Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
16 June 2016
Alabama Real Estate Investor Pleads Guilty to Mail Fraud Conspiracy Involving Foreclosed HomesRead the Press Release
An Alabama real estate investor pleaded guilty for his role in a conspiracy to commit mail fraud at public real estate foreclosure auctions held in southern Alabama, the Department of Justice announced today.
Adrian J. Beach admitted that he conspired with others to, among other things, defraud financial institutions, homeowners and others with a legal interest in rigged foreclosure properties, out of proceeds from foreclosure auctions. Beach is charged with participating in the conspiracy from January 2004 through March 2010. Financial institutions and homeowners suffered monetary losses as a result of the conspiracy.
“Adrian Beach schemed to rig home foreclosure auctions for his own benefit,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division. “Real estate investors should know that the division and its colleagues in law enforcement will hold them accountable for conspiring to defraud banks and homeowners by depriving them of competitive auctions.”
“Honesty and integrity in business practices are a hallmark of the American way and those who engage in illegal activities to obtain a business advantage which lines their pockets with ill-gotten gain will be held accountable by the FBI for their action,” said FBI Mobile Division Special Agent in Charge Robert F. Lasky.
Beach is the fourteenth defendant prosecuted in the Antitrust Division’s ongoing investigation of bid rigging and other fraudulent conduct in the Alabama real estate foreclosure industry.
The investigation into fraud and bid rigging in the Alabama real estate foreclosure industry is being conducted by the Washington Criminal II Section of the Antitrust Division, and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.
These charges have been filed in connection with the president’s Financial Fraud Enforcement Task Force. The president established the task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information about the task force, please visit www.StopFraud.gov. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.
Additional Defendant Charged in Cocaine ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a superseding indictment charging Robert Hall, 40, of Buffalo, NY, with conspiracy to possess with intent to distribute, and to distribute, five kilograms or more of cocaine, and attempted possession with intent to distribute 500 grams or more of cocaine. The charges carry mandatory minimum 10 years in prison, a maximum of life, and a $10,000,000 fine. In addition, Clarence Adams, 34, of Buffalo, NY, who was previously charged by complaint in this case, was also indicted on the same two charges.
Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that according to the previously filed complaint and superseding indictment, on May 13, 2016, law enforcement officers seized three packages containing suspected cocaine that were shipped from Texas to Buffalo. The cocaine was hidden inside air purifiers. Officers seized two of the packages before they were delivered and set up controlled deliveries to addresses on Tyler and Custer Streets in Buffalo.
The three packages contained a total of five kilograms of cocaine. Hall allegedly paid the intended recipients of the packages in crack cocaine.
During a subsequent search of a Mount Vernon Street residence where Adams lived, officers recovered a drug ledger that calculated the amount necessary to purchase 5 kilograms of cocaine from Adams’s bedroom. Also recovered were a digital scale and other drug preparation materials.
Adams and Hall were arraigned before U.S. magistrate Judge Jeremiah J. McCarthy. Adams and Hall are both being held.
The superseding indictment is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Niagara Frontier Transportation Authority Police, under the direction of Chief George Gast, and the Cheektowaga Police Department, under the direction of Chief David Zack.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
9 Defendants Named in Federal Indictment that Alleges $6 Million in Losses Resulting from Jewelry Store Robberies across SouthlandRead the Press Release
LOS ANGELES – Law enforcement authorities this morning arrested four defendants who are charged in a federal indictment with participating in a conspiracy that planned and executed a series of brazen smash-and-grab robberies that targeted millions of dollars worth of Rolex and other high-end Swiss watches being sold at retail outlets across Southern California.
The indictment charges a total of nine defendants, six of whom allegedly planned and organized the robberies, and three of whom allegedly participated in one or more of the robberies. In addition to four defendants arrested this morning by special agents with ATF and deputies with the Los Angeles County Sheriff’s Department, three defendants are already in custody. Authorities are continuing to search for two remaining defendants.
Members of conspiracy allegedly selected jewelry stores based on their inventory of expensive watches, including those manufactured by Rolex, Audemar Piguet and TAG Heuer. The organizers of the conspiracy recruited financially desperate young men to perform the smash-and-grab robberies, often by promising large sums of money if they were successful. However, when those involved in the actual robberies were eventually paid, they often received much less than what they had promised, despite stealing watches and other jewelry worth approximately $6 million.
“The organizers of this ring carefully planned and executed a series of daylight robberies that terrified and endangered store employees and bystanders,” said United States Attorney Eileen M. Decker. “The indictment and arrests today demonstrate that ringleaders cannot escape prosecution by sending lower-level participants in to commit the crimes on their behalf.”
The 13-count indictment, which was returned under seal by a federal grand jury in Santa Ana on June 8, charges all nine defendants with violating the Hobbs Act by conspiring to interfere with commerce by robbery. The conspiracy count alleges a string of 10 robberies between early August 2015 and April of this year. One heist at a store in the Century City mall allegedly netted watches worth more than $1.6 million and involved one of the robbers firing a shot from a rifle at a security guard who was trying to secure the store.
“Those who plan, equip or facilitate violent crime do not avoid accountability by never brandishing a firearm,” said ATF Special Agent in Charge Eric D. Harden. “ATF stands ready to combine resources with our state and local partners to pursue federal criminal charges against all that use violence to victimize businesses and endanger the public that patronizes them, regardless of their role.”
“This is a fine example of another successful collaborative effort between the Los Angeles County Sheriff’s Department’s Major Crimes Bureau and the Bureau of Alcohol, Tobacco, Firearms and Explosives,” said Captain Myron Johnson of the LASD’s Major Crimes Bureau. “Investigators from both agencies worked countless hours to bring several individuals who operated a highly sophisticated robbery crew to justice. This crew victimized a number of luxury, high-end watch establishments causing millions of dollars in losses to the victims."
The nine defendants are each charged in at least one of six counts alleging a Hobbs Act robbery. Five of the defendants are charged in at least one of six counts of using a firearm in relation to a crime of violence.
The nine defendants named in the indictment are:
-
Darrell Dent, 39, of Inglewood, who was arrested and who is accused of being the leader of the conspiracy;
-
Keith Walton, 45, of Los Angeles, another key figure in the conspiracy, who was already in federal custody on an unrelated charge;
-
Robert Johnson, 27, of Inglewood, who was arrested and who allegedly recruited robbers and supplied firearms used during several of the robberies;
-
Stanley Ford, 47, of Los Angeles, who was arrested and who is accused of being an organizer of the robberies;
-
Justin Henning, 28, of Inglewood, who was arrested and who allegedly helped recruit some of the robbers;
-
Evan Scott, 27, of Inglewood, currently a fugitive, who allegedly was a gunman in two of the robberies;
-
Kenneth Paul, 21, of Los Angeles, currently a fugitive, who allegedly helped recruit robbers;
-
Jameson Laforest, 24, of Inglewood, who was already in state custody on an unrelated charge and who allegedly received watches stolen during a robbery in Torrance; and
-
Marshawn Marshall, 18, of Inglewood, who was already in federal custody after being arrested in March 2016 on charges of participating in a jewelry store robbery in Mission Viejo.
Those arrested this morning are expected to be arraigned on the indictment this afternoon in United States District Court in downtown Los Angeles.
According to the indictment, the organizers planned the details of the robberies, including selecting the display cases to be smashed, and providing the firearms, tools, disguises and stolen cars used in the robberies.
The conspiracy count in the indictment alleges that 10 robberies were committed:
-
the August 3, 2015 robbery of Edward George Jewelers in Canoga Park, during which approximately $59,105 in watches and engagement rings were stolen;
-
the August 24, 2015 armed robbery of Rolex Boutique Geary’s in the Century City Mall, during which 40 Rolex watches with an approximate retail value of $1.63 million were stolen;
-
the October 21, 2015 armed robbery of Frederic H. Rubel Jewelers in the Shops at Mission Viejo, during which 40 Rolex watches and David Yurman jewelry with an approximate retail value of $595,000 were stolen;
-
the January 22, 2016 armed robbery of Manya Jewelry in Woodland Hills, during which three Rolex watches and other assorted watches and jewelry with an approximately retail value of $192,410 were stolen;
-
the February 7, 2016 robbery of Ben Bridge Jewelers in the Oaks Mall in Thousand Oaks, during which 35 Rolex watches with an approximate retail value of $298,000 were stolen;
-
the February 17, 2016 armed robbery of Westime in West Hollywood, during which 18 Audemars Piguet watches with an approximately retail value of $576,200 were stolen;
-
the February 29, 2016 armed robbery of Ben Bridge Jewelers in the Del Amo Fashion Center in Torrance, during which 30 Rolex watches with an approximate retail value of $456,325 were stolen;
-
the March 9, 2016 armed robbery of Ben Bridge Jewelers in Canoga Park, during which 36 Rolex watches with an approximate retail value of $662,650 were stolen;
-
the March 22, 2016 robbery of Westime in Malibu, during which 66 Audermar Piguet, Breitling, Franck Muller, Omega and Hublot watches with an approximate retail value of $1.42 million were stolen; and
-
the April 24, 2016 robbery of Ben Bridge Jewelers in Santa Monica, during which three Rolex watches and other assorted watches and jewelry with an approximate retail value of $192,000 were stolen.
Along with the nine defendants named in the indictment unsealed today, another nine defendants were previously named in a series of indictments that accuse them of participating in various jewelry store robberies.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The seven counts that allege violations of the Hobbs Act each carry a statutory maximum penalty of 20 years in federal prison. The charges that allege use of a firearm during the robberies carry a consecutive sentence of seven years, or 10 years if the gun is discharged during the underlying offense.
The investigation into the robbery ring is being conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Los Angeles County Sheriff's Department.
The cases resulting from the investigation are being prosecuted by Assistant United States Attorneys Scott D. Tenley of the Santa Ana Branch Office and Jeffrey M. Chemerinsky of the Violent and Organized Crime Section.
-
15 June 2016
Yorba Linda Chiropractor Sentenced to Four Years in Prison for Defrauding Investors in $2 Million Real Estate Ponzi SchemeRead the Press Release
SANTA ANA, California – A Yorba Linda chiropractor who solicited more than $2 million from investors in a real estate scam has been sentenced to four years in federal prison.
Bobby Hamby, 56, of Yorba Linda, was sentenced Monday afternoon by United States District Judge Cormac J. Carney, who also ordered the defendant to pay $1,257,628 in restitution.
Hamby pleaded guilty in May 2015 to two counts of wire fraud in connection with a real estate investment scheme he operated while doing business as B+E Family Investments LLC.
Hamby told investors that he would use the money invested in B+E to purchase and improve properties, resell the properties at a profit, and then share the profits with investors. Hamby falsely assured victims that their investments would be secure because he would put their names on the property deeds. At least 22 victims – some of whom were elderly – invested nearly $2.5 million with B+E during the scheme that ran from May 2008 through December 2011.
According to a plea agreement filed in this case, Hamby did not invest the victims’ money as promised. Instead, he spent the majority of his victims’ money to pay for personal expenses. Among other things, Hamby used the money to pay his mortgage, dues at the Yorba Linda Country Club, car payments, attorney fees, medical and dental bills, and expenses incurred at restaurants and several retail stores.
“As a result of Mr. Hamby’s scheme, a number of victims will live out their lives under a dark cloud of financial uncertainty,” said United States Attorney Eileen M. Decker. “Mr. Hamby must now trade the comfortable life that he financed with his victims’ money for this federal prison sentence.”
In addition to the real estate scheme, Hamby also fraudulently solicited investors to finance laser equipment for his chiropractic office. In this separate scheme, Hamby collected approximately $150,000 from November 2010 through May 2011, but used only about $5,000 on laser equipment, spending most of the money on personal expenses that including mortgage payments and private school tuition for his children.
After returning some of the investor’s money in Ponzi-style payments, the total loss for both schemes totaled approximately $1.25 million.
This case was investigated by the FBI. The case was prosecuted by Assistant United States Attorney Gregory W. Staples.
Wetumka Man Sentenced to 108 Months for Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that RODNEY GENE BENNETT, age 25, of Wetumka, Oklahoma, was sentenced to 108 months imprisonment, followed by 4 years of supervised release for POSSESSION WITH INTENT TO DISTRIBUTE METHAMPHETAMINE, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B).
The charge is a result of an investigation by the Seminole Nation Tribal Police and the Drug Enforcement Administration. The defendant was indicted in December, 2015.
The Indictment alleged that on or about August 5, 2015, in the Eastern District of Oklahoma, the defendant, RODNEY GENE BENNETT, did knowingly and intentionally possess with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshals Service pending transportation to the designated federal facility at which he will serve his nonparoleable sentence.
Assistant United States Attorney Timothy G. E. Hammer represented the United States.
Vice President of Local Drywall Company Indicted in Income Tax Fraud, False Statements CaseRead the Press Release
COLUMBUS, Ohio – A federal grand jury has charged Robert Porter, 52, of Westerville, Ohio with five counts of willfully filing a false income tax return with the Internal Revenue Service (IRS), and one count of making a false statement.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office, James Vanderberg, Special Agent in Charge, the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, Brad Geary, Special Agent in Charge, United States Department of Housing and Urban Development, Office of Inspector General, and Marlon V. Miller, Special Agent in Charge, Homeland Security Investigations announced the indictment that was returned yesterday.
The indictment alleges that Porter, Vice President of Porter Drywall, Inc., filed false personal income tax returns with the IRS for the 2009 through 2013 income tax years in which he omitted $236,064 in income.
In addition, it has been alleged that between June 2011 and December 2011, Porter, as a contractor for a HUD project, made false statements and representations relative to the filing of 29 false U.S. Department of Labor Forms (Forms WH-347). On the Forms, Porter attested to being in compliance with all federal, state, local and F.I.C.A. (Federal Insurance Contributions Act) tax laws with respect to the employees of Porter Drywall, Inc. who worked on the HUD project. Porter allegedly knew the information on the Forms was neither accurate nor complete.
Filing a false income tax return with the IRS is a crime punishable by up to three years imprisonment and a fine of up to $250,000, and making a false statement is a crime punishable by up to five years imprisonment and a fine of up to $250,000.
Acting U.S. Attorney Glassman commended the investigation of this case by the IRS, U.S. Department of Labor, U.S. Department of Housing and Urban Development, and Homeland Security Investigations, and Assistant U.S. Attorney Daniel A. Brown, who is prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
U.S. Postal Service Employee Pleads Guilty to Fraudulently Obtaining Workers Compensation BenefitsRead the Press Release
Greenbelt, Maryland – U.S. Postal Service employee Doreen Allen, age 51, of Temple Hills, Maryland, pleaded guilty today to theft of government property arising from a scheme to fraudulently obtain over $25,000 in worker’s compensation benefits.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Paul L. Bowman of the U.S. Postal Service, Office of Inspector General;and Special Agent in Charge Robin Blake, of the Washington Regional Office, U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
According to her plea agreement, Allen was employed by the United States Postal Service as a city carrier at the Capital Heights, Maryland, Processing and Distribution Facility. On September 27, 2002, Allen filed an injury claim which qualified her for Worker’s Compensation. Allen began receiving benefits in November 2002 from the Office of Worker’s Compensation Programs (OWCP), including reimbursement for travel expenses for medical treatment related to her injury.
Between July 2012 and September 2015, Allen received reimbursement for travel expenses for medical care related to one of her injury claims. This compensation was based on vouchers that Allen submitted for 721 trips to receive medical care. Allen admitted that approximately 27 of those trips were for medical care, while the remaining 694 were unrelated. Allen submitted numerous forms to OWCP falsely certifying that she had driven round trip from her home in Temple Hills to a doctor’s office in Laurel, Maryland for medical treatment related to her injury. As a result, Allen fraudulently received $27,639.10 in travel reimbursements.
Allen faces a maximum sentence of 10 years in prison. U.S. District Judge Paula Xinis scheduled Allen’s sentencing for September 13, 2016, at 9:30 a.m.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Service, Office of Inspector General and U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Hollis R. Weisman, who is prosecuting the case.
Two Japanese Auto Parts Companies, U.S. Subsidiaries, and Five Executives Indicted for Rigging Automotive Parts BidsRead the Press Release
More Than 100 Charged in Wide-Spread Auto Parts Investigation
A federal grand jury in the U.S. District Court for the Southern District of Ohio returned two indictments charging Japanese automotive parts companies, their U.S. subsidiaries, and a total of five executives for their alleged participation in international conspiracies to eliminate competition in the sale of automotive parts sold in the United States and elsewhere, the Justice Department announced today.
One of the indictments, filed today in Cincinnati, charges Tokai Kogyo Co. Ltd., its wholly-owned U.S. subsidiary, Green Tokai Co. Ltd., and Akitada Tazumi with conspiring to rig bids for and fix the prices of automotive body sealing products sold to Honda Motor Company Ltd. and certain of its subsidiaries and affiliates for installation in vehicles manufactured and sold in the United States and elsewhere. Automotive body sealing products consist of body-side opening seals, door-side weather-stripping, glass-run channels, trunk lids and other smaller seals, which are installed into automobiles to keep the interior dry from rain and free from wind and exterior noises.
In a separate indictment, also filed in Cincinnati, Maruyasu Industries Co. Ltd., its wholly-owned U.S. subsidiary, Curtis-Maruyasu America Inc. (CMA), Tadao Hirade, Satoru Murai, Kazunori Kobayashi and Yoshihiro Shigematsu were charged with conspiring to fix prices, allocate customers, and rig bids for automotive steel tubes sold in the United States and elsewhere. Automotive steel tubes are used in fuel distribution, braking, and other automotive systems and are sometimes divided into two categories – chassis tubes and engine parts. As their names suggest, chassis tubes, such as brake and fuel tubes, tend to be located in the body of a vehicle while engine parts, such as fuel injection rails, oil level tubes, and oil strainer tubes, are associated with the function of a vehicle’s engine.
“These defendants, as is their right, have chosen to put the government to its burden of proof, and we accept that challenge without hesitation,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “We will not be deterred from holding those involved – both corporations and individuals – accountable for their actions, and we welcome the opportunity to prove our cases to a jury.”
“The FBI is committed to aggressively investigating individuals who engage in criminal conduct that corrupts the global marketplace,” said Special Agent in Charge Howard Marshal of the FBI’s Louisville Division. “We will continue our work with the Department of Justice Antitrust Division to uncover schemes aimed at creating an unfair competitive advantage by way of price fixing, bid rigging or other illegal means.”
“The Department of Commerce Office of Inspector General is dedicated to working in conjunction with the DOJ Antitrust Division in protecting the U.S. economy from the type of criminal activity revealed in this case,” said Special Agent in Charge Duane Townsend of the Department of Commerce’s Office of Inspector General. “The charges today represent our diligent cooperative efforts to identify such activity and seek prosecution, whether committed by domestic or international sources, and to deter future attempts to damage our economy through criminal enterprise.”
According to the indictment charging Tokai Kogyo, Green Tokai, and Tazumi, the defendants, along with their co-conspirators, participated in meetings and conversations to discuss the allocation of sales of automotive body sealing products, and the bids and price quotations that they would submit to Honda. The indictment charges that the conspirators agreed on, and exchanged information about, bids, price quotations, and price adjustments to be submitted to Honda, and agreed to allocate sales of automotive body sealing products sold to Honda. The conspirators concealed their conduct by using code in e-mails and instructing e-mail recipients to delete e-mails referencing coordination with competitors, according to the charge.
Tokai Kogyo, Green Tokai, and Tazumi allegedly participated in the automotive body sealing products conspiracy from at least as early as March 2008 until at least August 2011. During this period, Tazumi served as Assistant General Manager at Tokai Kogyo, an Obu, Japan-based company that manufactured and sold automotive body sealing products.
According to the indictment charging Maruyasu Industries, CMA, Hirade, Murai, Kobayashi and Shigematsu, the defendants, along with their co-conspirators, participated in and directed subordinate employees to participate in meetings conversations, and communications in which they agreed to customer allocations as well as bids, prices and price adjustments to be submitted to customers in the United States and elsewhere. The indictment also alleges that the defendants and their conspirators employed measures to conceal their conduct, including meeting surreptitiously and adopting means and methods of communication designed to avoid detection.
Maruyasu Industries, CMA, Hirade, Murai, Kobayashi and Shigematsu allegedly participated in the automotive steel tubes conspiracy from at least as early as December 2003 until at least as late as July 9, 2011. During this period, Hirade, Murai, Kobayashi and Shigematsu served as sales executives at Maruyasu Industries, headquartered in Aichi Prefecture in Japan. Additionally, Kobayashi and Shigematsu each served as sales coordinators at Kentucky-based CMA for several years during the conspiracy.
The charges contained in these indictments are allegations and not evidence of guilt. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The companies charged today are the first companies to be indicted in the ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. A total of 64 individuals and 44 companies have been charged and have agreed to pay more than $2.7 billion in criminal fines. These indictments were brought by the Antitrust Division’s Chicago Office, the FBI’s Louisville Field Office, Covington Resident Agency, and the Department of Commerce’s Denver Field Office, with the assistance of the FBI’s International Corruption Unit, the FBI’s Cincinnati Field Office, and the U.S. Attorney’s Office of the Southern District of Ohio. Anyone with information about anticompetitive conduct in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or the FBI’s Louisville Field Office at 502-263-6000.
Tokai Kogyo et al. Indictment
Maruyasu Indictment
Two Arkansas Men Charged in Large-Scale Marijuana and Money Laundering ConspiracyRead the Press Release
CORPUS CHRISTI, Texas - Two men have been taken into custody in an Organized Crime Drug Enforcement Task Force (OCDETF) operation dubbed Operation Black Mask, announced U.S. Attorney Kenneth Magidson.
A federal grand jury indicted David Lee Perry, 45, of Little Rock, Arkansas, and Trolaurice Vaughnzedrick Walker aka T.W., 39, of Texarkana, Arkansas, May 11, 2016. The court unsealed the indictment following their arrests yesterday and today. Perry and Walker are expected to make appearances in court before U.S. Magistrate Judges Beth Deere in Little Rock and Barry Bryant in Texarkana, respectively.
Both are charged with conspiracy to possess with intent to distribute more than 1,000 kilograms of marijuana. Perry is also charged with conspiracy to commit money laundering. The indictment alleges the offenses spanned from 2013 to the present.
Also included in the indictment is a notice of criminal forfeiture regarding a Bank of America bank account in the name of Perry’s Auto Sales Inc. and property derived from proceeds of the criminal conduct or used to commit the violations. The government intends to seek a personal money judgment from the defendants in the amount of $250,000.
If convicted of the marijuana conspiracy, both face a minimum of 10 years and up to life in federal prison and a possible $10 million fine. Walker also another 20 years, upon conviction, as well as a possible $500,000 fine or twice the value of the monetary instrument or funds involved in the transactions or both.
The OCDETF investigation was conducted in Corpus Christi, McAllen, Mission, Falcon Dam, Rio Grande City, Texarkana and Houston. Investigating agencies included Homeland Security Investigations; Internal Revenue Service - Criminal Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Customs and Border Protection; Texas Department of Public Safety; Starr County High Intensity Drug Trafficking Area task force; sheriff’s offices in the Texas counties of Jim Wells, Hidalgo, Hunt and Harris; Miller County, Arkansas, Sheriff’s Office; police departments in Alice, McAllen, Pharr and Texarkana; and the U.S. Marshals Service.
Assistant U.S. Attorney Julie K. Hampton is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Twin Falls County Man Sentenced to 42 Months for Unlawful Possession of FirearmsRead the Press Release
BOISE – Michael A. Southerland, 26, of Twin Falls County, Idaho, was sentenced yesterday to 42 months in prison for unlawful possession of firearms, U.S. Attorney Wendy J. Olson announced. Chief United States District Judge B. Lynn Winmill also ordered Southerland to serve three years of supervised release and to pay a $1,000 fine. Southerland pleaded guilty on March 21, 2016.
According to the plea agreement, Southerland admitted that on October 28, 2015, he knowingly possessed two firearms after having been convicted of felony possession of a destructive device in California.
Southerland was arrested after law enforcement responded to a 911 call to the residence that he shared with his girlfriend, Lillian Cawley, and her daughter. The residence formerly belonged to Glen Cawley, Lillian Cawley’s estranged husband. In March 2015, Glen Cawley was found dead at the residence, having been shot in the back of the head with a shotgun. Lillian Cawley and Southerland subsequently moved into the residence. The murder of Glen Cawley is still under investigation.
The case was investigated by the FBI, the ATF, and the Twin Falls County Sheriff’s Office.
Tulsa Wife and Husband Sentenced in Tax Fraud SchemeRead the Press Release
TULSA, Okla.—A Tulsa woman was sentenced to 30 months in prison for her role in a fraudulent tax return scheme that falsely generated refunds totaling over $472,000 from the United States Treasury.
United States Attorney Danny C. Williams Sr. of the Northern District of Oklahoma, Special Agent in Charge Damon Rowe of the IRS-Criminal Investigation Dallas Field Office, and Resident Agent in Charge Ted Maliga of the United States Secret Service Tulsa Office made the announcement.
Chanesha Makala Jones, 33, and her husband Cory Mack Jones, 37, were each charged by a superseding indictment on May 5, 2015, and in August 2015, both defendants pleaded guilty to one count of conspiracy to defraud the government and two counts of false claims against the government.
In November 2015, Cory Jones was sentenced to 24 months in prison, and ordered to repay $472,021 as restitution to the Internal Revenue Service which today the court also ordered Chanesha Jones to pay.
According to court documents filed in the case, from January 2010 to April 2012, Chanesha and Cory Jones filed false tax returns using stolen personally identifiable information of various individuals. As part of the scheme, Chanesha Jones obtained personal information from living individuals, and Cory Jones obtained personal information of deceased individuals. Cory Jones used false income and employment information along with the genuine personal information obtained to create fraudulent tax returns. Chanesha Jones admitted to submitting two of the fraudulent tax returns to the IRS.
Based on the false personal information, each fraudulent tax return qualified for the refundable Earned Income Credit, generating tax refunds which the IRS deposited into either the bank account of Cory Jones or the bank account of a friend of the Joneses. The friend would then pay the money to the Joneses and Chanesha and Cory Jones would share the refund money between themselves. They would also pay some of the refund money to the individuals whose personal information they used to create the fraudulent tax returns.
The case was investigated by IRS-Criminal Investigation and the United States Secret Service. Assistant United States Attorneys Kevin Leitch and Clemon Ashley prosecuted the case.
###
Treasurer of Mahopac Volunteer Fire Department Charged with Embezzling More Than $5.7 Million and Failing to Report the Income to the IRSRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Shantelle P. Kitchen, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service - Criminal Investigation (“IRS-CI”), Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), George Beach, Superintendent, New York State Police, and Thomas P. DiNapoli, New York State Comptroller, today announced the arrest of MICHAEL KLEIN, the former treasurer of the Mahopac Volunteer Fire Department (“MVFD”), on charges of wire fraud and subscribing to false tax returns.
Manhattan U.S. Attorney Preet Bharara stated: “Michael Klein repaid the trust his fellow volunteer firefighters placed in him by allegedly stealing $5.7 million of their money over a period of more than 13 years as their elected treasurer. As alleged, Klein lavished the embezzled money on himself, buying yachts, jewelry, and a second home in Florida, and then failed to report any of it on his tax returns. Public corruption victimizes the public generally, but here, the people of Mahopac and its volunteer firefighters have suffered specifically and directly, having lost almost $6 million that could have been used for good, but instead was allegedly squandered away by Klein. ”
IRS Special Agent in Charge Shantelle P. Kitchen said: “Criminal tax investigations are often intertwined with investigations of alleged thefts by individuals entrusted with the stewardship of an organization’s assets. Individuals who have access to an organization’s bank accounts, books and records, and financial resources should seriously consider all of the consequences if they are inclined to embezzle. In addition to charges relating to the underlying financial theft, embezzlers expose themselves to federal criminal tax charges when they willfully fail to declare the proceeds of the thefts on their tax returns.”
FBI Assistant Director in Charge Diego Rodriguez said: “The subject of this investigation spent more than a decade living life in high style, while his fellow firefighters were busy volunteering their time to save people’s homes and lives. He allegedly embezzled millions of dollars in money that could have gone to help the firefighters in his department do their jobs. The FBI and our law enforcement partners won’t allow this type of greed to overshadow the great service the men and women on this volunteer fire department do each and every day they show up for work.”
New York State Police Superintendent George Beach said: “I commend the work performed on this case by our investigators from Troop K, the State Comptroller’s Office, and our federal partners. Our investigation revealed that this individual took millions of dollars meant to support the community’s fire department, and instead used it for his own personal gain. We will have no tolerance for those who abuse their position.”
New York State Comptroller Thomas P. DiNapoli said: “Mr. Klein allegedly stole nearly six million dollars from the Mahopac Volunteer Fire Department. Rather than protecting his neighbors as he pledged, they paid the price for his alleged thievery. I thank United States Attorney Preet Bharara, the Federal Bureau of Investigation, the New York State Police, and the Internal Revenue Service for their work with my office to bring Mr. Klein to justice.”
As alleged in the Indictment unsealed today in White Plains federal court[1]:
Michael Klein was first elected treasurer of the MVFD in 2001. From in or about January 2002 to in or about September 2015, Klein embezzled MVFD funds under his control by writing checks to the two businesses he owned, Abbie Graphic Services, Ltd. (“Abbie Graphic”) and Buckshollow Emergency Equipment Corp. (“BEEC”). Klein then deposited the checks to bank accounts held by Abbie Graphics or BEEC. He entered these checks into the MVFD’s books as having been made payable to various vendors, other than Abbie Graphics or BEEC, that sold firefighting equipment or services used by fire departments.
Klein embezzled more than $5.7 million by writing more than 275 checks over a period of more than 13 years. He used the money to purchase, among other things, yachts, including a 55-foot Neptunus motor yacht named “K’Bam;” a second residence in Palm City, Florida; and jewelry. He also used the money to support Abbie Graphic and BEEC. Klein also failed to report any of this income on his personal tax returns for the period from 2009 through 2014, thereby subscribing to false tax returns for each of these years.
Following the discovery by law enforcement in the fall of 2015 of Klein’s embezzlement, Klein offered K’Bam for sale with a yacht broker in Florida for $229,000. He rejected an offer he received of $175,000 but sold K’Bam to an automobile dealer for the $136,850 he owed on a loan secured by K’Bam. The dealer is now offering K’Bam for sale for $260,000.
* * *
KLEIN, 48, of Mahopac, New York, and Palm City, Florida, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, and six counts of subscribing to false tax returns, each of which carries a maximum sentence of three years in prison.
Mr. Bharara praised the outstanding investigative work of the IRS, FBI, New York State Police, and New York State Comptroller. He thanked the Putnam County District Attorney’s Office for its assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney James McMahon is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Topeka Man Sentenced for Gas Station RobberyRead the Press Release
TOPEKA, KAN. - A Topeka man was sentenced today to three years in federal prison for robbing a gas station, Acting U.S. Attorney Tom Beall said.
Darrian Michael Stewart, 22, Topeka, Kan., pleaded guilty to one count of bank robbery. In his plea, he admitted that on June 20, 2014, he robbed a BP convenience store at 1401 S.W. Huntoon Avenue in Topeka. He entered the store about 8:23 p.m. before approaching the clerk at the counter with what appeared to be a black handgun and demanding money. He fled the store on foot. Later he was identified from surveillance video and arrested.
Beall commended the Topeka Police Department, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.
Three Homewood Men Charged with Attempted Robbery and Violating Firearms LawsRead the Press Release
PITTSBURGH – Three Pittsburgh residents have been indicted by a federal grand jury in Pittsburgh on charges of conspiracy and attempt to commit robbery and violating federal firearms laws, United States Attorney David J. Hickton announced today.
The six-count indictment, returned on June 14, named Anthony Bailey, age 37; Raymond Denson, age 36; and David Lipinski, age 35; all of Pittsburgh.
According to the indictment presented to the Court, the defendants conspired and attempted to rob an individual of pharmaceutical products on April 27, 2016, and brandished a firearm while doing so. The indictment also alleges that the defendants, each of whom is a convicted felon, possessed firearms despite being prohibited by law from doing so.
The law provides for a minimum sentence for each defendant of not less than seven years and a maximum of life 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 offenses and the prior criminal history of the defendant.
This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter, and prosecute gun crime. Assistant United States Attorney Conor Lamb is prosecuting this case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Northern Regional 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.
Thirty-Two Charged in Manhattan Federal Court for Narcotics and Firearm OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Delano A. Reid, Special Agent in Charge of the New York Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), and William J. Bratton, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing this morning of two indictments, charging a total of 32 defendants with participating in conspiracies to distribute and possess with intent to distribute large quantities of crack cocaine in around the Lincoln Housing Development in East Harlem, New York (the “Lincoln Houses”). Six defendants are also charged with possessing and using firearms in connection with one of the narcotics trafficking conspiracies. Twenty-three defendants were taken into custody today and are expected to be presented in Manhattan federal court later today before U.S. Magistrate Judge James C. Francis IV. Five defendants are incarcerated in various locations in New York and are expected to be transported to the Southern District of New York within the next two weeks. Four defendants remain at large.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, these defendants blanketed the entire expanse of the Lincoln Houses with their round-the-clock drug dealing operation, using guns and violence to protect it. All New Yorkers, including the residents of NYCHA housing, are entitled to live in neighborhoods free of drugs and the inevitable violence that comes with it. Our actions today, with our partners at the ATF and NYPD, are a step toward making that a reality for the residents of the Lincoln Houses in East Harlem.”
ATF Special Agent in Charge Delano A. Reid said: “These defendants attempted to consolidate power over narcotics distribution in and around the Lincoln Houses, turning that community into an open air drug market. In the process they are alleged to have had access to firearms and to have engaged in acts of violence to protect and maintain their drug business. Today we say no more. The members of this criminal organization thought that they could use firearms and violence to shield themselves and their illicit activities. Instead, they have made themselves the targets of ATF and our law enforcement partners. Today’s arrests will help to preserve dignity and restore safety for law abiding residents of the Lincoln Houses and surrounding communities. To those that think they can use firearms and violence as tools to further their criminal ambitions, let this be a warning that we in law enforcement will be at the ready to ensure that your fate is the same as those arrested today. ATF would like to thank the NYPD and United States Attorney’s Office for their professionalism and perseverance during this long term investigation.”
NYPD Commissioner William J. Bratton said: “This long term investigation targeted key members of an East Harlem gang who, as alleged, distributed crack cocaine and engaged in rampant gun violence, willfully disregarding the safety of residents living in the Lincoln Houses. I commend both my NYPD detectives and our federal partners, whose diligence and perseverance have disrupted this criminal operation.”
As alleged in the indictments and in other documents previously filed in Manhattan federal court[1]:
The New York City Housing Authority (“NYCHA”) operates, among others, a housing development in the East Harlem neighborhood of Manhattan, New York: the Lincoln Houses, spanning an area between East 132nd Street and East 135th Street to the North and South, and Park Avenue and Fifth Avenue, to the East and West.
From at least in or about 2008, up to and including in or about 2016, in the Southern District of New York and elsewhere, RASHEED BAILEY, a/k/a “Ciroc,” WILLIAM BRYANT, a/k/a “Kenny,” KEVIN CHAVIS, JEFFREY CHILDS, a/k/a “Pap,” a/k/a “CJ,” TYRONE GLADDEN, a/k/a “Ty Boogie,” a/k/a “Ty Zooted,” TRAVIS HARRY, a/k/a “Trav Game,” RICHARD HILL, MICHAEL JOHNSON, a/k/a “Air,” KEVIN LEWIS, a/k/a “Ice,” DONTE McGILL, TORELL NIUELDER, a/k/a “Young,” a/k/a “Relli,” TUQUAN ROGERS, a/k/a “Tay,” DONALD ROSE, JAMAL RUSSEL, a/k/a “Mally,” LUKE RYANT, a/k/a “Berger,” KEVIN SAXON, a/k/a “Sax,” ANDREW SINGLETON, a/k/a “Drew,” SEON THOMAS, a/k/a “Cee,” a/k/a “Goon,” HENRY TRENTON, a/k/a “Kay,” a/k/a “Kels,” RENE VELEZ, a/k/a “White Boy,” TREVOR WATSON, a/k/a “Trev Wild,” and TYLER WILLIAMS, a/k/a “Ty Cracks,” and others known and unknown, conspired to distribute significant amounts of crack cocaine, in and around, among other places, the “West Side” of Lincoln Houses. Specifically, these defendants sold narcotics most frequently on public streets and inside public housing developments between East 132nd Street and East 135th Street, to the North and South, and between Madison Avenue and Fifth Avenue, to the East and West.
During the same time period, KAREEM ALLEN, a/k/a “Rocket,” HAROLD HILL, a/k/a “Dee Wee,” AARON JOHNSON, a/k/a “A,” ANTOINE MITCHELL, a/k/a “Red,” JEREL POOL, a/k/a “Nast,” DEREK SMITH, a/k/a “Ice,” MARK SMITH, NAJHEA SMITH, a/k/a “Boogz,” QWAME THOMAS, a/k/a “Afro,” BERNARD WALKER, a/k/a “M,” the defendants, and others known and unknown, conspired to distribute significant amounts of crack cocaine in and around, among other places, the “East Side” of Lincoln Houses. Specifically, these defendants sold narcotics most frequently on public streets and inside public housing developments between East 132nd Street and 135th Street, to the North and South, and Park Avenue to Madison Avenue, to the East and West.
The narcotics organizations operating on the West Side and the East Side of the Lincoln Houses distributed crack cocaine 24 hours each day, seven days each week.
In addition, members of the West Side organization had access to firearms and engaged in acts of violence in order to, among other reasons, protect and maintain their drug business, including JEFFREY CHILDS, a/k/a “Pap,” a/k/a “CJ,” TUQUAN ROGERS, a/k/a “Tay,” JAMAL RUSSEL, a/k/a “Mally,” LUKE RYANT, a/k/a “Berger,” SEON THOMAS, a/k/a “Cee,” and TREVOR WATSON, a/k/a “Trev Wild.”
* * *
All of the defendants face mandatory minimum prison terms ranging from 10 years to 15 years, and maximum terms of life in prison.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentences imposed on the defendants will be determined by the Court.
A chart containing the names of the defendants who were arrested today, and the charges and maximum penalties they face, is attached.
Mr. Bharara praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New York City Police Department.
The prosecution is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Amanda Houle, Hadassa Waxman, and Michael Gerber are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
CHARGE(S)
DEFENDANTS
MAXIMUM PENALTIES
Conspiracy to distribute and possess with intent to distribute 280 grams and more of crack cocaine.
RASHEED BAILEY, WILLIAM BRYANT, KEVIN CHAVIS,JEFFREY CHILDS, TYRONE GLADDEN, TRAVIS HARRY, RICHARD HILL, MICHAEL JOHNSON, KEVIN LEWIS, DONTE McGILL, TORELL NIUELDER, TUQUAN ROGERS, DONALD ROSE, JAMAL RUSSEL, LUKE RYANT, KEVIN SAXON, ANDREW SINGLETON, SEON THOMAS, HENRY TRENTON, RENE VELEZ, TREVOR WATSON, TYLER WILLIAMS, KAREEM ALLEN, HAROLD HILL, AARON JOHNSON, ANTOINE MITCHELL, JEREL POOL, DEREK SMITH, MARK SMITH, NAJHEA SMITH, QWAME THOMAS, and BERNARD WALKER.
Life in prison
Mandatory minimum: 10 years in prison
Possession of a firearm in furtherance of a narcotics trafficking offense
JEFFREY CHILDS, TUQUAN ROGERS, JAMAL RUSSEL, LUKE RYANT, SEON THOMAS, and TREVOR WATSON
Life in prison
Mandatory minimum: 5 years in prison, to be imposed consecutively to any other sentence
[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.
Stamford Resident Admits Orchestrating Murder for Hire SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Daniel J. Kumor, Special Agent in Charge of the ATF Boston Field Division, announced that LARRY TALLEDO-TORREJON, 29, a citizen of Peru last residing in Stamford, pleaded guilty today in Hartford federal court to orchestrating a murder for hire scheme.
According to court documents and statements made in court, in early December 2015, TALLEDO-TORREJON, as part of a contract to purchase a restaurant in Stamford for $300,000, provided the seller of the restaurant with $150,000 in cashier checks and an additional $150,000 in checks drawn on bank accounts with insufficient funds. On December 5, TALLEDO-TORREJON directed an individual who owed him $5,000 to follow the manager of the restaurant (“G.R.”) to his home in New York and to murder him. In exchange for doing so, TALLEDO-TORREJON agreed to forgive the $5,000 debt and to pay the individual an additional $5,000 in cash. The individual subsequently contacted law enforcement to report the incident, and then contacted TALLEDO-TORREJON to tell him that he had kidnapped G.R. and was holding him.
On December 7, 2015, TALLEDO-TORREJON provided the individual with a manila folder containing two copies of a receipt that falsely stated that TALLEDO-TORREJON had provided G.R. with $150,000. TALLEDO-TORREJON directed the individual to provide the receipts to G.R., coerce G.R. into signing them, and then kill him. TALLEDO-TORREJON told the individual that his pre-existing debt had been cancelled, and also suggested that they could start a business kidnapping and extorting money from persons.
On December 8, TALLEDO-TORREJON made a complaint with the Stamford Police Department falsely claiming that G.R. had stolen $150,000 that TALLEDO-TORREJON had provided G.R. to complete the purchase of the restaurant.
TALLEDO-TORREJON was arrested on December 8 after the individual provided him with the receipts signed by G.R., and TALLEDO-TORREJON provided the individual with $500 in partial payment for the murder.
TALLEDO-TORREJON is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on September 7, 2016, at which time he faces a maximum term of imprisonment of 10 years. He has been detained since his arrest.
This matter has been investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and is being prosecuted by Assistant U.S. Attorney Rahul Kale.
St. Louis Area Man Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – Stacey Wilson was sentenced to 81 months in prison on charges involving wire and bank fraud.
According to court documents, on or about November 1, 2013, and continuing to on or about December 1, 2015, Stacey Wilson and his accomplice recruited approximately 53 individuals to open checking accounts at U.S. Bank with nominal amounts of money, or provide access to their existing checking accounts. The recruited individuals provided their debit cards and checks issued on the accounts. In addition to checks and debit cards received from the recruited individuals, they obtained checks and debit cards from the victims of motor vehicle break-ins. Wilson and his accomplice drafted the checks in amounts ranging from $195.00 to $2,300.00 before depositing them into different fraudulently issued accounts through electronic wire transmissions of the checks’ images or through direct deposits. As soon as the funds were deposited, Wilson and others obtained funds from the financial institutions through automated teller machine transactions, counter withdrawals or debit card purchases. Unbeknownst to the financial institutions which accepted the fraudulently obtained checks for deposit, the accounts upon which the checks had been drawn were artificially inflated or had been closed as being fraudulent. As a result of the scheme, Wilson and others obtained, and attempted to obtain, more than $79,000.00 through more than 270 fraudulent transactions.
Wilson, of St. Louis City, pled guilty March 16, 2016, to felony counts of aggravated identity theft, wire fraud and access device fraud. He appeared today for sentencing before United States District Judge Ronnie L. White. In addition to the sentence of 81 months imprisonment, Wilson was ordered to pay restitution in the amount of $44,325.66.
The case was investigated by the United States Postal Inspection Service. Assistant United States Attorney Tracy Berry handled the case for the U.S. Attorney’s Office.
St. Albans man sentenced to five years in Federal prison for drug-related gun crimeRead the Press Release
CHARLESTON, W.Va. – A St. Albans man caught with fentanyl, marijuana, several pistols, and three assault rifles was sentenced today to five years in federal prison, announced Acting United States Attorney Carol Casto. O’Neil Anthony Peart, 37, previously pleaded guilty to possession of firearms in furtherance of drug trafficking offenses.
On December 4, 2015, drug task force officers executed a search warrant at Peart’s Walnut Street apartment in St. Albans. Among other items, police seized eight firearms, including three “AR”-style assault rifles with high-capacity magazines, approximately 21 grams of fentanyl, approximately 7.5 pounds of marijuana, and more than $5,300 in cash. All but two of the firearms were loaded.
The Metropolitan Drug Enforcement Network Team, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the St. Albans Police Department investigated this case. Assistant United States Attorney Joshua Hanks is in charge of the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.
This case was prosecuted as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime. This case was also brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
-
Follow us on Twitter: SDWVNews
-
Spring Hill Man Sentenced in Embezzlement SchemeRead the Press Release
Robert Majors, 58, of Spring Hill, Tenn., was sentenced today to 20 months in prison, followed by two years of supervised release, for embezzling more than $600,000 from his former employer, announced David Rivera, United States Attorney for the Middle District of Tennessee. U.S. District Court Judge Aleta Trauger also ordered Majors to pay $642,500.00 in restitution and to forfeit the proceeds of his crime.
Majors pleaded guilty in March 2015 to two counts of wire fraud in connection with a scheme to embezzle funds from his former employer, Irving Materials, Inc. (“IMI”). During the sentencing hearing, evidence established that while employed as Controller of IMI in Nashville, Tenn., Majors made fraudulent, electronic transfers in excess of $600,000, from an IMI bank account to his personal bank account during a seven-year period. Majors then took steps to conceal his fraud by recording the transfers as company purchases of fixed assets in the company’s journal entries. Majors admitted to using the funds derived from his scheme to, in part, pay his mortgage and other loans, pay credit card bills, make home repairs, and pay for a cruise to Italy.
The case was investigated by the Federal Bureau of Investigation. The United States is represented by Assistant U.S. Attorney Thomas J. Jaworski.
South Bay Man and Utah Man Charged with Defrauding Japanese Investors in $7 Million Ponzi SchemeRead the Press Release
SAN FRANCISCO –A federal grand jury indicted John Holdaway and Kevin Kyes yesterday with conspiracy, wire fraud, and money laundering, announced United States Attorney Brian J. Stretch, the Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
Holdaway, 72, of Sandy, Utah, and Kyes, 68, of Campbell, Calif., allegedly ran an approximately $7 million Ponzi scheme, primarily involving Japanese investors, from December 2012 through July 2015. According to the indictment, Holdaway and Kyes offered investors the opportunity to invest with a group of entities that they controlled and referred to as “Money Management Strategies,” or “MMS.” The defendants allegedly told the investors their money would be invested in currency or derivatives trading with returns of 100% annually. The defendants also allegedly told investors that their investments would be safe, in part because their principal would never leave the bank accounts into which the funds were sent and that any trading losses would be borne by MMS. Based on the representations of Holdaway and Kyes, these investors wired or otherwise transferred money to bank accounts in Northern California controlled by Holdaway and Kyes. The Japanese investors sent approximately $7 million to Holdaway and Kyes during the scheme.
The indictment alleges that in reality, Holdaway and Kyes did not invest the money as promised. Instead, they spent the money themselves, used it to fund Ponzi-type payments back to investors, spent the money to pay back prior investors from other investment programs that they had run, and spent it on gold-related businesses. In addition, Holdaway and Kyes allegedly told investors that they were receiving distributions or returns on their investment. To back up their claims, the defendants also allegedly created and sent to investors fake documents, including account statements and letters from an accountant. Holdaway also sent emails to investors under fake names, to give the appearance that multiple people worked for Holdaway and Kyes, and lied about traveling to Europe or elsewhere to work on their investments.
Holdaway and Kyes are charged with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; eighteen counts of wire fraud, in violation of 18 U.S.C. § 1343; one count of conspiracy to engage in monetary transactions in property derived from specified unlawful activity, in violation of 18 U.S.C. § 1956(h); and five counts of engaging in monetary transactions in property derived from specified unlawful activity, in violation of 18 U.S.C. § 1957.
Both defendants were arrested this morning and made their initial appearances in federal court, where they were released pending further hearings. Holdaway’s next scheduled appearance is at 9:30 a.m. on Tuesday, June 28, 2016, before the Honorable Laurel Beeler, U.S. Magistrate Judge. Kyes’s next scheduled appearance is at 11:00 a.m. on Friday, July 22, 2016, before the Honorable Susan Illston, U.S. District Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the maximum statutory penalty for each count of wire fraud or conspiracy to commit wire fraud is 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss resulting from the offense. The maximum statutory penalty for each count of conspiracy to engage in monetary transactions in property derived from specified unlawful activity or of engaging in monetary transactions in property derived from specified unlawful activity is 10 years’ imprisonment and a fine of $250,000 or twice the amount of property involved in the offense. Additional periods of supervised release and restitution also apply. 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.
Assistant U.S. Attorney Benjamin Kingsley is prosecuting the case with assistance from Jessica Meegan and Daniel Charlier-Smith. The prosecution is the result of an investigation by the FBI and the IRS-Criminal Investigation.
Smithfield Man Sentenced to 84 Months for Narcotics and Firearm OffensesRead the Press Release
GREENVILLE – The United States Attorney’s Office announced that today in federal court, Senior United States District Judge Malcolm J. Howard sentenced TERRELL RICKY SETTLES, 23, of Smithfield to 84 months imprisonment, followed by 5 years of supervised release.
SETTLES was named in an Indictment filed on December 15, 2015, charging him with Possession with Intent to Distribute a Quantity of a Mixture Containing Methamphetamine and Heroin and Aiding and Abetting; Maintaining a Place for the Purpose of Manufacturing, Storing, Distributing, and Using Methamphetamine and Aiding and Abetting; and Possession of a Firearm in Furtherance of a Drug Trafficking Crime and Aiding and Abetting. On February 8, 2016, SETTLES pled guilty to these charges.
In June 2015, officers with the Smithfield Police Department, received several complaints from concerned citizens regarding possible drug activity at a residence on Boyette Circle. Detectives also received information from at least two confidential informants which indicated SETTLES was involved in the distribution of narcotics in the Smithfield area. Detectives conducted surveillance and a “trash pull” at the residence on Boyette Circle. On July 17, 2015, officers executed a search warrant at the residence. SETTLES, and two co-defendants were present at the time of the execution of the search warrant. During a search of the residence, detectives located two loaded 9mm pistols in SETTLE’S bedroom; over two hundred grams of methamphetamine; 51 bindles (1.05 grams of heroin1); 2.5 grams of marijuana; approximately 200 rounds of 9mm ammunition; $7,528; and drug packaging materials.
SETTLES is responsible for the distribution of 272.86 grams of methamphetamine and 1.05 grams of heroin. SETTLES also possessed a firearm and maintained a residence for the purpose of distributing narcotics during the commission of these crimes.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Smithfield Police Department, and the Bureau of Alcohol Tobacco Firearms and Explosives (ATF). Assistant United States Attorney S. Katherine Burnette prosecuted the case for the government.
Slidell Man Sentenced to over 9 Years in Prison for Drugs and Firearms OffensesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that THOMAS BROWN, age 46, a resident of Slidell, Louisiana, was sentenced to 111 months imprisonment today on charges of possession with intent to distribute heroin, fentanyl, and cocaine, and possession of firearms in furtherance of drug trafficking.
According to court records, in July 2015, Drug Enforcement Administration agents observed BROWN supplying heroin to a targeted trafficker. After further investigation, agents obtained and executed a search warrant at BROWN’s residence and found 188 grams of acetyl fentanyl, 66 grams of heroin, 150 grams of cocaine hydrochloride, and 17.9 grams of marijuana. Most of the narcotics seized were hidden between a furnace and a wall in a hallway closet, and the drugs had been packaged for sale. Near the narcotics agents also located a loaded .45 caliber pistol, a .38 caliber revolver, and a loaded 20-guage shotgun.
U.S. District Judge Susie Morgan sentenced the defendant to a 51-month term of imprisonment for the drugs charge, to be followed by a consecutive 60-month term of imprisonment for the firearms charge. BROWN was also ordered to serve a 4-year term of supervised release following imprisonment and to pay a $200 special assessment.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in investigating this matter. Assistant United States Attorney Michael B. Redmann is in charge of the prosecution.
Seng Xiong Indicted for Defrauding Hmong EldersRead the Press Release
United States Attorney Andrew M. Luger today announced an indictment charging SENG XIONG, 48, with wire and mail fraud for operating an affinity scheme targeting Hmong elders. XIONG was arrested on Thursday, March 24, 2016, at Los Angeles International Airport, prior to boarding a flight bound for Thailand.
According to the Indictment, XIONG was conducting a fraud scheme through his organization “Hmong Tebchaws,” in which Hmong elders were being directed to deposit $3,000 to $5,000 into a bank account held in the name of SENG XIONG. In exchange for the payments, victims were allegedly promised 10 acres of land, a house, and many other benefits in a future country that would be established as a Hmong homeland somewhere in Southeast Asia.
According to the Indictment, XIONG claimed to be working with the White House and United Nations to establish the new Hmong country. He also claimed that a piece of land had already been set aside for the Hmong people somewhere in Southeast Asia.
According to the Indictment, XIONG offered several “investment” options which purported to represent varying levels of return that “founders” would be able to receive on their investment in the new country. Investments between $3,000 and $5,000 would guarantee the “investor” and his or her future generations, land, a house, free healthcare, free education, and government financial assistance for people over 65 years of age, as well as a return on that investment equal to a percentage of the income generated by the new Hmong country. Those who could not afford the $3,000 - $5,000 “founders” option could pay $20 per month, or $240 per year, which would secure their spot in the new Hmong country along with some of the benefits, although those who “enrolled” at that level would not receive a return on their investment.
If you or someone you know could be a victim, please contact the Minnesota Financial Crimes Task Force by sending an email to [email protected].
This case is the result of an investigation conducted by the Minnesota Financial Crimes Task Force, Saint Paul Police Department, United States Secret Service, Federal Bureau of Investigation and Appleton Police Department.
Special assistance was provided by the United States Attorney’s Offices for the Eastern District of California.
This case is being prosecuted by Assistant United States Attorney Amber M. Brennan.
Defendant Information:SENG XIONG, 48
Maplewood, Minn.Charges: • Wire fraud, 1 count
• Mail fraud, 1 countSchuylkill County Man Indicted for Production of Child Pornography and Enticement of A MinorRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that a federal grand jury in Scranton returned an indictment yesterday charging a 19-year-old Pine Grove man with production of child pornography and enticement of a minor to engage in illegal sexual activity.
According to United States Attorney Peter Smith, the Indictment alleges that Josiah Ferrebee persuaded and coerced a 15-year-old girl to engage in sexually explicit conduct for the purpose of producing a visual image of such conduct, and enticed, persuaded and coerced the minor to engage in illegal sexual activity in January 2016.
The charges stem from an investigation by agents from the Department of Homeland Security and detectives from the County Sheriff’s Office in Grand Traverse Michigan.
If convicted, Ferrebee faces a mandatory minimum sentence of 15 years in prison and a potential maximum sentence of 30 years in prison for the child pornography charge, and a mandatory minimum sentence of 10 years in prison and a potential maximum sentence of life in prison for the enticement of a minor charge.
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."
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Sayre Man Sentenced to 188 Months for Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced that BUDDY KENNY ROGERS, age 36, of Sayre, Oklahoma was sentenced to 188 months imprisonment, followed by four years supervised release, for DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(B) and 841(b)(1)(C).
The charge is a result of an investigation by the Tulsa County Sheriff’s Office, Tahlequah Police Department and the Drug Enforcement Administration. The defendant was indicted in November, 2015 and pled guilty in February, 2016.
The Indictment alleged that that in or about June 2014 and continuing until on or about April 1, 2015, within the Eastern District of Oklahoma and elsewhere, the defendant, BUDDY KENNY ROGERS did knowingly and intentionally combine, conspire, confederate and agree together, and with others, known and unknown to commit offenses against the United States to possess with intent to distribute and to distribute 50 grams or more of a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II controlled substance and a mixture or substance containing a detectable amount of Heroin, a Schedule I controlled substance.
Rogers was a California state inmate incarcerated within the Oklahoma Department of Corrections. While incarcerated within the Oklahoma Department of Corrections, Rogers utilized a cellular telephone to contact others in California to coordinate the delivery of methamphetamine and heroin to others outside the prison system but within the Eastern District of Oklahoma.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshals Service pending transportation to the designated federal facility at which he will serve his nonparoleable sentence.
Assistant United States Attorney Shannon Henson represented the United States.
Santa Fe County Man Arrested on Misdemeanor Charge for Trespassing on Nambe Pueblo LandRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez and Special Agent in Charge William McClure of District IV of the BIA’s Office of Justice Services announced the arrest of Steve Romero, a non-Indian, on the misdemeanor charge of trespassing on Nambe Pueblo land.
Romero, a 32-year-old resident of Santa Fe County, N.M. made his initial appearance today in federal court in Albuquerque, N.M., on a criminal complaint charging him with the misdemeanor trespass offense. The complaint alleges that in Feb. 2016, the Nambe Tribal Council banished Romero from entering any land within the Nambe Pueblo boundaries. It further alleges that Romero reentered Nambe Pueblo land on four occasions between April 2016 and June 2016, in violation of the Pueblo’s banishment resolution. Romero remains in custody pending a preliminary hearing and a detention hearing, which are scheduled for tomorrow.
If convicted of the misdemeanor offense charged in the criminal complaint, Romero faces a maximum penalty of a year in federal prison. Charges in criminal complaints are merely accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
This case was investigated by the Northern Pueblos Agency of the BIA’s Office of Justice Services and is being prosecuted by Assistant U.S. Attorney Raquel Ruiz-Velez.
Statement to Lgbt CommunityRead the Press Release
The United States Attorney’s Office for the District of Columbia offers its deepest condolences in the wake of the unconscionable violence that occurred June 12, 2016 at the Pulse nightclub in Orlando, Florida. Our office condemns this horrific terrorist attack against the LGBT community and its allies. We send our thoughts and prayers to the families and friends of the victims.
As Deputy Attorney General Sally Q. Yates stated, “Words cannot express the depth of our sorrow or the measure of our grief for all those whom we lost and all those whose lives have been changed forever. What happened in Orlando … was a horrifying act of evil and of terror. For the LGBT community, Pulse was more than a place to celebrate and see friends. It was a place that promised safety, inclusion and the freedom for people to be themselves – the same promise our country has made to all of us. This was an attack on that promise. It was an attack on our values, on our country and on our national community. It was an attack on who we are as a nation and as a people. And our country as a whole stands united in its response to this cowardly and despicable act.”
The U.S. Attorney has made a concerted effort, through our Hate Bias Task Force, our participation on the Mayor’s Office on LGBT Affair’s Violence Prevention and Response Team, and other outreach efforts, to build relationships with the LGBT community. We stand in staunch support and solidarity with LGBT communities in Orlando and here in Washington, D.C.
Together with our law enforcement partners, we will do all that we can to assist the LGBT community during this troubling time and to strengthen safety and security.
Roswell Felon Facing Federal Firearms ChargesRead the Press Release
ALBUQUERQUE –This morning a U.S. Magistrate Judge sitting in Las Cruces, N.M., found probable cause to support a criminal complaint charging Michael Dalton, 33, of Roswell, N.M., with violating the federal firearms laws. The Magistrate Judge also entered an order detaining Dalton pending trial.
Dalton was arrested on June 7, 2016, on a criminal complaint charging him with being a felon in possession of firearms and ammunition. The criminal complaint alleges that Dalton committed the crime on Aug. 28, 2015, in Chaves County, N.M.
According to the criminal complaint, Roswell Police Department (RPD) officers responded to a call from Dalton’s neighbor who allegedly heard Dalton arguing with and threatening to shoot a woman. The neighbor then allegedly heard gunshots coming from Dalton’s residence. When the officers then executed a state search warrant at Dalton’s residence, they allegedly located multiple rounds of ammunition and three firearms.
The criminal complaint alleges that Dalton was prohibited from possessing firearms and ammunition on Aug. 28, 2015, because of his previous convictions for larceny, possession of a controlled substance, burglary, tampering with evidence, possession of burglary tools, breaking and entering, aggravated fleeing a law enforcement officer and forgery.
If convicted of the crimes charged in the criminal complaint, Dalton faces a statutory maximum sentence of ten years in prison. Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the RPD. Assistant U.S. Attorney Alexander B. Shapiro of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
Rochester Man Arrested for Threatening A Federal Law Enforcement OfficerRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Tony Ivey, 52, of Rochester, NY, was arrested and charged by criminal complaint with threatening to assault or murder a Federal law enforcement officer with the intent to interfere with the officer while performing official duties. The charge carries a maximum penalty of six years in prison and a $250,000 fine.
“Thanks to the quick work of the U.S. Marshal Service, this defendant is now is police custody and unable to carry out any of these alleged threats,” said U.S. Attorney Hochul.
“We take a zero tolerance approach when any individual threatens to commit an act of violence with a gun against a law enforcement officer or any member of our community,” said U.S. Marshal Salina.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that according to the complaint, on June 13, 2016, Ivey contacted the U.S. Attorney’s Office in Rochester and complained about the Rochester Housing Authority. During these calls, the defendant became verbally abusive and agitated.
Ivey contacted the U.S. Attorney’s Office once again on June 14, 2016. During that call, an Assistant U.S. Attorney (AUSA) attempted to advise the defendant that the U.S. Attorney’s Office would not be able to assist Ivey with his complaints but would assist in directing the defendant to other entities. Ivey became agitated and claimed his civil rights were being violated.
As the call continued, the defendant became verbally abusive and stated that he was going to go to the AUSA’s office with an assault weapon and shoot people. Ivey further stated that he was willing to die.
The United States Marshals Service tracked the defendant to a residence on Westland Parkway in Cheektowaga where he was arrested. During his arrest, Ivey told a Deputy Marshal, “you are the type of people that provoke Orlando.” The defendant further stated, “I wish I had a gun, I just don’t have access...but I would if I got them, do that (expletive) I would.”
The complaint is the result of an investigation by the United States Marshals Service, under the direction of Marshal Charles Salina and the United States Marshals Service Task Force.
The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.
Rochester Brothers Plead Guilty to Armed Cocaine TraffickingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Shawnta Brown, 40, and Kenya Brown, 41, both of Rochester, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine and 280 grams or more of crack cocaine, and possession of firearms in furtherance of a drug trafficking crime. The charges carry a mandatory minimum penalty of 15 years in prison, a maximum of life, a fine of $10,250,000, or both.
Assistant U.S. Attorney Robert A. Marangola, who is handling the case, stated that between 2006 and March 2012, the Brown brothers obtained kilogram quantities of cocaine, manufactured crack cocaine from cocaine, then broke down and packaged smaller quantities for resale. The defendants also distributed cocaine and crack cocaine directly to others, operated drug houses where they directed and supervised lower-level members of the conspiracy who sold the illegal narcotics.
The Brown brothers were arrested March 9, 2012 when officers raided 2294 Clifford Avenue, 138 Strong Street, 29 Aberdeen Street and other locations in Rochester utilized by the defendants in their drug trafficking operation. At these locations, officers seized more than five kilograms of cocaine, a quantity of crack cocaine, firearms with ammunition, paraphernalia for the packaging, processing and weighing of narcotics, and receipts for gold and silver bars. A few days later, officers raided a residence in the Town of Red Creek in Cayuga County, seizing more firearms, dozens of rounds of ammunition, $303,355 in U.S. currency, and over $23,000 in gold and silver bars and coins. The investigation continued, and resulted in the arrest of Eric Contreras, 29, the California kilogram supplier on May 15, 2012 in Whittier, California. Contreras was convicted and sentenced to 188 months in prison.
Today’s convictions are the culmination of an investigation on the part of the Rochester Police Department, under the direction of Chief Michael Ciminelli and Special Agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, with assistance provided by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Delano A. Reid, and the United States Marshal Service under the direction of United States Marshal Charles Salina.
Sentencing is scheduled for August 15, 2016 at 2:00 pm before Judge Wolford.
Quad/Graphics, Inc. Agrees to Pay $750,000 to United States to Settle Allegations Regarding Work for Government Publishing OfficeRead the Press Release
WASHINGTON – Quad/Graphics Inc. has agreed to pay $750,000 to the United States to resolve allegations that the firm violated security requirements involving personally identifiable information on contracts with the U.S. Government Publishing Office (GPO).
The settlement agreement was announced today by U.S. Attorney Channing D. Phillips and Michael A. Raponi, Inspector General for the U.S. Government Publishing Office.
The company, based in Sussex, Wisconsin, specializes in print solutions, such as retail inserts, publications, catalogs, direct mail, packaging, books, and directories. Since January of 2013, it provided printing services under contracts with the GPO. These contracts involved the electronic receipt and printing of Social Security Administration forms that contain personally identifiable information, protected from disclosure under the federal Privacy Act and other laws. Under the contracts, the company was to meet security requirements involving the handling of documents with personally identified information, including the handling of waste.
The agreement resolves allegations stemming from an investigation by the GPO Office of Inspector General of a company facility in Chalfont, Pennsylvania. As a result of the investigation, the United States alleged civil claims arising from its contention that Quad/Graphics failed to comply with the security requirements. For example, the government alleged, Quad/Graphics failed to dispose of waste according to GPO procedures; used malfunctioning security cameras to monitor production runs and the bale room; allowed unauthorized employees who had not undergone required background checks to work on the contracts, and altered sign-in sheets to conceal the fact that the unauthorized employees had access to the secure work area.
In addition to the $750,000 payment, Quad/Graphics has agreed to a series of changes in the way it trains its employees on the handling of documents containing personally identifiable information and in the actual physical layout of its printing facility to maximize security of personal identification information.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The settlement was the result of a coordinated effort among the Civil Division of the U.S. Attorney’s Office of the District of Columbia and the GPO Office of Inspector General. In announcing the settlement, U.S. Attorney Philips and Inspector General Raponi commended the work of Special Agent Keith D. Olive, who investigated the case from the Inspector General’s Office, and Assistant U.S. Attorney Darrell C. Valdez of the U.S. Attorney’s Office.
Public Land Marijuana Grower Sentenced to 97 Months in Federal PrisonRead the Press Release
BOISE - Martin Diaz-Lara, 33, a Mexican National, illegally residing in Walla Walla, Washington, was sentenced today to 97 months in prison for possession of a firearm in furtherance of a drug trafficking crime and conspiracy to manufacture a controlled substance, more than 1,000 marijuana plants, with the intent to distribute it, U.S. Attorney Wendy J. Olson announced. Chief United States District Judge B. Lynn Winmill also ordered Diaz- Lara to serve three years of supervised release. Diaz-Lara will likely be deported to Mexico following completion of his prison sentence. Diaz-Lara pleaded guilty on March 8, 2016.
According to court documents, Diaz Lara was arrested on September 23, 2015, along with a co-conspirator Carlos Avalos-Cervantes, in a canyon half a mile from the North Fork of Payette River, ten miles north of Banks, in Boise County, Idaho. Agents were able to document a total of 6,870 live and harvested marijuana plants on state lands in the canyon. According to court proceedings, Diaz-Lara and Avalos-Cervantes each possessed a 9 mm handgun in furtherance of the drug trafficking crime. Agents discovered that Diaz-Lara and others working in the grow used a banned Mexican pesticide, carbofuran. Carbofuran was banned by the U.S. Environmental Protection Agency in 1991, after its use resulted in the death of millions of birds per year. The court documents also state that the marijuana operation was supported and supplied by other co-defendants. All of those responsible for the public land outdoor marijuana grow are Mexican nationals who entered the United States illegally.
Co-defendant Avalos-Cervantes pleaded guilty to the same charges as Diaz-Lara and was sentenced on April 19, 2016 to 180 months in prison. Avalos-Cervantes was believed to have been involved in another public land marijuana grow in Umatilla County, Oregon in 2007. Trial for the remaining defendants is scheduled for July 18, 2016, before Chief U.S. District Judge B. Lynn Winmill.
The arrests and complaints are the result of a joint investigation and cooperative law enforcement efforts of the Organized Crime and Drug Enforcement Task Force (OCDETF), led by the Drug Enforcement Administration, Bureau of Land Management (BLM), Nampa Police Department Special Investigations Unit (SIU). Other agencies include Ada County Sheriff’s Office, United States Forest Service (USFS), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Boise County Sheriff’s Office, Boise Police Department, Gooding County Sheriff’s Office, Idaho Department of Fish and Game, Idaho National Guard—Counterdrug Support Office, Meridian Police Department, Milton-Freewater Police Department, Oregon State Police, Power County Sheriff’s Office, Spokane Police Department, Valley County Sheriff’s Office, Walla Walla Police Department, and Washington State Patrol.
The OCDETF program is a federal multi agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Pittsburgh Dentist Charged with Illegally Distributing PainkillersRead the Press Release
PITTSBURGH – A Monroeville resident has been indicted by a federal grand jury in Pittsburgh on charges of distribution of Oxycodone, a Schedule II controlled substance, outside the usual course of professional practice, and omitting material information from required reports, records and other documents, United States Attorney David J. Hickton announced today.
The seven-count indictment, returned on June 7 and unsealed on Monday, named Daniel Garner, 44, a dentist who practices in Pittsburgh, Pennsylvania, as the sole defendant.
According to the indictment, from Feb. 13, 2014 through June 11, 2015, Garner distributed Oxycodone on six occasions, a Schedule II controlled substance, outside the usual course of professional practice. The indictment further alleges that on Jan. 14, 2016, Garner omitted material information from an application for a Drug Enforcement Agency registration number.
The law provides for a maximum total sentence on all counts of incarceration of up to 124 years, a fine of $6,250,000, a term of supervised release of three years, 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 Cindy K. Chung is prosecuting this case on behalf of the government.
The Drug Enforcement Administration and the Federal Bureau of Investigation conducted the investigation that led to the prosecution of Daniel Garner.
Philadelphia man found guilty of heroin, oxycodone traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – A federal jury convicted Keevus Weeks, 32, of Philadelphia, Pennsylvania of heroin and oxycodone trafficking today, United States Attorney William J. Ihlenfeld, II, announced.
Evidence presented at trial indicated that Weeks was involved in a drug trafficking operation in which heroin and oxycodone were transported across state lines from Philadelphia to Morgantown, West Virginia for redistribution and sale throughout the region.
Following a 3 day trial, a jury found Weeks guilty of one count of “Conspiracy to Distribute Oxycodone and Heroin,” two counts of “Distribution of Oxycodone within 1000 feet of a Protected Location,” and one count of “Distribution of Oxycodone.”
For the “Conspiracy to Distribute Oxycodone and Heroin” charge, Weeks faces up to 20 years in prison and a fine of up to $1,000,000. Weeks faces between one to 40 years in prison and a fine of up to $2,000,000 for each of the “Distribution of Oxycodone within 1000 feet of a Protected Location” charges. For the “Distribution of Oxycodone” charge, Weeks 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 for each charge will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The West Virginia State Police Bureau of Criminal Investigation, the Federal Bureau of Investigation, and the Mon Metro Drug and Violent Crime Task Force investigated.
U.S. District Judge Irene M. Keeley presided.
Penn Hills Man Sentenced for Role in Cocaine Trafficking ConspiracyRead the Press Release
PITTSBURGH - A resident of Penn Hills, Pa., has been sentenced in federal court to five years’ probation with four months to be served in community confinement and six months’ home detention on his conviction of conspiracy to distribute cocaine, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Lavon Hudgins, 45, of Pittsburgh, PA.
According to information presented to the Court, in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. During that timeframe, Lavon Hudgins was intercepted over the wire conspiring with others to possess with intent to distribute and distribute cocaine, which was shipped from California to the Western District of Pennsylvania through the United States Postal Service or commercial carrier.
Prior to imposing sentence, Judge Hornak stated that the sentence was sufficient but not greater than necessary to fulfill the purposes of sentencing.
Assistant United States Attorney Tonya Sulia Goodman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Hudgins.
Overdose Investigation Leads to Heroin Distribution Charges Against Bridgeport ManRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration for New England, today announced that on Monday, DAQUONE JOHNSON, 24, of Bridgeport, was arrested on heroin distribution offenses. The charges stem from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
JOHNSON is charged by criminal complaint with possession with intent to distribute, and distribution of, heroin, and conspiracy to distribute heroin. The charges carry a maximum term of imprisonment of 20 years on each count.
According the complaint, on May 9, 2016, a 30-year-old female was found unresponsive at a residence in Monroe. Police and medical personnel responded to the scene and administered multiple doses of Narcan to the victim. The victim, who did not respond to the Narcan, was transported to the hospital where she was pronounced dead. While administering aide to the victim, hospital staff located unopened heroin folds on the victim’s person. The substance within the folds later tested positive for heroin and fentanyl, and the Connecticut Office of the Medical Examiner has determined the victim’s cause of death to be acute heroin and fentanyl toxicity.
Based on an investigation that has included witness interviews and analysis of calls and text messages to and from the victim’s phone, the complaint alleges that the victim ordered heroin from JOHNSON on the day of her death.
JOHNSON was arrested on June 13, 2016, after law enforcement conducted a controlled purchase of heroin from him. He appeared yesterday before U.S. Magistrate Judge William I Garfinkel in Bridgeport and was released on a $125,000 bond.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Tactical Diversion Squad, and the Monroe, Milford and Bridgeport Police Departments. The Task Force includes participants from the New Haven, Hamden, Greenwich, Shelton, Bristol, Vernon, Wilton, Milford, Monroe, Fairfield and Middlebury Police Departments, and the Connecticut State Police. The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
Orange County Businessman Sentenced to over 10 Years in Federal Prison for Defrauding Investors out of nearly $50 MillionRead the Press Release
SANTA ANA, California – A former Newport Beach resident has been sentenced to 121 months in federal prison for running a Ponzi scheme through his Orange County-based company that defrauded hundreds of investors out nearly $50 million.
Joseph J. Lampariello, 62, who recently relocated to Huntington Station, New York, was sentenced Monday afternoon by United States District Judge David O. Carter.
In addition to the prison term of just over 10 years, Judge Carter ordered Lampariello to pay $39,961,859 in restitution.
Lampariello previously pleaded guilty to one felony count of wire fraud and one misdemeanor count of willfully failing to file a tax return.
Lampariello was the president and chief operating officer of Medical Capital Holdings, Inc., a medical receivables financing company that operated out of offices in Anaheim and Tustin. Medical Capital administered several entities that raised money from investors who were told their money would be used to purchase account receivables from accredited medical providers, make secured loans and provide money for general operating expenses.
Over 11 months in 2008 and 2009, Lampariello misappropriated funds invested with one of the entities and used the money to make Ponzi payments to prior investors and to pay himself administrative fees. Lampariello, through Medical Capital, defrauded over 700 investors of nearly $49 million.
“Mr. Lampariello’s sentence properly reflects the significant harm he caused to hundreds of victims,” said United States Attorney Eileen M. Decker. “This defendant’s false promises were designed only to provide wealth for himself, and he must now pay for that greed.”
“The massive monetary figures can’t begin to explain the devastation to victims in this case, some of whom were forced out of retirement, some who lost their marriage and many more who lost trust and live with despair as a result,” said Deirdre L. Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Investors must do extensive research before handing over their hard-earned savings, and must never fall for phony online profiles as a way of determining a reputable investment business.”
“When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime,” stated IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando. “Today’s sentencing demonstrates how federal law enforcement will band together to help put an end to the criminal behavior of those who prey on investors for their own personal financial gain.”
This case was the result of a joint investigation by the Federal Bureau of Investigation and IRS Criminal Investigation. The prosecution was handled by Assistant United States Attorney Jennifer L. Waier.
Murphysboro Man Sentenced on Crack Cocaine OffenseRead the Press Release
On June 14, 2016, Keenon J. Farr, a/k/a "Keeno," 32, of Murphysboro, IL, was sentenced for a crack cocaine offense, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Farr, who had previously pled guilty to an indictment charging conspiracy to distribute 28 grams or more of crack cocaine, was sentenced to 125 months in federal prison, to be followed by 8 years’ supervised release, and fined $500.00. The offense occurred between October 2014 and July 2015, in Williamson and Jackson Counties. Evidence at the plea and sentencing hearings established that Farr was involved with others in the distribution of crack cocaine in the Marion and Carbondale areas. During the investigation, Farr sold crack cocaine to confidential sources working for law enforcement. At sentencing, the judge found that Farr was responsible for the distribution of 525.12 grams of crack cocaine and 24.78 grams of cocaine. Co-defendants Tommy T. Langston and Tammy R. Whitton have each previously been sentenced to terms of 120 months for their role in the crack cocaine conspiracy. One co-defendant has pled guilty and is awaiting sentencing. One co-defendant has pled not guilty and is awaiting trial.
The ongoing investigation is being conducted by the Southern Illinois Enforcement Group, Drug Enforcement Administration, Jackson County Sheriff’s Office, and Carbondale Police Department. The Williamson and Jackson County State’s Attorneys’ Offices also assisted in the investigation.
Monroe County Man Indicted for Sex Trafficking Conspiracy and Interstate Prostitution CrimesRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that a federal grand jury in Scranton returned an indictment on June 14, 2016, charging a 39-year-old East Stroudsburg man with conspiracy to commit sex trafficking by force and coercion, and interstate transportation of others for purposes of prostitution.
According to United States Attorney Peter Smith, the Indictment alleges that Thurman Stanley allegedly forced and coerced several women to engage in prostitution in Monroe County and elsewhere, and transported women from Pennsylvania to New York, Iowa, and North Dakota to engage in prostitution.
The charges stem from an investigation by the Federal Bureau of Investigation, the Pennsylvania State Police, and Bismarck, North Dakota detectives.
The indictment alleges that Stanley and/or his co-conspirators used social network sites to recruit females for prostitution; used cell phones to post ads on adult escort websites to solicit customers; rented hotel and motel rooms in Monroe County and elsewhere for purposes of prostitution; provided heroin and other illegal drugs to the prostitutes; and used force, threats, and coercion to carry out prostitution activities. The indictment alleges that the conduct occurred between December 2013 and December 2015.
Stanley was arrested in May 2016 on a Criminal Complaint and remains in custody.
If convicted of the charges, Stanley faces a mandatory minimum sentence of 15 years in prison and a potential maximum sentence of life in prison for the sex trafficking charge, and up to 10 years in prison on each of the interstate prostitution charges.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Michigan Tax Return Preparer Pleads Guilty to Preparing False ReturnsRead the Press Release
A Michigan man pleaded guilty in the U.S. District Court for the Eastern District of Michigan today to one count of aiding and assisting in the preparation of false tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Royal Alexander Jr., 51, who owned and operated Royal Publishing Inc., in Flint, Michigan, admitted that from 2010 through 2015, he willfully aided in the preparation and filing of 40 false individual income tax returns. According to the information, these returns were false in that they included inflated or entirely fictitious Schedules C; claimed a false dependent; claimed a false IRA deduction; falsely claimed Head of Household status for a client; and/or claimed a false education credit, all to produce larger refunds.
Alexander’s sentencing hearing is scheduled for Sept. 20. He faces a statutory maximum sentence of three years in prison and agreed in his plea to pay $98,605 in restitution to the Internal Revenue Service (IRS). Alexander also faces financial penalties and a term of supervised release.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Jeffrey A. McLellan and Abigail B. Chingos of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
McAlester Man Sentenced to 30 Months for Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced that MALCOLM DEWAYNE ELLIS, age 38, of McAlester, Oklahoma was sentenced to 30 months imprisonment, followed by 3 years supervised release, for FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2).
The charge is a result of an investigation by the McAlester Police Department. The defendant was indicted in January, 2016 and pled guilty in February, 2016.
The Indictment alleged that on or about April 6, 2015, within the Eastern District of Oklahoma, the defendant, MALCOLM DEWAYNE ELLIS, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm, to-wit: One (1) Bersa, Model Mini 9 Firestorm, 9mm caliber semi-automatic pistol, serial number 621726, manufactured in Argentina, Imported by “RSA Enterprises INC”, which had been shipped and transported in interstate commerce.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshals Service pending transportation to the designated federal facility at which he will serve his nonparoleable sentence.
Assistant United States Attorney Dean Burris represented the United States.
McAlester Man Pleads Guilty to Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced that LUKE AUSTIN HOMER, age 35, of McAlester, Oklahoma, pled guilty to an Information charging him with POSSESSION WITH INTENT TO DISTRIBUTE 5 GRAMS OR MORE OF METHAMPHETAMINE (Actual), in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B).
The charge arose from an investigation by the Pittsburg County Sheriff’s Department and the Drug Enforcement Administration.
The Information alleged that on or about March 5, 2016, in the Eastern District of Oklahoma, the defendant, LUKE AUSTIN HOMER, did knowingly and intentionally possess with intent to distribute 5 grams of more of methamphetamine (Actual), a Schedule II controlled substance.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the defendant’s guilty plea, and ordered the completion of a presentence report. Sentencing will be scheduled upon its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is up to 40 years imprisonment, a fine of up to $4,000,000.00 or both.
Assistant United States Attorney Tim Hammer represented the United States.
Maryland Health Care Provider Sentenced to 10 Years in Federal Prison for Health Care Fraud Resulting in Patient DeathsRead the Press Release
Baltimore, Maryland – U. S. District Judge James K. Bredar sentenced the owner of Alpha Diagnostics, Rafael Chikvashvili, age 69, of Baltimore, Maryland, today to 10 years in prison, followed by two years of supervised release, for charges related to a health care fraud and wire fraud conspiracy resulting in the deaths of patients, as well as false statements and aggravated identity theft, related to a scheme to defraud Medicare and Medicaid of more than $6 million. Judge Bredar also ordered that Chikvashvili pay restitution and forfeit proceeds of the fraud, with the exact amount to be determined at a later date. Chikvashvili has been detained since his conviction by a federal jury on February 17, 2016.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
“The evidence showed that Rafael Chikvashvili failed to provide medical services to patients who needed them, and billed for services that he did not provide,” said U.S. Attorney Rod J. Rosenstein. “The jury found that two patients died because their X-rays were not reviewed by a qualified radiologist. Health care fraud has consequences, in money wasted and lives lost.”
According to the evidence presented at the two-and-a-half week trial, Chikvashvili formed Alpha Diagnostics Services, Inc., which later became Alpha Diagnostics, LLC, in 1993, and was the Managing Member, Authorized Official, Managing Employee, President and Chief Executive Officer for Alpha Diagnostics. Chikvashvili holds a PhD in mathematics, but was never a medical doctor or licensed physician. Timothy Emeigh was the Vice President in charge of Operations at Alpha Diagnostics and was a licensed radiologic technologist.
Alpha Diagnostics was a portable diagnostic services provider, principally of X-rays, but also provided ultrasound tests, and cardiologic examinations. Alpha Diagnostics’ clients included nursing homes whose patients were covered by Medicare and Medicaid. Alpha Diagnostics operated in Maryland, Delaware, Pennsylvania, Virginia and the District of Columbia, but was headquartered in Owings Mills, Maryland, where Chikvashvili worked full time.
Based on the evidence, the jury found that from 1997 through October 2013, Chikvashvili conspired with others to defraud Medicare and Medicaid by: creating false radiology, ultrasound and cardiologic interpretation reports; by submitting insurance claims for medical examination interpretations that were never completed by licensed physicians; by falsely representing to Medicare and Medicaid, as well as to treating physicians, that the interpretations had, in fact, been completed by actual licensed physicians; by submitting insurance claims for radiology, ultrasound and cardiologic examinations (and their associated costs) that were never performed and/or were not ordered by the treating physician; and by submitting claims for transportation and other charges that Alpha Diagnostics was not entitled to receive.
According to witness testimony, Chikvashvili instructed his non-physician employees, including Emeigh, to interpret X-rays, ultrasounds and cardiologic examinations instead of licensed radiologists. For example, in June 2012, Emeigh traveled to Jamaica for a vacation. The evidence showed that Chikvashvili directed Emeigh, through text messages and telephone calls, to view medical images using his personal laptop in his hotel room and then draft false physician interpretation reports. Alpha Diagnostics personnel subsequently submitted false claims to Medicare for these images and fraudulent physician reports.
The evidence showed that Chikvashvili also caused employees to draft licensed physician’s examination reports. Chikvashvili, in turn, caused a copy of the handwritten signature of the actual physician to be affixed to the report, or forged the physician’s signature himself, creating the appearance that a licensed physician had performed the medical interpretation.
According to the testimony provided at trial, two patients died because their X-rays were not interpreted by a qualified radiologist. Instead, non-physician Alpha Diagnostics employees reviewed the images and failed to detect congestive heart failure. As a result of the incorrect reading the her chest X-ray, the first patient with congestive heart failure was not transferred to an acute care facility for treatment, as is standard medical practice, but remained in a rehabilitative nursing home. The patient died four days after unqualified Alpha Diagnostics personnel misinterpreted her chest X-ray. Witnesses testified that had the patient been transferred, her symptoms could have been addressed. The second patient was scheduled to undergo elective surgery and the chest X-ray was a pre-operation test to determine if the patient could safely have surgery. According to the evidence presented at trial, although the patient’s X-ray revealed mild congestive heart failure, the non-physician Alpha Diagnostics employee failed to detect it. A patient in congestive heart failure is at an increased risk of bleeding during and after surgery. As a result of the incorrect reading of the chest X-ray, the patient was cleared for elective surgery and experienced significant bleeding after the elective surgery, and the worsening of her congestive heart failure. Six days after unqualified Alpha Diagnostics personnel misinterpreted her chest X-ray, the patient died.
Subsequently, Alpha Diagnostics submitted claims to Medicare falsely representing that licensed radiologists had interpreted both patients’ chest X-rays. Medicare paid Alpha Diagnostics $8.87 for the first claim and $218.36 for the second claim.
The evidence showed that over the course of the conspiracy, Chikvashvili and Alpha Diagnostics received more than $6 million from fraudulent claims submitted to Medicare and Medicaid.
Timothy Emeigh, age 51, of York Springs, Pennsylvania previously pleaded guilty to health care fraud and is scheduled to be sentenced on June 17, 2016.
United States Attorney Rod J. Rosenstein praised the HHS-OIG and the FBI for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Leo J. Wise and P. Michael Cunningham, who prosecuted the case.
Manager and Two Debt Collectors Plead Guilty in $31 Million Fraudulent Debt Collection SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that HEATHER GASTA, a/k/a “Heather Brez,” a former manager of a Buffalo, New York-based debt collection company (the “Company”), pled guilty today to participating in a scheme to coerce thousands of victims across the country through false threats and representations into paying a total of more than $31 million to the Company to resolve debts these victims purportedly owed. Earlier this week, COLUMBUS SIMMONS, a/k/a “Timothy Ham,” and WILLIAM CLARK, a/k/a “John Harvey,” two former debt collectors at the Company, also pled guilty for their roles in the debt collection scheme. GASTA, SIMMONS, and CLARK each pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud before U.S. District Judge Katherine Polk Failla. To date, nine former employees of the Company have pled guilty to participating in the scheme.
U.S. Attorney Preet Bharara said: “As they admitted in court this week, these defendants were key members of a band of predatory debt collectors, or as they called themselves, ‘the elite team.’ Armed with telephones and a litany of threatening lies, they and others at the Company coerced thousands of desperate, debt-ridden victims to send them tens of millions of dollars. In a practice they called ‘juicing the balance,’ these defendants also falsely inflated the debt owed by the victims so they could collect even more.”
According to the allegations contained in the Indictment to which GASTA, SIMMONS, and CLARK pled guilty and statements made during their plea proceedings:
Between 2010 and February 2015, GASTA, SIMMONS, CLARK, and their co-defendants (collectively, the “defendants”) routinely attempted to trick and coerce thousands of victims throughout the United States into paying millions of dollars in consumer debts through a variety of false statements and false threats. The defendants, using a variety of aliases, falsely told victims, among other things, that: (1) the Company was affiliated with local government and law enforcement agencies, including the “county” and the district attorney’s office; (2) the consumers had committed criminal acts, such as “wire fraud” or “check fraud,” and if they did not pay the debt immediately, warrants or other process would be issued, at which point they would be arrested or hauled into court; (3) the victims would have their driver’s licenses suspended if they did not pay their debts immediately; (4) the Company was a law firm or mediation firm and that the Company’s employees were working with lawyers, a law firm, mediators, or arbitrators; and (5) a civil lawsuit would be filed, or was pending, against the victims for failing to pay their debts.
As a further part of the scheme, the defendants lied to victims by falsely inflating the balances of the debts so that they could collect more money from the victims than the victims actually owed, a practice known within the Company as “juicing” balances.
GASTA, SIMMONS, and CLARK were members of the Company’s so-called “elite team,” which used particularly aggressive and egregious tactics in attempting to trick consumers into paying debts. GASTA also served as a Company manager.
* * *
GASTA, 41, SIMMONS, 46, and CLARK, 30, all of Buffalo, New York, each pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison and three years of supervised release. The maximum potential sentences in this case are prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
GASTA, is scheduled to be sentenced on September 30, SIMMONS on September 23, and CLARK on September 29, 2016, respectively, before Judge Failla.
In total, nine former employees of the Company have pled guilty to defrauding consumers as part of this debt collection scheme. In addition to the pleas of GASTA, SIMMONS and CLARK, former Company mangers Mark Lavin and John Salatino and debt collectors Jessica Mann, Charles Starks, Michael Calandra, and Jennifer Sherk each pled guilty for their roles in the fraud. The other defendants who have not pled guilty are presumed innocent unless and until proven guilty.
On or about May 20, 2016, Mann was sentenced by Judge Failla to a prison term of one year and one day. The sentencing of the other defendants who have pled guilty is pending.
Mr. Bharara praised the efforts of the Office’s Criminal Investigators.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Edward A. Imperatore and Jordan L. Estes are in charge of the prosecution.
MEDIA ADVISORY-- HOPE Initiative Partners to Co-Host KANW/Albuquerque Journal Public Forum on New Mexico’s Heroin and Opioid EpidemicRead the Press Release
ALBUQUERQUE – HOPE Initiative partners, U.S. Attorney Damon P. Martinez and Executive Vice Chancellor Richard Larson, UNM Health Sciences Center, will co-host the KANW/Albuquerque Journal public forum on New Mexico’s heroin and opioid epidemic which will be broadcast by KANW 89.1 FM from 7:00 pm to 9:00 pm tonight. During the public forum, which will be moderated by Albuquerque Journal Editor-in-Chief Kent Walz and Albuquerque Journal Investigative Reporter Mike Gallagher, more than 20 experts from law enforcement, the medical profession, local government and community organizations will respond to questions about the epidemic from New Mexico residents. A list of the experts participating in the public forum is attached.
WHO:
U.S. Attorney Damon P. Martinez
Executive Vice Chancellor Richard Larson, UNM Health Sciences Center
Kent Walz, Editor-in-Chief, Albuquerque Journal
Mike Gallagher, Investigative Reporter, Albuquerque Journal
WHAT:
Live Public Forum on New Mexico’s Heroin and Opioid Epidemic
WHEN:
WEDNESDAY, JUNE 15, 2016 FROM 7:00 PM TO 9:00 PM
WHERE:
KANW 89.1FM
The New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative was launched in Jan. 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national heroin and opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC) and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico. The Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The new community education program is part of the prevention and education component of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
HOPE Forum Expert List
Lancaster Resident Sentenced to 18 Months in Prison for Unemployment Compensation Benefits FraudRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Angel Luis Carrasco-Rivera, age 54, was sentenced to 18 months in prison by Chief United States District Court Judge Christopher C. Conner in Harrisburg for fraudulently obtaining unemployment benefits.
According to U.S. Attorney Peter Smith, Carrasco-Rivera, Lancaster, was charged in a Criminal Information with mail fraud in January 2016. The charge stemmed from Carrasco-Rivera filing claims for unemployment compensation benefits from 2008 through late 2012 with the Pennsylvania Department of Labor and Industry in Harrisburg. Carrasco-Rivera knew he was not entitled to those benefits because he was employed full time when he applied for and received them. Carrasco-Rivera obtained more than $102,000 in benefits to which he was not entitled during that four-year period.
Carrasco-Rivera pled guilty in February 2016 pursuant to a plea agreement. Chief Judge Conner ordered Carrasco-Rivera to pay $89,500 in restitution to the Pennsylvania Department of Labor and Industry.
The case was investigated by the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, with assistance from the Pennsylvania Department of Labor and Industry, Internal Audits Division. Assistant U.S. Attorney James T. Clancy prosecuted the case.
# # #
LRGP Member Pleads Guilty to Rico Conspiracy Involving Murder and Drug ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Philip Brown, 24 of Buffalo, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to RICO conspiracy. Keys faces a mandatory minimum penalty of 20 years in prison and a $250,000 fine.
“Today’s conviction brings to an end a violent chapter on Buffalo's East Side, perpetrated by the gang formerly called LRGP,” said U.S. Attorney Hochul. “Thanks to this prosecution, numerous murderers- including a woman who lured a victim to his death - have been brought to justice, and multiple acts of violence solved. Most importantly, justice for the victims and residents alike have been served. And as is the case with federal RICO prosecutions brought by this Office, the gang no longer exists.”
Assistant U.S. Attorneys Thomas S. Duszkiewicz and Joel L. Violanti, who are handling the case, stated that between 2009 and January 23, 2012, Brown was an associate of the LRGP gang which operates primarily in the area of Lombard, Rother, Gibson and Playter Streets in the City of Buffalo. It is alleged to be an organization engaged in violent criminal activity, including the distribution of cocaine and crack cocaine and the use of firearms.
In April 2011, the defendant and others, while at 318 Sobieski Street in Buffalo, agreed that a member of the Cold Springs Gang, a rival criminal organization, should be murdered in retaliation for the killing Alonzo Scott, in March 2011. Scott was the brother of LRGP leader Dewayne Gray. The individuals settled upon killing Amir Chambers, whom they believed to be associated with the Cold Springs Gang, and who had an ongoing social relationship with Alexis Mills.
After a failed attempt by Mills to poison Amir Chambers, it was agreed that co-defendant Fred Keys would kill Chambers by shooting him. Mills was to use her relationship with Chambers to get the victim to open his residence door. On April 20, 2011, Keys, Mills, Timothy Finch and the defendant went to a residence at 111 Mills Street in Buffalo where they dropped off Fred Keys and Alexis Mills. Chambers opened the residence door upon seeing Alexis Mills at which time Keys killed Chambers by shooting him in the head. Mills, for her part, kicked the victim in the head following the shooting to ensure that Chambers was in fact deceased. Keys later called 911 to report that there was a “body” at 111 Mills Street.
Philip Brown is the final defendant out of 17 individuals to be convicted in this case.
The plea is the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent in Charge Adam S. Cohen, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Office and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Brown will be sentenced on September 22, 2016 at 12:30 p.m. before Judge Arcara.Iowa Businessman Pleads Guilty for Failing to Pay Employment Taxes and Violating Clean Water ActRead the Press Release
An Iowa businessman pleaded guilty yesterday in federal court to failing to pay employment taxes and violating the Clean Water Act, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kevin W. Techau of the Northern District of Iowa.
Randy Less, 49, of Hopkinton, Iowa, was charged in an indictment in January 2016 with multiple counts of willfully failing to collect, truthfully account for and pay federal income, social security and Medicare taxes that were withheld from the wages of employees of Permeate Refining Inc., an ethanol production business in Hopkinton.
“Mr. Less made the choice to ignore his employment tax obligations, and will now pay a price for his criminal conduct,” said Acting Assistant Attorney General Ciraolo. “We are committed to holding accountable those employers who take advantage of their employees, their competitors and the U.S. Treasury.”
“The United States takes very seriously its obligation to ensure that employers collect, account for and pay taxes withheld from the wages of their employees,” said U.S. Attorney Techau. “Environmental crimes that involve polluting Iowa’s waterways are serious matters. Violations of our environmental laws impact our communities both now and in years to come.”
“Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service (IRS),” said Special Agent in Charge Karl Stiften of IRS Criminal Investigation. “The failure to pay over withheld taxes is a serious offense. IRS Criminal Investigation vigorously pursues anyone who collects taxes and fails to timely remit those taxes.”
“Iowa’s waterways are not dumping grounds,” said Assistant Special Agent in Charge Justin Oesterreich of the U.S. Environmental Protection Agency’s (EPA) criminal enforcement program in Iowa. “Mr. Less admitted that he knowingly discharged or caused to be discharged production wastewater into a tributary of the Maquoketa River without a permit to do so, putting public health, wildlife and the environment at risk. This case demonstrates that EPA takes seriously its commitment to protect our natural resources and the communities that rely upon them.”
At his guilty plea proceeding, Less admitted that as the majority owner, general partner and general manager of Permeate Refining, he had the responsibility to collect, truthfully account for and pay over to the IRS the taxes withheld from his employees’ wages.
Less also pleaded guilty yesterday to an information, which the government filed the same day, charging him with violations of the Clean Water Act. Less admitted that in July 2013, he knowingly discharged or caused to be discharged ethanol, a pollutant, from Permeate Refining Inc. into an unnamed tributary of the Maquoketa River without a permit to do so.
A sentencing date has not yet been set. Less faces a statutory maximum sentence of five years in prison and a fine of up to $250,000 for the tax charge and a statutory maximum sentence of three years in prison and a fine of up to $250,000 on the Clean Water Act charge.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Techau thanked special agents of the IRS-Criminal Investigation, FBI, U.S. Postal Inspection Service and EPA, who investigated the case, and Assistant U.S. Attorney Tim Vavricek of the Northern District of Iowa and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting the case.
Iowa Businessman Pleads Guilty for Failing to Pay Employment Taxes and Violating Clean Water ActRead the Press Release
CEDAR RAPIDS, IA – An Iowa businessman pled guilty yesterday in federal court to failing to pay employment taxes and violating the Clean Water Act, announced U.S. Attorney Kevin W. Techau of the Northern District of Iowa and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Randy Less, 49, of Hopkinton, Iowa, was charged in an Indictment in January 2016 with multiple counts of willfully failing to collect, truthfully account for and pay federal income, social security and Medicare taxes that were withheld from the wages of employees of Permeate Refining Inc., an ethanol production business in Hopkinton.
At his guilty plea proceeding, Less admitted that as the majority owner, general partner and general manager of Permeate Refining, he had the responsibility to collect, truthfully account for and pay over to the Internal Revenue Service (IRS) the taxes withheld from his employees’ wages.
Less also pled guilty yesterday to an Information charging him with violations of the Clean Water Act that the government filed on the same day. Less admitted that in July 2013, he knowingly discharged or caused to be discharged ethanol, a pollutant, from Permeate Refining Inc. into an unnamed tributary of the Maquoketa River without a permit to do so.
“The United States takes very seriously its obligation to ensure that employers collect, account for, and pay taxes withheld from the wages of their employees,” stated United States Attorney Kevin W. Techau. He further added, “Environmental crimes that involve polluting Iowa’s waterways are serious matters. Violations of our environmental laws impact our communities both now and in years to come.”
“Mr. Less made the choice to ignore his employment tax obligations, and will now pay a price for his criminal conduct,” said Acting Assistant Attorney General Ciraolo. “We are committed to holding accountable those employers who take advantage of their employees, their competitors, and the U.S. Treasury.”
“Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service,” said Karl Stiften, Special Agent in Charge of IRS Criminal Investigation. “The failure to pay over withheld taxes is a serious offense. IRS Criminal Investigation vigorously pursues anyone who collects taxes and fails to timely remit those taxes.”
“Iowa’s waterways are not dumping grounds,” said Assistant Special Agent in Charge Justin Oesterreich of the U.S. Environmental Protection Agency’s (EPA) criminal enforcement program in Iowa. “Mr. Less admitted that he knowingly discharged or caused to be discharged production wastewater into a tributary of the Maquoketa River without a permit to do so, putting public health, wildlife and the environment at risk. This case demonstrates that EPA takes seriously its commitment to protect our natural resources and the communities that rely upon them.”
A sentencing date has not yet been set. Less faces a statutory maximum sentence of five years in prison and a fine of up to $250,000 for the tax charge and a statutory maximum sentence of three years in prison and a fine up to $250,000 on the Clean Water Act charge.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Techau thanked special agents of the IRS Criminal Investigation, FBI, U.S. Postal Inspection Service and U.S. Environmental Protection Agency, who investigated the case, and Assistant U.S. Attorney Tim Vavricek of the Northern District of Iowa and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting the case.
Follow us on Twitter @USAO_NDIA.
Indictment Unsealed Charging Heroin and Cocaine Conspiracy in St. Charles and St. John the Baptist ParishesRead the Press Release
U.S. Attorney Kenneth A. Polite announced the recent unsealing of a Superseding Indictment charging an array of federal narcotics and firearm violations by members of a drug trafficking organization operating in south Louisiana. The Superseding Indictment, which was returned by the grand jury on May 26, 2016 and unsealed today, charges eight defendants with conspiring to distribute controlled dangerous substances in the parishes of St. Charles and St. John the Baptist. The Superseding Indictment names the following defendants: ANDRE STAGGERS, a/k/a “Dre,” age 42, COREY SESSION, age 42, GREGORY LONDON, JR., a/k/a “Lil Gregg,” age 40, TERRANCE ANDERSON, a/k/a “City,” age 34, KIRK BALLARD, age 34, LEONARD MORRISON, a/k/a “Leonard London,” age 33, CHRISTOPHER OLAVARRIETA, age 30, and KIRKLAND JEROME STERLING, age 42.
According to the Superseding Indictment, these defendants conspired together, from approximately January 2015 through May 2016, to distribute heroin, cocaine, and marijuana in the Eastern District of Louisiana and elsewhere. The scope of the conspiracy encompassed at least five kilograms or more of cocaine and one kilogram or more of heroin. During the course of this investigation, federal and state law enforcement officers seized various drugs, including cocaine, heroin, marijuana, and methamphetamine. According to court documents, search warrants executed on February 25, 2016, at two residences used by COREY SESSION resulted in the seizure of two AK-style rifles, approximately $10,000 in cash, and a half kilogram of cocaine. A search warrant executed the same day at the residence of ANDRE STAGGERS resulted in the seizure of an AR-15 rifle, a half kilogram of heroin, and over $400,000 in cash.
If convicted for violating federal drug conspiracy laws, the defendants face the following penalties. STAGGERS, SESSION, LONDON Jr., ANDERSON, and BALLARD each face a maximum of life imprisonment, a $10,000,000 fine, and at least five years of supervised release. MORRISON faces a maximum of 40 years imprisonment, a $5,000,000 fine, and at least four years of supervised release. OLAVARIETTA and STERLING could receive a maximum of twenty years in prison, a $1,000,000 fine, and at least three years of supervised release.
STAGGERS and SESSION also are charged with federal firearms violations. STAGGERS is charged with possession of a firearm as a felon, for which he could receive up to ten years of imprisonment, a $250,000 fine, and up to three years of supervised release. SESSION is charged with possession of a firearm as an armed career criminal, for which he could receive a minimum of fifteen years in prison and a maximum of life imprisonment, a $250,000 fine, and up to five years of supervised release. Both STAGGERS and SESSION are also charged with possession of a firearm in furtherance of a drug trafficking crime, for which they each face a minimum of five years in prison consecutive to any other sentence, a $250,000 fine, and up to five years of supervised release.
U.S. Attorney Polite reiterated that the Superseding Indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
This indictment represents a coordinated effort of federal and state law enforcement authorities within the Drug Enforcement Administration’s Gulf Coast High Intensity Drug Trafficking Area (HIDTA) Program. The DEA’s HIDTA Group #11, operating out of the New Orleans Field Division, includes members of the Louisiana State Police, Jefferson Parish Sheriff’s Office, and other local agencies. Agents and officer with the DEA HIDTA Group arrested GREGORY LONDON Jr., TERRANCE ANDERSON, LEONARD MORRISON, CHRISTOPHER OLAVARRIETA, and KIRKLAND JEROME STERLING on June 15, 2016. KIRK BALLARD was arrested on August 23, 2015, on state charges that were incorporated into the federal indictment. ANDRE STAGGERS and COREY SESSION were both arrested after the February 25, 2016 search warrants that were executed at their respective residences.
The prosecution is being handled by Assistant United States Attorney Matthew Payne and Special Assistant United States Attorney Andre Gaudin, who is assigned from the Orleans Parish District Attorney’s Office to the DEA HIDTA Group.