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14 June 2016
Minerva man indicted for transporting girl across state lines to engage in illicit sexual conductRead the Press Release
Eric T. Shotwell, 41, of Minerva, was charged with transportation of a minor to engage in illegal sexual activity and travel with intent to engage in illicit sexual conduct, said Carole S. Rendon, Acting United States Attorney for the Northern District of Ohio.
Shotwell knowingly traveled from Ohio to Missouri and Kentucky in March for the purpose of engaging in illicit sexual conduct with a 14-year‑old girl, according to the indictment.
The indictment also charges that, from March 13, 2016, through March 17, 2016, Shotwell knowingly transported a 14-year-old girl from Kentucky to Ohio with the intent that the girl would be engaged in sexual activity for which Shotwell could be charged with a criminal offense.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant's role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case was investigated by the Canton Office of the Federal Bureau of Investigation, the Minerva Police Department, the Canton Police Department, and the West Plains, Missouri Police Department. It is being prosecuted by Assistant U.S. Attorney Michael A. Sullivan.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Michigan Man Pleads Guilty to Possessing 20 Kilograms of Marijuana with Intent to DistributeRead the Press Release
St. Thomas, USVI – Deonte Damari Bailey, 24, pleaded guilty on Monday, June 13, 2016, in District Court on St. Thomas to one count of possession with intent to distribute marijuana, United States Attorney Ronald W. Sharpe announced.
According to the plea agreement, on Wednesday, January 20, 2016, Bailey arrived at the Cyril E. King Airport, St. Thomas, Virgin Islands, on board a Delta Airlines flight from New York. Bailey’s flight had originated in Las Vegas, Nevada. Bailey removed his suitcase from the conveyor belt when U.S. Customs and Border Protection (CBP) Officers conducting routine inspections, along with CBP canine Castro, alerted to the presence of narcotics. Bailey was escorted to secondary inspection for further investigation. During secondary inspection, CBP officers discovered a second baggage tag. Officers went to Delta Airlines baggage claim and retrieved a second suitcase belonging to Bailey. Both suitcases were inspected and each contained approximately 10 kilograms of marijuana. When questioned, Bailey admitted that he had possession of both bags from the time he packed them until he checked them in with Delta Airlines in Las Vegas.
District Court Judge Curtis V. Gomez permitted Bailey to remain on release pending his October 12, 2016, sentencing date. Bailey faces a maximum sentence of five years’ imprisonment and a maximum fine of $250,000.
This case was investigated by CBP and Immigration and Customs Enforcement’s Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Nelson L. Jones.
Menominee Woman Sentenced to Prison for Assault on ChildRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that that on June 13, 2016, Loni M. Tepiew (age: 28) of the Menominee Indian Reservation was sentenced this morning to federal prison by Chief United States District Judge William C. Griesbach. Tepiew previously entered a guilty plea for an assault on her minor child which resulted in serious bodily injury contrary to Title 18, United States Code, Sections 113(a)(6) and 1153.
According to the plea agreement and other documents filed with the court, Tepiew fractured her 19-month-old child’s skull with a shoe and inflicted multiple bruises and other injuries to the child’s body. Further, she failed to seek medical attention for the child for a period of approximately six days. Based on a report, the Menominee Tribal Police ultimately entered the residence and rescued the child.
In pronouncing the sentence, Chief Judge Griesbach classified the crime as a “brutal beating” that “cried out for justice.” The defendant requested that she be placed on probation in lieu of incarceration. Ultimately, the judge determined that this “very, very, serious offense” was worthy of 48 months in federal prison, followed by 3 years of supervised release.
The case was investigated by the Menominee Tribal Police and the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Daniel R. Humble.
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Massachusetts Man Sentenced to Four Years for Possessing Child PornographyRead the Press Release
Contact: Michael J. Conley
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that William Duffy, 59, of Attleboro, Massachusetts, was sentence today in U.S. District Court by Judge George Z. Singal to four years in prison to be followed by five years of supervised release for possessing child pornography. Duffy was also ordered to pay $5,000 in restitution to one of the victims of sexual abuse. Duffy pleaded guilty to the charge on February 23, 2016.
According to court records, in May 2015, deputies with the Cumberland County Sheriff’s Office executed a search warrant for Duffy’s laptop computer at his Sebago residence. A forensic analysis revealed 4,475 still images and 261 video files depicting minors being sexually abused, many depicting adults abusing prepubescent minors and infants.
In determining sentence, Judge Singal noted that possessing child pornography encourages the sexual abuse of children and elevates the trauma that victims of sexual abuse have already endured: “Simply creating a market for child pornography guarantees that more children will be abused. ... The impact of early childhood abuse never goes away. It’s there all the time. We have a population ... of [people] who live day by day knowing that the videos and photographs of their abuse are not only being distributed but are continuing to fuel sexual gratification of people who view them. And that never ends. ... It’s always there and will be there even after they are dead. That is their legacy to posterity.”
The investigation was conducted by the Federal Bureau of Investigation, the Cumberland County Sheriff’s Office and the Maine State Police Computer Crimes Unit.
Martinsburg man admits to unlawful acquisition of firearmRead the Press Release
MARTINSBURG, WEST VIRGINIA – Deven Deloreece Johnson, 21, of Martinsburg, West Virginia, pled guilty today to providing false information in order to purchase a firearm, United States Attorney William J. Ihlenfeld, II, announced.Johnson provided false information during the acquisition of a 9mm caliber pistol in December 2015 in Berkeley County, West Virginia.
Johnson pled guilty today to one count of “Conspiracy to Provide a False Statement During the Attempted Purchase of a Firearm.” He faces up to 10 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the West Virginia State Police investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Manhattan U.S. Attorney Announces Economic Espionage Charges Against Chinese Man for Stealing Valuable Source Code from Former Employer with Intent to Benefit the Chinese GovernmentRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and John P. Carlin, Assistant Attorney General for National Security, announced a six-count superseding indictment (the “Superseding Indictment”) charging XU JIAQIANG with economic espionage and theft of trade secrets, in connection with XU’s theft of proprietary source code from XU’s former employer, with the intent to benefit the National Health and Family Planning Commission of the People’s Republic of China. XU was initially arrested by the Federal Bureau of Investigation (“FBI”) in White Plains on December 7, 2015, and had previously been charged with one count of theft of trade secrets. XU is scheduled to be arraigned on the Superseding Indictment at 12:00 p.m. on Thursday, June 16, 2016, in White Plains federal court before the Honorable Kenneth M. Karas.
U.S. Attorney Preet Bharara stated: “As alleged, Xu Jiaqiang is charged with stealing valuable, proprietary software from his former employer, an American company, that he intended to share with an agency within the Chinese government. Economic espionage not only harms victim companies that have years or even decades of work stolen, but it also crushes the spirit of innovation and fair play in the global economy. Economic espionage is a serious federal crime, for which my office, the Department of Justice’s National Security Division, and the FBI will show no tolerance.”
Assistant Attorney General John P. Carlin stated: “Xu allegedly stole proprietary information from his former employer for his own profit and the benefit of the Chinese government. Those who steal America’s trade secrets for the benefit of foreign nations pose a threat to our economic and national security interests. The National Security Division will continue to work tirelessly to identify, pursue and prosecute any individual who attempts to harm American businesses by robbing them of their valuable intellectual property.”
According to the allegations contained in the criminal Complaint on which Xu was initially arrested, the original Indictment, and the Superseding Indictment[1] filed today in Manhattan federal court:
From November 2010 to May 2014, XU worked as a developer for a particular U.S. company (the “Victim Company”). As a developer, XU enjoyed access to certain proprietary software (the “Proprietary Software”), as well as that software’s underlying source code (the “Proprietary Source Code”). The Proprietary Software is a clustered file system developed and marketed by the Victim Company in the United States and other countries. A clustered file system facilitates faster computer performance by coordinating work among multiple servers. The Victim Company takes significant precautions to protect the Proprietary Source Code as a trade secret. Among other things, the Proprietary Source Code is stored behind a company firewall and can be accessed by only a small subset of the Victim Company’s employees. Before receiving Proprietary Source Code access, Victim Company employees must first request and receive approval from a particular Victim Company official. Victim Company employees must also agree in writing at both the outset and the conclusion of their employment that they will maintain the confidentiality of any proprietary information. The Victim Company takes these and other precautions in part because the Proprietary Software and the Proprietary Source Code are economically valuable, which value depends in part on the Proprietary Source Code’s secrecy.
In May 2014, XU voluntarily resigned from the Victim Company. XU subsequently communicated with one undercover law enforcement officer (“UC-1”), who posed as a financial investor aiming to start a large-data storage technology company, and another undercover law enforcement officer (“UC-2”), who posed as a project manager, working for UC-1. In these communications, XU discussed his past experience with the Victim Company and indicated that he had experience with the Proprietary Software and the Proprietary Source Code. On March 6, 2015, XU sent UC-1 and UC-2 a code, which XU stated was a sample of XU’s prior work with the Victim Company. A Victim Company employee (“Employee-1”) later confirmed that the code sent by XU included proprietary Victim Company material that related to the Proprietary Source Code.
XU subsequently informed UC-2 that XU was willing to consider providing UC-2’s company with the Proprietary Source Code as a platform for UC-2’s company to facilitate the development of UC-2’s company’s own data storage system. XU informed UC-2 that if UC-2 set up several computers as a small network, then XU would remotely install the Proprietary Software so that UC-1 and UC-2 could test it and confirm its functionality.
In or around early August 2015, the FBI arranged for a computer network to be set up, consistent with XU’s specifications. Files were then remotely uploaded to the FBI-arranged computer network (the “Xu Upload”). Thereafter, on or about August 26, 2015, XU and UC-2 confirmed that UC-2 had received the Xu Upload. In September 2015, the FBI made the Xu Upload available to a Victim Company employee who has expertise regarding the Proprietary Software and the Proprietary Source Code (“Employee-2”). Based on Employee-2’s analysis of technical features of the Xu Upload, it appeared to Employee-2 that the Xu Upload contained a functioning copy of the Proprietary Software. It further appeared to Employee-2 that the Xu Upload had been built by someone with access to the Proprietary Source Code who was not working within the Victim Company or otherwise at the Victim Company’s direction.
On December 7, 2015, XU met with UC-2 at a hotel in White Plains, New York (the “Hotel”). XU stated, in sum and substance, that XU had used the Proprietary Source Code to make software to sell to customers, that XU knew the Proprietary Source Code to be the product of decades of work on the part of the Victim Company, and that XU had used the Proprietary Source Code to build a copy of the Proprietary Software, which XU had uploaded and installed on the UC Network (i.e., the Xu Upload). XU also indicated that XU knew that the copy of the Proprietary Software XU had installed on the UC Network contained information identifying the Proprietary Software as the Victim Company’s property, which could reveal the fact that the Proprietary Software had been built with the Proprietary Source Code without the Victim Company’s authorization. XU told UC-2 that XU could take steps to prevent detection of the Proprietary Software’s origins – i.e., that it had been built with stolen Proprietary Source Code – including writing computer scripts that would modify the Proprietary Source Code to conceal its origins.
Later on December 7, 2015, XU met with UC-1 and UC-2 at the Hotel. During that meeting, XU showed UC-2 a copy of what XU represented to be the Proprietary Source Code on XU’s laptop. XU noted to UC-2 a portion of the code that indicated it originated with the Victim Company as well as the date on which it had been copyrighted. XU also stated that XU had previously modified the Proprietary Source Code’s command interface to conceal the fact that the Proprietary Source Code originated with the Victim Company and identified multiple specific customers to whom XU had previously provided the Proprietary Software using XU’s stolen copy of the Proprietary Source Code.
In connection with the economic espionage counts charged in the Superseding Indictment, XU stole, duplicated, and possessed the Proprietary Source Code with the intent to benefit the National Health and Planning Commission of the People’s Republic of China.
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The Superseding Indictment charges XU, 30, with three counts of economic espionage, in violation of Title 18, United States Code, Sections 1831 and 2, each of which carries a maximum sentence of 15 years in prison, and three counts of theft of a trade secret, in violation of Title 18, United States Code, Sections 1832 and 2, each of which carries a maximum sentence of 10 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Bharara praised the FBI’s outstanding investigative efforts. This prosecution is the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York and the National Security Division of the U.S. Department of Justice.
The case is being prosecuted by the Office’s Terrorism and International Narcotics Unit and its White Plains Division. Assistant U.S. Attorneys Benjamin Allee and Ilan Graff are in charge of the prosecution, with assistance from Trial Attorney David Aaron of the National Security Division’s Counterintelligence and Export Control Section.
The charges in the Superseding Indictment, the original Indictment, and the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, the original Indictment, and the Superseding Indictment, and the description of those documents set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Man Pleads Guilty to Using False Information to Obtain FirearmsRead the Press Release
CONCORD – United States Attorney, Emily Gray Rice announced today that Nana Kofi Baffoe, 63, appeared before United States District Court Chief Judge Joseph Laplante and pleaded guilty to two charges of making false statements related to the purchase of firearms.
According to documents that were filed in United States District Court and statements in the plea proceeding, on February 4, 2015, Baffoe purchased two Ruger .45 caliber pistols from a federally licensed firearms dealer in Hudson, New Hampshire. In purchasing these handguns, Baffoe filled out a form where he stated that he resided at a location in Manchester, New Hampshire. A subsequent law enforcement investigation showed that this statement was false. At the time of the purchase, Baffoe was residing in Canada and never resided at the address in Manchester. Under federal law, the firearms dealer could not have lawfully sold the firearms to the defendant if he was not a resident of New Hampshire.
Baffoe was originally arrested on May 26, 2015. According to an affidavit previously filed in federal court, Baffoe entered the United States from Canada at a border crossing on May 18, 2015. A few days later, he met with a firearms dealer in Nashua, New Hampshire and sought to purchase 100 handguns. However, that subsequent transaction did not take place.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with assistance from the Manchester Police Department, Nashua Police Department, the New Hampshire State Police, Office of Inspector General of the Social Security Administration, the U.S. Department of Commerce, Homeland Security Investigations, and the U.S. State Department. It is being prosecuted by Assistant United States Attorney John J. Farley.
A sentencing hearing has been scheduled for September 19, 2016.
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Lead Defendant Sentenced to over 13 Years in Prison in Trinity County Marijuana CaseRead the Press Release
SACRAMENTO, Calif. — Bryan Schweder, 53, of Hayfork, was sentenced today by U.S. District Judge Kimberly J. Mueller to 13 and a half years in prison for conspiracy to manufacture marijuana and for being a felon in possession of firearm, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, federal search warrants were executed on two properties in Trinity County owned by Schweder. At his residence on Highway 3 in Hayfork, agents located Schweder and 10 of his co-defendants, as well as 347 marijuana plants, a large marijuana processing area with approximately 300 pounds of drying marijuana plants, approximately 110 pounds of processed marijuana, and eight firearms, including a loaded 9 mm Uzi semiautomatic assault rifle and an AK-47. At his Dirt Road property, agents located 146 marijuana plants and 10 pounds of processed marijuana.
According to court documents, Schweder was the manager of the growing operation. He has a criminal history that includes two felony convictions of possession of marijuana for sale (1999 and 2005), two felony convictions for being a felon in possession of firearms (1997 and 1999), and a domestic violence conviction (1995).
The following co-defendants pleaded guilty and have already been sentenced in this case or are pending sentencing:
On March 16, 2016, Effren Rodriguez was sentenced to 10 years in prison
On June 8, 2016, Brian Pickard was sentenced to seven years and three months in prison;
On March 30, 2016, Juan Madrigal Olivera was sentenced to two years and three months in prison;
On December 14, 2015, Manuel Madrigal Olivera was sentenced to five years in prison;
On January 28, 2016, Fred Holmes was sentenced to one year in prison;
On September 16, 2015, Paul Rockwell was sentenced to four years in prison;
On January 13, 2016, Rafael Camacho-Reyes was sentenced to six years in prison;
On March 19, 2014, Homero Lopez Barron was sentenced to three years in prison;
On July 2, 2014, Victorino Betancourt-Meraz was sentenced to three years in prison;
On June 4, 2012, Oseas Carnenas Tolentino was sentenced to three years in prison;
On March 19, 2014, Fernando Reyes Mojica was sentenced to three years in prison;
On June 4, 2014, Juan Cisneros Vargas was sentenced to three years in prison;
On March 19, 2014, Osiel Valencia Alvarez was sentenced to 2.5 years in prison;
On November 13, 2013, Filiberto Espinoza-Tapia was sentenced to 2.5 years in prison;
Leonardo Tapia, is scheduled to be sentenced on July 20, 2016.
On April 17, 2015, Judge Mueller denied Pickard’s motion to dismiss the indictment and upheld the listing of marijuana as a Schedule I Controlled Substance after a five-day evidentiary hearing. In a 38-page written opinion outlining the evidence and the position of the parties, Judge Mueller joined the numerous other judges who have concluded that a rational basis exists for the inclusion of marijuana as a Schedule I Controlled Substance.
This case is the product of an investigation by the U.S. Forest Service, the Trinity County Sheriff’s Office, and the California Department of Justice’s North State Marijuana Investigative Team (NSMIT). Assistant United States Attorneys Samuel Wong, Richard Bender, and Gregory Broderick are prosecuting the case.
Kailua Man Sentenced to 46 Months in Prison for Drug Offense Committed Near SchoolRead the Press Release
HONOLULU -- Chief United States District Judge J. Michael Seabright yesterday sentenced Aaron Hu, 52, of Kailua, to 46 months imprisonment for possessing, with intent to distribute, a quantity of methamphetamine and heroin within 1,000 feet of a public elementary school on March 30, 2015. Hu was convicted on February 25, 2016 following a three-day jury trial.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to information produced for the court, Hu agreed to sell approximately one ounce of heroin and a quantity of methamphetamine within 1,000 feet of Kailua Elementary School to an individual who was cooperating with law enforcement. Hu was also sentenced to serve a 12-year term of supervised release following the completion of his prison term as a result of having previously been convicted by the State of Hawaii for promotion of a dangerous drug in the second degree in 2006.
The case arose from an investigation conducted by the Drug Enforcement Administration, and was prosecuted by Assistant U.S. Attorney Thomas C. Muehleck.
Justice Department and CNCS Announce Elder Justice AmeriCorps; $2 Million Partnership will Expand Legal Resources for Older Crime VictimsRead the Press Release
Today, at the United State of Women Summit, the Department of Justice and the Corporation for National and Community Service (CNCS), through its new Elder Justice AmeriCorps partnership, announced $2 million in grants to provide legal assistance and support services to victims of elder abuse, neglect and exploitation – the majority of whom are women.
The Elder Justice AmeriCorps program is funded by the Justice Department’s Elder Justice Initiative, Office for Victims of Crime and CNCS, the federal agency which administers AmeriCorps and other national service programs. This new effort is also supported by the Justice Department’s Office for Access to Justice.
The new program will support 300 AmeriCorps members, serving through Equal Justice Works, over the next two years in Alaska, California, Colorado, Florida, Georgia, Illinois, Iowa, Louisiana, Massachusetts, Montana, New York, North Carolina, Oregon, Texas, Virginia and Washington, D.C.
“Elder abuse and exploitation exact an enormous physical, financial and emotional toll on victims, many of whom never find the comprehensive support they so desperately need,” said Attorney General Loretta E. Lynch. “Elder Justice AmeriCorps deploys a volunteer army of legal advocates in communities across the country, giving thousands of our nation’s elders a place to turn for healing and justice.”
“After a lifetime of hard work, serving our nation, and raising their families, our seniors are often targeted by unscrupulous actors who intend to take advantage of them, making them vulnerable to abuse and exploitation,” Said Wendy Spencer, CEO of the Corporation for National and Community Service. “Through Elder Justice AmeriCorps, we are expanding our partnership with the U.S. Department of Justice to connect these older adults with highly skilled AmeriCorps members who can provide legal services that will ensure our seniors have the care and support they need and deserve.”
The AmeriCorps members are expected to serve more than 4,000 older adults each year by providing screenings for abuse, neglect or exploitation; referrals to support services associated to abuse or neglect; and high-quality legal services. Elder Justice AmeriCorps members are also expected to leverage an additional 300 community volunteers who will be engaged in the provision of specialized legal services to older adults who have been victims of abuse, neglect or exploitation.
Elder Justice AmeriCorps is the first-ever army of new lawyers and paralegals to help victims of those who prey on our nation’s elders. It expands on an existing partnership between the two agencies, which includes justice AmeriCorps, a legal aid program launched in 2014 by the Department of Justice and CNCS to serve unaccompanied minors. Upon completion of their service, Elder Justice AmeriCorps members will be eligible for a Segal AmeriCorps Education Award, or scholarship, to help pay for additional education or pay back student loans.
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The Corporation for National and Community Service is a federal agency that engages millions of Americans in service through its AmeriCorps, Senior Corps, Social Innovation Fund and other programs, and leads president's national call to service initiative, United We Serve. For more information, visit www.nationalservice.gov.
On June 14 the White House Council on Women and Girls is convening the first United State of Women Summit, a large-scale effort to rally together advocates of gender equality to highlight what we've achieved, identify the challenges that remain, and chart the course for addressing them. Experts, advocates, and grassroots and business leaders who work in both domestic and international arenas will gather to highlight key issues affecting women and girls. More information on the summit is available at www.theunitedstateofwomen.org.
Justice Department Awards More Than $3.2 Million to Reduce Domestic Violence HomicidesRead the Press Release
The Justice Department’s Office on Violence Against Women (OVW) today announced more than $3.2 million in new investments to help communities prevent domestic violence homicides.
“Despite improvements in shelter, protection orders and training for law enforcement, judges and prosecutors, domestic violence homicide is all too common,” said Principal Deputy Director Bea Hanson of OVW. “These awards we’re announcing are part of OVW's ongoing efforts to prevent domestic violence homicide.”
OVW will provide $700,000 to the Battered Women’s Justice Project to improve the criminal justice system’s response to domestic violence homicides involving firearms. The funds will establish a National Resource Center on Domestic Violence and Firearms that will build the capacity of victim service providers to respond effectively to domestic violence cases involving firearms.
The National Council of Juvenile and Family Court Judges will receive $900,000 to provide enhanced training and technical assistance, working closely with OVW, to implement an effective firearms response at the local, state and tribal levels.
National Intimate Partner Violence Intervention Initiative (NIPVII), a partner of the National Network for Safe Communities at John Jay College of Criminal Justice, will also receive $1.6 million. NIPVII will work with three cities, to be selected as part of the demonstration pilot, to replicate a promising strategy for reducing intimate partner violence and homicides. The National Institute of Justice will oversee an evaluation of the initiative through a grant to Yale University.
Additionally, OVW also announced the addition of two new cities, Miami and Winnebago County, Illinois, as replication sites for the evidence-based Lethality Assessment Program model, which has been shown to be effective in encouraging victims to use domestic violence support and shelter services. The Lethality Assessment Program model was included as part of OVW’s Domestic Violence Homicide Prevention Demonstration Initiative, established in 2012.
OVW provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of VAWA and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. More information is available at www.justice.gov/ovw.
Joplin Man Sentenced for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., man was sentenced in federal court today for receiving and distributing child pornography over the Internet.
Mark Eugene Drew, 59, of Joplin, was sentenced by U.S. District Judge Beth Phillips to eight years in federal prison without parole.
On Jan. 25, 2016, Drew pleaded guilty to receiving and distributing child pornography.
Court documents cite Drew’s long-term involvement in a Web site that hosted a massive collection of child pornography and erotica, some of which Drew contributed. Beginning in November 2010, the Department of Justice Child Exploitation and Obscenity Section launched an investigation into a Web site (referred to as “website A” to protect the integrity of the investigation) that was used to post and exchange depictions of the sexual abuse of children. During the course of the investigation, approximately 24 individuals in the United States were identified as contributors to “website A.” In over half of these cases, the investigation revealed that the users not only posted images to “website A,” but also actively committed sexual crimes against children.
Drew was identified as one of the contributors. According to court documents, he created digital albums and posted them to a Web site utilized for the exchange of child pornography. Law enforcement officers executed a search warrant at Drew’s residence on Nov. 21, 2013, and seized three computers, a flash drive and a DVD. A total of 351 images of child pornography were found on the computer equipment. Messages exchanged between Drew and other individuals were also recovered. During these exchanges, Drew claimed to have engaged in sexual intercourse with a minor.
Drew also admitted to the investigators that he was sexually attracted to children and bragged about having sex with children.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Southwest Missouri Cyber Crime Task Force and the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Indictment: Undocumented Workers Forced to Pay Kickbacks to KCK Roofing CompanyRead the Press Release
KANSAS CITY, KAN. - A federal grand jury indictment unsealed here today alleges the owners of a Kansas City roofing company intimidated and coerced undocumented workers to pay kickbacks in violation of federal forced labor statutes, Acting U.S. Attorney Tom Beall said.
The indictment alleges the owners of Century Roofing knowingly employed undocumented workers, using coercion, extortion and threats to control workers and force them to pay kickbacks. Their goal was to make money by cutting Century Roofing’s costs and giving the company a competitive advantage.
“Unlawful business practices alleged in the indictment paint a picture of undocumented workers being manipulated by employers who played on their vulnerabilities – particularly their fear of being caught and deported from the United States,” said Acting U.S. Attorney Tom Beall.
The indictment alleges the owners of Century Roofing at 6 South 59th St. Lane, Kansas City, Kan., used primarily undocumented workers who were paid in cash to complete commercial and residential roofing projects in the Kansas City metro area. The defendants are alleged to have used unlawful tactics to enrich themselves at the expense of workers including:
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Threatening to fire roofing crew leaders unless they paid cash kickbacks to the defendants.
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Threatening to cause roofing crew leaders to be fired from jobs working for other companies -- or to be unable to get jobs with other companies -- unless they paid kickbacks to the defendants.
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Threatening to take back work trucks provided to crew leaders unless they paid kickbacks, even when crew leaders were making loan payments, and paying for insurance and maintenance on the trucks.
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Threatening to report them to U.S. immigration authorities unless they paid kickbacks.
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Threatening to report them to U.S. immigration authorities if crew leaders or crews worked for other roofing companies without the defendants’ approval.
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Threatening to report them to U.S. immigration authorities if crew leaders or crews failed to complete work by deadlines set by the defendants.
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Evicting or threatening to evict crew leaders from housing provided by defendants if they didn’t follow the defendants’ orders.
“This joint operation reflects our commitment to working with our law enforcement partners to bring to justice human traffickers,” said Acting Special Agent in Charge James Gibbons of HSI Chicago. “We are resolute in our efforts to not only arrest human traffickers, but also to rescue the victims.”
Defendants named in the indictment are in custody and scheduled to make an appearance this afternoon in U.S. District Court in Kansas City, Kan. The defendants are:
Tommy Frank Keaton, 70, Shawnee, Kan., co-owner of Canadian West, Inc., and RAM Metal Products, doing business as Century Roofing.
Graziano Cornolo, 55, Lenexa, Kan., co-owner of co-owner of Canadian West, Inc., and RAM Metal Products, doing business as Century Roofing.
Alberto Diaz-Hernandez, 33, a citizen of Mexico, and employee of Century Roofing.
Charges in the indictment include:
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Conspiracy to obtain forced labor and benefit from forced labor (count one).
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Obtaining and attempting to obtain forced labor (counts 2,3 and 4)
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Benefitting from forced labor (counts 5, 6 and 7)
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Conspiracy to transport undocumented workers in the United States and encouraging undocumented aliens to remain in the United States for the purpose of financial gain (count eight)
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Transporting an undocumented worker in the United States (counts nine and 10).
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Harboring an undocumented worker (counts 11, 12 and 13)
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Encouraging or inducing undocumented workers to reside in the United States (count 14-17)
Upon conviction the charges carry the following penalties:
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Counts 1-7 labor trafficking: Up to 20 years in federal prison and a fine up to $250,000 on each count.
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Count 8: Up to 20 years in federal prison and a fine up to $250,000.
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Counts 9-17 Transporting, encouraging undocumented workers to remain unlawfully in the United States: A maximum penalty of five years in federal prison and a fine up to $250,000.
Investigating agencies include: Homeland Security Investigations (HSI), the Kansas Department of Revenue, the Clay County Sheriff’s Department, the Overland Park Police Department, the Wyandotte County Sheriff’s Department, the Kansas City, Kan., Police Department, the Lenexa Police Department and the Shawnee Police Department. Assistant U.S. Attorney Brent Anderson is prosecuting. keaton_indict_2_.pdf
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
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Hurst, Texas, Man Sentenced to 360 Months in Federal Prison for Federal Child Pornography OffensesRead the Press Release
FORT WORTH, Texas — A Hurst, Texas, man was sentenced this morning by U.S. District Judge Terry R. Means to 360 months in federal prison and 10 years of supervised release for child pornography offenses, announced John Parker, U.S. Attorney for the Northern District of Texas.
Randy Ray Wesson, 29, pleaded guilty, in February 2015 to one count of possession of child pornography and one count of receipt of child pornography.
According to the complaint, the investigation began when a detective with the Hurst Police Department received information form the Dallas Police Department’s Internet Crimes Against Children (ICAC) unit regarding a Cybertip received from the National Center for Missing and Exploited Children (NCMEC). That referral indicated that a particular Instagram member had uploaded an image of child pornography through their server on June 7, 2014. The investigation revealed that Wesson was the owner of that account.
Officers with the Hurst Police Department executed a state search warrant at Wesson’s home on November 18, 2014, in an effort to search for and seize evidence of child pornography. Wesson was present during the search. A forensic examination revealed that Wesson’s desktop computer contained files visually depicting minors, including a prepubescent minor, engaged in sexually explicit conduct.
In addition, according to the filed factual resume, on February 9, 2014, Wesson used the Internet and Instagram to receive visual depictions of minors engaged in sexually explicit conduct.
The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Hurst Police Department investigated. Assistant U.S. Attorney A. Saleem prosecuted.
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Houston Man Convicted of Multiple Counts Involving Child PornographyRead the Press Release
HOUSTON – A 48-year-old man from Houston has entered a guilty plea to sexual exploitation of a child, distribution and possession of child pornography, announced U.S. Attorney Kenneth Magidson.
William Lee Niver appeared today before U.S. District Judge Gray Miller and entered a plea of guilty to one count of production of child pornography, two counts of distribution of child pornography and one count of possession of child pornography.
Niver first came to the attention of law enforcement after he had sent images of child pornography to an undercover agent. Federal agents executed a search warrant at Niver’s residence and performed a forensic examination on his computer which resulted in the discovery of more than 6,000 images and 1,000 videos of young children engaged in sexually explicit conduct. The images included children under the age of 12, bondage and acts of violence. Some of the images are of known victims as identified through the National Center for Missing and Exploited Children.
At the time of the plea, Niver admitted to taking sexually explicit photographs and a video of a minor relative and emaileing them to others.
Judge Miller has set sentencing for Sept. 1, 2016. At that time, Niver faces a minimum of 15 and up to 30 years in federal prison for the production, up to 20 years imprisonment on each of the distribution convictions and a maximum of 10 years for possessing child pornography.
Homeland Security Investigations conducted the investigation.
This case, prosecuted by Assistant U.S. Attorneys Kimberly Ann Leo and Carrie A. Wirsing, 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."
Harrisburg Man Sentenced to 11 Years in Prison for Drug DistributionRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Malachi Maurice Glass, age 33, of Harrisburg, Pennsylvania, was sentenced yesterday to 11 years in prison by United States District Court Judge John E. Jones, III in Harrisburg, for distribution of cocaine base (crack) and cocaine hydrochloride.
According to United States Attorney Peter Smith, Glass previously pleaded guilty to distribution of cocaine. Glass, in his plea, acknowledged distributing more than 55 grams of crack cocaine in Mifflin County (with a value over $3,000) between April and August 2013.
Glass was indicted by a federal grand jury in Harrisburg in October 2013, as a result of an investigation by the Federal Bureau of Investigation, the Mifflin County Drug Task Force, and the Lewistown Police Department. Assistant United States Attorney Daryl F. Bloom prosecuted the case.
Judge Jones also ordered Glass to be placed on three years of supervised release following his prison sentence.
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Galax Man Indicted on Eights Counts of Child Pornography ProductionRead the Press Release
ABINGDON, VIRGINIA – A federal grand jury sitting in the United States District Court for the Western District of Virginia in Abingdon has charged a Galax man with eight counts of producing child pornography, United States Attorney John P. Fishwick Jr. announced today.
In an indictment returned yesterday, the grand jury in Abingdon has charged Richard Denny Nofsinger Jr., 37, of Galax, Virginia, with eight counts of production of child pornography. If convicted, each count carries a possible sentence, by statute, of between 15-30 years in federal prison.
According to the indictment, the alleged acts took place between December 2015 and May 2016 in the Western District of Virginia, and elsewhere.
The investigation of the case was conducted by the United States Secret Service and the Galax Police Department. Assistant United States Attorney Jenifer Bockhorst will prosecute the case for the United States.
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Former Utz Quality Foods Employee & Vendor Charged with $1.4 Million False Invoice Kickback SchemeRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a former employee of Utz Quality Foods, Inc., Hanover, Pennsylvania and a former Utz vendor have been charged with a false invoice kickback scheme that defrauded Utz out of approximately $1.4 million.
Kevin Myers, age 38, a former resident of Abbottstown, Pennsylvania, and the former Director of Purchasing for Utz, and Jonathan Haas, age 45 of Easton, Pennsylvania, the former owner of Haas Packaging and Design, Inc. Bethlehem, Pennsylvania, were each charged today in a Criminal Information filed in U.S. District Court in Harrisburg.
The government also filed plea agreements with the defendants which are subject to the approval of the court.
According to United States Attorney Peter Smith, Haas Packaging & Design was a vendor that supplied Utz with shelving and packaging products between January 2010 and August 2014. The defendants allegedly defrauded Utz by Haas’ submission of approximately 83 false invoices and approximately 43 bogus purchase orders prepared by Myers for products Utz never actually received. After Myers approved Haas’ false invoices for payment, Haas allegedly would kickback a portion of the proceeds to Myers. Haas allegedly received approximately $1,474,765 from Utz as a result of the false invoices and kicked back approximately $651,000 of that amount to Myers.
The defendants also allegedly attempted to conceal kickbacks to Myers as payments for consulting services. Some of the kickbacks were in the form of checks payable to “Myers Packaging Consulting,” a fictional business entity created by Myers.
The specific wire fraud charge relates to an alleged interstate wire transmission of a $26,000 check into a Myers Packaging Consulting bank account in January 2014. The government is also seeking forfeiture of approximately $1.4 million as proceeds of the scheme.
The case was investigated by the Harrisburg Office of the Federal Bureau of Investigation and Utz Quality Foods, Inc. cooperated with the investigation. The case is being prosecuted by Assistant United States Attorney Kim Douglas Daniel.
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 20 years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Former Owner and Operator of Purported HIV/AIDS Health Clinics Sentenced to 63 Months in Prison for $12 Million Medicare Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JORGE JUVIER, a former owner and operator of multiple HIV/AIDS clinics in New York City, was sentenced today to 63 months in prison for engaging in a scheme to defraud Medicare out of more than $12 million through the use of fraudulent HIV/AIDS clinics in New York City. As part of the Medicare fraud scheme, JUVIER and his co-conspirators paid patients cash kickbacks for coming to the clinics, coached patients on lies to tell clinic doctors to enable fraudulent billing, and billed Medicare for medications that were never administered, that were administered at incorrect dosages, or that were medically unnecessary. JUVIER previously pled guilty to conspiring to commit health care fraud before U.S. Magistrate Judge Frank Maas. U.S. District Judge Kimba M. Wood imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Jorge Juvier and his co-conspirators set up and operated health care fraud mills and billed Medicare for HIV/AIDS medications that were incorrectly provided or not provided at all. Juvier and his co-conspirators effectively stole more than $12 million from U.S. taxpayers that could have been used to pay for legitimate Medicare expenses. The sentence imposed today on Juvier reflects the seriousness of his offense.”
According to the criminal complaint, the criminal information, and other documents filed in Manhattan federal court, as well as statements made at related court proceedings:
JUVIER and his co-conspirators set up and operated multiple health care clinics in New York City that purported to provide injection and infusion treatments to Medicare-eligible HIV/AIDS patients, but that were, in reality, health care fraud mills (the “Clinics”), that routinely billed Medicare for medications that were never provided or were provided at highly diluted doses, and that were often unnecessary because the person being “treated” did not medically need the treatments.
JUVIER and his co-conspirators executed the fraudulent scheme by recruiting HIV/AIDS patients who were eligible for Medicare to come to the Clinics multiple times per week, for multiple months, to undergo expensive “treatments” that were often unnecessary. The purported treatments included drugs costing hundreds of dollars each to administer, which were typically reserved for cancer and anemia patients. JUVIER and his co-conspirators paid the patients cash kickbacks of up to $300 per week in exchange for coming to the Clinics and agreeing to undergo the treatments. Patients were also offered approximately $50 for each additional patient they referred to the Clinics. JUVIER and his co-conspirators regularly instructed patients to lie to clinic doctors by claiming they had medical conditions that they did not in fact have. JUVIER and his co-conspirators then used these patients’ status as Medicare beneficiaries to submit claims to Medicare for reimbursement for the treatments purportedly administered to the patients, often receiving tens of thousands of dollars in reimbursements per patient. However, in truth, the treatments typically were provided in highly diluted doses or not provided at all, and were often medically unnecessary. As a result of the scheme, from 2009 through 2013, JUVIER and his co-conspirators defrauded the Medicare system out of at least $12 million.
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In addition to the term of prison, JUVIER, 58, of Queens, New York, was sentenced to three years of supervised release and was ordered to pay $12,233,292.23 in forfeiture and $12,233,292.23 in restitution.
Oscar Huachillo, 56, of Manhattan, was charged separately in connection with the above-described Medicare fraud scheme. On August 25, 2015, U.S. District Judge Katherine Polk Failla sentenced Huachillo to 87 months in prison, $31,177,987.84 in forfeiture, and $3,454,244.16 in restitution. To date, the United States has recovered over $14 million in assets through forfeiture as part of this prosecution.
Mr. Bharara praised the outstanding efforts of the Department of Health and Human Services-Office of the Inspector General, IRS-Criminal Investigation Division, and the Federal Bureau of Investigation in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Jonathan Cohen is in charge of the prosecution.
Former Office Manager Pleads Guilty to Wire FraudRead the Press Release
Acting United States Attorney for the Middle District of Georgia, G. F. “Pete” Peterman , III, announced today that Maria E. Trenam, age 52, of Cumming, Georgia, previously of Warner Robins, Georgia, entered a plea of guilty to one count of wire fraud on June 14, 2016, before the Honorable Marc T. Treadwell, U. S. District Court Judge, in Macon, Georgia.
Ms. Trenam was the office manager of Surgical Associates of Warner Robins, P.C., in Warner Robins, Georgia. Surgical Associates is a health care benefit program providing surgical and other medical services to individuals under public and private plans. As office manager of Surgical Associates, Ms. Trenam had access to the banking and financial records of the business.
Beginning about March 31, 2011, through about August 11, 2015, Ms. Trenam used her position to embezzle money from Surgical Associates totaling $1,178,736.90. She embezzled money in several ways, including making unauthorized cash withdrawals utilizing her business credit card at automated teller machines, writing unauthorized checks to herself on business accounts and concealing the unauthorized checks by falsifying bookkeeping ledger entries, increasing her salary without authorization, using her business credit card to make unauthorized purchases of goods and services, using her business credit card for unauthorized travel and entertainment, and using her business credit card to make unauthorized purchases of goods and services on the internet.
Ms. Trenam entered a plea of guilty to Count One of the indictment, which charged that on March 16, 2015, she used her Surgical Associates business credit card to make a personal and unauthorized purchase of goods in the amount of $2,289.79 by computer on the internet from the Jo-Ann Fabric and Crafts Store in Ohio.
“Stealing from an employer is a particularly dastardly crime, as you literally bite the hand that feeds you. In this case it is far worse, in that Ms. Trenam could only have stolen this large sum of money because her employer trusted her enough to place in a position of great responsibility and trust, which trust she abused in the worst and most selfish way possible,” said Acting United States Attorney Peterman.
Ms. Trenam faces 20 years of imprisonment, a fine of $250,000.00, or both. She can also be ordered to pay restitution in the amount of $1,178,736.90 to the victims in this case. Additionally, she can be ordered to forfeit assets obtained with proceeds of the scheme. Sentencing is currently scheduled for August 24, 2016.
The case was investigated by the Macon Resident Agency of the Federal Bureau of Investigation, and by the Houston County Sheriff’s Office. Assistant United States Attorney Paul C. McCommon III is prosecuting the case on behalf of the Government.
Inquiries regarding the case should be directed to Pamela Lightsey at the United States Attorney’s Office at 478-621-2603.
Former Milwaukee Police Detective Pleads Guilty to Violating Civil Rights by Assaulting a Handcuffed ArresteeRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, has announced that a former Milwaukee Police Department detective pleaded guilty today to depriving an arrestee of his civil rights by assaulting him while he was handcuffed to an interview-room wall.
Rodolfo Gomez, Jr. (age 49) pleaded guilty before United States District Judge Pamela Pepper of the Eastern District of Wisconsin to depriving an in-custody suspect of his civil rights under color of law in violation of Title 18, United States Code, Section 242.
In connection with his guilty plea, Gomez admitted that he repeatedly punched the victim in the face and head and kneed him in the torso, all while one of the victim’s hands was handcuffed to a wall in an interview room. Gomez stopped punching and kicking the victim when a police lieutenant who heard yelling entered the room. In pleading guilty, Gomez acknowledged that the force used was unreasonable and that the victim suffered bodily injury.
“Protecting citizens’ civil rights is a top priority of the United States Attorney’s Office and the Department of Justice, said United States Attorney Gregory J. Haanstad. “So is working to enhance the public trust in police. This case involved criminal conduct that implicates both of these priorities. When a law enforcement officer abuses his authority in this way, he not only violates the civil rights of a person in police custody, but he also undermines public trust and makes it more difficult for good, dedicated police officers to do their jobs.”
This case was investigated by the FBI, building upon an earlier investigation done by the Milwaukee Police Department. The case is being prosecuted by United States Attorney Gregory J. Haanstad and Assistant United States Attorney Mel S. Johnson.
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Former Director of General Services Administration Division and Husband Indicted for Fraud and NepotismRead the Press Release
ALEXANDRIA, Va. – Helen Renee Ballard, 51, and Robert S. Ballard, 55, both of Brandywine, Maryland, were indicted by a federal grand jury today on charges of conspiracy, wire fraud, aggravated identity theft, and false statements for their roles in a scheme to fraudulently obtain employment from the U.S. government and federal contractors for family members.
According to the indictment, Helen Renee Ballard (“Renee Ballard”) was the Director of the Central Office Contracting Division of the United States General Services Administration (GSA) from May 2006 to May 2011. From 2006 through May 2011, Renee Ballard and her husband, Robert S. Ballard (“Steve Ballard”), engaged in a scheme to enrich themselves and their family members by obtaining employment with federal contractors and the U.S. government through false and misleading statements concerning their relation, education, qualifications, and experience. As part of the $1.3 million scheme, Renee and Steve Ballard fraudulently induced a federal contractor located in Arlington to hire four relatives of the Ballards and a relative of Renee Ballard’s direct subordinate. The Arlington based contractor then placed all of the Ballard’s relatives, including Steve Ballard, on a federal contract awarded by GSA and supervised by Renee Ballard. Later, according to the indictment, Renee Ballard attempted to hire Steve Ballard, her husband, for a position within GSA under her supervision.
In addition, according to the indictment, Renee and Steve Ballard caused over 139 false employment applications to be submitted to federal agencies, including the FBI, Office of the Director of the National Intelligence, U.S. Customs and Border Protection, U.S. State Department, and the U.S. Office of Personnel Management. These applications falsely misrepresented Steve Ballard’s education, qualifications, and experience, including that he had earned or taken classes toward a master’s degree and was certified in government contracting at Levels I, II, and III. In order to corroborate these false representations, Renee and Steve Ballard created and submitted fake certification documents. Finally, in order to conceal the scheme, Renee Ballard removed relevant documents from government files and suggested that a witness lie to federal investigators.
Renee and Steve Ballard face a mandatory sentence of two years in prison if convicted of aggravated identity theft and a maximum penalty of 20 years in prison if convicted of wire fraud. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Carol Fortine Ochoa, Inspector General, GSA, made the announcement. Assistant U.S. Attorneys Uzo Asonye and Katherine Wong are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16CR136.
Former Bennington Executive Pleads Guilty to FraudRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Gregory Harriman, 52, formerly of Bennington, Vermont, pleaded guilty today to two counts of mail fraud before District Judge William K. Sessions III, in federal court in Burlington one day after the jury was selected for his upcoming federal trial. The mail fraud scheme Harriman acknowledged involved the embezzlement of funds by Harriman while he served as plant manager of NSK Steering Systems America, one of the largest employers in Bennington. Harriman admitted that from 2007 through 2011, he ran a scheme to obtain money from NSK by means of false and fraudulent pretenses, representations, and promises, whereby he caused NSK to pay invoices that were false and he had some of the money paid on those invoices redirected to benefit himself. As part of the scheme, Harriman set up Frontier Automation with James Waters and directed NSK work to Frontier Automation starting in 2007 and continuing through 2011. Harriman concealed from NSK his control of, and interest in, Frontier Automation. He assisted Waters in preparing false quotes and invoices sent from Frontier Automation to NSK. At NSK, Harriman approved or directed others at NSK to approve these false invoices for payment, despite knowing that Frontier Automation had not performed the work listed on the invoices. During the course of the scheme, NSK paid Frontier Automation hundreds of thousands of dollars on false invoices. In addition, Harriman convinced the owner of Red C Parts to provide NSK an invoice for work Red C Parts did not perform. Harriman controlled the purchase on behalf of NSK, approving the purchase and the invoice for payment. Harriman also had substantial portions of the funds paid by NSK for this invoice redirected to benefit himself. Harriman left NSK in 2011. Under the plea agreement filed in connection with the guilty plea, Harriman faces a sentence of no less than 24 months in jail and no more than 30 months. Harriman also agreed to pay restitution in the amount of $386,850 to NSK. The Court scheduled the sentencing for November 7, 2016. Waters has previously pleaded guilty to participating in the mail fraud scheme. This case was investigated by the Federal Bureau of Investigation. AUSAs Paul Van de Graaf and Kunal Pasricha prosecuted the case. Harriman is represented by Thomas Sherrer of Burlington.Former Bank Vice President Sentenced for Structuring Transactions in East TexasRead the Press Release
TYLER, Texas – A 53-year-old former bank vice president and trust officer has been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Carol D. Rushton, of Tyler, Texas, pleaded guilty on Dec. 17, 2015, to unlawfully structuring transactions and was sentenced to 36 months of federal probation today by U.S. District Judge Michael H. Schneider. Rushton was also ordered to pay a $30,000 fine and must perform 108 hours of community service as well as notify all of her current and future clients of her conviction.
According to information presented in court, from Nov. 3, 2010 to Aug. 15, 2012, Rushton, while employed at Regions Bank in Tyler, Texas, caused nine separate transactions of $10,000 or less, totaling $70,500 for the purpose of evading federal reporting requirements. Rushton admitted that she was aware that financial institutions are responsible for filing a Currency Transaction Report (CTR) with the Internal Revenue Service when a customer conducts a currency transaction in excess of $10,000.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Jim Noble.
Former Amherst Woman Convicted of Social Security FraudRead the Press Release
CONCORD, N.H. – United States Attorney Emily Gray Rice announced that Judith Bayly, 64, formerly of Amherst, was convicted yesterday by a jury in the United States District Court for the District of New Hampshire on one count of Social Security Fraud and one count of Theft of Public Funds.
Bayly applied for Social Security disability benefits in August 2008. Eligibility for disability benefits under the Supplemental Security Income program is based, in part, on the applicant having limited income and resources. At the time she applied, Bayly was receiving monthly alimony payments from her former spouse in an amount that would have rendered her ineligible for any benefits, but she failed to disclose this income to Social Security. As part of a review of her claim by Social Security in February 2013, Bayly underreported the amount of alimony she received and falsely reported that her alimony payments had begun one month prior in order to continue to receive disability benefits. She concealed the true value of her alimony payments from the Social Security Administration from the time of her application in 2008 until her fraud was uncovered by an investigation in March 2014. As a result of her concealment, Bayly fraudulently received $17,728 in Supplemental Security Income benefits that she would not have received if she had truthfully reported her receipt of alimony.
Bayly is scheduled to be sentenced on October 4, 2016. She was released on conditions pending sentencing.
This case was investigated by the Social Security Administration’s Office of the Inspector General and prosecuted by Special Assistant United States Attorney Karen Burzycki.
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Federal jury finds real estate company owners, attorney guilty in Alexandria mortgage loan schemeRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that a federal jury found a couple who owned an Alexandria real estate company and an attorney guilty last week in a scheme to fraudulently obtain more than $2 million in loans.
Deion A. Duruisseau, 47, and Lashawn A. Duruisseau, 41, both of Alexandria, and attorney Harold L. Lee, 55, of Pineville, La., were found guilty Thursday of one count of conspiracy to commit bank and wire fraud, and two counts of bank fraud. The eight-day trial started May 31st and ended June 9th, with the jury deliberating for four hours. United States District Judge Dee D. Drell presided over the trial.
According to the testimony and evidence presented, between June 2004 and October 2009, the defendants conspired to provide fraudulent information in order to finance more than 30 properties with mortgage loans totaling $2,119,000. Many of the properties went into foreclosure and caused the lenders to suffer losses. Some of the buyers would later declare bankruptcy and attempt to discharge the debt owed to the lenders. The Duruisseaus’ company, Billionaire Properties, was used to further the scheme. Deion and Lashawn Duruisseau perpetrated the scheme by recruiting buyers from their church. The evidence showed that Deion Duruisseau would negotiate an initial contract with the seller of a rental property. Deion Duruisseau would negotiate a price and other conditions of sale for the investment property. Using the same property’s address but a recruited buyer’s information, he would then create a second contract. Deion Duruisseau would also increase the sale’s price of the property and submit the second contract to the loan company to initiate the mortgage loan process. This allowed him to pay the current owner of the property at the previously agreed upon price in the first contract, and then keep the difference of the increased amount negotiated with the lender. The seller of the property and the mortgage loan company never knew the second contract existed.
After the buyers were recruited, the Duruisseaus counseled and advised them on what false information to include on the mortgage applications. Examples of false or withheld information included false monthly incomes, fictitious assets and down payment omissions. As a result, loan companies were led to believe the buyers had sufficient assets and the capabilities to furnish the down payments for the purchase of the various investment properties.
Harold Lee, who operated as the closing attorney, also used his company, Alexandria Title, as the settlement agent in the scheme to defraud. Lee created trust accounts and deposited his own funds into that account to facilitate the misrepresentation to the lender that the recruited buyers had sufficient funds and assets qualifying them for the loans on the investment property. Based on false information in loan applications and related documents, the lenders approved the loans. Once approved, the lenders issued closing instructions and an approved HUD-1 settlement statement to Lee as the lending agent. However, contrary to the lenders’ closing instruction and the approved HUD-1, Lee used the lenders’ funds for the personal financial benefit of the Durusisseaus and himself. Lee failed to disclose to the lenders that he was a part owner of the properties that were sold having provided the funds to purchase the properties months earlier in the name of Deion Duruisseau. His failure to disclose to the lender his financial relationship with the Duruisseaus as a silent investor was a material omission. In addition, Lee did not collect the down payment from the borrowers. Instead, this money came from the lenders’ own funds. Lee also did not distribute the money in the way HUD-1 required the money to be distributed. Once the transaction was complete, he split the proceeds with the Duruisseaus.
The defendants face up to 30 years in prison and a $1 million fine for each conspiracy count and the bank fraud counts. They also face five years of supervised release and restitution. A sentencing date of September 8, 2016 was set.
The FBI conducted the investigation. Assistant U.S. Attorneys Cytheria D. Jernigan and Earl M. Campbell are prosecuting the case.
Federal Racketeering Indictment Targets Santa Fe Spring-Based Street Gang that Operates under Control of Mexican MafiaRead the Press Release
LOS ANGELES – As a result of a racketeering indictment issued last week by a federal grand jury, 31 members and associates of a Santa Fe Springs-based street gang were arrested today on charges related to a wide-ranging criminal enterprise controlled by a member of the Mexican Mafia that allegedly is responsible for the murder of a rival gangster and the attempted murder of a Whittier Police officer.
The 147-page indictment names 51 defendants, including the so-called shotcaller of the Canta Ranas street gang, which operates in Santa Fe Springs and Whittier. The indictment alleges that an incarcerated member of the Mexican Mafia prison gang exerts control over Canta Ranas and other gangs, and that he received compensation in the form of “rent” or “taxes” generated by drug trafficking and other offenses committed in gang territory.
The Mexican Mafia “carnal” identified in the indictment as D.G. (who was not charged as he is currently serving a life-without-parole sentence in Pelican Bay State Prison) allegedly issued instructions from prison that directed and authorized gangsters under his control to attack rivals and others who disobeyed directives, distribute narcotics, collect extortion payments from drug dealers and commit acts of violence. The indictment specifically discusses criminal acts that date back to the spring of 2004, when members of the gang allegedly attempted to rob a group of high school students near a Santa Fe Springs park.
The lead defendant in the 35-count indictment is Jose Loza, who recently became a full-fledged member of the Mexican Mafia and is the “shotcaller” of the Canta Ranas gang. In addition to implementing D.G.’s orders, Loza allegedly executed another member of the Mexican Mafia who wanted to expand his influence and challenge D.G.’s authority over street gangs in the San Gabriel Valley. During the incident two months ago at a restaurant in the San Gabriel Valley community of Basset, the Mexican Mafia member was fatally shot, his bodyguard was severely wounded, and an innocent restaurant patron was shot six times in the abdomen.
The indictment also alleges that two defendants who were part of the Canta Ranas organization overseen by D.G. attempted to murder a detective with the Whittier Police Department when they shot at him in his unmarked vehicle while he was conducting undercover surveillance as part of a narcotics investigation.
Participants in the racketeering conspiracy also threatened to tax and “to shoot up” a private party because the residence was in gang territory, according to the indictment, which also states that gang members used Facebook and text messages to advertise narcotics sales, make threats, plan attacks and negotiate transactions involving firearms and ammunition.
“As this indictment charges, the Canta Ranas gang is a root cause of violence and drugs in multiple communities here in Southern California,” said United States Attorney Eileen M. Decker. “The RICO statutes are designed to target criminal enterprises like Canta Ranas, and RICO prosecutions like this one, which target the top leaders of the gang, help make whole communities safer.”
The indictment also alleges a series of narcotics transactions, including one involving one-half pound of methamphetamine.
During today’s law enforcement operation, approximately 400 agents and officers targeted members and associates of the Canta Ranas gang, which was formed in Santa Fe Springs around 1950. The gang (Spanish for “Singing Frogs”), whose estimated 140 members reside primarily in Santa Fe Springs and Whittier, has established a presence in other California communities, including Riverside, Sacramento and Stockton.
During the course of the three-year investigation, which was called Operation “Frog Legs,” authorities seized 51 firearms and made several narcotics seizures, including nearly one pound of methamphetamine seized during the execution of search warrants after Loza allegedly murdered the other Mexican Mafia member.
“We are grateful for the cooperation that took place throughout this investigation among local, state and federal law enforcement resources,” said Whittier Police Chief Jeff Piper. “This operation was a true example of law enforcement partners working tirelessly to make our communities safer.”
Operation Frog Legs is the result an investigation by the Southern California Drug Task Force, which is led by the Drug Enforcement Administration as part of the High Intensity Drug Trafficking Area (HIDTA) initiative. The Task Force members that participated in Operation Frog Legs were U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI), the Whittier Police Department, the Los Angeles County Sheriff’s Department, IRS Criminal Investigation, the California Department of Corrections and Rehabilitation, Office of Correctional Safety, Special Service Unit.
“This coordinated enforcement action illustrates how effective our law enforcement alliances are in attacking the crime afflicting our communities,” said DEA Los Angeles Special Agent in Charge John S. Comer. “These types of criminal organizations are comprised of the worst of the worst offenders who are trafficking drugs and committing acts of violence, putting citizens in serious danger.”
“This criminal organization may be less well-known than many of the Southland street gangs, but if the allegations in this case prove true, its members are no less ruthless or violent,” said Edward Owens, deputy special agent in charge for HSI Los Angeles. “Today’s actions not only took some of the most dangerous members of the Canta Ranas off the streets, but through our joint enforcement efforts we’ve made significant strides toward dismantling a criminal organization that has for too long believed it could operate with impunity in our communities.”
The indictment specifically charges a conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO) and a second conspiracy to distribute narcotics, which includes allegations of smuggling controlled substances, including heroin, into county jails. All 51 defendants are charged in these two conspiracy counts.
The indictment further charges eight counts of violent crimes in aid of racketeering (VICAR). Loza and five other defendants each are charged in at least two of these VICAR charges that involve the hit on the rival Mexican Mafia member, the attack on the Whittier Police officer, and the stabbing of a rival gang member.
Various defendants are additionally charged in 11 drug trafficking charges, 13 firearms offenses and a conspiracy to commit money laundering.
“The alleged ‘tax’ payments made to the Mexican Mafia demonstrate the hierarchy and organizational structure of this criminal enterprise, as the money flowed from the Canta Ranas Organization to Mexican Mafia member D.G. and his designees,” stated IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando. “The role of IRS Criminal Investigation in narcotics investigations is to follow the money so we can financially disrupt and dismantle these major drug trafficking organizations and protect our communities from the violent behavior of these malicious street gangs.”
Among the 51 defendants charged in the indictment are:
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Jose Loza, also known by a number of monikers, including “Cartune” and “Pumpkin Head,” 37, of Whittier, who was arrested last month on state charges related to the execution of the Mexican Mafia member, but who is expected to be turned over to federal authorities today;
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David Gaitan, 37, of Whittier, who was Loza’s top lieutenant and who, among other things, allegedly sought “flash-bang” grenades to help the gang collect taxes;
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Leonardo Antolin, 21, of Whittier, who was also arrested last month for allegedly participating in the hit on the rival Mexican Mafia member and is expected to be turned over today to federal authorities;
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Sylvia Olivas, 69, of Whittier, a “secretary” to Mexican Mafia member D.G., who allegedly obtained orders during visits to Pelican Bay and relayed instructions to members of his organization;
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Christy Arizmendi, 37, of Whittier, another secretary to D.G., who also allegedly negotiated the purchase of narcotics;
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Frankie Vasquez, 37, of Carson, a member of the Varrio Keystone street gang and a key supplier of narcotics to the Canta Ranas organization, who allegedly fired the shots during the attack on the Whittier Police detective;
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Rene Pantaleon, 37, of Carson, a member of the 38th Street gang who allegedly participated in the attack on the Whittier Police officer while driving a vehicle immediately behind Vasquez; and
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Peter Orozco, 48, of Pico Rivera, the shotcaller of the Brown Brotherhood gang who worked with Gaitan to manage gangs overseen by D.G.
Twenty-eight defendants were taken into custody today in the Los Angeles area, and they are expected to be arraigned on the charges in the indictment this afternoon in United States District Court in downtown Los Angeles. Three other defendants were arrested today in Northern California and Arizona.
A dozen of the 51 RICO defendants – including Loza and Antolin – were already in state custody. They are expected to be turned over to federal authorities in the coming days.
“Through the dedication and hard work of the Sheriff’s Homicide Bureau, detectives were able to arrest Jose Loza and Leonardo Antolin as the suspects responsible for the murder,” said Los Angeles County Sheriff's Homicide Captain Steve Katz. “Working collaboratively with the assistance of HIDTA Task Force investigators, Sheriff's Homicide Bureau detectives determined the murder to be connected with the activities of the Mexican Mafia Prison Gang.”
Authorities continue to search for eight defendants who are named in the RICO indictment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
All of the defendants are charged in the RICO conspiracy, which carries a statutory maximum penalty of 20 years in federal prison. The VICAR charges carry varying penalties, but the two defendants charged with murder could potentially face the death penalty. The narcotics charges all carry mandatory minimum sentences of either five or 10 years in prison.
In addition to the participating members of the Southern California Drug Task Force, the Los Angeles Police Department, the Stockton Police Department, the Riverside County Sheriff’s Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives provided substantial assistance during the investigation.
The Task Force received assistance during today’s takedown from the United States Marshals Service, the Multi-Agency Response Team, LA IMPACT, the El Monte Police Department, the United States Postal Inspection Service, the United States Secret Service, the Pasadena Police Department, the Simi Valley Police Department and the West Covina Police Department.
The RICO case resulting from Operation Frog Legs is being prosecuted by Assistant United States Attorney Carol Chen of the Organized Crime Drug Enforcement Task Force.
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Federal Jury Convicts Two Orlando Men of Timeshare Resale FraudRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Eugene Warren Brewington (34, Orlando) and Chima Edozie Aligwekwe (33, Orlando) guilty of conspiracy to commit mail fraud and wire fraud. Brewington was also convicted of 4 counts of wire fraud and 11 counts of mail fraud. Aligwekwe was convicted of one count of mail fraud. Each faces a maximum penalty of 20 years in federal prison for each count and will be required to pay restitution to their victims. The sentencing hearing has been scheduled for August 25, 2016. Brewington and Aligwekwe were indicted on December 2, 2015.
According to testimony and evidence presented at trial, Brewington founded and operated two companies in Orlando, “Timeshare Title Services LLC” and “United Clearing Solutions LLC.” Representatives of the two companies, known as “callers,” made unsolicited phone calls to timeshare owners throughout the country and falsely claimed that a buyer existed for their timeshares. The timeshare owners were told that buyers had deposited money into an escrow account for the purchase of their timeshares, and they received documents from the companies that appeared to be legitimate timeshare sales contracts. Ultimately, the timeshare owners were told to send advance fees to the companies to finalize the sales. Numerous timeshare owners made the advance fee payments to the companies but received no services and their timeshares were never sold. Brewington managed the bank accounts where the advance fees were deposited and had rented the office spaces from where the “callers” executed the scheme. Aligwekwe provided customer lead information for the timeshare owners and managed a team of “callers” for one of the companies. In a three month period, more than $500,000 in timeshare owner payments were deposited into bank accounts for the two companies. Brewington, Aligwekwe, and others associated with the companies used these funds to enrich themselves.
This case was investigated by the United States Postal Inspection Service and the Orange County Sheriff’s Office, with assistance from the United States Secret Service. It is being prosecuted by Assistant United States Attorneys Andrew C. Searle and Kara M. Wick.
Federal Jury Convicts Kingsport Attorney of FraudRead the Press Release
GREENEVILLE, Tenn. – On June 13, 2016, following a five-day trial in U.S. District Court, a jury convicted Everett H. Mechem, 57, of 28 counts of wire fraud, two counts of Supplemental Security Income (SSI) fraud, two counts of providing false statements, and one count of theft from the United States. Sentencing is set for 1:30 p.m., on Sept. 21, 2016, in U.S. District Court in Greeneville.
According to the evidence presented at trial, from January 2009 to July 2013, Everett H. Mechem, acting as the attorney and representative payee for his wife, Sheila A. Mechem, schemed to defraud the United States government to obtain SSI payments for her to which she was not entitled. The scheme involved false statements and misrepresentations to the Social Security Administration (SSA) regarding Sheila Mechem’s living arrangements, financial resources, and income. Everett Mechem reported that he was living separately from his wife and that she had little to no income or resources; meanwhile, husband and wife rented a five-bedroom home together in Kingsport, Tenn., purchased a new home in 2012, and shared in the profits of Everett Mechem’s law practice. Additionally, Everett Mechem concealed that his wife was working as a paralegal and office manager at the Mechem Law Firm, P.C. in Kingsport. She also served as a commercial spokesperson for Everett Mechem’s affiliated business, the Consumer Law Center, all while Everett Mechem collected monthly SSI payments for his wife’s claimed inability to work.
Nancy Harr, Acting U.S. Attorney for the Eastern District of Tennessee said, “As a program meant to help those who can’t afford the basic necessities of life, the integrity of the Social Security Administration’s SSI program is vital to its continued success. The U.S. Attorney’s Office will continue to pursue and prosecute those who attempt to defraud that federal program and the United States.”
“One of our highest priorities is ensuring that those who steal SSA payments are swiftly detected and prosecuted. I’m grateful that the U.S. Attorney’s Office shares our determination to protect the integrity of the SSA’s programs for those who rely on them now and into the future,” Special Agent in Charge Margaret Moore-Jackson, SSA/Office of the Inspector General (OIG).
The SSA/OIG led the investigation which led to the indictment and subsequent conviction of Everett Mechem. Assistant U.S. Attorneys David Gunn and Christian Lampe represented the United States at trial.
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Federal Investigation Yields Multiple Convictions in Connection with Bribery of Veterans Affairs Contracting OfficerRead the Press Release
SAN JOSE – Today, Justin Tolentino became the last of seven defendants involved in a Veterans Affairs (VA) contracting officer bribery scandal to be sentenced, announced United States Attorney Brian J. Stretch, FBI Special Agent in Charge John F. Bennett, and VA Office of Inspector General (OIG) Special Agent in Charge Michael Seitler. The sentence brings to a close the five-year investigation into a bribery scandal pursuant to which former VA contacting officer, Tracy Marasco, accepted cash, trips, and gifts in exchange for steering million-dollar contracts to particular contractors.
In 2011, the VA OIG and the FBI began their probe into alleged corrupt contracting activities at the VA Medical Centers (VAMCs) in Palo Alto, Calif. and Sacramento, Calif. Since then, the multi-year investigation resulted in the charging of seven individuals including one VA contracting officer, three VA contracting officer’s representatives, and three construction contractors. With today’s sentence, all of the defendants have been convicted and sentenced. The individuals charged and convicted in connection with the scheme include the following:
- Tracy Marasco, 49, of Modesto, pleaded guilty on February 21, 2014, to one count of Receipt of a Bribe as a Public Official, in violation of 18 U.S.C. § 201(b)(2)(A). Marasco admitted using her position as a Veterans Affairs contracting officer to steer valuable construction and maintenance contracts to certain prime contractors in exchange for cash payments and gifts. Marasco was indicted by a federal grand jury on May 4, 2011 and was charged with five counts of receiving bribes within her capacity as a public official, in violation of 18 U.S.C. § 201(b)(2)(A); and one count of making false statements to a government agency, in violation of 18 U.S.C. § 1001(a)(2). Marasco admitted that between 2007 and 2010, she received tens of thousands of dollars in cash payments and two used cars from various private contractors and subcontractors. In addition, during the same period, she received paid trips to Puerto Rico, Disneyland, and Las Vegas. On June 6, 2016, she was sentenced by U.S. District Judge Edward J. Davila to six months in prison and an additional six months of home detention as a term of supervised release.
- Xerxes “Ike” Zapata, a former Palo Alto VAMC contracting officer’s representative, pleaded guilty to one count of Receipt of a Bribe by a Public Official, in violation of 18 U.S.C. § 201(b)(2)(A). Zapata admitted accepting cash, flight tickets, and payments to credit cards in exchange for steering construction and maintenance contracts to the benefit of those providing the bribes. Zapata was sentenced by U.S. District Judge Edward J. Davila to 16 months in prison and a $25,000 fine.
- Russell Allgire, a former Palo Alto VAMC contracting officer’s representative engineer, pleaded guilty to one count of Receipt of a Bribe by a Public Official, in violation of 18 U.S.C. § 201(b)(2)(A). Allgire admitted accepting cash and car payments in exchange for steering construction and maintenance contracts to the benefit of those providing the bribes. Allgire was sentenced by U.S. District Judge Edward J. Davila to a term of three years of probation with a term of 12 months of home detention and a $7,500 fine.
- Conrad Alfaro, a former Palo Alto VAMC contracting officer’s representative, pleaded guilty to one count of Receipt of a Gratuity by a Public Official, in violation of 18 U.S.C. § 201(c)(1)(B). Alfaro admitted receiving roofing work on his home which was paid for by a VA general contractor while overseeing a Palo Alto VAMC project to install a new MRI scanner by the same VA general contractor. Alfaro was sentenced by U.S. District Judge Lucy H. Koh to 5 years of probation with a term of 12 months of home detention, and a $25,000 fine.
- Jack Stringer, a former VA contractor, pleaded guilty to one count of Providing a Gratuity to a Public Official, in violation of 18 U.S.C. § 201(c)(1)(A). Stringer admitted that he provided cash and gifts to several VA employees, including entertainment tickets, gift cards, vacation packages, and the payment of credit card bills. Stringer was sentenced by U.S. District Judge Edward J. Davila to a term of 3 years of probation and a special condition of eight months of home detention, and a $27,500 fine.
- Jacobo Herrera, a former VA contractor, pleaded guilty to one count of Providing a Gratuity to a Public Official, in violation of 18 U.S.C. § 201(c)(1)(A). Herrera admitted providing cash payments, Disneyland Tickets, and hotel accommodations to VA officials. Herrera was sentenced by U.S. District Judge Lucy H. Koh to a term of 3 years of probation and eight months’ home detention, and a $20,000 fine.
- Justin Tolentino a former VA contractor, pleaded guilty to one count of Providing a Gratuity to a Public Official, in violation of 18 U.S.C. § 201(c)(1)(A). Tolentino admitted providing flight and hotel accommodations to a VA official on three occasions. Tolentino was sentenced by U.S. District Judge Beth L. Freeman to a term of 3 years of probation, and ordered to pay a $5,000 fine.
Assistant U.S. Attorneys Jeff Nedrow and Amber Rosen are prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of an investigation by the FBI and VA-OIG.
Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
United States Attorney Bill Nettles stated today that a Federal Grand Jury in Charleston, South Carolina, returned Indictments against the following: Hanahan Man Indicted for Possession of Child Pornography
Mr. Nettles stated that the charges in this Indictment are merely accusations and that the defendants are presumed innocent until and unless proven guilty. #####
United States Attorney Bill Nettles announced today an indictment charging Jonathan Hayhoe, age 26, of Hanahan, South Carolina, was charged in a 1-count Indictment with Possession of Child Pornography, a violation of 18 U.S.C. § 2252A. The maximum penalty that Hayhoe could receive is 20 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the FBI and is assigned to Assistant United States Attorney Rhett DeHart of the Charleston office for prosecution.
North Charleston Man Indicted for Possession and Distribution of Child Pornography
United States Attorney Bill Nettles announced today an indictment charging Roman Bennett, age 46, of North Charleston, South Carolina, was charged in a 3-count Indictment with Possession and Distribution of Child Pornography, a violation of 18 U.S.C. § 2252A. The maximum penalty that Bennett could receive is 20 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the Postal Inspection Service and is assigned to Assistant United States Attorney Rhett DeHart of the Charleston office for prosecution.Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
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United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictments against the following: Greenville Resident Indicted for Theft of Government Funds
Stephanie Lake Meyer, age 46, of Greenville, South Carolina, was charged in a 2-count indictment. Meyer was charged with Theft of Government Funds, a violation of Title 18, United States Code, Section 641, which carries a maximum penalty of 10 years imprisonment and a maximum fine of $250,000; and with Obstruction of the Administration of the Internal Revenue Laws, a violation of Title 26, United States Code, Section 7212(a), which carries a maximum penalty of 3 years imprisonment and a maximum fine of $5,000. The case was investigated by agents of the Internal Revenue Service and is assigned to Assistant United States Attorney David C. Stephens of the Greenville office for prosecution.
The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.Federal Bank Robbery, Firearm Charges Filed Against Three Wichita MenRead the Press Release
WICHITA, KAN. - Federal bank robbery and firearm charges were filed Tuesday against three Wichita men, Acting U.S. Attorney Tom Beall said.
The defendants are:
Raishat McGill, 34, Wichita, Kan., one count of bank robbery and one count of brandishing a firearm in relation to the robbery.
Andre Bryant, 29, Wichita, Kan., one count of bank robbery and one count of brandishing a firearm in relation to the robbery.
Elijah Shelton, 25, Wichita, Kan., one count of bank robbery and one count of brandishing a firearm in relation to the robbery.
An investigator’s affidavit filed in the case alleges that on June 13, 2016, three men robbed the Carson Bank at 4641 E. Douglas in Wichita. At about 10:30 a.m., two of the robbers entered the bank brandishing firearms and shouting orders to bank employees. One of the defendants shouted: “If you guys don’t open up in 30 seconds, I’m shooting.” The defendants forced two bank employees to enter codes to open a vault. The robbers seized cash from the vault and fled from the bank.
Police spotted the robbers’ car in the 800 block of South Martinson and followed until the robbers ran from the car on foot and were arrested.
If convicted, the defendants face a penalty of up to 25 years in federal prison and a fine up to $250,000 on the bank robbery charge, and not less than five years and a fine up to $250,000 on the firearm charge. The Wichita Police Department, the Sedgwick County Sheriff’s Department and the FBI investigated. Assistant U.S. Attorney Lanny Welch is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Eighteen Individuals Indicted for Conspiracy to Distribute HeroinRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced today the unsealing of a federal indictment charging eighteen defendants with conspiring to distribute 1 kilogram or more of heroin. If convicted, the defendants face a maximum term of life imprisonment, as well as a mandatory minimum term of ten years.
The defendants charged in the indictment are:
Edgardo Q. RIVERA, age, 45
Edgar VELEZ, age 51
Carlos DAVID, age 47
Eddie RIVERA, age 34
Justo CAPELES, age 45
Jose E. DEANDA, age 34
Omayra RIVERA, age 40
Edgardo S. RIVERA, age 27
Jorge FONTANEZ-MASSO, age 28
Jose SANTOS-MARTI, age 23
Isaac ELENA-LEONARDO, age 25
Ramon ELIZONDO, age 44
Brenda FONTANEZ-MASSO, age 43
Carlos VELASQUEZ, age 44
Luis DIAZ, age 23
Emerito QUILES, age 64
Jason RIVERA, age 35
Jaime M. VEGA, age 19
Earlier today, federal, state, and local law enforcement agents and officers arrested seventeen of these defendants, who had been residing in Milwaukee, Kenosha, and Chicago. The other defendant named in the indictment, Eddie Rivera, is still at large.
The agents and officers also executed a number of search warrants in the Milwaukee and Kenosha areas, resulting in the seizure of distribution quantities of heroin and cocaine; sixteen firearms; and approximately $150,000 in cash.
United States Attorney Haanstad, in announcing the federal charges, arrests, and search warrants, said, “There is a heroin epidemic in Milwaukee and the surrounding areas. The dangers of heroin trafficking and abuse have been escalating and present an urgent public safety and public health crisis. Investigations and prosecutions like this one are an integral component of the collaborative effort among federal, state, and local law enforcement agencies to deal with that public safety and public health crisis.”
The investigating agencies included the Drug Enforcement Administration (DEA), Milwaukee Police Department (MPD), and the Wisconsin High Intensity Drug Trafficking Area Task Force.
DEA Milwaukee Assistant Special Agent in Charge Robert Bell praised this collaborative effort. “Working closely with the U.S. Attorney’s Office and joining resources with our state and local law enforcement partners make significant operational successes possible. Together, we will continue to hold violent gangs accountable for the opioid and heroin-related deaths and addiction they cause in our communities. At the same time, we will keep working closely with prevention and treatment specialists to raise the public’s understanding of the risks, reduce demand and provide paths to recovery.”
Captain Jeffery Micklitz of the Milwaukee Police Department stated, “The Milwaukee Police Department’s Narcotics Division, as part of the Wisconsin High Intensity Drug Trafficking Area (HIDTA) is pleased to have worked with the DEA, U.S. Attorney’s Office, and other local law enforcement partners in this investigation, which is tied to overdose deaths. We are optimistic that these arrests will have an impact on the heroin epidemic in and around the Milwaukee community and we urge those addicted to seek treatment.”
“These arrests are yet another example of our collective resolve to relentlessly pursue and dismantle drug trafficking organizations from top to bottom,” said James M. Gibbons, acting special agent in charge of HSI Chicago. “HSI and its law enforcement partners are committed to stopping the networks that funnel dangerous drugs onto our streets and spread violence into our communities.”
Agencies who assisted with the arrests and search warrants include the Department of Homeland Security – Homeland Security Investigations, Federal Bureau of Investigation, United States Marshals Service, Wisconsin Department of Justice – Division of Criminal Investigations, Wisconsin State Patrol, Wisconsin Department of Corrections, Milwaukee County Sheriff’s Office, Waukesha County Sheriff’s Department, Kenosha County Sheriff’s Department, West Allis Police Department, Wauwatosa Police Department, Greenfield Police Department, Kenosha Police Department, South Milwaukee Police Department.
This case is being prosecuted by Assistant United States Attorney Mario Gonzales of the United States Attorney’s Office.
An indictment is merely the formal method of charging an individual and does not constitute inference of his or her guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.
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East Hampton Man Sentenced to 20 Years for Using Computer to Entice Minors to Engage in Sexual ActivityRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the Federal Bureau of Investigation, announced that KEITH HAESSLY, 46, of East Hampton, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 240 months of imprisonment, followed by a lifetime term of supervised release, for using a computer to persuade minors to engage in unlawful sexual activity.
According to court documents and statements made in court, between approximately August 2013 and June 2015, HAESSLY, using video chat programs such as Skype and Omegle, posed as a young female and used previously-recorded videos of females to entice numerous boys to engage in sexual activity over webcams. HAESSLY then made recordings of the boys engaged in sexual activity, and distributed some of the images he recorded to an individual in Virginia.
Analysis of HAESSLY’s computer revealed images and videos that depict more than 950 child victims.
“This defendant victimized hundreds of boys by enticing them to engage in explicit sexual acts over the internet, recording those acts, categorizing and storing the videos, and distributing some of the images to another individual,” said U.S. Attorney Daly. “This sentence will ensure that a child predator will be neutralized for years to come. I thank the FBI and the Connecticut Child Exploitation Task Force for thoroughly investigating this matter and attaining justice for the many victims of this pervasive crime.”
HAESSLY has been detained since his arrest on June 3, 2015. At the time of his arrest, he was a member of the Connecticut Air National Guard.
On February 18, 2016, HAESSLY pleaded guilty to one count of use of an interstate facility to persuade a minor to engage in unlawful sexual activity.
This matter was investigated by the Federal Bureau of Investigation and the Connecticut Child Exploitation Task Force, with the assistance of the Connecticut Air National Guard Office of Special Investigations. The case was prosecuted by Assistant U.S. Attorneys Ray Miller and Neeraj Patel.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Drug User Enters Guilty Plea to Gun OffenseRead the Press Release
BOISE – Jose Balderas-Duarte, 28, of Caldwell, Idaho, entered a guilty plea yesterday to the charge of unlawful possession of a firearm, U.S. Attorney Wendy J. Olson announced. Balderas-Duarte was indicted by a federal grand jury on January 12, 2016.
According to the plea agreement, on December 8, 2015, Balderas-Duarte was stopped as part of an investigation into a claim that he had engaged in assault with a deadly weapon. Balderas-Duarte was removed from the vehicle and arrested. Officers searched his person and located a 9 mm magazine in his pocket. The vehicle was subsequently searched and a 9 mm caliber pistol was located between the center console and the front passenger seat where he had been seated prior to his arrest.
Balderas-Duarte was interviewed by a detective and admitted to possessing the gun. Balderas-Duarte told the detective that he had purchased the gun two months prior to the date of the interview and admitted that he was a methamphetamine addict who had last smoked methamphetamine a few days prior to his interview. Federal law prohibits a user of illegal controlled substances to possess a firearm. Balderas-Duarte is a legal alien however, given the conviction he will likely be deported following sentencing.
The charge of unlawful possession of a firearm is punishable by up to 10 years in prison, a maximum fine of $250,000, and up to three years of supervised release. Balderas-Duarte’s sentencing is set for August 31, 2016 before Chief U.S. District Judge B. Lynn Winmill.
The case was investigated by the Boise Police Department and members of the Boise Police Department Gang Unit as well as the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The case was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Departments of Justice and Housing and Urban Development Award $9.2 Million to Provide Stable Housing to Victims of Domestic Violence Living with HIV/AIDSRead the Press Release
Joint Demonstration to Enhance Coordination between HIV Housing and Domestic Violence Services
In an effort to help prevent victims of domestic violence living with HIV/AIDS from falling into homelessness, the Department of Justice and the U.S. Department of Housing and Urban Development (HUD) today announced more than $9 million to support eight local programs across the country working to protect and house these victims.
“This joint effort will help low-income individuals with HIV/AIDS who have survived domestic violence secure the vital services they need to reclaim their lives and restore their futures,” said Attorney General Loretta E. Lynch. “The Justice Department is committed to safeguarding the rights and opportunities of all Americans, including the most vulnerable among us. And in the days ahead, we will continue our work to ensure that every American – from every background – has the safety, security, and support that they deserve.”
“Every person, especially those fighting the effects of HIV/AIDS or looking to escape an abusive situation, deserves to live in a safe and stable environment,” said HUD Secretary Julián Castro. “Through this collaborative effort with the Justice Department, we’re able to help those living at the intersection of HIV/AIDS and domestic violence to secure the housing and health services they need to build a better future.”
The Justice Department’s Office on Violence Against Women (OVW) and HUD’s Office of HIV-AIDS Housing collaborated to provide these grants under the Violence Against Women Act (VAWA) and HUD’s Housing Opportunities for Persons with AIDS (HOPWA) Program. During today’s White House United State of Women Summit, the following grantees were announced:
STATE
GRANTEE
HOPWA
VAWA
TOTAL
California
Volunteers of America of Los Angeles
$1,068,681
$185,259
$1,253,940
City of San Jose
$1,089,000
$197,520
$1,286,520
District of Columbia
DC Department of Health
$1,100,000
$197,520
$1,297,520
Louisiana
UNITY of Greater New Orleans
$1,100,000
$197,520
$1,297,520
Missouri
City of Kansas City
$817,720
$191,520
$1,009,240
New York
Gay Men's Health Crisis Inc.
$1,085,977
$197,520
$1,283,497
Unity House of Troy Inc.
$869,257
$197,519
$1,066,776
Oregon
City of Portland
$602,795
$125,622
$728,417
TOTAL
$7,733,430
$1,490,000
$9,223,430
Through this demonstration program, HUD will provide funding for housing assistance and supportive services to low-income persons living with HIV/AIDS who are victims of sexual assault, domestic violence, dating violence or stalking. Grantees are required to form partnerships between local HIV housing and service providers and domestic violence and sexual assault service providers for client outreach and engagement and for comprehensive supportive services to ensure client success in the program. Descriptions of the funded projects can be found here.
This demonstration follows a recommendation by the Federal Interagency Working Group on the Intersection of HIV/AIDS, Violence against Women and Girls, and Gender–Related Health Disparities to enhance federal efforts in addressing HIV and intimate partner violence (IPV) among homeless and marginally housed women and girls. While the working group focuses on women and girls, the housing assistance and supportive services provided through the demonstration will be open to all eligible clients regardless of sex, gender identity, sexual orientation, familial status, marital status, race, color, religion, national origin, disability or age.
OVW, headed by Principal Deputy Director Bea Hanson, provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of VAWA and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. More information is available at www.justice.gov/ovw.
The HOPWA program is the only federal program dedicated to addressing the housing needs of persons living with HIV/AIDS and their families. Grantees partner with nonprofit organizations and housing agencies to provide housing and support to program beneficiaries.
Denham Springs Woman Sentenced to 30 Months in Prison for Embezzlement of over $600,000Read the Press Release
U.S. Attorney Kenneth A. Polite announced that KRISTIN KOENIG, a/k/a KRISTIN BARNES, age 41, of Denham Springs, was sentenced following a guilty plea to a one count Bill of Information for bank fraud.
U.S. District Judge Jay C. Zainey sentenced KOENIG to 30 months incarceration. In addition to incarceration, KOENIG was sentenced to five years of supervised release, ordered to pay restitution in the amount of $623,3748.42, and assessed a $100 mandatory special assessment.
According to court records, KOENIG was hired to do accounting work for a Jefferson Parish business. From September of 2011 through July of 2014, KOENIG embezzled $601,822.90 from her client by forging her name on company checks and manipulating internal computer/accounting records. KOENIG also embezzled $21,925.53 from another client and placed the funds into her own account.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation, along with assistance from the Internal Revenue Service and the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorney Edward J. Rivera was in charge of the prosecution.
Defiance woman charged wtih failing to report nearly $800,000 in incomeRead the Press Release
A Defiance woman was charged with failing to report nearly $800,000 in income to the Internal Revenue Service, said Carole S. Rendon, Acting United States Attorney for the Northern District of Ohio.
Sandra Vonderembse, 65, of did not report taxable income between the tax years of 2009 through 2011. During that time, her income was approximately $793,204, meaning she would owe the IRS approximately $136,351 in taxes, according to the criminal information.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, and the defendant’s role in the offense and the characteristics of the violation. Tax evasion is punishable by a sentence of of up to five years in prison. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Internal Revenue Service-Criminal Investigation, Toledo. The case is being handled by Assistant United States Attorney Noah P. Hood and Department of Justice Trial Attorneys Jack Morgan and Jeffrey McLellan.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Dallas Man Faces Federal Prison for Stealing Mail TruckRead the Press Release
DALLAS — Daniel Dixon, 32, appeared this morning before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to a three-count indictment charging felony offenses stemming from his theft of a mail truck last year, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Dixon, also known as “Jason Lee Smallwood,” pleaded guilty to one count of theft of government money, property or records; one count of willfully injuring or committing depredation against any property of the United States; and one count of obstruction of correspondence. Dixon, who has been in custody since his arrest shortly after the incident, faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine for both the theft count and the depredation of property count and five years and a $250,000 fine for the obstruction of correspondence count. Sentencing is set for September 28, 2016, before U.S. District Judge Ed Kinkeade.
According to documents filed in the case, on December 28, 2015, as a U.S. Postal Service employee was stopped at a gas station to refill the mail truck’s gas tank, a man later identified as Dixon exited the backseat of a nearby vehicle, entered the driver’s seat of the mail truck, and drove away in the mail truck. Dixon abandoned the mail truck on Windfall Circle in Dallas, where it was later recovered with extensive damage.
The U.S. Postal Inspection Service and the Dallas Police Department investigated. Assistant U.S. Attorney Jamie Hoxie is in charge of the prosecution.
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Couple Pleads Guilty to Child Sex TraffickingRead the Press Release
TULSA, Okla.—A Florida woman and North Carolina man pleaded guilty to sex trafficking a 14 year old girl, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma.
Jasmine Lynch, 24, of Jacksonville, Florida, and Ryan Patrick Wise, 35, of Greensboro, North Carolina, were charged by a second superseding indictment in May 2016. Lynch pleaded guilty today and Wise pleaded guilty on June 7, 2016. United States District Court Judge John E. Dowdell presided over the case.
According to court documents, Lynch and Wise admitted that in November 2015, they recruited, enticed, provided, and advertised a 14 year old girl from Tulsa to engage in commercial sex acts with adult men. Lynch and Wise rented hotel and motel rooms in Tulsa to provide the underage girl for prostitution purposes. Lynch and Wise advertised the 14 year old girl for sex on Backpage.com.
At the time of sentencing, the defendants each face not less than 10 years and up to life in prison. Lynch and Wise are set to be sentenced in September.
The case was investigated by the Tulsa Police Department; and prosecuted by Assistant United States Attorney Trent Shores.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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Coconut Grove Resident Sentenced to Two Years in Prison for Trafficking in Counterfeit Goods, Concealing Assets and Money LaunderingRead the Press Release
A Coconut Grove resident was sentenced to 24 months in prison, to be followed by two years of supervised release, by United States District Judge Donald M. Middlebrooks, following his conviction for trafficking in counterfeit merchandise, concealing assets, and laundering money.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, made the announcement.
Tatiana F. Tascon, 40, of Coconut Grove, previously pled guilty to trafficking in counterfeit goods, in violation of Title 18, United States Code, Section 2320(a)(1); concealing assets, in violation of Title 18, United States Code, Sections 152(1) and 152(2); and money laundering, in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i). As part of Tascon’s sentence, the defendant agreed to forfeit $78,949.45, as well as two properties in Miami, Florida.
According to court documents, Tascon trafficked in counterfeit goods, including high-end designer handbags, wallets and watches, out of a showroom in her Coconut Grove residence. While trafficking in counterfeit goods, the defendant filed for and was ultimately granted Chapter 7 bankruptcy protection. In her bankruptcy filings the defendant failed to report that she had earned over $700,000 from her illicit counterfeit goods business. Tascon laundered the earnings from her illegal business through the bank accounts of third parties.
Mr. Ferrer commended the investigative efforts of ICE-HSI. This case was prosecuted by Assistant U.S. Attorneys Robert J. Emery, Daya Nathan, and Eloisa Fernandez.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Chinese National Charged for Stealing Source Code from Former Employer with Intent to Benefit Chinese GovernmentRead the Press Release
Xu Jiaqiang, 30, was charged in a six-count superseding indictment with economic espionage and theft of trade secrets, in connection with Xu’s theft of proprietary source code from his former employer, with the intent to benefit the National Health and Family Planning Commission of the People’s Republic of China.
The superseding indictment was announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York.
Xu was initially arrested by the FBI on Dec. 7, 2015, and was previously charged with one count of theft of trade secrets. Xu is scheduled to be arraigned on the superseding indictment at 12 p.m. EDT on June 16, 2016, before U.S. District Judge Kenneth M. Karas of the Southern District of New York.
“Xu allegedly stole proprietary information from his former employer for his own profit and the benefit of the Chinese government,” said Assistant Attorney General Carlin. “Those who steal America’s trade secrets for the benefit of foreign nations pose a threat to our economic and national security interests. The National Security Division will continue to work tirelessly to identify, pursue and prosecute any individual who attempts to harm American businesses by robbing them of their valuable intellectual property.”
“As alleged, Xu Jiaqiang is charged with stealing valuable, proprietary software from his former employer, an American company, that he intended to share with an agency within the Chinese government,” said U.S. Attorney Bharara. “Economic espionage not only harms victim companies that have years or even decades of work stolen, but it also crushes the spirit of innovation and fair play in the global economy. Economic espionage is a serious federal crime, for which my office, the Department of Justice’s National Security Division, and the FBI will show no tolerance.”
According to the allegations contained in the criminal complaint on which Xu was initially arrested, the original indictment and the superseding indictment:
From November 2010 to May 2014, Xu worked as a developer for a particular U.S. company (victim company). As a developer, Xu had access to certain proprietary software, as well as that software’s underlying source code. The proprietary software is a clustered file system developed and marketed by the victim company in the United States and other countries. A clustered file system facilitates faster computer performance by coordinating work among multiple servers. The victim company takes significant precautions to protect the proprietary source code as a trade secret because the value of the proprietary source code depends in part on its secrecy. Among other things, the proprietary source code is stored behind a company firewall and can be accessed by only a small subset of the victim company’s employees. Before receiving proprietary source code access, victim company employees must first request and receive approval from a particular victim company official. Victim company employees must also agree in writing at both the outset and the conclusion of their employment that they will maintain the confidentiality of any proprietary information.
In May 2014, Xu voluntarily resigned from the victim company. Xu subsequently communicated with one undercover law enforcement officer (UC-1), who posed as a financial investor aiming to start a large-data storage technology company, and another undercover law enforcement officer (UC-2), who posed as a project manager working for UC-1. In these communications, Xu discussed his past work with the victim company and indicated that he had experience with the proprietary software and the proprietary source code. On March 6, 2015, Xu sent UC-1 and UC-2 a code, which Xu stated was a sample of Xu’s prior work with the victim company. A victim company employee (employee-1) later confirmed that the code sent by Xu included proprietary victim company material that related to the proprietary source code.
Xu subsequently informed UC-2 that he was willing to consider providing UC-2’s company with the proprietary source code as a platform for UC-2’s company to facilitate the development of UC-2’s company’s own data storage system. Xu informed UC-2 that if UC-2 set up several computers as a small network, then Xu would remotely install the proprietary software so that UC-1 and UC-2 could test it and confirm its functionality.
In or around early August 2015, the FBI arranged for a computer network to be set up, consistent with Xu’s specifications (UC network). Files were then remotely uploaded to the FBI-arranged computer network. Thereafter, on or about Aug. 26, 2015, Xu and UC-2 confirmed that UC-2 had received the upload. In September 2015, the FBI made Xu’s upload available to a victim company employee who has expertise regarding the proprietary software and the proprietary source code (employee-2). Based on employee-2’s analysis of technical features of Xu’s upload, it appeared to employee-2 that the upload contained a functioning copy of the proprietary software. It further appeared to employee-2 that Xu’s upload had been built by someone with access to the proprietary source code that was not working within the victim company or otherwise at the victim company’s direction.
On Dec. 7, 2015, Xu met with UC-2 at a hotel in White Plains, New York. Xu stated, in sum and substance, that he had used the proprietary source code to make software to sell to customers, that he knew the proprietary source code was the product of decades of work on the part of the victim company and that he had used the proprietary source code to build a copy of the proprietary software, which he had uploaded and installed on the UC network. Xu also indicated that he knew that the copy of the proprietary software he had installed on the UC network contained information identifying the proprietary software as the victim company’s property, which could reveal the fact that the proprietary software had been built with the proprietary source code without the victim company’s authorization. Xu told UC-2 that he could take steps to prevent detection of the proprietary software’s origins, including writing computer scripts that would modify the proprietary source code to conceal its origins.
Later on Dec. 7, 2015, Xu met with UC-1 and UC-2 at the hotel. During that meeting, Xu showed UC-2 a copy of what he represented to be the proprietary source code on his laptop. Xu noted to UC-2 a portion of the code that indicated it originated with the victim company as well as the date on which it had been copyrighted. Xu also stated that he had previously modified the proprietary source code’s command interface to conceal the fact that the proprietary source code originated with the victim company and identified multiple specific customers to whom he had previously provided the proprietary software using his stolen copy of the proprietary source code.
In connection with the economic espionage counts charged in the superseding indictment, Xu stole, duplicated and possessed the proprietary source code with the intent to benefit the National Health and Planning Commission of the People’s Republic of China.
The superseding indictment charges Xu with three counts of economic espionage, which each carry a maximum sentence of 15 years in prison. He was also charged with three counts of theft of a trade secret, which each carry a maximum sentence of 10 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
A superseding indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty.
The case is being investigated by the FBI, and is being prosecuted by Assistant U.S. Attorneys Benjamin Allee and Ilan Graff of the Southern District of New York, with assistance from Trial Attorney David Aaron of the National Security Division’s Counterintelligence and Export Control Section.
Xu Superseding Indictment
Chief Executive Officer of International Metallurgical Company Pleads Guilty to Conspiring to Export Specialty Metals to IranRead the Press Release
Earlier today in federal court in Brooklyn, Erdal Kuyumcu, the chief executive officer of Global Metallurgy, LLC, a company based in Woodside, New York, pleaded guilty to one count of conspiring to violate the International Emergency Economic Powers Act in connection with the export of specialty metals from the United States to Iran. Today’s plea proceeding took place before Chief United States District Judge Dora L. Irizarry.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and John P. Carlin, Assistant Attorney General for National Security.
As detailed in the criminal information to which he pleaded guilty and in related court filings, Kuyumcu, a United States citizen, conspired to export from the United States to Iran a metallic powder composed of cobalt and nickel without having obtained the required license from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). The metallic powder can be used to coat gas turbine components, such as turbine blades, and can also be used in aerospace, missile production, and nuclear applications. Such specialized metals are closely regulated by the U.S. Department of Commerce to combat nuclear proliferation and protect national security, and exporting them without an OFAC license is illegal. Kuyumcu and others conspired to obtain over one thousand pounds of the metallic powder from a U.S.-based supplier for export to Iran. To hide the true destination of the goods from the U.S. supplier, Kuyumcu and a co-conspirator arranged for the metallic powder to be shipped first to Turkey and then to Iran.
In announcing the guilty plea, Mr. Capers extended his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, and the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office, the agencies that led the government’s investigation.
At sentencing, Kuyumcu faces up to 20 years in prison a $1 million fine.
The case is being prosecuted by Assistant U.S. Attorneys Tiana A. Demas and Ameet B. Kabrawala of the Eastern District of New York, with assistance from Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.
The Defendant:
ERDAL KUYUMCU
Age: 44
Woodside, New YorkE.D.N.Y. Docket No. 16-CR-308 (DLI)
Charleston felon pleads guilty to Federal gun crimeRead the Press Release
CHARLESTON, W.Va. – A Charleston man pleaded guilty today to a federal gun crime, announced Acting United States Attorney Carol Casto. Timothy Lee Leftenant, 36, entered his guilty plea to illegally possessing a firearm after being convicted of a felony.
On December 28, 2015, the Kanawha County Sheriff’s Department responded to a call at America’s Best Value Inn in St. Albans and encountered Leftenant after smelling marijuana outside his room. Leftenant ran from the officers when they attempted to pat him down. As he was running, Leftenant threw his hat, which contained heroin and a loaded 9 mm semi-automatic handgun. Leftenant was prohibited from possessing any firearm under federal law because of previous felony convictions for possession with intent to distribute crack and for carrying a firearm in relation to a drug crime. Additionally, Leftenant was on federal supervised release for the two prior felony convictions at the time he possessed the handgun.
Leftenant faces up to 10 years in federal prison for illegally possessing a firearm, and up to an additional two years in federal prison for the supervised release violation. He is scheduled to be sentenced on October 4, 2016.
The investigation was conducted by the Kanawha County Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Haley Bunn is in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
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Capitol Heights Felon Pleads Guilty to Stealing Guns from a Federally Licensed Firearms Dealer and to Illegal Possession of AmmunitionRead the Press Release
Greenbelt, Maryland – Gary Alphonso Robinson, age 27, of Capitol Heights, Maryland, pleaded guilty today to the theft of eight firearms and possession of ammunition by a convicted felon.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Queen Anne’s County Sheriff Gary Hofmann; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Chief Hank Stawinski of the Prince George’s County Police Department.
According to his plea agreement, on July 27, 2015, Robinson robbed a federally licensed firearms dealer in Stevensville, Maryland. Robinson entered the store by breaking a glass window and squeezing through the security bars. Robinson smashed a display case and took a 9mm semi-automatic handgun, a .45 caliber semi-automatic handgun, a .44 caliber revolver, a .38 caliber revolver, and three .357 caliber revolvers. He placed the guns in a bag, which he handed to a co-conspirator through the broken window. A security video recorded Robinson’s actions and the DNA profile of blood recovered from the scene matched Robinson’s, as did a partial palm-print found on a piece of the broken glass.
On September 17, 2015, a search warrant was executed at Robinson’s residence. Law enforcement recovered 43 rounds of 9mm ammunition hidden in a shoe in Robinson’s bedroom closet. Robinson had a previous felony conviction and was prohibited from possessing firearms or ammunition.
Robinson faces a maximum sentence of 10 years in prison for each of the two counts: theft of firearms; and possession of ammunition by a convicted felon. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for September 12, 2016 at 12:30 p.m.
United States Attorney Rod J. Rosenstein commended the FBI, Queen Anne’s County Sheriff’s Office, Maryland State Police, and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Joseph R. Baldwin and Deborah A. Johnston, who are prosecuting the case.
Capital Region Anti-Gang Project Reaches More than 1,800 Fifth-GradersRead the Press Release
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian wrapped up the 2016 LEADership Project this afternoon at a news conference at the Giffen Memorial Elementary School, part of the Albany School District. The LEADership Project, an anti-gang curriculum for fifth-grade students, was expanded to include the fifth-grade classrooms in the Albany, Schenectady, Troy, and Lansingburgh School Districts this year.
“We took on the challenges associated with reaching all the fifth-grade classrooms in these four districts this year so every student could learn about good decision making, staying away from gang activity, and focusing on what they want their futures to be. Each law enforcement officer spent time getting to know the students in their assigned classroom and encouraged them to be the best they can be,” said United States Attorney Hartunian. “Many thanks to our law enforcement and school district partners who helped steer our young people away from gangs and violence and toward a bright and productive future.”
To meet the challenge of getting volunteer instructors for the 79 fifth-grade classrooms in the four school districts, U.S. Attorney Hartunian reached out to federal, state, and local law enforcement agencies, and they answered the call. The chart below lists all the law enforcement agencies that participated:
14 Federal Agencies
United States Attorney’s Office
Federal Bureau of Investigation
Bureau of Alcohol, Tobacco, Firearms & Explosives
Drug Enforcement Administration
Internal Revenue Service Criminal Investigations
Transportation Security Administration
U.S. Coast Guard
U.S. Immigration & Customs Enforcement, Homeland Security Investigations
U.S. Probation and Pretrial Services
U.S. Customs & Border Protection
U.S. Postal Inspection Service
U.S. Postal Service Office of the Inspector General
U.S. Dept. of Health & Human Services OIG
Federal Public Defenders Office
3 State Agencies
NYS Dept. of Corrections & Community Supervision
NYS Dept. of Homeland Security & Emergency Services
New York State Police
12 Local Agencies
Albany Police Department
Schenectady Police Department
Troy Police Department
Schenectady Auxiliary Police Dept.
Albany County Family Court
Schenectady County DA’s Office
Rensselaer County DA’s Office
Schenectady County Probation Dept.
Rensselaer County Probation Dept.
Albany County Sheriff’s Office
Schenectady County Sheriff’s Office
Rensselaer County Sheriff’s Office
Through role-playing skits centered on two fifth-grade characters who are lured by an older gang member to make some bad decisions, classroom discussions revolved around making good life decisions, focusing on the future, acknowledging positive personal traits, and becoming the best that students can be. The sessions introduced the students to the concepts of responsibility and accountability through learning about Victim Impact Panels and Community Accountability Boards.
In past student questionnaires, 84% of fifth-graders stated it is very important to them to have help to stay away from gangs. These sessions help students learn how to do that. While 98% said they were not in a gang, 73% indicated they had friends who are in gangs. Prevention research tells us that having friends in gangs is a risk factor for future involvement in gangs and delinquent behaviors. When asked who can help them stay away from gangs, students notably listed their parents, teachers, police officers, and their LEADership instructors.
The LEADership Project is a small project with big returns. Even though it is only four sessions in each fifth-grade classroom, it reaches over 1,800 fifth-grade students in Albany, Schenectady, Troy, and Lansingburgh. The project uses very few resources; it is driven by over 80 volunteer law enforcement instructors. The LEADership Project is an investment in our future. “We are committed to working with our communities to break the cycle of violence and other crime; to helping our youth see and find a better way; and to listening and learning from these young voices – who, it is our hope, will become our next community leaders,” said U.S. Attorney Hartunian.
Canadian Man Pleads Guilty Immigration ChargeRead 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 Juvenal Lima Bettencourt de Quadros, 50, of Oakville, Ontario, Canada, pleaded guilty to being an alien found in the United States after removal subsequent to a conviction for an aggravated felony, before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Mary Catherine.Baumgarten, who is handling the case, stated that de Quadros is a native of Portugal and a citizen of Canada. On October 20, 1997, the defendant was convicted of federal cocaine charges in Massachusetts and sentenced to 60 months in prison. The crimes were designated as an aggravated felony under the Immigration and Nationality Act. On August 6, 2001, de Quadros was ordered removed from the United States and was officially removed on May 28, 2002.
On March 19, 2016, the defendant attempted to enter the United States at the Peace Bridge Port of Entry. Fingerprints determined that de Quadros was previously convicted of federal crimes and was not authorized to legally enter the United States. The defendant did not obtain the consent of the Attorney General of the United States or her successor, the Secretary for Homeland Security, to reapply for admission to the United States.
The plea is the result of an investigation by Customs and Border Protection, under the direction of Acting Director of Field Operations Rose Hilmey.
Sentencing is scheduled for September 21, 2016 at 12:30 p.m. before Judge Arcara.
California Man Pleads Guilty to Drug Trafficking Charge Arising Out of 9.5 Pound Heroin Seizure in New MexicoRead the Press Release
ALBUQUERQUE –Mario Arvizo Padron, Jr., 28, of Bakersfield, Calif., pled guilty today in federal court in Albuquerque, N.M., to a heroin trafficking charge arising out of a DEA seizure of more than nine and a half pounds of heroin in April 2015.
Padron was arrested in April 2015, and was charged in a criminal complaint with a heroin trafficking offense after the DEA seized approximately 4.35 kilograms (9.57 pounds) of heroin from him during an interdiction investigation at the Greyhound Bus Station in Albuquerque. The heroin was contained in bundles that were concealed inside the lining of Padron’s luggage
Padron was subsequently indicted on April 28, 2015, and charged with possession of heroin with intent to distribute on April 2, 2015, in Bernalillo County, N.M.
During today’s proceedings, Padron pled guilty to a felony information charging him with possession of heroin with intent to distribute. In entering the guilty plea, Padron admitted that on April 2, 2015, DEA agents found heroin in his checked bag while he was traveling through Albuquerque on the Greyhound Bus.
Padron remains in federal custody pending his sentencing hearing, which has yet to be scheduled. At sentencing, he faces a statutory maximum penalty of 20 years in prison.
This case was investigated by the Albuquerque office of the DEA. Assistant U.S. Attorney Paul Mysliwiec is prosecuting the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national 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 HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
CEO of International Metallurgical Company Pleads Guilty to Conspiring to Export Specialty Metals to IranRead the Press Release
Erdal Kuyumcu, 44, the CEO of Global Metallurgy LLC, a company based in Woodside, New York, pleaded guilty to one count of conspiring to violate the International Emergency Economic Powers Act, in connection with the export of specialty metals from the United States to Iran.
The guilty plea was announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Robert L. Capers of the Eastern District of New York.
As detailed in the criminal information to which he pleaded guilty and other court filings, Kuyumcu, a U.S. citizen, conspired to export from the United States to Iran a metallic powder composed of cobalt and nickel, without having obtained the required license from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). The metallic powder can be used to coat gas turbine components, including turbine blades, and can be used in aerospace, missile production and nuclear applications. Such specialized metals are closely regulated by the U.S. Department of Commerce to combat nuclear proliferation and protect national security, and exporting them without an OFAC license is illegal. Kuyumcu and others conspired to obtain over 1,000 pounds of the metallic powder from a U.S.-based supplier for export to Iran. To hide the true destination of the goods from the U.S. supplier, Kuyumcu and a co-conspirator arranged for the metallic powder to be shipped first to Turkey and then to Iran.
Kuyumcu pleaded guilty before Chief U.S. District Judge Dora L. Irizarry of the Eastern District of New York. At sentencing, he faces up to 20 years in prison and a $1 million fine.
Assistant Attorney General Carlin joined U.S. Attorney Capers in thanking the FBI’s New York Field Office and the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office.
The case is being prosecuted by Assistant U.S. Attorneys Tiana A. Demas and Ameet B. Kabrawala of the Eastern District of New York, with assistance from Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.
Kuyumcu Information