, Rey Produce, Corp. (“Rey Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Chico applied for, and obtained, authorization to participate in SNAP. Between September 2014 and March 2016, Chico and Luisdian H. Hernandez, 22, of Hialeah, were involved in a scheme in which they exchanged food stamp benefits for cash, by swiping EBT cards at Rey Produce. From September 2014 until March 2016, Chico and Hernandez redeemed over $600,000 in EBT food stamp benefits which were deposited into a bank account that Chico controlled.
13. United States v. Fernando Fernandez Garcia, Case No. 16-20320-CR-Lenard
According to the indictment, Fernando Fernandez Garcia, 33, of Miami, owned a food stand business, Santa Cruz Shark Inc., (“Santa Cruz Shark”) located at 12704 NW 42nd Avenue, in Opa-Locka, Florida. Garcia applied for, and obtained, authorization to participate in SNAP. Between December 2014 and May 2016, Garcia was involved in a scheme in which he and his employees exchanged food stamp benefits for cash. From December 2014 through March 2016, Garcia fraudulently redeemed over $500,000 in EBT food stamp benefits.
14. United States v. Luis Casola Rojas, Case No. 16-20323-CR-Moore
According to the indictment, Luis Casola Rojas, 43, of Hialeah, owned a food stand business, Casola Produce, Corp. (“Casola Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Rojas applied for, and obtained, authorization to participate in SNAP. Between September 2015 and May 2016, Rojas was involved in a scheme in which he exchanged food stamp benefits for cash. From October 2015 through March 2016, Rojas fraudulently redeemed over $380,000 in EBT food stamp benefits.
15. United States v. Angelo Socarras, Case No. 16-20308-CR-Cooke
According to the indictment, Angelo Socarras, 37, of Hialeah, owned a food stand business, Angelo Produce, Corp. (“Angelo Produce”), located at 12705 NW 42nd Avenue, in Opa-Locka, Florida. Socarras applied for and obtained authorization to participate in SNAP. From October 2015 through March 2016, Socarras was involved in a scheme in which he exchanged food stamp benefits for cash and fraudulently redeemed approximately $190,000 in EBT food stamp benefits.
If convicted of the charged conduct, a defendant faces a possible maximum statutory sentence of 20 years’ imprisonment for conspiracy to commit wire fraud; 20 years’ imprisonment for wire fraud; and 5 years’ imprisonment for food stamp/EBT fraud.
U.S. Attorney Ferrer acknowledged the dedicated efforts of the Florida Attorney General, Florida Department of Children and Families, Florida Department of Financial Services to provide services to the community and identify for prosecution those individuals who compromise public benefits. Mr. Ferrer also commended the investigative efforts of USDA-OIG, PBSO and MPD, and expressed his gratitude to ICE-HSI, FDLE, U.S. Marshals Service, MDPD and the United States Coast Guard (District 7), for their assistance with the investigation and law enforcement operation. Mr. Ferrer recognized Assistant United States Attorneys Timothy J. Abraham, Miesha S. Darrough, Anne P. McNamara, Daya Nathan, Jonathan K. Osborne, Brian J. Shack, and Jonathan D. Stratton, who are prosecuting these cases.
A complaint or an indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
21 Members of South Bronx Drug Trafficking Organization Charged with Narcotics Trafficking and Firearms OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, the Special Agent in Charge of the New York Division of the Drug Enforcement Administration (“DEA”), Angel M. Melendez, the Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (“HSI”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing today of two Indictments charging a total of 21 members of a Bronx-based drug trafficking organization with narcotics trafficking and firearms offenses. The organization operates in the vicinity of the Diego Beekman Houses (“Beekman Houses”) in the South Bronx and is charged in two separate indictments – United States v. Demetrius Flowers et al. and United States v. Damon Guadalupe et al. Some of the members of the organization were affiliated with a subset of the Bloods Street Gang, known as the “Low Rider Brims,” and other members were affiliated with a gang known as the “Young Shooters.” Of the 21 defendants charged in both Indictments, 14 are currently in custody, including 12 defendants who were arrested earlier today and yesterday as part of a coordinated takedown. The defendants already in custody will be presented today before United States Magistrate Ronald L. Ellis in Manhattan federal court.
In connection with today’s takedown, law enforcement agents also executed search warrants at three locations, including residential apartments in the area occupied by several of the defendants. During the execution of those search warrants, agents recovered, among other items, crack, cocaine, marijuana, as well as ammunition and gang paperwork. To date, in this case, agents and officers have seized, among other evidence, quantities of crack, cocaine, heroin, marijuana, prescription pills, as well as firearms, ammunition, and knives. During the investigation, agents and officers also intercepted thousands of wiretapped calls, during many of which various members and associates of the drug trafficking organization discussed their gang and narcotics activities.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, these defendants, many of them members of street gangs, terrorized a South Bronx neighborhood with their drug dealing and violence. Law enforcement has no duty more important than keeping our citizens safe. As we have done in a number of recent takedowns with our law enforcement partners, we will continue to focus on those in our communities who are allegedly responsible for so much of the gang and gun violence. All New Yorkers are entitled to live in neighborhoods free from constant drug-dealing and senseless violence. That is why we bring actions like the one we bring today.”
DEA Special Agent-in-Charge James J. Hunt said: “Law enforcement’s crackdown on gang related drug trafficking has netted 14 more arrests in New York City. It is alleged that the ‘Low Rider Brims’ and ‘Young Shooters’ street gangs instilled fear and intimidation in the residents of the Beekman Housing Projects in the Bronx. Not only did their alleged drug trafficking fuel drug addiction, their ‘armed and ready’ attitude resulted in numerous shootings and turf battles jeopardizing the safety of the neighboring schools and community.”
HSI Special Agent-in-Charge Angel M. Melendez said: “Residents of the Mott Haven section of the Bronx can rest easier knowing members of a violent gang are under arrest and out of their neighborhood. These gangs allegedly peddled drugs and used violence to protect their criminal enterprise. HSI and its law enforcement partners are committed to combating violent criminal organizations and ensure the continued safety of our communities.”
Commissioner William J. Bratton said: “This investigation is the latest example of a coordinated effort to combat drug trafficking, whose operations brought an influx of violence and firearms to the Bronx. I commend both our NYPD detectives and law enforcement partners for their hard work, which led to these arrests, and for their ongoing commitment to protect our neighborhoods.”
As alleged in the Indictments unsealed today in Manhattan federal court and in other court papers[1]:
The Beekman Houses is a private housing complex comprising approximately 38 apartment buildings in the Mott Haven neighborhood of the Bronx, New York. From at least 2010 up to and including May 2016, the defendants operated a drug trafficking organization (the “Beekman Houses DTO”) in and around the Beekman Houses. The Beekman Houses DTO trafficked in a variety of narcotics – including crack cocaine, heroin, and marijuana – on a daily basis. Some of the members of the Beekman Houses DTO were affiliated with a subset of the Bloods Street Gang known as the “Low Rider Brims,” and other members were affiliated with a gang known as the “Young Shooters.” The defendants sold narcotics in areas frequented by New York City’s most vulnerable citizens, including in the vicinity of New York City schools.
In addition, members of the Beekman Houses DTO protected and maintained their drug business through the possession of firearms and acts of violence. These included shootings that happened in broad daylight on public streets and into apartment buildings.
* * *
Charts containing the names, ages, charges, and maximum penalties for the defendants are set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the NYPD’s Bronx Gang Squad, HSI’s El Dorado Task Force, and the New York Field Division of the DEA, as well as the United States Marshals’ Service for its assistance in today’s arrests. He also thanked the Bronx County District Attorney’s Office for their support in this ongoing investigation.
This case is being handled by the Office’s Narcotics Unit. Assistant United States Attorneys Eli J. Mark and Matthew Laroche are in charge of the prosecution.
The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Demetrius Flowers, a/k/a “MoJo” et al.
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Conspiracy to Distribute Narcotics
(including crack cocaine, heroin, and marijuana)
21 U.S.C. § 846
DEMETRIUS FLOWERS, a/k/a “Mojo,”
JOSEPH SMITH, a/k/a “Joe Lite,”
FRANK O’BRYANT, a/k/a “Frank White,”
ELADIO PADILLA, a/k/a “Nino,”
QUINZELL FRAZIER, a/k/a “Q Black,” a/k/a “Blizzy,”
JONATHAN SAEZ, a/k/a “John J,” a/k/a “J,”
BRIAN MCBETH, a/k/a “Smoove,”
FRANCISCO REYES, a/k/a “Bundlez,”
LUIS CRUZ, a/k/a “Manny,”
RALPHIE DEJESUS, a/k/a “Nuws,”
GABRIEL OCASIO, a/k/a “Fifty,”
RAHIM SOLANO, a/k/a “Rah,” a/k/a “Radio,”
MICHAEL MESTRE, a/k/a “Getty,” a/k/a “Wax,”
SAQURAN CURTIS, a/k/a “Esai,”
CHRISTOPHER NAPOLEONIS, a/k/a “Pudge,”
ROBERT WILSON, a/k/a “Rubar,” a/k/a “Lil Rubar,”
Life in prison with a mandatory minimum of 10 years in prison
2
Use of Firearms in Furtherance of Narcotics Trafficking
18 U.S.C. § 924(c)(1)(A)
DEMETRIUS FLOWERS, a/k/a “Mojo,”
JOSEPH SMITH, a/k/a “Joe Lite,”
FRANK O’BRYANT, a/k/a “Frank White,”
ELADIO PADILLA, a/k/a “Nino,”
QUINZELL FRAZIER, a/k/a “Q Black,” a/k/a “Blizzy,”
JONATHAN SAEZ, a/k/a “John J,” a/k/a “J,”
BRIAN MCBETH, a/k/a “Smoove,”
FRANCISCO REYES, a/k/a “Bundlez,”
LUIS CRUZ, a/k/a “Manny,”
RALPHIE DEJESUS, a/k/a “Nuws,”
GABRIEL OCASIO, a/k/a “Fifty,”
RAHIM SOLANO, a/k/a “Rah,” a/k/a “Radio,”
MICHAEL MESTRE, a/k/a “Getty,” a/k/a “Wax,”
Life in prison with a mandatory minimum of 10 years in prison
3
Felon in Possession of a Firearm
18 U.S.C. § 922(g)(1)
DEMETRIUS FLOWERS, a/k/a “Mojo,”
10 years in prison
DEFENDANT
AGE
DEMETRIUS FLOWERS, a/k/a “Mojo,”
35
JOSEPH SMITH, a/k/a “Joe Lite,”
28
FRANK O’BRYANT, a/k/a “Frank White,”
29
ELADIO PADILLA, a/k/a “Nino,”
27
QUINZELL FRAZIER, a/k/a “Q Black,” a/k/a “Blizzy,”
23
JONATHAN SAEZ, a/k/a “John J,” a/k/a “J,”
30
BRIAN MCBETH, a/k/a “Smoove,”
24
FRANCISCO REYES, a/k/a “Bundlez,”
22
LUIS CRUZ, a/k/a “Manny,”
20
RALPHIE DEJESUS, a/k/a “Nuws,”
24
GABRIEL OCASIO, a/k/a “Fifty,”
28
RAHIM SOLANO, a/k/a “Rah,” a/k/a “Radio,”
24
MICHAEL MESTRE, a/k/a “Getty,” a/k/a “Wax,”
24
SAQURAN CURTIS, a/k/a “Esai,”
26
CHRISTOPHER NAPOLEONIS, a/k/a “Pudge,”
26
ROBERT WILSON, a/k/a “Rubar,” a/k/a “Lil Rubar,”
24
United States v. Damon Guadalupe, a/k/a “Pappy,” et al.
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Conspiracy to Distribute Narcotics
21 U.S.C. § 846
DAMON GUADALUPE, a/k/a “Pappy,”
MOHAMMED FABELO, a/k/a “Mo,”
WILLIAM RODRIGUEZ,
JASON HOOKS, a/k/a “Hamo,”
WILFREDO LABOY, a/k/a “Gutter,”
Life in prison with a mandatory minimum of 10 years in prison
2
Possession of Firearms in Furtherance of Narcotics Trafficking
18 U.S.C. § 924(c)(1)(A)
DAMON GUADALUPE, a/k/a “Pappy,”
Life in prison with a mandatory minimum of 5 years in prison
DEFENDANT
AGE
DAMON GUADALUPE, a/k/a “Pappy,”
34
MOHAMMED FABELO, a/k/a “Mo,”
38
WILLIAM RODRIGUEZ,
54
JASON HOOKS, a/k/a “Hamo,”
31
WILFREDO LABOY, a/k/a “Gutter,”
30
[1] As the introductory phrase signifies, the entirety of the text of the Indictments, and the description of the Indictments set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Tuesday 10 May 2016
Washington County Man Sentenced to Two Years in Prison for Defrauding HospitalsRead the Press Release
PANAMA CITY, FLORIDA – Eon L. Menckeberg, 55, of Chipley, Florida, was sentenced today to two years’ imprisonment and ordered to pay $268,135.10 in restitution to Northwest Florida Community Hospital and $122,184.38 in restitution to Jackson County Hospital. The sentence was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
On January 14, 2016, Menckeberg was convicted by a jury of six counts of wire fraud for falsely representing to a hospital that he possessed health insurance to obtain specialized medical treatments for a broken ankle. At trial, the government presented evidence that, in May 2012, Menckeberg visited the Jackson County Hospital emergency room after sustaining a compound fracture to his ankle. Over the next several months, Menckeberg was treated and received several surgeries for his injury. In September 2012, after falsely representing that he had insurance to cover his medical expenses at Jackson County Hospital, Menckeberg went to the Wound Trauma Institute at the Northwest Florida Community Hospital to obtain elective hyperbaric-oxygen treatment to aid in the healing of the wound. To pay for the treatments, he falsely told hospital staff that he possessed health insurance through Lloyd’s of London and was president of the Prince Trust. Menckeberg submitted false documents purporting to confirm insurance coverage and authorizing the elective treatments at the hospital. Menckeberg received numerous hyperbaric-oxygen treatments during the next several months, and the treatments and physician costs at the Northwest Florida Community Hospital totaled more than $268,000. Medical treatment at the Jackson County Hospital totaled more than $122,000. Menckeberg was assisted in the fraud by a woman who posed as a Lloyd’s of London broker and told both hospitals that Menckeberg had sufficient insurance to cover his medical treatment. The monies owed to the hospitals were never paid by Menckeberg.
While the jury was deliberating in January, the defendant was taken into federal custody for violating the terms of his pre-trial release by being illegally present in the U.S. At a hearing, it was revealed that Menckeberg was not a United States citizen, but actually a citizen of Suriname. Nineteen years earlier, the Immigration and Naturalization Service denied Menckeberg’s petition to become a permanent resident alien and ordered him to voluntarily depart from the United States by December 26, 1986. Menckeberg failed to do so. Menckeberg subsequently obtained a Florida driver’s license and claimed to be a U.S. citizen born in Florida. Menckeberg has been living and posing as a U.S citizen for the past 19 years. Upon completion of his federal prison sentence, Menckeberg will be subject to deportation from the United States.
The case was investigated by the Federal Bureau of Investigation and the Florida Department of Financial Services, Division of Insurance Fraud. It was prosecuted by Assistant United States Attorney Stephen M. Kunz.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Union President from Ocean County, New Jersey, Convicted of Embezzling over $350,000 in Union FundsRead the Press Release
TRENTON, N.J. – The founder of the United Security and Police Officers of America (USPOA) was convicted today by a federal jury of embezzling hundreds of thousands of dollars in union funds for his personal use, U.S. Attorney Paul J. Fishman announced.
Assane Faye, 61, of Toms River, New Jersey, was convicted of all counts of an indictment charging him with two counts of embezzling union funds and seven counts of mail fraud arising from unemployment insurance fraud. Faye was convicted following a three-week trial before U.S. District Judge Peter G. Sheridan in Trenton federal court. The jury deliberated for five hours before returning the guilty verdict.
According to the documents filed in this case and the evidence presented at trial:
As the founder, national president, and director of the USPOA, as well as a signatory on the USPOA checking account, Faye was obligated to hold and disperse funds of the USPOA solely for the benefit of the union and its members.
Yet in Feb. 2010, without approval of the USPOA Executive Board, Faye put a woman identified in the indictment as “Individual 1,” with whom he had a prior romantic relationship, on the USPOA payroll for $800 a week, purportedly to act as a USPOA organizer in New York. She received additional allowances of $1500 for monthly medical coverage, as well as disbursements for mileage, tolls, parking and vehicle tune-ups. Individual 1 had limited ability to communicate in English, lacked labor organizing experience, and did not own a personal vehicle. As such, Faye’s representations to the Executive Board of her organizing successes were fictional. In addition, Faye had access to both Individual 1’s personal data and bank accounts.
For three and one half years, the union dispersed over $244,000 to Individual 1 while she performed no services for the union. Individual 1 testified that, for at least six months of every year she was on the payroll, she resided in her home country of Senegal. During that time, Faye withdrew approximately $180,000 of her union salary and expense payments for his personal use.
In addition, Faye submitted to the USPOA inflated reimbursement vouchers purportedly for mileage and wear and tear on his personal car, even though he was using rental vehicles. Faye even submitted false vouchers when he traveled outside the United States to Paris, Dubai, China and Milan.
Lastly, despite controlling and collecting disbursements from the USPOA operating account, between April 5, 2010 and June 30, 2010, Faye also committed seven counts of mail fraud by misrepresenting his employment status and fraudulently collecting over $7,000 in unemployment payments from New Jersey’s Unemployment Insurance Division.
Each count of embezzlement carries a maximum potential penalty of five years in prison and a $250,000 fine. Each count of mail fraud arising from Faye’s unemployment insurance fraud carries a maximum potential penalty of twenty years in prison and a $250,000 fine. Sentencing is set for Aug. 22, 2016.
U.S. Attorney Fishman credited the Department of Labor, Office of Inspector General (OIG), under the supervision of Acting Supervisory Agent in Charge Jonathan Mellone, and the Office of Labor Management Standard (OLMS) under the supervision of District Director Andriana Vamvakas for the investigation and trial support leading to today’s verdict.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Office’s Organized Crime and Gang Unit in Newark.
Defense counsel: Andrea Bergman and Lisa Van Hoeck, Federal Public Defenders
Two Clarksburg, WV residents sentenced for selling drugs near local playgroundsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Two Clarksburg residents were sentenced today for selling cocaine and prescription drugs near local playgrounds, United States Attorney William J. Ihlenfeld, II, announced.
Davina Bland, 22, of Clarksburg, sold cocaine near Clarksburg City Park – Monticello Avenue Playground in Harrison County, West Virginia. She pled guilty in September 2015 to one count of “Distribution of Cocaine Base within 1,000 feet of a Protected Location.” She was sentenced today to 33 months in prison.
Tyler Shay Romine, 24, of Clarksburg, sold buprenorphine near Clarksburg City Park – Stealy Park, a playground in Harrison County, West Virginia. He pled guilty in September 2015 to one count of “Distribution of Buprenorphine within 1,000 feet of a Protected Location.” He was sentenced today to 15 months in prison.
Assistant U.S. Attorney Sarah Montoro and former Assistant U.S. Attorney Shawn Morgan prosecuted the cases on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Irene M. Keeley presided.
Three Men Arrested for Possession with Intent to Distribute CocaineRead the Press Release
St. Thomas, USVI- Miguel Rodriguez, 60, of St. Thomas, Estanislao de Jesus, 47, and Tomas Miguel Liriano Castillo, 44, both of the Dominican Republic, were arrested Monday on a criminal complaint charging them with one count each of possession with intent to distribute narcotics, United States Attorney Ronald W. Sharpe announced today. Rodriguez, de Jesus, and Castillo made their initial appearance in court today before District Court Magistrate Judge Ruth Miller. A detention hearing is set for May 11, 2016 for Rodriguez, and May 12, 2016 for de Jesus and Castillo. A preliminary hearing is set for May 12, 2016 for all three men.
According to the complaint, Castillo came by vessel from Tortola with six kilograms of cocaine. Castillo had made arrangements with de Jesus and Rodriguez to pick him up at Hull Bay. When the boat arrived in Hull Bay, Castillo was seen jumping from the vessel with a backpack while de Jesus and Rodriguez waited for him on shore. When Drug Enforcement Administration (DEA) Agents approached the men, Castillo attempted to throw the backpack under a tree. The bag was searched and six bricks of a white substance were located inside the backpack. The substance field tested positive for cocaine and weighed approximately six kilograms. It was determined that Castillo and de Jesus are in the United States illegally.
Possession with the intent to distribute cocaine carries a sentence of not less than 10 years in prison and up to life.
United States Attorney Sharpe reminds the public that a complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the DEA, U.S. Department of Homeland Security, Homeland Security Investigations, FBI, United States Postal Inspection Service, Internal Revenue Service-Criminal Investigations, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
Syrian Electronic Army Member Extradited to the United StatesRead the Press Release
Peter Romar, 36, a Syrian national affiliated with the Syrian Electronic Army (SEA), made his initial appearance this afternoon before U.S. Magistrate Judge John F. Anderson of the Eastern District of Virginia on charges that he conspired to violate U.S. law, including by unauthorized access to, and damage of, computers and related extortionate activities; receiving the proceeds of extortion; money laundering; wire fraud; violations of the Syrian Sanctions Regulations; and unlawful interstate communications.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director James Trainor of the FBI’s Cyber Division and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office announced Romar’s extradition.
Romar, who was detained by German authorities on a provisional arrest warrant on behalf of the United States, was charged by criminal complaint unsealed on March 22, 2016.
According to allegations in the complaint, beginning in or around 2011, co-defendant Firas Dardar, 27, known online as “The Shadow,” and another member of the SEA’s “Special Operations Division” engaged in a multi-year criminal conspiracy to conduct computer intrusions against perceived detractors of President Bashar al-Assad, including media entities, the White House and foreign governments. Beginning in or around 2013, SEA members Romar and Dardar also engaged in an extortion scheme that involved hacking online businesses in the United States and elsewhere for personal profit. Specifically, the complaint alleges that the conspiracy would gain unauthorized access to the victims’ computers and then threaten to damage computers, delete data or sell stolen data unless the victims provided extortion payments to Dardar and/or Romar. In at least one instance, Dardar attempted to use his affiliation with the SEA to instill fear into his victim. If a victim could not make extortion payments to the conspiracy’s Syrian bank accounts due to the Syrian Sanctions Regulations or other international sanctions regulations, Romar would act as an intermediary in an attempt to evade those sanctions.
The case is being investigated by the FBI’s Washington Field Office, with assistance from the NASA Office of the Inspector General, Department of State Bureau of Diplomatic Security and other law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorneys Jay V. Prabhu and Maya D. Song of the Eastern District of Virginia, and Special Assistant U.S. Attorney Brandon Van Grack and Trial Attorneys Scott McCulloch and Nathan Charles of the National Security Division’s Counterintelligence and Export Control Section. The Justice Department’s Office of International Affairs also provided significant assistance.
Syrian Electronic Army Member Extradited to the United StatesRead the Press Release
ALEXANDRIA, Va. – Peter Romar, 36, a Syrian national affiliated with the Syrian Electronic Army (SEA), made his initial appearance here this afternoon on charges that he conspired to violate U.S. law, including by unauthorized access to, and damage of, computers and related extortionate activities; receiving the proceeds of extortion; money laundering; wire fraud; violations of the Syrian Sanctions Regulations; and unlawful interstate communications.
Romar, who was detained by German authorities on a provisional arrest warrant on behalf of the United States, was charged by criminal complaint unsealed on March 22, 2016.
According to allegations in the complaint, beginning in or around 2011, co-defendant Firas Dardar, 27, known online as “The Shadow,” and another member of the SEA’s “Special Operations Division” engaged in a multi-year criminal conspiracy to conduct computer intrusions against perceived detractors of President Bashar al-Assad, including media entities, the White House and foreign governments. Beginning in or around 2013, SEA members Romar and Dardar also engaged in an extortion scheme that involved hacking online businesses in the United States and elsewhere for personal profit. Specifically, the complaint alleges that the conspiracy would gain unauthorized access to the victims’ computers and then threaten to damage computers, delete data or sell stolen data unless the victims provided extortion payments to Dardar and/or Romar. In at least one instance, Dardar attempted to use his affiliation with the SEA to instill fear into his victim. If a victim could not make extortion payments to the conspiracy’s Syrian bank accounts due to the Syrian Sanctions Regulations or other international sanctions regulations, Romar would act as an intermediary in an attempt to evade those sanctions.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John P. Carlin, Assistant Attorney General for National Security; James Trainor, Assistant Director of the FBI’s Cyber Division; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after Romar’s initial appearance.
The case is being prosecuted by Assistant U.S. Attorneys Jay V. Prabhu and Maya D. Song of the Eastern District of Virginia, and Special Assistant U.S. Attorney Brandon Van Grack and Trial Attorneys Scott McCulloch and Nathan Charles of the National Security Division’s Counterintelligence and Export Control Section. The Justice Department’s Office of International Affairs also provided significant assistance.
The case is being investigated by the FBI’s Washington Field Office, with assistance from the NASA Office of the Inspector General, Department of State Bureau of Diplomatic Security and other law enforcement agencies.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case Nos. 1:14-mj-292, and 1:14-mj-498.
Criminal complaints contain allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Summerville Man Sentenced to Prison in $45 Million Mortgage Fraud SchemeRead the Press Release
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Scott M. Wickersham, age 36, of Summerville, has been sentenced in federal court in Charleston, South Carolina for Conspiracy to Commit Mail Fraud, Wire Fraud, and Bank Fraud, a violation of 18 U.S.C. § 1349, and two counts of Willfully Making and Subscribing a False Tax Return, in violation of Title 26, United States Code, Section 7206(1). U.S. District Judge Richard M. Gergel sentenced Wickersham to 36 months in federal prison for the conspiracy count and 30 months on each of the two tax fraud counts, to run concurrently. Judge Gergel also ordered Wickersham to serve five years of supervised release on the conspiracy count and one year of supervised release on each of the two tax fraud counts after he is released from prison, to run concurrently. Wickersham was also ordered to pay restitution in the amount of $23,997,151 on the conspiracy count, and he was further ordered to pay the Internal Revenue Service a total of $256,862 in restitution for the two tax counts.
Evidence presented in court documents and hearings established that Wickersham participated in a mortgage fraud conspiracy that utilized real estate and mortgage businesses operated in Summerville, South Carolina, under the names North American Mortgage Group, LLC; Realty Executives of Coastal Carolina; and New Freedom Enterprises, LLC. The scheme involved more than 70 properties, approximately $45 million of mortgage loans, and a loss of more than $23 million suffered by financial institutions. The properties were located in Charleston, Johns Island, Ladson, Mount Pleasant, Summerville, Edisto Island, St. Helena Island, Garden City, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Lake Keowee, and Tybee Island, Georgia.
Wickersham was a loan officer for North American Mortgage Group, LLC; a real estate agent and part-owner/franchisee of Realty Executives of Coastal Carolina; and a partner in New Freedom Enterprises, LLC. Wickersham and others used straw purchasers and made other false representations on mortgage loan applications to induce financial institutions to provide mortgage loans for the properties in the scheme. The properties later went into foreclosure and sold at a significant loss to the lenders.
In addition to his participation in the mortgage fraud scheme, Wickersham also willfully made and filed false U.S. Individual Income Tax Returns, Forms 1040, for calendar years 2006 and 2007. Both of those returns, which he filed late on January 27, 2009, were materially false because he willfully failed to report income he received from the mortgage fraud scheme. Specifically, on line 22 of the 2006 tax return, he claimed $103,205 of total income when he knew he had at least $965,402 of total income. On line 22 of the 2007 tax return, he claimed $13,383 of total income when he knew he had at least $256,119 of total income. This under reporting resulted in a tax loss of $206,100 for 2006 and $50,762 for 2007, for a total tax loss of $256,862. Each return was verified by a written declaration that it was made under the penalties of perjury.
Two other defendants have been convicted in connection with the mortgage fraud scheme. Steven F. Weiss, 67, of Virginia Beach, Virginia, pleaded guilty to one count of Conspiracy to Commit Mail Fraud, Wire Fraud, and Bank Fraud, in violation of Title 18, United States Code, Section 371. Weiss, a former loan officer of North American Mortgage Group, LLC, was sentenced in April to 30 months in federal prison. Judge Gergel also ordered Weiss to serve three years of supervised release after he is released from prison and to pay restitution in the amount of $4,961,732. Kelly Martin, 34, of Moncks Corner, pleaded guilty in 2015 to one count of Conspiracy to Commit Mail Fraud, Wire Fraud, and Bank Fraud, in violation of Title 18, United States Code, Section 371. She is awaiting sentencing.
The case was investigated by agents of the Federal Bureau of Investigation (FBI) and the Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant United States Attorney Dean H. Secor of the Charleston office prosecuted the case.
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Springfield Woman Pleads Guilty to Producing Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., woman pleaded guilty in federal court today to producing and distributing child pornography.
Tracy Ann Smith, 41, of Springfield, pleaded guilty before U.S. District Judge M. Douglas Harpool to the charges contained in a Jan. 19, 2016, federal indictment.
By pleading guilty today, Smith admitted that she used a minor, identified as Jane Doe #1, to produce child pornography between Nov. 1, 2014, and Jan. 8, 2016. Smith also admitted that she received and distributed child pornography during that time.
Under federal statutes, Smith is subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to a sentence of 50 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Springfield, Mo., Police Department and the FBI.
Project Safe Childhood
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."
Spartanburg Man Guilty in Three Million Dollar Wire FraudRead the Press Release
Contact Person: David Stephens (864) 282-2100
Greenville, South Carolina ---- United States Attorney Bill Nettles announced today that Claus C. Foerster, age 55, formerly of Spartanburg, South Carolina, entered a plea of guilty as charged today to multiple counts of Wire Fraud in violation of Title 18, United States Code, Section 1343. United States District Court Judge Bruce H. Hendricks, sitting in Greenville, accepted the plea of guilty. Judge Hendricks will sentence Foerster after the preparation of a Presentence Report. On each of the five counts of the Indictment, Foerster faces a possible sentence of up to twenty years in prison and a fine of $250,000.00.
At the guilty plea hearing Assistant United States Attorney David C. Stephens advised the court of the following: 1997 through 2014 Mr. Foerster was a financial advisor employed by national investment counseling firms. In approximately 2000 Mr. Foerster began stealing from his clients. He would advise the clients that he had located better investments than their current portfolio. He would then tell them that to get in to these investments they would have to withdraw their funds from his employers’ accounts and transfer them to his account for further investment. Once the funds were in Mr. Foerster’s account he would simply divert them to his own use. By creating bogus account statements and on occasion returning some funds to the clients as “profits” he was able to keep the scheme going for over a decade. By his use of this scam Foerster cheated his clients out of more than three million dollars ($3,000,000.00).
The United States Secret Service investigated the case. Mr. Nettles commended them and AUSA Stephens for their diligence in this investigation and prosecution.
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Southern California Man Pleads Guilty to Making Illegal Contributions to His Son’s Congressional CampaignsRead the Press Release
A southern California man pleaded guilty today to making excessive campaign contributions and making campaign contributions in the name of another.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Phillip A. Talbert of the Eastern District of California made the announcement.
Babulal Bera, 83, of La Palma, California, pleaded guilty in Sacramento before U.S. District Judge Troy L. Nunley in the Eastern District of California. He is scheduled to be sentenced by Judge Nunley on Aug. 4.
In connection with his pleas, Bera admitted that, in 2010 and 2012, he made the maximum allowable individual contributions to his son’s congressional campaigns in California’s District 3 (2010) and District 7 (2012). He further admitted that he solicited friends, family members and acquaintances to make contributions, which he then reimbursed with his own funds to make campaign contributions in excess of the contribution limits established by federal law. The government has identified over 130 improper campaign contributions involving approximately 90 contributors in the two elections. To date, the government has identified over $220,000 in reimbursed contributions relating to the 2010 campaign and over $40,000 in reimbursed contributions relating to the 2012 campaign.
This case was investigated by the FBI. Trial Attorney Richard Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys John Vincent and Philip Ferrari are prosecuting the case.
Southern California Man Pleads Guilty to Making Illegal Contributions to His Son’s Congressional CampaignRead the Press Release
SACRAMENTO, Calif. — Babulal Bera, 83, of La Palma, pleaded guilty today to making excessive campaign contributions and making campaign contributions in the name of another.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting United States Attorney Phillip A. Talbert made the announcement.
The charges were filed in the District Court in Sacramento on Monday. Earlier today, Bera was arraigned and pleaded guilty to both counts before United States District Judge Troy L. Nunley.
According to court documents, in 2010 and 2012, Bera’s son was a candidate for a seat in the United States Congress representing District 3 (2010) and District 7 (2012) from the state of California. With respect to both elections, the candidate’s official federal campaign committee was headquartered in Elk Grove. With respect to both elections, the defendant made the maximum allowable individual contributions to his son’s campaign, and he also solicited friends, family members and acquaintances to make contributions, which he then reimbursed with his own funds. Bera did this to make contributions to his son’s campaign in excess of the contribution limits established by federal law. With respect to the 2010 and 2012 elections, the government has identified over 130 improper campaign contributions involving approximately 90 contributors. To date, the government has identified over $220,000 in reimbursed contributions relating to the 2010 campaign, and over $40,000 in reimbursed contributions relating to the 2012 campaign.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys John Vincent and Philip Ferrari, and Department of Justice Public Integrity Section Trial Attorney Richard Evans are prosecuting the case.
Bera, who was ordered released on his own recognizance, is scheduled to be sentenced by Judge Nunley on August 4, 2016. Bera faces a maximum statutory penalty of five years in prison on each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Sherman Man Charged with Violating Clean Air Act, Making False Statements Related to Asbestos RemovalRead the Press Release
Springfield, Ill. – A Sherman, Ill., man, Joseph J. Chernis, IV, is scheduled to appear for arraignment on June 7, 2016, in federal court, to face charges that he violated the Clean Air Act and made false statements related to asbestos removal at the former Pillsbury Mills / Cargill facility in Springfield. The indictment, returned by the grand jury on May 5, 2016, charges Chernis, 33, with illegal and unsafe asbestos removal and with making false statements during a hearing in the Circuit Court of the Seventh Judicial District, Sangamon County.
The indictment alleges that in October 2014, Chernis hired an untrained individual to illegally remove dry asbestos pipe insulation from the facility located at 1525 East Phillips Street. From October 2014 to August 2015, dry asbestos-containing insulation was allegedly cut and stripped from pipes inside four buildings at the facility, including the structure known as the Dryer building. The asbestos debris was stuffed into approximately 300 garbage bags and at least two open-topped cardboard boxes, and left inside vacant buildings at the facility. The indictment further alleges that in late October 2014, Chernis caused the Dryer building to be demolished with more than 1,000 linear feet of asbestos pipe insulation remaining inside the structure.
The indictment further charges Chernis with two counts of making false statements during a hearing on Oct. 1, 2015, in the Circuit Court of the Seventh Judicial District, Sangamon County, in connection with a civil action filed against him by the Illinois Attorney General’s Office at the request of the Illinois Environmental Protection Agency. The indictment alleges Chernis falsely represented that he did not know who had performed the demolition work at the Pillsbury Mills / Cargill facility, when he knew that he had personally participated in the demolition work and had solicited others to assist him. In addition, Chernis allegedly falsely represented that another individual was responsible for the work activity by the untrained individual hired to remove dry asbestos pipe insulation when he knew that he had hired and directed the individual’s activity at the facility.
Under provisions of the Clean Air Act, the EPA has promulgated rules, regulations and requirements to control the removal, handling and disposal of asbestos, a hazardous air pollutant. Any owner or operator of a renovation or demolition activity which involves removal of specified amounts of asbestos-containing material must comply with the EPA regulations.
The indictment specifically charges Chernis with four violations of the Clean Air Act and the federal asbestos regulations from Oct. 1, 2014, to Aug. 31, 2015: failure to have at least one on-site representative, trained in federal asbestos regulations, present during the removal of regulated asbestos-containing material; failure to adequately wet all regulated asbestos-containing material and ensure that it remained wet until collected and contained or treated in preparation for disposal; failure to remove all regulated asbestos-containing material from a building before beginning any activity that would break-up, dislodge or similarly disturb regulated asbestos-containing material; and failure to deposit all asbestos-containing waste material as soon as was practical at a waste disposal site operated in accordance with the federal asbestos regulations.
If convicted, the statutory penalty for each count charged in the indictment, violation of the Clean Air Act (four counts) and making a false statement (two counts), is a maximum of five years in prison and a term of supervised release of up to three years following any term of imprisonment, as well as a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorney Katherine Boyle and Special Assistant U.S. Attorney James Cha. The charges are the result of investigation by the U.S. Environmental Protection Agency, Criminal Investigation Division.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Sex Offender Sentenced for Failing to Register in MassachusettsRead the Press Release
BOSTON – A former Amherst man was sentenced yesterday in U.S. District Court in Springfield for failing to register as a sex offender, his fifth conviction for violating his registration obligations.
Jose Dones, 40, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 30 months in prison and seven years of supervised release. In January 2016, Dones pleaded guilty to one count of failing to register as a sex offender.
Dones was designated a Level Three sex offender in New York after being convicted of rape in 1994 and forcible touching in 2008. Dones was aware of his obligations to register as a sex offender, but failed to do so leading to four convictions in New York. In November 2014, Dones moved from New York to Amherst, Mass. to live with a woman he met on the Internet and her children, and failed to register as a sex offender for over two months.
United States Attorney Carmen M. Ortiz and John Gibbons, U.S. Marshal for the District of Massachusetts, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Alex J. Grant of Ortiz’s Springfield Branch Office.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’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, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Second Defendant Pleads Guilty to Methamphetamine Conspiracy ChargeRead the Press Release
ROANOKE, VIRGINIA – The second member of a conspiracy that distributed methamphetamine in the Western District of Virginia pled guilty today in the United States District Court for the Western District of Virginia in Roanoke, United States Attorney John P. Fishwick announced today.
Timothy Scott Anderson, 50, of Wytheville, Virginia, pled guilty today in District Court to one count of conspiring to distribute more than 500 grams of a mixture containing methamphetamine.
“The scourge of methamphetamine abuse continues to ravage communities throughout Southwest Virginia,” United States Attorney John P. Fishwick Jr. said today. “We will continue to be vigilant in working with our partners in law enforcement to combat this growing threat.”
At sentencing, Anderson faces a mandatory minimum sentence of ten years in prison and a maximum statutory sentence of life in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors.
The investigation of the case was conducted by the Drug Enforcement Administration, the Virginia State Police, the Wythe County Sheriff’s Office, the Smyth County Sheriff’s Office and the United States Marshals Service. Assistant United States Attorney Andrew Bassford prosecuted the case for the United States.
Repeat Sex Offender Sentenced to over Ten Years in Prison for Possession of Child PornographyRead the Press Release
PHOENIX – On May 9, 2016, David Lee Frater, 63, of Mesa, Ariz., was sentenced by U.S. District Judge David G. Campbell to 125 months in prison followed by a lifetime term of supervised release. Frater had previously pleaded guilty to possession of child pornography.
In 2014, a detective in New Zealand encountered a user on a popular file-sharing software who was distributing images of child pornography. Through this investigation, it was learned that the individual was Frater, who had also been advertising child pornography under alternate online personas. Frater was an unregistered sex offender who had previously been convicted of possession of child pornography and annoying or molesting a child under 18. A search warrant was executed at Frater’s residence which revealed he was in possession of over 28,000 images and 713 videos of child pornography, some of which depicted prepubescent minors and sadistic or masochistic conduct. In sentencing Frater, Judge Campbell indicated that child pornography is a “scourge of society” that preys on helpless victims and to traffic the materials “fuels the fire that is consuming many children.”
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigation in this case was conducted by the Federal Bureau of Investigations as assisted by the New Zealand Customs Service and other law enforcement agencies in New Zealand. The prosecution was handled by Rachel Reames Stoddard, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-14-1517-PHX-DGC
RELEASE NUMBER: 2016-044_Frater
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Psychologist from Rio Rancho Sentenced to Probation for Federal Health Care Fraud ConvictionRead the Press Release
ALBUQUERQUE – Julee K. Huggins, 61, of Rio Rancho, N.M., was sentenced today in federal court in Albuquerque, N.M., to five years of probation for her conviction on healthcare fraud charges. Huggins also was ordered to pay $157,839.94 in restitution to Medicare and two private insurance carriers who were the victims of Huggins’ criminal conduct.
Huggins entered a guilty plea on Nov. 3, 2015, to a felony information charging her with healthcare fraud. At the time she committed the crime, Huggins was a licensed and practicing clinical psychologist who provided mental health counseling out of a practice in Rio Rancho.
In entering her guilty plea, Huggins admitted that between Jan. 2011 and Feb. 2014, she executed a scheme to fraudulently obtain money from three health care benefit programs, Medicare, which provides healthcare benefits to persons over 65 years of age and persons who are disabled, Presbyterian Health Plan and Blue Cross Blue Shield of New Mexico (collectively, the healthcare benefit programs). Huggins admitted perpetuating the scheme by submitting claims to the three healthcare benefit programs for counseling services that were never performed and by overbilling the programs. Huggins defrauded the three healthcare benefit programs of an aggregate of $157,839.94.
This case was investigated by the Albuquerque office of the FBI and was prosecuted by Assistant U.S. Attorney Reeve L. Swainston.
President of Engineering Firm Admits to Bribing Elected Officials in Allentown and ReadingRead the Press Release
PHILADELPHIA – Court documents were unsealed today in relation to the guilty plea entered by Matthew McTish, 57, of Orefield, PA. McTish pleaded guilty on April 28, 2016 to one count of conspiracy to commit bribery offenses, announced United States Attorney Zane David Memeger. McTish faces a maximum possible sentence of five years in prison, a possible fine, three years of supervised release, and a $100 special assessment. U.S. District Judge Juan R. Sanchez scheduled a sentencing hearing for August 2, 2016.
McTish[1] was the president of an engineering firm which heavily relied on contracts with governmental organizations in Pennsylvania, including the cities of Allentown and Reading. Public Official #1, of Reading, PA, and Public Official # 3, of Allentown, PA, made clear to subordinates and donors that favorable official action would be withheld from certain donors who failed to provide satisfactory campaign contributions. By the same token, these elected officials directly and indirectly communicated to certain donors that they were expected to provide items of value, including campaign contributions, in return for certain past or prospective official actions in Reading and Allentown.
Public Official #1 and Public Official #3 identified certain engineering firms, including McTish’s, as promising targets for their pay to play schemes. Public Official #1 and Public Official #3 believed that these firms were particularly vulnerable to fundraising solicitations by elected city officials because of the firms’ reliance on municipal contracts and their desire to win such contracts in Reading and Allentown. Public Official #1 and Public Official #3 believed that for these firms, losing thousands of dollars to campaign treasuries was more acceptable than being shut out of consideration for millions of dollars’ worth of contracts. McTish admitted that under pressure from Public Official #1, Public Official #3 and their subordinates, he agreed to remit thousands of dollars of campaign contributions in order to keep his company viable for consideration for municipal contracts in Reading and Allentown. McTish agreed to continue raising such contributions for Public Official #1 even after he had lost re-election so that Public Official #1 could help McTish’s firm before leaving office. McTish also agreed to reward Mary Ellen Koval with a campaign contribution for her efforts in helping Public Official #3 trying to steer a contract to his company.
After paying campaign contributions to reward Koval and Public Official #3 for their efforts to steer an Allentown city contract to his company, McTish learned that the city had cancelled its plans for the contract. When McTish met with Public Official #3 to discuss the prospects of future engineering contracts with the City of Allentown, Public Official #3 asked for even more money – this time asking McTish to raise at least $21,600 before a federal campaign reporting deadline of June 30, 2015. Public Official #3 claimed that winning the federal campaign would allow him to provide greater assistance to McTish’s company. McTish was unhappy with Public Official #3’s demand but gave a $2,500 contribution in order to maintain his company’s viability for future contracts from the City of Allentown.
This case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police. It is being prosecuted by Assistant United States Attorneys Joe Khan, Michelle Morgan, and Anthony Wzorek.
[1] McTish was identified in pleadings in related cases (and in paragraph 15 of his own Information) as “Donor #2.”
Pennsylvania State Senator and Pennsylvania Democratic Party Official Charged in Vote Buying SchemeRead the Press Release
A Pennsylvania State Senator and a Pennsylvania Democratic Party Official were charged in a federal indictment for their involvement in a bribery and fraud scheme related to the 2011 election for Democratic Ward Leader for Philadelphia’s Eighth Ward.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division made the announcement.
Lawrence “Larry” Farnese, 47, and Ellen Chapman, 62, both of Philadelphia, were charged with conspiracy, mail fraud, wire fraud, and violations of the Travel Act. According to the indictment, at the time of the alleged illegal conduct, Farnese was a Pennsylvania State Senator and a candidate for Democratic Ward Leader of the Eighth Ward and Chapman was a member of the Eighth Ward Democratic Committee.
The indictment alleges that from May to December 2011, Farnese and Chapman devised a bribe scheme in which Farnese paid $6,000 to a college study-abroad program for Chapman’s daughter in exchange for Chapman’s agreement to use her position with the Eighth Ward Democratic Committee to support Farnese in the upcoming ward leader election. According to the indictment, Chapman had originally intended to support a different candidate in the ward leader election. The indictment also alleges that Farnese made the $6,000 payment using campaign funds and disguised the true purpose of the payment by falsely listing it as a “donation” on the campaign’s finance report.
The charges and allegations in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case was investigated by the FBI and is being prosecuted by Trial Attorneys Jonathan Kravis and Peter Halpern of the Criminal Division’s Public Integrity Section.
Pair Pleads Guilty to Cocaine, Gun ChargesRead the Press Release
DANVILLE, VIRGINIA – Two men, who were part of a conspiracy to distribute cocaine, pled guilty yesterday in the United States District Court for the Western District of Virginia in Danville to Federal drug charges, United States Attorney John P. Fishwick Jr. announced today.
Osman Roverto Leiva Castellanos, 33, a citizen of Honduras and Virginio Aguirre Jimenez, a citizen of Mexico, each pled guilty yesterday in separate hearings to one count of conspiring to possess with the intent to distribute 500 grams or more of cocaine and one count of possessing a firearm in furtherance of a drug trafficking offense.
“Trafficking in illegal drugs is a serious offense that we will continue to work with our partners in law enforcement to take action against,” United States Attorney John P. Fishwick Jr. said today. “We will work to put those who distribute these addictive substances in prison and provide support for those in need of treatment and prevention services.”
The investigation of the case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Danville Police Department, the Eden, North Carolina Police Department and the Rockingham County Sheriff’s Office. Assistant United States Attorney Ashley B. Neese prosecuted the case for the United States.
Owner of Reisterstown Telemarketing Business Charged in Nationwide Office Supply ScamRead the Press Release
Baltimore, Maryland – A criminal complaint was filed charging Brian Keith Wallen, age 52, of Lutherville, Maryland with mail fraud arising from a nationwide fraudulent telemarketing scheme designed to ship unwanted and vastly over-priced light bulbs and cleaning supplies to thousands of businesses and non-profit organizations, including churches, schools and homeless shelters. The complaint was filed on May 4, 2016 and unsealed today.
The criminal complaint was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Postal Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service - Washington Division.
“We are asking for the public’s help in finding Brian Wallen,” said U.S. Attorney Rod J. Rosenstein. “Mr. Wallen reportedly left a note referencing his death, but law enforcement is still searching for him.”
According to the affidavit supporting the complaint, Wallen and others operated principally operated out of Maryland and Florida, and used a variety of company names to disguise the existence of the scheme and confuse victims. The conspirators used a company dubbed Midway Industries, as well as other related companies (collectively, the shell entities) to distribute products and collect the money from victims through fraud. Wallen owned and/or managed in part all of the shell entities, and oversaw the Reisterstown-based operations. Wallen, along with others, personally handled the accounts of large, repeat victims.
The affidavit alleges that from about 2010 to 2014, Wallen and others in the shell entities (collectively, the conspirators) telephoned authorized representatives of businesses and non-profit organizations, purportedly on behalf of individual shell entities. The authorized representatives were often maintenance employees. During these phone calls, the conspirators falsely stated that: the victim businesses had an existing business relationship with the shell entities; the purpose of the call was to provide an updated phone number or to send catalogues; and that the shell entities would send a “half box” of light bulbs, when in fact there were never any half boxes. The “half box” was a deceptive technique used to understate the volume and price of shipments, and disguise unwanted future shipments.
According to the affidavit, during the initial calls, conspirators regularly promised national store gift cards to the authorized representatives to induce them to place initial orders, or to provide to the shell entities additional company information or personal information, like the authorized representatives’ home address and personal phone number. The conspirators used the cell phone numbers and/or birthdays of the authorized representatives as “purchase order” numbers in order to lend legitimacy to later collections efforts. If the maintenance employee inquired about price, the caller falsely stated that he or she did not have the price in front of them, but that it would be at the corporate discount. In fact, the shell entities did not offer a corporate discount.
As long as the victims continued paying the shell entities’ invoices, the conspirators misrepresented in subsequent calls that the balance of the victim’s order or “regular seasonal order” had recently been shipped, despite no order having been made by the victim business, and no actual shipment having yet been sent. The conspirators called authorized representatives under the guise of different shell entities in order to repeat the process using a product other than light bulbs, often cleaning supplies. The conspirators often denied the relationship between the shell entities when questioned by victims.
The affidavit further alleges that on multiple occasions, when the authorized representative could not be reached by phone, the conspirators would simply send the product to the victim, without the victim placing an order. The conspirators referred to this practice as “just shipping.” Wallen was such a prolific user of the “just ship” method, his nickname within the shell entities was “Ship.” If the authorized representative had quit, been fired, or even passed away, they sent a product to the victim knowing that the victim would be unable to dispute the validity of the order.
According to the affidavit, Wallen and his co-conspirators ordered light bulbs and cleaning supplies from a company located in New Jersey (supplier). They instructed the supplier to ship the products to the victim without an invoice, and to send the invoices directly to the shell entities. The conspirators sent inflated invoices to the billing departments of the victims, which were often different departments from those of the authorized representatives.
The price billed to victims allegedly had no correlation to the product being sent. Rather, the price was determined and/or approved by a supervisor based on what they suspected the victim would pay without detecting the scheme. The invoices were regularly 900% above the prices the shell entities paid the supplier. After a victim had paid one invoice, the conspirators sent invoices to the victim that were sometimes greater than 8,000% above the supplier’s prices.
When victims did not remit payment, the shell entities repeatedly called the victims’ collection departments in order to force them to pay the inflated invoices. If the victim company continued to protest, they were told that the authorized representative was recorded ordering the product. The shell entities insisted that the fact that the authorized representative had provided his home address to receive a gift card indicated that the authorized representative had actually placed an order with Midway. Conspirators recorded the serial numbers of gift cards before they were sent to victims in order to track the balance and use the expenditures by the maintenance employee against the victim companies.
If the victim threatened to contact law enforcement or the Better Business Bureau, the conspirators offered to take back a product at either a discounted rate or for a re-stocking fee that was still substantially greater than the cost of the products purchased from the supplier.
From January 1, 2011 through June 2, 2014, a Federal Trade Commission (FTC) consumer protection database documented more than 500 complaints regarding the shell entities. On July 21, 2014, the FTC filed a civil complaint in federal court in Baltimore, Maryland alleging telemarketing and consumer fraud. The court temporarily enjoined the shell entities, and Wallen individually, from operating the businesses, and froze assets. Business operations were halted on July 23, 2014.
As a result of the fraud scheme, Midway and the shell entities allegedly sent fraudulent invoices to victim companies for more than $100 million and received more than $50 million in payments on those invoices.
Wallen faces a sentence of 20 years in prison.
On April 28, 2016, Wallen was reported missing. The Baltimore County Police Department is currently conducting a missing person investigation. Anyone with information concerning Wallen’s whereabouts is urged to call police at 410-307-2020. http://www.baltimorecountymd.gov/News/PoliceNews/iWatch/PoliceNeedHelpFindingMissingLuthervilleMan
A criminal complaint is not a finding of guilt. A defendant charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the FBI and U.S. Postal Inspection Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Sean R. Delaney and Harry M. Gruber, who are prosecuting the case.
Owner Admits Underground Sewage Dumping at Dunes Toy Storage in HoltvilleRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – May 10, 2016
SAN DIEGO –Daniel Williams of Arizona pleaded guilty today in federal court, admitting that he concealed the illegal underground disposal of sewage at a recreational vehicle (RV) storage location in Holtville, California.
In 2005, Williams formed a partnership known as Dunes Toy Storage with another individual. In entering his plea, Williams acknowledged that a septic leach system was installed at Dunes Toy Storage even though he had no authorization from the EPA, and the permit obtained from Imperial County specifically prohibited the use of leach lines.
Williams admitted that he was aware that the sewage was leaching out underground at the site from 2006 to 2015. Williams stated that even after he became aware of the federal felony prosecution of Glamis Dunes Storage for the same offense, he concealed the existence of the underground discharge at Dunes Toy Storage and did not bring it to the attention of the authorities. Over the last decade, hundreds of thousands of gallons of improper waste was discharged at the site.
“Pollutants that are improperly discharged can contaminate our water supplies and sicken or injure people and wildlife,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “That’s why it is imperative that we enforce environmental laws and hold polluters accountable. Today’s plea demonstrates that EPA and its law enforcement partners are committed to protecting public health and the environment.”
Williams is scheduled for sentencing before U.S. District Judge Janis L. Sammartino on August 5, 2016, at 9:00 a.m.
DEFENDANTS Criminal Case No. 16cr1003-JLS
Daniel Williams Age: 67 Littlefield, Arizona
SUMMARY OF CHARGES
Misprison of a Felony– Title 18, U.S.C., Section 4
Maximum penalty: Five years in prison and $250,000 fine
AGENCY
Bureau of Land Management, Office of Law Enforcement; U.S. Environmental Protection Agency, Criminal Investigations Division
Orange County Man Who Embezzled from Employer – while on Bond in another Federal Embezzlement Case – Pleads Guilty to Bank FraudRead the Press Release
SANTA ANA, California – An Orange County man has pleaded guilty to embezzling approximately $1.4 million from his employer, a crime he committed when he was pending sentencing in another embezzlement case involving another former employer.
Peter Suk Lee, 49, a resident of the City of Orange, pleaded guilty yesterday afternoon to a federal bank fraud charge and admitted that he embezzled company funds from Contempo Inc. USA, a family-owned, Los Angeles-based business that imports and distributes fashion accessories.
As a result of this week’s guilty plea and the earlier federal charges, Lee faces a statutory maximum sentence of 90 years in federal prison when he is sentenced by United States District Judge David O. Carter on August 15.
From August 2014 through September 2015, Lee was the controller at Contempo. During this time, Lee embezzled money by forging the signatures of the company officers on 92 unauthorized checks that were made out to him and several associates. The total value of these checks was $1.38 million. Lee admitted that he deposited $393,400 embezzled from Contempo into his personal TD Ameritrade account, and caused other embezzled funds to be wired to casinos for his use.
At the time, Lee was free on bond and awaiting sentencing after pleading guilty to wire fraud for embezzling money from another business. In that prior case, Lee admitted that he embezzled approximately $2.65 million from Glovis America, Inc., an Irvine-based automotive logistics company where Lee had been employed as the accounting manager.
In court on Monday, Lee also admitted that, between his stints at Glovis and Contempo, he embezzled from a third company. Lee specifically admitted that he stole approximately $70,000 from the Placentia-based Orion Technology, Inc.
“This defendant’s brazen theft of millions of dollars from three different employers in only a few years was extremely harmful to those companies,” said United States Attorney Eileen M. Decker. “That Mr. Lee continued to victimize employers while pending sentencing on fraud charges makes his actions all the more outrageous.”
This case was investigated by the Federal Bureau of Investigation.
Okaloosa County Father and Son Sentenced in Wire Fraud Scheme to Defraud Non-ProfitsRead the Press Release
PENSACOLA, FLORIDA – Anthony Floyd Hemphill, 39, and his father, William Hemphill, 58, both of Crestview, Florida, were sentenced today after pleading guilty in February 2016 to conspiracy to commit wire fraud in connection with a scheme to defraud non-profit organizations of more than $300,000. Anthony Hemphill was sentenced to 41 months in prison, to be served consecutive to another sentence he is currently serving, and William Hemphill to 5 years’ probation. The sentences were announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
During their pleas, the conspirators admitted that, between December 2013 and December 2014, they fraudulently represented that A.F.H. Construction LLC owned modular buildings that could be donated to non-profit organizations free of charge, if the non-profit organizations would agree to pay for the transportation and set up of the buildings. Using high pressure sales tactics, the conspirators persuaded the non-profit organizations to quickly wire advance payments for transportation and set up costs, ostensibly to prevent the modular buildings from being donated to other parties.
Once they had their victims’ money in hand, the Hemphills used delaying tactics and false statements to convince the victims that the modular buildings were in the process of being delivered and set up. In fact, no modular buildings were ever delivered.
During the conspiracy, the victims wired approximately $311,700 as advance payments for the transportation and set up costs. Anthony Hemphill used $51,000 of these payments to make a partial restitution payment that he owed in another federal criminal case in the Western District of Texas. Anthony Hemphill is currently serving a 41-month sentence imposed in the Texas case. He committed the conduct underlying the modular building fraud while on pre-trial release and/or as a fugitive in the Texas case.
In addition to the conspiracy charge, Anthony Hemphill pled guilty to wire fraud, and William Hemphill pled guilty to making a false statement to a federal agent.
This case resulted from an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Kathryn D. Risinger prosecuted the case.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Ohio Man Charged with April Robberies at Erie Bank, Gas StationRead the Press Release
ERIE, PA. – A former resident of Wickliffe, Ohio, has been indicted by a federal grand jury in Erie on charges of bank robbery and Hobbs Act robbery, United States Attorney David J. Hickton announced today.
The two-count indictment named Zachary Price, 33.
According to the indictment presented to the court, on April 24, 2016, Price robbed the Kwik Fill located at 3620 Peach Street, Erie, Pennsylvania. On April 25, 2016 Price robbed $2,000 from the Huntington Bank, located at 5808 Peach Street, Erie, Pennsylvania.
The law provides for a maximum total sentence of 40 years in prison, a fine of $500,000 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 Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Erie Police Department and the Millcreek Police Department 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.
New Kensington Man Sentenced to 12 Years in Prison for Violating Gun and Drug LawsRead the Press Release
PITTSBURGH – A Westmoreland County resident has been has been sentenced in federal court to 144 months’ imprisonment, followed by five years’ supervised release, on his conviction of violating federal narcotics and firearms laws, United States Attorney David J. Hickton announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Kevin Witcher, 41, of New Kensington, Pennsylvania.
According to information possessed by the Court, on or about Feb. 3 and 4, 2015, Witcher, a convicted felon, illegally possessed a Ruger, .357 caliber revolver, and a Zastava Arms PAP, Model M85PV pistol. Federal law prohibits anyone who has been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing a firearm. Additionally, Witcher possessed with intent to distribute 100 grams or more of heroin, a Schedule I controlled substance, and 500 grams or more of cocaine, a Schedule II controlled substance, and distributed and possessed with intent to distribute an additional quantity of heroin, while possessing the two firearms in furtherance of drug trafficking.
Assistant United States Attorney Katherine A. King prosecuted this case on behalf of the government.
The Pennsylvania State Police and the Drug Enforcement Administration conducted the investigation leading to the successful prosecution of Witcher.
New Jersey Man Sentenced to 15 Years in Prison for Conspiring to Provide Material Support to ISILRead the Press Release
A West New York, New Jersey, man today was sentenced to 15 years in prison for conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division.
Alaa Saadeh, 24, was sentenced by U.S. District Judge Susan D. Wigenton of the District of New Jersey, after pleading guilty on Oct. 29, 2015, to an information charging him with one count of conspiring with others to provide material support to ISIL. In addition to the prison term, Judge Wigenton sentenced Saadeh to a lifetime of supervised release.
“With this sentence, Alaa Saadeh is being held accountable for conspiring with his brother and others to travel overseas to join ISIL,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“Saadeh didn’t just plan to join ISIL, he facilitated his brother’s overseas travel and deliberately took steps to conceal the scheme from law enforcement,” said U.S. Attorney Fishman. “Today’s sentence is an appropriate punishment for his role in a conspiracy that would have supplied new recruits to a terrorist organization that regularly threatens American lives at home and abroad.”
“I want to commend the work of the FBI’s Joint Terrorism Task Force investigators and the prosecutors in the U.S. Attorney’s Office who worked countless hours throughout this investigation to protect the community in their execution of the FBI’s Counterterrorism strategy to detect, penetrate and disrupt potential acts of terrorism in the United States and abroad,” said Special Agent in Charge Gallagher.
According to documents filed in this and related cases and statements made in court:
Saadeh admitted that prior to his arrest on June 29, 2015, he planned to travel overseas to join ISIL along with others. Saadeh discussed the plans to join ISIL with his brother, Nader Saadeh, Samuel Rahamin Topaz and Munther Omar Saleh, and admitted that at various times each of them indicated that they wanted to join ISIL. Saadeh also admitted that he watched ISIL-related videos with Nader Saadeh and Topaz, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.
On May 5, 2015, Nader Saadeh, departed the United States with plans to travel overseas to join ISIL as part of the conspiracy. Saadeh admitted assisting Nader Saadeh with these plans by letting him purchase airline tickets using Saadeh’s credit card, removing the SIM card from Nader’s smartphone and resetting the smartphone in an effort to avoid detection. Saadeh also admitted that Saleh assisted Nader Saadeh by giving him contact information for an individual who would facilitate Nader Saadeh’s travel from Turkey to ISIL in Syria.
Saadeh admitted that after his brother left the United States, Saleh and Topaz intended to travel overseas to join ISIL. After becoming aware that the FBI was investigating this matter, Saadeh instructed an individual who knew of Nader Saadeh’s support for ISIL to lie if questioned by the FBI on the subject. Saadeh told this individual to “just play stupid,” “pretend it never happened” and “keep it honest up to a point.”
Saadeh admitted to knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes and executing individuals who did not obey ISIL’s commands.
Saadeh’s alleged co-conspirators are being prosecuted and are currently in federal custody. Topaz and Nader Saadeh both previously pleaded guilty to conspiring to provide material support to ISIL and await sentencing.
Saleh has been indicted on terrorism-related charges in the Eastern District of New York. The charges and allegations against Saleh are merely accusations, and he is presumed innocent unless and until proven guilty.
Assistant Attorney General Carlin and U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, under the direction of Special Agent in Charge Gallagher, and the Joint Terrorism Task Force with the investigation leading to today’s sentencing.
The case is being prosecuted by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta and Francisco J. Navarro of the District of New Jersey, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
Navajo Man Sentenced to 108 Months’ Imprisonment for Voluntary ManslaughterRead the Press Release
PHOENIX, Ariz. – On May 9, 2016, Douglas Lawrence Bedell, Jr., 31, of Dilkon, Arizona, a member of the Navajo Nation, was sentenced by U.S. District Judge Diane J. Humetewa to 108 months’ imprisonment. Bedell had previously pleaded guilty to voluntary manslaughter.
On Jan. 4, 2015, Bedell killed the victim, Brian Lee, also, a member of the Navajo Nation, by stabbing him in the throat. The incident occurred on the Navajo Reservation.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Department of Criminal Investigations. The prosecution was handled by Cassie Bray Woo and Brandon Brown, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-15-8023-PCT-DJH
RELEASE NUMBER: 2016-043_Bedell
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
National Park Service Recognizes Two United States Attorney’s Office EmployeesRead the Press Release
HAMMOND – United States Attorney for the Northern District of Indiana, David Capp, announced that Assistant United States Attorney Wayne Ault and Senior Civil Investigator Paul Drapac were recognized by the National Park Service, Indiana Dunes National Lakeshore for their outstanding work in a civil case to recover damages to park property.
According to Park Superintendent Paul Labovitz; “On March 10, 2012, an Indiana Harbor Belt train passing through the western portions of Indiana Dunes National Lakeshore started a series of wildfires. As the fires raced through the park, they injured or destroyed a variety of park resources, including habitat for the Karner Blue Butterfly, a federally endangered species. These dangerous fires not only devastated natural and man-made resources, but they also jeopardized the safety of park visitors and local residents. At one point during the emergency, fires threatened several homes resulting in the partial evacuation of the Town of Ogden Dunes.”
According to documents in the case, on February 1, 2016 the Indiana Harbor Belt Railroad Company entered a stipulation and agreed judgment for the damages caused to the Indiana Dunes National Lakeshore. After the Court entered judgment, the company paid $72,500 for the damage it caused to the Indiana Dunes National Lakeshore.
This case was the result of an investigation by the National Park Service. This case was handled by Assistant United States Attorney Wayne Ault and Senior Civil Investigator Paul Drapac.
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Martinsburg, WV man pleads guilty to heroin traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Matthew Dylan Harrison, 25, of Martinsburg, pled guilty today to heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Harrison sold heroin in June 2014 in Berkeley County, West Virginia. He pled guilty today to one count of “Distribution of Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Special Assistant U.S. Attorney Stephanie Taylor, also of the Berkeley County, West Virginia Prosecuting Attorney’s Office, prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Malden Man Pleads Guilty to Armed Bank RobberyRead the Press Release
Boston – A Malden man pleaded guilty today in U.S. District Court in Boston to robbing the Hingham Institute for Savings Bank in October 2015.
Anthony Pantone, 56, pleaded guilty to one count of armed bank robbery. U.S. District Court Judge Indira Talwani scheduled sentencing for Aug. 1, 2016.
On Oct.9, 2015, two individuals entered the Hingham Institute for Savings Bank in Boston’s Beacon Hill neighborhood. While one individual, later identified as Russell Dinovo, jumped over the teller’s counter and stole money, the other individual, identified as Pantone, remained in the lobby holding what appeared to be a handgun. During the robbery, Pantone repeatedly said to Dinovo, “hurry up, let’s go” and “get the drawer.” Pantone also told the tellers not to look at the robbers. After putting $16,320 in a duffel bag, the two individuals fled the bank on foot, and were captured with the duffel bag shortly thereafter in a cab. In addition to the cash, an item that looked like a handgun, but was determined to be a fake gun was found in the duffle bag.
Dinovo was charged in a separate indictment with one count of armed bank robbery. His case is pending before U.S. District Court Judge Richard G. Stearns.
The charging statute provides a sentence of no greater than 25 years in prison, five years of supervised release 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 Investigations, Boston Field Office; and Boston Police Commissioner William Evans, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Suzanne Sullivan Jacobus of Ortiz's Major Crimes Unit.
Local Teacher Arrested on Child Pornography ChargesRead the Press Release
HOUSTON – A 50-year-old Houston man has been charged with distribution, receipt and possession of child pornography, announced U.S. Attorney Kenneth Magidson.
Authorities arrested Jason Dion Johnson Friday, May 6, 2016. He made his initial appearance yesterday, at which time he was ordered into custody pending a detention hearing which is set for tomorrow at 10:00 a.m. before U.S. Magistrate Judge Mary Milloy.
At the time of the investigation, Johnson was employed as a 7th grade Social Studies teacher at Beechnut Academy in Houston, according to the charges.
The investigation began Dec. 6, 2015, as the FBI sought to identify persons using peer-to-peer software to traffic in child pornography, according to the criminal complaint filed in the case. According to the charges, authorities soon discovered a specific computer as offering to participate in the distribution of child pornography movies. Johnson was allegedly identified as the person linked to that computer.
Law enforcement executed a search warrant May 6, 2016, at Johnson’s Houston residence, at which time the criminal complaint alleges investigators found a number of videos and images of prepubescent girls being sexually exploited. Additionally, agents allegedly found several unmarked VHS tapes which revealed the presence of what appeared to be a hidden camera video from a changing area within a school. On these tapes, there are young female students who are observed to be entering the camera’s field of view and removing their clothing while in the process of changing into a uniform, according to the complaint.
Authorities do not believe the footage was taken at Beechnut Academy.
If convicted, Johnson faces a minimum of five and up to 20 years imprisonment for the distribution and receipt as well as another 10 years for the possession of child pornography charges.
FBI investigated.
This case, prosecuted by Assistant U.S. Attorney Kimberly Ann Leo, 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."
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.###
Kentucky Tax Return Preparer Pleads Guilty to Federal Tax CrimesRead the Press Release
A Kentucky man pleaded guilty in the U.S. District Court for the Eastern District of Kentucky today to one count of conspiracy to defraud the United States with respect to claims, one count of wire fraud and one count of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky.
Brian Hamilton admitted that during the years 2011 and 2012 he conspired with others, including his brother, Billy Ray Hamilton, Patsy Carnes and Diana Hill to file false tax returns from the Bailey Switch Pawn Shop in Knox County, Kentucky. According to the plea agreement, the Hamiltons prepared and electronically filed with the Internal Revenue Service (IRS) at least 31 tax returns that contained false and fraudulent information regarding wages, self-employment income, expenses, filing statuses and dependents. The Hamiltons did not list their names as return preparers on these tax returns. In some cases, the Hamiltons filed false tax returns without the knowledge or permission of the taxpayers named on the returns. To aid in the preparing and filing of false tax returns, Hill obtained personal identifying information and Carnes was responsible for keeping files of that information and providing it to the Hamiltons.
He faces a statutory maximum sentence of 10 years in prison for the conspiracy charge and 20 years in prison for the wire fraud charge. He also faces a mandatory two year prison term for the aggravated identity theft charge, which will be in addition to any other term of imprisonment he receives. Hamilton also faces financial penalties, supervised release and restitution.
In January, Carnes and Hill each pleaded guilty to one count of conspiracy to defraud the United States with respect to claims. On April 20, Billy Ray Hamilton, pleaded guilty to conspiracy to defraud the United States, wire fraud and aggravated identity theft for his role in the scheme. He is scheduled to be sentenced on Aug. 2.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Harvey commended special agents of IRS – Criminal Investigation, who investigated the case and Assistant U.S. Attorney Neeraj Gupta of the Eastern District of Kentucky and Trial Attorney Abigail Burger Chingos of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Kansas Sex Offender Charged with Child PornographyRead the Press Release
BOSTON – A previously convicted sex offender was arrested Friday, May 6, 2016 in Kansas in connection with distributing child pornography to a currently incarcerated federal inmate.
Christopher Saemisch, 58, was charged in a criminal complaint with one count of distribution of child pornography. He was arrested on Friday while attending an event at a nudist retreat in McLouth, Kansas. Saemisch was ordered detained during an initial hearing in U.S. District Court in Kansas yesterday afternoon. He will appear in U.S. District Court in Massachusetts on May 31, 2016.
According to the complaint, on March 30, 2016, federal agents received information regarding Saemisch from an inmate at FMC-Devens who has been incarcerated since 1997 for child exploitation offenses. The inmate told agents that he had communicated with Saemisch, a registered sex offender living in Kansas City, who admitted to looking at and storing child pornography as well as his expressed interested in traveling to Europe to have sex with children. The inmate allegedly knew Saemisch from when they were previously incarcerated at the same federal prison facility.
Agents reviewed the inmate’s communications with Saemisch, which included special coded language to discuss the collection and distribution of child pornography. The inmate confirmed that they used the code word “antiques,” when referring to child pornography and the code word “puppies,” to refer to children. Agents then initiated an undercover operation using the inmate to communicate with Saemisch. During their monitored conversations on various messaging apps and web platforms, Saemisch helped the inmate set-up accounts to receive and exchange child pornography, and allegedly sent him child pornography he had stored on various file storage sites. Saemisch was arrested on May 6, 2016 at Gaea Retreat Center in Kansas.
The charging statute provides for a mandatory minimum sentence of 15 years and no greater than 40 years in prison, a minimum of five years and up to a lifetime 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; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Joe Norwood, Northeast Regional Director of the Federal Bureau of Prisons, made the announcement today. Assistance was also provided by the United States Attorney’s Office for the District of Kansas, as well as the Johnson County and Leavenworth County Sheriffs’ Departments in Kansas. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Members of the public who have questions, concerns or information related to this case, or any information relating to the sexual exploitation of children, should call (617) 748-3274.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’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, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Jury Convicts KC Man of Illegal FirearmRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man who was wounded in a shoot-out with police officers was convicted in federal court today of illegally possessing a firearm.
Cahlan A. Clay, 28, of Kansas City, was found guilty of being a felon in possession of a firearm. Clay, who has two prior felony convictions, illegally possessed a Jimenez Arms 9mm handgun on Sept. 23, 2012.
According to trial testimony, two uniformed Kansas City police officers who were working off-duty heard multiple gunshots from the area of the Club Luna nightclub, 1520 Grand Ave., at approximately 2:45 a.m. on Sept. 23, 2012. As the officers approached, Clay raised his firearm and pointed it at one of the officers. The officer saw a muzzle flash but was unable to return fire because of the people running in his direction. Clay began running south on Grand Avenue with the officer in pursuit. Clay turned and pointed the gun in the officer’s direction a second time and the officer returned fire. Clay fell when he reached the corner of 16th and Grand.
As the officer turned the corner at 16th and Grand, he found Clay, who had been shot twice, sitting on the ground and leaning against a building with a gun in his hand, pointed at the officer. Clay complied after being told to drop the gun.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Clay has a prior felony conviction for aggravated battery.
Under federal statutes, Clay is subject to a sentence of up to 10 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for about an hour and a half before returning the guilty verdict to U.S. District Judge Roseann Ketchmark, ending a trial that began Monday, May 9, 2016.
This case is being prosecuted by Assistant U.S. Attorneys Patrick Edwards and Courtney R. Pratten. It was investigated by the Kansas City, Mo., Police Department.
Judge Sentences Pittsburgh Heroin Dealer to 20 Years in Federal PrisonRead the Press Release
PITTSBURGH. – A resident of Allegheny Count, Pennsylvania has been sentenced in federal court to 240 months, followed by 10 years supervised release, on his conviction of possession with intent to distribute 100 grams or more of heroin, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence yesterday on Rodney Howard, age 31, of Pittsburgh, Pennsylvania.
According to information presented to the court, on or about September 18, 2014, Howard possessed with the intent to distribute 100 grams or more of a mixture and substance which contained heroin, a Schedule I controlled substance.
Assistant United States Attorneys Cindy K. Chung and Stephen Gilson prosecuted this case on behalf of the government.
U.S. Attorney David Hickton commended the Federal Bureau of Investigation and the Allegheny County Sheriff’s Office for conducting the investigation that led to the successful prosecution of Howard.
Jefferson County, WV man pleads guilty to traveling to engage in sexual conduct with minor victimRead the Press Release
MARTINSBURG, WEST VIRGINIA – Joseph Robert Paper, 32, of Ranson, West Virginia, pled guilty today to traveling across state lines with the intent to engage in sexual conduct with a minor victim, United States Attorney William J. Ihlenfeld, II, announced.
In January 2016, Paper transported a minor female across state lines from Pennsylvania into West Virginia with the intent to engage in illicit sexual conduct. He pled guilty today to one count of “Travel with Intent to Engage in Illicit Sexual Conduct.” He faces up to 30 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn Adkins prosecuted the case on behalf of the government. The West Virginia State Police Crimes Against Children Unit investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Iowa Woman Convicted of Making a False Statement in an Immigration PetitionRead the Press Release
A woman who made a false statement in an immigration petition was convicted by a jury on May 9, 2016, after a one-day trial in federal court in Cedar Rapids.
Tamie Marie Samuels, age 46, from North Liberty, Iowa, was convicted of one count of making a false statement in an immigration matter. The verdict was returned Monday afternoon following about thirty minutes of jury deliberations.
The evidence at trial showed that on March 11, 2015, Samuels filed an immigration petition to help her husband, who she married on February 3, 2015, gain legal status to remain in the United States. Samuels’ husband is from Jamaica and he entered the United States on a visitor visa on February 1, 2015. In the immigration petition, Samuels falsely claimed she had never filed a petition for an alien relative before. Samuels had previously filed a petition for an alien relative in 1997 for her second husband who was from Peru. United States Citizenship and Immigration Services (USCIS) reviews immigration petitions and investigates whether the marital relationships indicate marriage fraud. By denying that she filed a previous immigration petition, USCIS was unaware of Samuels’ previous filing which could have impacted USCIS’ review of the new petition.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Samuels remains free on bond previously set pending sentencing. Samuels faces a possible maximum sentence of ten years imprisonment, a $250,000 fine, $100 in special assessments, and three years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Daniel C. Tvedt and was investigated by the Department of Homeland Security, United States Immigration and Customs Enforcement, Homeland Security Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-0001.
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Husband and Wife Conceal Death of Parent for More Than a Decade to Steal Social Security Retirement BenefitsRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924
NEWS RELEASE SUMMARY – May 10, 2016
SAN DIEGO – Terry Lee Anderson and Melanie Jane Anderson of Watauga, Texas, pleaded guilty today in federal court to theft charges, admitting they concealed the death of Melanie’s father, Mervin Hartman, thereby stealing approximately $100,000 in Social Security retirement benefits.
According to court documents, Mervin Hartman died in January 2002 while living in the Philippines. Normally, the Social Security Administration automatically ceases payments upon the death of a retiree, but in this case no death certificate or other notification was provided due to Hartman’s death overseas. As a result, the Social Security Administration continued to directly deposit monthly retirement benefits through 2013 – at which time the SSA/OIG investigation uncovered his death overseas.
The investigation revealed that Hartman’s bank account had been kept active after his death, and that the only people who had accessed the account and withdrawn the funds were the Andersons, who were then living in the Southern District of California.
In entering their guilty pleas, each of the defendants admitted that they had concealed Mervin Hartman’s death from the Social Security Administration and from his bank. They also admitted that they specifically knew Hartman’s retirement benefits should not have continued after his death, and that they stole the money and converted it to their own use.
As a part of their plea agreement, the Andersons agreed to pay restitution in the amount of $95,877.78 to the Social Security Administration. Both are scheduled to be sentenced on August 15, 2016, before U.S. District Judge Marilyn L. Huff.
DEFENDANT Criminal Case No. 16cr1002-H
Terry Lee Anderson Watauga, TX Age: 70
Melanie Jane Anderson Watauga, TX Age: 65
SUMMARY OF CHARGES
Theft of Public Property – Title 18, U.S.C., Section 641
Maximum penalty: 10 years’ imprisonment and $250,000 fineAGENCIES
Social Security Administration / Office of Inspector General
Hudson County, New Jersey, Man Sentenced to 15 Years in Prison for Conspiring to Provide Material Support to ISILRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was sentenced today to 15 years in prison for conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division announced.
Alaa Saadeh, 24, 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 conspiring with others to provide material support to ISIL. Judge Wigenton imposed the sentence today in Newark federal court.
“Saadeh didn’t just plan to join ISIL: he facilitated his brother’s overseas travel and deliberately took steps to conceal the scheme from law enforcement,” U.S. Attorney Fishman said. “Today’s sentence is an appropriate punishment for his role in a conspiracy that would have supplied new recruits to a terrorist organization that regularly threatens American lives at home and abroad.”
“With this sentence, Alaa Saadeh is being held accountable for conspiring with his brother and others to travel overseas to join ISIL,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism and we will continue to pursue justice against those who seek to provide material support to designated foreign terrorist organizations.”
“I want to commend the work of the FBI’s Joint Terrorism Task Force investigators and the prosecutors in the U.S. Attorney’s Office who worked countless hours throughout this investigation to protect the community in their execution of the FBI’s Counterterrorism strategy to detect, penetrate, and disrupt potential acts of terrorism in the United States and abroad,” stated Newark FBI Special Agent in Charge Timothy Gallagher.
According to documents filed in this and related cases and statements made in court:
Saadeh admitted that, prior to his arrest June 29, 2015, by the FBI Joint Terrorism Task Force (JTTF), he planned to travel overseas to join ISIL along with others. Saadeh discussed the plans to join ISIL with his brother, Nader Saadeh, Samuel Rahamin Topaz, and Munther Omar Saleh, and admitted that at various times each of them indicated that they wanted to join ISIL. Saadeh also admitted he watched ISIL-related videos with Nader Saadeh and Topaz, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.
On May 5, 2015, Saadeh’s brother, Nader Saadeh, departed the United States with plans to travel overseas to join ISIL as part of the conspiracy. Saadeh admitted assisting his brother with these plans by letting him purchase airline tickets using Saadeh’s credit card and by removing the SIM card from Nader’s smartphone and resetting the smartphone in an effort to avoid detection. Saadeh also admitted that Saleh assisted Nader Saadeh by giving him contact information for an individual who would facilitate Nader’s travel from Turkey to ISIL in Syria.
Saadeh admitted that, after Nader Saadeh left the United States, Saleh and Topaz intended to travel overseas to join ISIL. After becoming aware that the FBI was investigating this matter, Saadeh instructed an individual who knew of Nader Saadeh’s support for ISIL to lie to the FBI if the individual was interviewed. Saadeh told this individual to “just play stupid,” “pretend it never happened,” and “keep it honest up to a point.”
Saadeh admitted knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes, and executing individuals who did not obey ISIL’s commands.
In addition to the prison term, Judge Wigenton sentenced Saadeh to a lifetime of supervised release.
Saadeh’s alleged conspirators are being prosecuted and are currently in federal custody. Topaz and Nader Saadeh both previously pleaded guilty to conspiring to provide material support to ISIL and await sentencing.
Saleh has been indicted on terrorism-related charges brought by the U.S. Attorney’s Office for the Eastern District of New York. The charges and allegations against Saleh are merely accusations, and he is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman and Assistant Attorney General Carlin credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and the JTTF, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the U.S. Attorney’s Office National Security Unit in Newark, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
Defense counsel: Maria Noto Esq., Matawan, New Jersey
Hudson County, New Jersey, Man Pleads Guilty to Equity-Skimming FraudRead the Press Release
TRENTON, N.J. – A West New York, New Jersey, man who fraudulently obtained a federally insured mortgage for a West New York rental property today admitted intentionally failing to make loan payments while using $149,000 in rental income from the property for personal expenses, U.S. Attorney Paul J. Fishman announced.
Ruben Vargas, 65, pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of equity skimming.
According to the documents filed in this case and statements made in court:
On Sept. 21, 2007, Vargas obtained a $417,449 mortgage loan insured by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development (HUD), in order to purchase a property located at 5512 Grant Place in West New York.
Vargas had obtained the loan using supporting documentation that contained inflated income, false employment information and false rental history. By March 1, 2008, he had defaulted on the loan by failing to make timely payments. However, Vargas continued to earn nearly $3,000 in monthly rental income from the property by renting the first and second floors to separate tenants.
From March 2008 through December 2013, while in default on the loan, Vargas received approximately $149,000 in rental income. Vargas admitted that he used the funds for personal expenses instead of paying back the mortgage loan.
The federal equity skimming statute prohibits an individual defaulting on a HUD-insured mortgage note from using rental or other income derived from the property for purposes other than the reasonable and necessary expenses of the property. HUD ultimately paid off Vargas’ past due mortgage loan for losses in the amount of approximately $491,000, inclusive of unpaid principal and interest.
The charge for equity skimming to which Vargas pleaded guilty, carries a maximum penalty of five years in prison and a $500,000 fine. Vargas’s sentencing is scheduled for Aug. 18, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Christopher D. Adams, Holmdel, New Jersey
Hollister Man Sentenced to 30 Years for Producing Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Hollister, Mo., man was sentenced in federal court today for producing child pornography.
Michael Shane Tyson, 31, of Hollister, was sentenced by U.S. District Judge M. Douglas Harpool to 30 years in federal prison without parole. The court also sentenced Tyson to a lifetime term of supervised release following incarceration.
Tyson, a former airline pilot, pleaded guilty on Sept. 10, 2015. He admitted that he sexually assaulted a 9-year-old child over a two-year period and created several videos of the abuse with his cell phone.
According to the plea agreement, a Hollister, Mo., police officer responded to Cox Hospital in Branson, Mo., on April 7, 2015, to a report of child molestation. The mother of the child victim told the officer that Tyson had sexually assaulted her daughter the previous week. The mother also told the officer that the abuse had been occurring over the past two years. The child victim did not report the abuse, she said, because Tyson had threatened to kill her if she told anyone.
The child victim was interviewed at the Branson West Child Advocacy Center. She reported that Tyson made videos of her with his cell phone. When she told Tyson she did not want to engage in sexual activities, the plea agreement says, he became angry and threatened her by brandishing a knife taken from a knife block in the kitchen.
Law enforcement officers executed a search warrant at Tyson’s residence and seized seven cell phones, two laptop computers and four flash drives. Investigators discovered several video recordings on one of Tyson’s cell phones in which he placed his phone in the bathroom and secretly recorded two additional child victims, of similar ages to the first victim, undressing, showering and drying off. Investigators also discovered videos and images of the sexual assault of the first child victim on Tyson’s laptop computer, along with 20 images of child pornography that had been downloaded over the Internet.
This case was prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI.
Project Safe Childhood
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."
Guilty Plea in Sex Trafficking ConspiracyRead the Press Release
PROVIDENCE, R.I. – Reginald Chaney, a/k/a “Reggie,” 20, of East Providence, pleaded guilty in U.S. District Court in Providence today to conspiring to transport minors for the purpose of sex trafficking.
Appearing before U.S. District Court Judge John J. McConnell, Jr., Chaney admitted to the court that in January 2015, he conspired with two juveniles to transport two young females, ages 15 and 16, to motels in Seekonk, Mass., and to locations in Providence, Warwick, Charlestown and Narragansett for the purpose of sex trafficking. He is scheduled to be sentenced on August 10, 2016.
Chaney’s guilty plea is announced by United States Attorney Peter F. Neronha; Rhode Island Attorney General Peter F. Kilmartin; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England; Providence Police Chief Colonel Hugh T. Clements, Jr.; East Providence Police Chief Christopher J. Parella; and Seekonk, Mass., Police Chief Craig A. Mace.
According to information presented to the court, on January 28, 2015, Providence Police responded to Hasbro Childrens’ Hospital for a report of sexual exploitation offenses involving a 16 year-old female. As a result of information provided to the officers, and a subsequent investigation by Providence Police and Homeland Security Investigations, law enforcement learned that on January 16, 2015, Chaney and two juvenile males conspired to take photographs of the 16 year-old female and a 15 year-old female in various stages of undress, and to post the photographs in advertisements on Backpage.com.
According to information presented to the court, between January 16 and January 28, 2015, Chaney and the two juvenile males conspired to transport the teenage girls from Chaney’s East Providence residence to locations in Massachusetts and Rhode Island for the purpose of offering the girls for prostitution. Based on the information developed by Providence Police and Homeland Security Investigations, Chaney was arrested by East Providence Police on January 29, 2015. He was ordered detained in state custody as a Superior Court probation violator on a 5-year suspended sentence imposed on January 14, 2015, on a weapons charge.
Two juvenile males from East Providence identified as co-conspirators in this matter were arrested on January 29, 2015, and prosecuted in Family Court by the Rhode Island Attorney General’s Office. Brian Desmarais, who was 17 at the time of his arrest, pleaded nolo contendere on November 2, 2015, to two counts of sex trafficking of a minor and one count of conspiracy to commit sex trafficking of a minor. Under the terms of the plea agreement, Desmarais received a certified sentence of 10 years with 19 months plus two days to serve, the remainder suspended with probation. He has begun serving his sentence at the Rhode Island Training School until a “modification hearing” takes place at which time a Family Court judge will determine if the sentence should be modified or continued to be served at the Adult Correctional Institution.
The second juvenile offender, J'Maire Wray, who was 15 at the time of his arrest, pleaded nolo contendere before Family Court Judge Kathleen A. Voccola to two counts of sex trafficking of a minor, one count of conspiracy to commit sex trafficking of a minor, and one count of felony assault. Under the terms of the plea agreement, Wray received a certified sentence of 15 years with six years to serve.
Under certification, both Desmarais and Wray are convicted and their sentences will extend into adulthood.
The cases are being jointly prosecuted by Assistant U.S. Attorney Terrence P. Donnelly and Rhode Island Attorney General Daniel Carr Guglielmo.
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