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9 June 2016
Navajo Man from Standing Rock, N.M., Pleads Guilty to Federal Sexual Abuse ChargeRead the Press Release
ALBUQUERQUE – Julius H. Willie, 30, an enrolled member of the Navajo Nation who resides in Standing Rock, N.M., pled guilty this morning in Albuquerque, N.M., to an aggravated sexual abuse charge. Under the terms of his plea agreement, Willie will be sentenced to 21 years in federal prison followed by a term of supervised release to be determined by the court. Willie will also be required to register as a sex offender after he completes his prison sentence.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division, Director Jesse Delmar of the Navajo Nation Division of Public Safety, and Chief Robert Cron of the Gallup Police Department.
Willie was charged in April 2014, in a five-count indictment with kidnapping, three counts of aggravated sexual abuse, and abusive sexual contact. According to the indictment, Willie committed the crimes on Aug. 26, 2012, on the Navajo Indian Reservation in McKinley County, N.M. He was transferred to federal custody on April 24, 2014, from state custody where he had been held for two years on related state charges.
During today’s proceedings, Willie pled guilty to Count 2 of the indictment charging him with aggravated sexual abuse. In entering the guilty plea, Willie admitted that on Aug. 26, 2012, he forced the victim to engage in a sexual act.
Willie’s sentencing hearing has yet to be scheduled. According to the plea agreement, Willie’s 21-year prison sentence will begin on the date of sentencing.
The Crownpoint office of the Navajo Nation Division of Public Safety, the Gallup office of the FBI and the Gallup Police Department investigated this case.
Assistant U.S. Attorneys Novaline D. Wilson and Kyle T. Nayback are prosecuting the case as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico, which is sponsored by the Justice Department’s Office on Violence against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native American women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Multi-Convicted Felon Sentenced to More Than Two Decades in Federal Prison for Trafficking Drugs and Possessing FirearmsRead the Press Release
SAVANNAH, GA: Darius Andre “Arnie” Holmes, 41, of Savannah, Georgia, was sentenced yesterday by U.S. District Judge William T. Moore, Jr. to serve 262 months in federal prison for trafficking heroin and unlawfully possessing firearms. After Holmes completes his nearly 22-year prison term, he will be supervised by the United States Probation Office for an additional five years. Parole has been abolished in the federal system.
According to the evidence presented at trial, Holmes sold heroin to a confidential police informant on multiple occasions in August 2015. After one such sale, Holmes told the informant he wanted to buy firearms. Agents of the Chatham-Savannah Counter Narcotics Team (CNT) and the ATF then organized a sting operation during which Holmes exchanged drugs with an undercover officer for semiautomatic weapons. With assistance from the Savannah-Chatham Metropolitan Police Department SWAT team, Holmes was arrested immediately following the trade.
At sentencing, the Court noted that, Holmes had been convicted of more than 35 felony offenses over the course of nearly 25 years. Many of Holmes’ crimes involved drugs, guns, and violence, and all of them were perpetrated in the Savannah area.
U.S. Attorney Edward Tarver said, “This defendant’s more than two-decade prison sentence is an appropriate response to the offenses he committed and his history of crime in the Savannah community. The Department of Justice will continue to apprehend and prosecute criminals who terrorize our communities with violence, guns and drugs. There should be no doubt that if you’re a felon with a gun or even one bullet; or if you’re pushing poison in our streets, you’ll soon be headed to a federal prison, far, far away and for a very long time.”
The U.S. Attorney’s Office prosecuted Holmes as part of Project Ceasefire, a joint federal, state and local initiative to combat gun violence and ensure that repeat offenders are subjected to stiff federal prison sentences.
Assistant United States Attorneys Joseph D. Newman and Theodore S. Hertzberg prosecuted the case on behalf of the United States. The Georgia Bureau of Investigation and the Chatham County Sheriff’s Office also provided support to the ATF/CNT/SCMPD investigation. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Miami-Dade County Resident Convicted of Distributing and Possessing Child PornographyRead the Press Release
A Miami-Dade County resident was convicted at trial yesterday of distributing and possessing child pornography.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Anthony Daron Johnson, 43, of Miami-Dade, was convicted by United States District Judge Ursula Ungaro of distribution of child pornography, in violation of Title 18, United States Code, Sections 2252(a)(2) and (b)(1), and possession of child pornography, in violation of Title 18, United States Code, Sections 2252(a)(4)(B) and (b)(2). Johnson is scheduled to be sentenced on September 2, 2016 at 1:30 p.m.
According to court documents and evidence presented at trial, between May 23, 2012 and September 21, 2014, Johnson used a peer-to-peer file-sharing program to download hundreds of child pornography files, including videos and still images. On June 8, 2014, law enforcement downloaded one complete file and one partial file from Johnson, both of which contained images of minors engaged in sexually explicit conduct. On November 20, 2014, law enforcement executed a federal search warrant at Johnson’s residence and recovered a computer containing two hundred still images and three videos of children engaged in sexually explicit conduct.
Mr. Ferrer commended the investigative efforts of the FBI. This case was prosecuted by Assistant U.S. Attorneys Joshua Rothstein and Jonathan Kobrinski.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. 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 exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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.
Miami Man Sentenced to 144 Months in Prison for Role in Multimillion-Dollar Scheme to Defraud Commercial Lenders and U.S. Export-Import BankRead the Press Release
A Miami man was sentenced today to 12 years in prison for his role in a scheme to defraud two commercial lenders and the Export-Import Bank of the United States (EXIM Bank) out of more than $11 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Inspector General Michael McCarthy of EXIM Bank made the announcement.
Guillermo A. Sanchez-Badia, 61, was sentenced today by U.S. District Judge Joan A. Lenard of the Southern District of Florida, who also sentenced Sanchez-Badia to three years of supervised release and ordered him to forfeit $41,924,418 and pay $11,503,068 in restitution, joint with co-conspirators Isabel C. Sanchez and Gustavo Girol. Sanchez-Badia pleaded guilty on March 21, 2016, to one count of conspiracy to commit wire fraud, one count of wire fraud and one count of conspiracy to commit money laundering.
Sanchez-Badia admitted that from 2007 through 2012, he and his co-conspirators utilized companies that they controlled to create fictitious invoices for sales of merchandise that never occurred. These invoices were sold to two Miami-area commercial lenders in a process called “factoring,” which allowed the conspirators to receive cash for approximately 90 percent of the value of the merchandise listed on the fake invoices. Sanchez-Badia admitted that, in order to continue the scheme, he and his co-conspirators created additional fictitious invoices, transferred the funds they received through numerous bank accounts under their control and, in a Ponzi-style scheme, used a portion of the new proceeds to pay off prior factored invoices.
Sanchez-Badia admitted that when the Miami lenders refused to extend further credit, he and his co-conspirators created false invoices and shipping documents to obtain a loan guaranteed by the EXIM. Rather than acquiring, selling and shipping American manufactured goods as required for an EXIM guaranteed loan, Sanchez-Badia and his co-conspirators used the loan proceeds to pay off earlier factored invoices, thereby extending the scheme, and kept the balance of the loan proceeds for themselves, he admitted. The factoring loans and the EXIM-guaranteed loan ultimately defaulted, causing losses of more than $9 million to the lenders and $2 million to the United States.
Five other individuals have been convicted for their roles in this scheme: Sanchez, 36, and Giral, 38, both of Miami, who await sentencing; and Freddy Moreno-Beltran, 43, of Bogota, Colombia. Ricardo Beato, 62, of Miami, and Jorge Amad, 48, of Miramar, Florida, were separately charged, pleaded guilty and have been sentenced for their roles in the scheme.
The EXIM Office of Inspector General investigated the case. Trial Attorney William Bowne and Senior Litigation Counsel Patrick Donley of the Criminal Division’s Fraud Section prosecuted the case.
Miami Man Sentenced to 144 Months in Prison for Role in Multimillion-Dollar Scheme to Defraud Commercial Lenders and U.S. Export-Import BankRead the Press Release
A Miami man was sentenced today to 12 years in prison for his role in a scheme to defraud two commercial lenders and the Export-Import Bank of the United States (EXIM Bank) out of more than $11 million.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Inspector General Michael McCarthy of EXIM Bank made the announcement.
Guillermo A. Sanchez-Badia, 61, was sentenced today by U.S. District Judge Joan A. Lenard of the Southern District of Florida, who also sentenced Sanchez-Badia to three years of supervised release and ordered him to forfeit $41,924,418 and pay $11,503,068 in restitution, joint with co-conspirators Isabel C. Sanchez and Gustavo Girol. Sanchez-Badia pleaded guilty on March 21, 2016, to one count of conspiracy to commit wire fraud, one count of wire fraud and one count of conspiracy to commit money laundering.
Sanchez-Badia admitted that from 2007 through 2012, he and his co-conspirators utilized companies that they controlled to create fictitious invoices for sales of merchandise that never occurred. These invoices were sold to two Miami-area commercial lenders in a process called “factoring,” which allowed the conspirators to receive cash for approximately 90 percent of the value of the merchandise listed on the fake invoices. Sanchez-Badia admitted that, in order to continue the scheme, he and his co-conspirators created additional fictitious invoices, transferred the funds they received through numerous bank accounts under their control and, in a Ponzi-style scheme, used a portion of the new proceeds to pay off prior factored invoices.
Sanchez-Badia admitted that when the Miami lenders refused to extend further credit, he and his co-conspirators created false invoices and shipping documents to obtain a loan guaranteed by the EXIM. Rather than acquiring, selling and shipping American manufactured goods as required for an EXIM guaranteed loan, Sanchez-Badia and his co-conspirators used the loan proceeds to pay off earlier factored invoices, thereby extending the scheme, and kept the balance of the loan proceeds for themselves, he admitted. The factoring loans and the EXIM-guaranteed loan ultimately defaulted, causing losses of more than $9 million to the lenders and $2 million to the United States.
Five other individuals have been convicted for their roles in this scheme: Sanchez, 36, and Giral, 38, both of Miami, who await sentencing; and Freddy Moreno-Beltran, 43, of Bogota, Colombia. Ricardo Beato, 62, of Miami, and Jorge Amad, 48, of Miramar, Florida, were separately charged, pleaded guilty and have been sentenced for their roles in the scheme.
The EXIM Office of Inspector General investigated the case. Trial Attorney William Bowne and Senior Litigation Counsel Patrick Donley of the Criminal Division’s Fraud Section prosecuted the case.
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
Mexican National Convicted of Operating Methamphetamine Lab in FresnoRead the Press Release
FRESNO, Calif. — On Wednesday, after a two-day trial, a jury found Humberto Bucio Delgado, 41, of Mexico, guilty of conspiracy to distribute methamphetamine and possession with the intent to distribute methamphetamine, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, on September 30, 2014, Delgado was arrested at a methamphetamine conversion lab inside a Fresno residence. Agents recovered over 60 pounds of methamphetamine from the house as well as materials used in the manufacturing and distribution of methamphetamine.
Sentencing is set for August 29, 2016, before Chief United States District Judge Lawrence J. O’Neill. Delgado faces a sentence of 10 years to life in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the Fresno Methamphetamine Task Force, the California Department of Justice, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Kathleen A. Servatius and Daniel J. Griffin are prosecuting the case.
Marathon Petroleum Company to Reduce Air Pollution from Refineries in Five StatesRead the Press Release
The U.S. Environmental Protection Agency (EPA) and the Department of Justice today announced an agreement with Ohio-based Marathon Petroleum Company that will reduce air pollution from the company’s petroleum refineries in Illinois, Kentucky, Louisiana, Michigan and Ohio. Marathon will spend $319 million to install state-of-the-art Flare Gas Recovery Systems (FGRSs), which will capture and recycle gases that would otherwise be sent to combustion devices known as flares. Marathon will also spend $15.55 million on projects to reduce air pollution at three of the facilities and will pay a civil penalty of $326,500 to the United States.
“This agreement continues the significant pollution reductions achieved under our earlier consent decree with Marathon in 2012,” said John C. Cruden, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “All five communities near these refineries will breathe cleaner air as a result of this agreement and Detroit will see a reduction in flaring at the refinery’s fence line.”
“When companies like Marathon install state-of-the-art pollution controls, they reduce air pollution in some of our most vulnerable communities,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “By updating this agreement, we are furthering our commitment to protect communities across the Southeast and the Midwest, especially places like Detroit that are overburdened by pollution.”
“This agreement marks significant progress in environmental justice in southwest Detroit,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan. “It shows that industry can thrive while protecting the environment. By investing in technology, Marathon will improve air quality for all of our residents throughout southeastern Michigan.”
The settlement filed today in the U.S. District Court in Detroit amends a 2012 consent decree involving the company’s flares. A flare is a mechanical device, ordinarily elevated high off the ground, used to combust waste gases.
When fully implemented, today’s agreement is expected to reduce harmful air pollutants like volatile organic compounds (VOCs), sulfur dioxides (SO2) and nitrogen oxides (NOx) by approximately 1,037 tons per year. In 2012, Marathon agreed to reduce air pollution from flares by generating less waste gas and by installing equipment designed to make flares burn more efficiently. The 2012 settlement has reduced emissions of VOCs and SO2 by over 5,200 tons per year.
Under the agreement filed today, Marathon will install seven FGRSs at an estimated cost of $319 million at five of its refineries located in Canton, Ohio; Catlettsburg, Kentucky; Detroit; Garyville, Louisiana; and Robinson, Illinois. Marathon will be required to operate these FGRSs at a higher percentage of time than EPA has ever secured in prior enforcement actions. Marathon will also maintain two duplicates of a critical spare part to be delivered immediately to any of these refineries as necessary, to help make sure the FGRSs have minimal downtime.
Marathon will also spend approximately $6 million to shut down a flare at the fence line of its Detroit refinery and $9.55 million on projects to reduce NOx emissions at its Canton and Garyville refineries.
By installing advanced pollution controls at its refineries, Marathon will help reduce emissions that can cause respiratory and cardiovascular health impacts, which can disproportionately affect low-income and vulnerable populations, including children.
Under the settlement, some of Marathon’s obligations under the 2012 agreement to ensure high flare combustion efficiency will eventually be replaced by Marathon’s obligation to comply with a new, 2015 EPA rule on flare combustion efficiency. At four refineries, compliance with an EPA flare standard related to SO2 will be extended for a limited period. The projected temporary increase in pollution related to those extensions will be more than offset by contemporaneous decreases that will continue indefinitely.
The consent decree – subject to a 30-day public comment period and final court approval – is available at: www.justice.gov/enrd/.
To learn more about the settlement, visit: https://www.epa.gov/enforcement/first-amendment-2012-us-v-marathon-petroleum-co-clean-air-act-consent-decree
To learn more about EPA’s civil enforcement of the Clean Air Act, visit: https://www.epa.gov/enforcement/air-enforcement.
To learn more about EPA’s refinery initiative, visit: https://www.epa.gov/enforcement/petroleum-refinery-national-case-results.
MPC First Amendment to Consent Decree
Manhattan U.S. Attorney Sues New York City Department of Education for Discrimination and Retaliation at Pan American International High SchoolRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has filed a lawsuit against the NEW YORK CITY DEPARTMENT OF EDUCATION (the “DOE”) for engaging in a pattern and practice of discrimination and retaliation in violation of Title VII. The Government alleges that during the 2012-2013 school year, the DOE permitted Principal Minerva Zanca and Superintendent Juan Mendez to discriminate against every black teacher at Pan American International High School (“Pan American”) and retaliate against an assistant principal who spoke out against the discrimination.
Manhattan U.S. Attorney Preet Bharara said: “It is nearly unthinkable that, in this day and age, one of the largest and most diverse school districts in the United States would allow racial discrimination and retaliation to flourish. Yet that is what we allege happened at Pan American International High School. Federal civil rights laws prohibit this misconduct. This suit seeks to remedy the violations that occurred at Pan American and ensure that the New York City Department of Education protects its employees’ civil rights in the future.”
As alleged in the Complaint filed in Manhattan federal court:
In August 2012, Superintendent Mendez selected Minerva Zanca as Pan American’s new principal. During the 2012-2013 school year, Pan American employed 27 teachers, three of whom were black. Throughout that school year, Principal Zanca purposely targeted John Flanagan and Heather Hightower, two untenured black teachers, for unsatisfactory lesson ratings. According to Assistant Principal Anthony Riccardo, Principal Zanca decided to give Mr. Flanagan and Ms. Hightower unsatisfactory ratings before she had seen the lesson she was supposed to evaluate.
In connection with her reviews of Mr. Flanagan and Ms. Hightower, Principal Zanca made derogatory racial comments to Assistant Principal Riccardo. Specifically, Principal Zanca stated that Hightower “looked like a gorilla in a sweater,” asked whether Assistant Principal Riccardo had seen Flanagan’s “big lips quivering” during a meeting, complained that she could “never” have “fucking nappy hair” like Hightower, and stated that she had difficulty not laughing at Flanagan because he reminded her of a Tropicana commercial where a black man “with those same lips” danced down a supermarket aisle.
Principal Zanca also discriminated against Lisa-Erika James, a tenured black teacher, by cutting the highly successful theater program Ms. James oversaw. On multiple occasions during the 2012-2013 school year, Principal Zanca attempted to cancel student productions. First, she refused to pay for expenses associated with a production. When money for the production was obtained from other sources, Principal Zanca then claimed that the school could not pay overtime wages for more than five hours of rehearsal per week. Pan American in fact had sufficient money to pay for more rehearsal, and Principal Zanca simply reallocated that money to other projects. Ultimately, the second student production of the 2012-2013 school year was cancelled.
During the spring of 2013, when Assistant Principal Riccardo refused to give an unsatisfactory rating to a lesson taught by Ms. Hightower, Principal Zanca yelled at Assistant Principal Riccardo, accused him of “sabotaging her plan,” and called school security to have him removed from the building. Subsequently, Principal Zanca initiated two complaints against Assistant Principal Riccardo with the DOE’s internal investigatory offices. Those offices determined that Principal Zanca’s allegations did not warrant any charges against Assistant Principal Riccardo. In June of 2013, Principal Zanca gave Assistant Principal Riccardo, Mr. Flanagan, and Ms. Hightower annual performance ratings of “unsatisfactory.”
The allegations that Principal Zanca engaged in discrimination and retaliation were brought to the attention of Superintendent Mendez, but the DOE did not take any disciplinary action against Principal Zanca. Even after the United States Equal Employment Opportunity Commission found reasonable cause to believe that the DOE had discriminated and retaliated against James, Riccardo, and Hightower, Principal Zanca was allowed to remain in charge of Pan American. Neither Ms. Hightower, Mr. Flanagan, Ms. James, nor Mr. Riccardo worked at Pan American after the 2012-2013 school year.
Title VII authorizes the Department of Justice to commence an action in the United States District Court against the DOE to remedy discrimination and retaliation for opposing discrimination. The Complaint seeks declaratory and injunctive relief, as well as compensatory damages on behalf of Mr. Flanagan, Ms. James, Ms. Hightower, and Assistant Principal Riccardo.
In October of 2013, Mr. Flanagan filed a lawsuit against the DOE, Principal Zanca, Superintendent Mendez, and others. That suit was docketed as Flanagan v. N.Y.C. Dep’t of Educ. et al., No. 13 Civ. 8456. On August 21, 2015, Magistrate Judge James C. Francis IV recommended the denial of Defendants’ motion for summary judgment on Mr. Flanagan’s Title VII claims for discrimination and retaliation. The DOE has not objected to Judge Francis’s recommendation, and the deadline for doing so has expired. The United States anticipates moving to intervene in Flanagan and to consolidate that case with its own.
The case is being handled by the Office’s Civil Rights Unit. Assistant U.S. Attorney Caleb Hayes-Deats is in charge of the case.
Manhattan U.S. Attorney Announces Extradition of Defendants Linked to Massive Network Intrusions at U.S. Financial Institutions, U.S. Brokerage Firms, A Major News Publication, and Other Companies in Furtherance of Securities Fraud Scheme and Other CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and David E. Beach, Special Agent in Charge of the U.S. Secret Service New York Field Office (“USSS”), announced today that GERY SHALON, a/k/a “Garri Shalelashvili,” a/k/a “Gabriel,” a/k/a “Gabi,” a/k/a “Phillipe Mousset,” a/k/a “Christopher Engeham,” and ZIV ORENSTEIN, a/k/a “Aviv Stein,” a/k/a “John Avery,” were extradited from Israel. SHALON and ORENSTEIN were arrested in July 2015 for charges arising out of SHALON’s orchestration of massive computer hacking crimes against U.S. financial institutions, brokerage firms, and financial news publishers, including the largest theft of customer data from a U.S. financial institution in history. SHALON is charged with committing these crimes with JOSHUA SAMUEL AARON, a/k/a “Mike Shields,” in furtherance of securities market manipulation schemes that SHALON and AARON perpetrated with defendant ORENSTEIN. SHALON, a Georgian and Israeli citizen, and ORENSTEIN, an Israeli citizen, arrived in the Southern District of New York last night and early this morning, respectively, and will be presented today in Manhattan federal court, before U.S. Magistrate Judge Kevin Nathaniel Fox.
Manhattan U.S. Attorney Preet Bharara said: “Gery Shalon and Ziv Orenstein, two of the alleged perpetrators of the cybercrime that we described at the time of their arrests as securities fraud on cyber steroids, have been successfully extradited from Israel to the United States. For the alleged hacks into numerous U.S. companies, including the largest theft of customer data from a U.S. financial institution in history, in furtherance of their securities fraud, Sharon and Orenstein will now face prosecution in a U.S. court.”
SHALON and ORENSTEIN were arrested by Israeli authorities in July 2015, pursuant to a provisional arrest warrant that was issued on the securities fraud charges in this case. AARON, a U.S. citizen, has yet to be arrested by U.S. authorities.
* * *
The charges in the Indictment against SHALON, 31, of Savyon, Israel, AARON, 31, a U.S. citizen who is believed to reside in Moscow, Russia, and ORENSTEIN, 40, of Bat Hefer, Israel, are included in the chart below. The maximum potential sentences listed below are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and the United States Secret Service, and expressed his sincere gratitude to the Office of the State Attorney of the Israel Ministry of Justice’s Department of International Affairs and the Israel National Police, including its Cyber Unit - Lahav 433, for their support and assistance with the investigation and the extradition proceedings. He also thanked the Securities and Exchange Commission, Immigration and Customs Enforcement - Homeland Security Investigations, the Financial Industry Regulatory Authority, the National Credit Union Administration, the Office of International Affairs of the U.S. Department of Justice, the Financial Services Information Sharing and Analysis Center, which significantly aided the investigation by facilitating information-sharing among the victim institutions, and the U.S. Marshals Service, for their assistance in the extradition of the defendants.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Eun Young Choi and Sarah Lai are in charge of the prosecution. Assistant U.S. Attorney Edward Diskant of the Office’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Count
Defendants
Charge
Maximum Prison Term
One
SHALON and AARON
Conspiracy to commit computer hacking
Five years
Two
SHALON and AARON
Computer hacking
Five years
Three
SHALON and AARON
Computer hacking
Five years
Four
SHALON, AARON, and ORENSTEIN
Conspiracy to commit securities fraud
Five years
Five
SHALON, AARON, and ORENSTEIN
Conspiracy to commit wire fraud: Securities Market Manipulation Scheme
20 years
Six
SHALON, AARON, and ORENSTEIN
Securities fraud
20 years
Seven
SHALON, AARON, and ORENSTEIN
Eight
SHALON, AARON, and ORENSTEIN
Nine
SHALON, AARON, and ORENSTEIN
10
SHALON, AARON, and ORENSTEIN
11
SHALON, AARON, and ORENSTEIN
12
SHALON, AARON, and ORENSTEIN
13
SHALON, AARON, and ORENSTEIN
Wire fraud
20 years
14
SHALON, AARON, and ORENSTEIN
Conspiracy to commit identification document fraud
15 years
15
SHALON, AARON, and ORENSTEIN
Aggravated identity theft
Mandatory two years
16
SHALON and ORENSTEIN
Unlawful internet gambling enforcement act conspiracy
Five years
17
SHALON and ORENSTEIN
Unlawful internet gambling enforcement act
Five years
18
SHALON and ORENSTEIN
Operation of illegal gambling business
Five years
19
SHALON and ORENSTEIN
Conspiracy to commit wire fraud: unlawful payment processing
20 years
20
SHALON
Conspiracy to operate an unlicensed money transmitting business
Five years
21
SHALON
Operation of an unlicensed money transmitting business
10 years
22
SHALON, AARON, and ORENSTEIN
Conspiracy to commit money laundering: Securities Market Manipulation Scheme
20 years
23
SHALON and ORENSTEIN
Conspiracy to commit money laundering: Internet Gambling and Payment Processing Schemes
20 years
Manhattan U.S. Attorney Announces $54 Million Settlement Against Salix Pharmaceuticals for Using “Speaker Programs” as Mechanism to Pay Illegal Kickbacks to Doctors to Induce Them to Prescribe Salix ProductsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”), and Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today a $54 million settlement in a civil fraud lawsuit against SALIX PHARMACEUTICALS, INC. (“SALIX”), a specialty pharmaceutical company based in Raleigh, North Carolina, that sells products used to treat various gastroenterology conditions. The settlement resolves claims that SALIX violated the federal Anti-Kickback Statute and False Claims Act by using its “speaker programs” as a mechanism to pay kickbacks to doctors to induce them to prescribe SALIX drugs and medical devices that were reimbursed by federal health care programs. Specifically, the United States’ Complaint-in-Intervention alleges that SALIX held sham speaker programs, frequently at high-end restaurants, where doctors were paid substantial honoraria purportedly to educate other doctors about a Salix product, but in reality spent little or no time discussing the product. The settlement will also resolve numerous state law civil fraud claims.
Today, U.S. District Court Judge Denise L. Cote approved a settlement stipulation to resolve the Government’s claims against SALIX. Under the settlement, SALIX is required to pay approximately $46.53 million to the United States and has made extensive admissions regarding its conduct. Further, as part of the settlement, SALIX will pay approximately $7.47 million to resolve the state law civil fraud claims.
Manhattan U.S. Attorney Preet Bharara said: “For years, Salix Pharmaceuticals unlawfully sought to increase prescriptions of its products by using its ‘speaker programs’ as a vehicle to pay kickbacks to doctors. Through these ‘speaker programs,’ which were frequently nothing more than social gatherings with little or no educational component, Salix found a way to pay doctors money and treated them to fancy meals to push their drugs. With today’s settlement, Salix has taken responsibility for its conduct and agreed to pay a significant financial penalty. This action and settlement is part of our continuing effort to pursue health care providers who put their profits ahead of patient safety.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “When Salix Pharmaceuticals paid doctors large sums of money to speak at programs that were primarily social events, the goal was to induce the doctors to prescribe Salix products and enhance the company’s bottom line. We will continue to investigate such illegal arrangements that undermine impartial medical judgment and place company interests above those of patients.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Salix used high priced meals at swanky restaurants to get doctors to push its products. Whether those doctors actually prescribed those medications, the simple idea behind the pitch eats away at the faith patients have in their doctors to put their health and wellbeing above the interests of a corporation. The FBI and our partners will do all that we can to keep these practices from doing more harm than good.”
As alleged in the Complaint-in-Intervention filed in Manhattan federal court:
During the period January 2009 through December 2013 (the “Covered Period”), many of SALIX’s speaker programs for Xifaxan, Apriso, Relistor, MoviPrep, OsmoPrep, Solesta, and Deflux (the “Covered Products”) were nothing more than social events at which SALIX wined and dined doctors to induce them to write prescriptions for these products. These speaker programs included both in-person events (at which both the speaker and the attendees were present in person and the speaker was paid to provide an educational talk on a Covered Product to the attendees using a slide presentation), as well as pre-recorded events (at which a SALIX employee was supposed to use a laptop or other device to play for the attendees a pre-recorded video of a doctor delivering a slide presentation, and then call the paid speaker, who was to be available to answer any questions by telephone).
The speaker programs, which were typically held in restaurants, were supposed to be educational in nature and the cost of the meal was supposed to be modest. But in practice, SALIX held many speaker programs that were primarily social in nature, including events where it repeatedly invited the same doctors, who frequently were from the same practice or otherwise knew each other, to attend the same exact program on the same exact topic. With respect to the pre-recorded programs – which SALIX personnel internally referred to as “doc-in-the-box programs” – the pre-recorded video frequently was not played or was intentionally played in a manner so it could be ignored. SALIX also held many speaker programs at very expensive, high-end restaurants.
The doctors whom SALIX paid to be speakers and whom SALIX invited to its events were often the high prescribers of its products or were viewed as having the potential to be high prescribers. Many of these doctors increased their prescription-writing for the Covered Products after becoming speakers and/or repeatedly attending sham speaker programs. During the Covered Period, SALIX spent approximately $25 million on speaker payments and meals.
As part of the settlement, SALIX admitted, acknowledged, and accepted responsibility for the following conduct:
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Throughout the Covered Period, speaker programs were an important part of SALIX’s strategy for increasing sales of the Covered Products.SALIX conducted approximately 10,000 speaker programs for the Covered Products, including approximately 8,000 programs alone for Xifaxan, Apriso, and Relistor.
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Speaker honoraria payments for a program ranged from $250 (for a doctor available on call to answer questions associated with a pre-recorded program) to $4,500 (for a doctor who spoke at an in-person program and had a specified level of experience and certain credentials).During the Covered Period, SALIX paid over 500 physicians honoraria for serving as speakers on the Covered Products, with dozens of physicians earning more than $50,000, and several earning more than $100,000.
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Throughout the Covered Period, SALIX did not have effective mechanisms in place to monitor adequately its speaker programs to ensure compliance with internal policies. For example, there were no effective mechanisms in place to audit speaker programs and insufficient efforts were made to review data and other information on speaker programs to ensure compliance with the company’s internal policies.
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Throughout the Covered Period, numerous SALIX employees held speaker programs for the Covered Products that were primarily social in nature and/or otherwise did not comply with the company’s internal policies.For example, there were programs where:
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the designated speaker spent little or no time discussing the Covered Product;
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the required slide presentation was not shown in its entirety or not at all;
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doctors attended multiple programs on the same topic (at which the same slide presentation was supposed to have been shown) within a short period of time;
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the programs were held in the main dining rooms of restaurants or other locations that were not conducive to an educational program;
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the programs were held at high-end restaurants (such as Nobu and Le Bernardin in New York City), with per-person costs exceeding $200 and even $300;
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the SALIX sales representative responsible for a program reported that certain physicians had attended the event even though they had not, in order to make the per-person cost of the event appear lower than it actually was;
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attendees included individuals other than healthcare professionals with a legitimate interest in the scheduled topic, such as a physician’s spouse; and/or
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the programs were used as an opportunity to provide a physician’s practice (in some cases including administrative staff) with a meal or a happy hour.
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Additionally, with respect to the pre-recorded speaker programs, there were numerous instances where:(1) the SALIX sales representative did not play the pre-recorded presentation; (2) the SALIX sales representative played the pre-recorded presentation but placed the laptop or other viewing device in a location where it could not readily be seen or at a volume at which it could not readily be heard; and/or (3) the designated approved speaker was not called at the end of the pre-recorded presentation but still received an honorarium payment.
In connection with the filing of the lawsuit and settlement, the Government joined two private whistleblower lawsuits that had previously been filed under seal pursuant to the False Claims Act.
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Mr. Bharara thanked HHS’s Office of the Inspector General, the FBI, and the Medicaid Fraud Control Units for Ohio and New York for their investigative efforts and assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Jeffrey K. Powell and Christopher B. Harwood are in charge of the case.
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Madison Business Owner and His Brother Sentenced to Prison for Participating in Stolen Property Fraud RingRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced that yesterday, James D. Litchfield, 59, owner of Big Jim’s Autorama in Madison, IL, and his brother, Ryan P. Litchfield, 37, of O’Fallon, MO, were both sentenced to prison for their participation in a large stolen property ring. James Litchfield was sentenced to 3 years in prison, while Ryan Litchfield was sentenced to 1 year and 1 day in prison.
The charges arise from an indictment that was returned by a federal grand jury in East St. Louis, IL, on October 20, 2015. The indictment alleges that the leader of this fraud ring, Jason J. Parmeley, 42, formerly of O’Fallon, MO, conducted this fraud scheme from Mexico. According to the indictment, Parmeley used the internet to obtain credit account numbers that individuals and businesses had with retail stores, such as Home Depot, Lowes, Menards, and rental stores, such as SunBelt Rentals. Using this information, Parmeley placed orders with the stores in the names of, and under the credit accounts, of the individuals and businesses. The items Parmeley ordered frequently consisted of appliances, computers, expensive tools, and construction equipment. The indictment charges that, after he placed the orders, Parmeley dispatched drivers to go to the stores and pick up the items. According to the indictment, the items were then sold at prices substantially below retail. The profits were then wire transferred to Parmeley in Mexico.
When he pled guilty on February 11, 2016, James Litchfield admitted that he received numerous truckloads of items which he knew had been obtained by fraud. This fraudulently obtained property included construction equipment, such as Skid Steer Loaders, appliances, such as washing machines, dryers, and refrigerators, and assorted other merchandise, including paint, flooring, and siding. These items were delivered to Big Jim’s Autorama in Madison, IL. James Litchfield admitted that he kept some of these items for his own personal use, but sold other items at prices far below their retail value. He also admitted that he provided two trucks that were used by the co-conspirators to pick up fraudulently ordered items. Finally, James Litchfield admitted that he engaged in money laundering by wire transferring payments for the merchandise to Parmeley in Mexico under fake names. At the sentencing hearing yesterday afternoon, the court found that the amount of stolen property James Litchfield received exceeded $150,000.
Ryan Litchfield also pled guilty on February 11, 2016. During his plea hearing, Ryan Litchfield admitted that he received approximately 20 to 25 truckloads of property and merchandise that had been obtained by fraud. He sold the majority of that merchandise to his friends and business associates. On occasion, Ryan Litchfield sold the items by placing advertisements on websites such as Craig’s List. He also occasionally allowed Parmeley to store items that had been obtained by fraud at his house and rented storage lockers that were used to store property obtained by fraud. The court found that the amount of stolen property received by Ryan Litchfield was approximately $80,000.
The charges contained in the indictment include conspiracy to commit wire fraud, conspiracy to transport property obtained by fraud in interstate commerce, wire fraud, interstate transportation of property obtained by fraud, possession of property obtained by fraud, money laundering, and aggravated identity theft.
In late August of this year, Mexican Immigration Authorities deported Parmeley from Mexico. Parmeley is currently in federal custody and is awaiting trial.
In addition to Parmeley and the Litchfields, the indictment charges 12 other individuals with participating in this fraud scheme. Four of those individuals have pled guilty and are awaiting sentencing. The individuals who have pled guilty are: Benedict G. Pellerito, 55, of Troy, MO; Tony G. Robertson, 44, of O’Fallon, MO; Alice J. Hembree, 43, of Moscow Mills, MO; and Nicholas A. Brockman, 20, of Wentzville, MO. The trial of Parmeley and the remaining eight defendants is currently scheduled to begin on August 22, 2016. Those eight defendants are: Angel Speed, 25, formerly of O’Fallon, MO; Sean A. Shields, 47, of Ozark, MO; Shannan Flora, 41, of Vienna, IL; Steven J. Belcher, 44, of Wentzville, MO; Jesse S. Urias, 36, of Los Angeles, CA; Rigoberto Gutierrez, 26, of Compton, CA; Russell J. Witt, 33, of New Baltimore, MI; and Bryce E. Atkinson, 21, of Lake Saint Louis, MO.
Note: As to those defendants who are awaiting trial, the law presumes them to be innocent unless they are proven guilty beyond a reasonable doubt.
The investigation is being conducted by agents from the St. Louis Division of the Federal Bureau of Investigation ("FBI"). The FBI has received substantial assistance from many state and local police departments in numerous jurisdictions, including the Metro East Auto Theft Task Force and the California Highway Patrol. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman.
Lovington Man Sentenced to 84 Months for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Jose Antonio Rodriguez, 42, of Lovington, N.M., was sentenced yesterday afternoon in federal court in Las Cruces, N.M., to 84 months in prison followed by four years of supervised release for his methamphetamine trafficking conviction.
Rodriguez was arrested in Sept. 2015, and charged in a criminal complaint with conspiracy and possession of methamphetamine with intent to distribute. According to the complaint, Rodriguez was arrested on Sept. 3, 2015, in Doña Ana County, N.M., after U.S. Border Patrol agents at the Border Patrol Checkpoint on Interstate 10 in Las Cruces found 44.6 grams of methamphetamine in his vehicle during a routine inspection.
On Dec. 18, 2015, Rodriguez pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute and admitted possessing 44.6 grams of methamphetamine. Rodriguez acknowledged that he intended to sell the methamphetamine to others.
This case was investigated by the U.S. Border Patrol and the Las Cruces office of the DEA. Assistant U.S. Attorney Selesia L. Winston prosecuted the case.
Lindenhurst Man Detained in Federal Custody for Allegedly Constructing Potentially Destructive Pipe BombsRead the Press Release
CHICAGO — A man who allegedly manufactured explosive devices and kept them in the bedroom of his Lindenhurst home was ordered detained in federal custody today.
U.S. Magistrate Judge Sidney Schenkier ordered MICHAEL SUOPYS, 28, held without bond on a charge of knowingly possessing an unregistered destructive device. A detention hearing is scheduled for June 15, 2016, at 10:30 a.m.
A federal criminal complaint alleges that Suopys built two pipe bombs by filling a metal pipe with Nitrocellulose and adding a wick. Suopys was also charged in Lake County Circuit Court with possessing bombs containing an explosive substance, which is a Class 3 felony. The state charge was dismissed this morning.
“Thankfully, law enforcement at the federal, state and local level was able to identify and safely interrupt the threat described in the complaint,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “The Federal Bureau of Investigation, Lake County State’s Attorney’s Office and Lindenhurst Police Department are to be commended for their diligence and collaboration in this investigation.”
The federal complaint was announced by Mr. Fardon, along with Michael J. Anderson, Special Agent in Charge of the Chicago office of the FBI; Michael G. Nerheim, Lake County State’s Attorney; and Tom Jones, Chief of the Lindenhurst Police Department.
The federal charge carries a maximum sentence of ten years in prison and a fine of up to $250,000.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Matthew Hiller.
Leander Doctor Pleads Guilty to Illegal Prescription Drug DistributionRead the Press Release
In Austin this afternoon, Leander physician 47–year-old Ronald Michael Mansolo pleaded guilty to writing prescriptions for controlled substances without a legitimate medical purpose announced United States Attorney Richard L. Durbin, Jr., and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, Houston Division.
Appearing before United States Magistrate Judge Mark Lane, Dr. Mansolo pleaded guilty to one count of unlawful dispensing of controlled substances. By pleading guilty, Dr. Mansolo admitted that from January 2009 to August 2013, he knowingly dispensed controlled substances including brand name and generic Ritalin, Adderall and Focalin as well as hydrocodone, Carispodol and Xanax without a legitimate medical purpose and outside the usual course of professional practice.
According to the court records, Dr. Mansolo operates Leander Primary Care and used to operate RapidCare, an afterhours pain management clinic in Cedar Park, TX. Throughout the time of the offense, Dr. Mansolo wrote and issued numerous unlawful prescriptions knowing that such practice could result in dependence and addiction. Dr. Mansolo prescribed excessive amounts to certain patients knowing that they would either abuse the controlled substances personally or subsequently distribute the controlled substances to other individuals. Contrary to accepted medical practice, Dr. Mansolo prescribed controlled substances to patients without first conducting a physical examination in order to verify the patient’s claimed illness or condition; without reviewing patients’ drug screen tests; or, despite obvious indications that the patients were abusing, misusing, or distributing the controlled substances he prescribed.
Dr. Mansolo faces up to two years in federal prison. He remains on bond pending sentencing later this year before United States District Judge Lee Yeakel in Austin.
This investigation is being conducted by the Drug Enforcement Administration Diversion Unit. Assistant United States Attorney Douglas Gardner is prosecuting this case on behalf of the Government.
Leader of Washington, D.C. Metro Area Drug Trafficking Organization Sentenced to over 11 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Paul W. Grimm sentenced Marvin Taaff, age 29, of Takoma Park, Maryland, today to 140 months years in prison followed by five years of supervised release for conspiring to possess with intent to distribute five kilograms or more of cocaine, cocaine base and 100 kilograms or more of marijuana.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Frank Riehl of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief Hank Stawinski of the Prince George’s County Police Department; Acting Chief Stanley Johnson, of the Maryland National Capital Park Police, Prince George’s County Division; Chief Antonio DeVaul of the Maryland National Capital Park Police, Montgomery County Division; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, from April to October 2013, Taaff distributed cocaine base (crack cocaine) during several controlled purchases with a law enforcement source. Further investigation revealed that Taaff was a significant local distributor of marijuana, cocaine and cocaine base. Taaff, who was a leader of the drug operation in Maryland, coordinated the shipments of controlled substances from sources within and outside Maryland, including Arizona. He directed other members of his drug trafficking organization to provide locations to store and distribute drugs.
On December 5, 2013, search warrants were executed at several locations in and around Prince George’s and Montgomery Counties, and in Tucson, Arizona, including Taaff’s residence and the residences of his co-conspirators. Narcotics, drug paraphernalia, shipping materials, cash, and firearms were seized from locations associated with the conspiracy. Law enforcement seized a .38 caliber revolver with an obliterated serial number and a loaded 9mm pistol; ammunition; a quarter ounce of suspected powder cocaine; and drug paraphernalia, from Taaff’s residence.
The investigation revealed that Taaff conspired with members of his drug trafficking organization to distribute over five kilograms of cocaine, between 196 and 280 grams of cocaine base, and at least 100 kilograms of marijuana.
Phillip Bingham, age 56, of Tucson, Arizona; Mahmood Hussain, age 31, of Laurel, Maryland; Fernando Gastellum-Rivas, age 43, of Tucson; and Annis Attar, age 30, of Largo, Maryland, previously pleaded guilty to their roles in the conspiracy and were sentenced to 11 years in prison, 10 years in prison, 42 months in prison, and 40 months in prison, respectively.
United States Attorney Rod J. Rosenstein praised the ATF, Prince George’s County Police Department, Maryland National Capital Park Police and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Lindsay Eyler Kaplan, who prosecuted the case.
Keshena Man Indicted on Assault ChargeRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on June 7, 2016, a federal grand jury returned a one-count indictment against Jeremy M. Peters (age: 29) of Keshena, Wisconsin, charging him with a count of Assault Resulting in Serious Bodily Injury in violation of 18 United States Code, Sections 113(a)(6) and 1153(a). If convicted of the offense, the defendant faces a sentence of up to 10 years imprisonment, a two hundred and fifty thousand dollar fine, and up to 3 years of supervised release.
According to the indictment, Peters, who is an enrolled member of the Menominee Indian Tribe of Wisconsin, assaulted another member of the tribe, causing serious injury including a broken facial bone.
The case was investigated by the Menominee Tribal Police Department and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Andrew J. Maier.
The public is cautioned that an indictment is merely a charge and the defendants are presumed innocent until and unless proven guilty.
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KC Man Sentenced for Bank RobberyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for robbing Commerce Bank.
David E. Clark, 37, of Kansas City, was sentenced by U.S. District Judge Gary A. Fenner to five years in federal prison without parole. The court also ordered Clark to pay $3,037 in restitution.
On Dec. 8, 2015, Clark was convicted following a bench trial of stealing $3,037 from Commerce Bank, 118 W. 47th Street, Kansas City.
Clark was wearing an orange construction-type vest when he entered the bank on July 28, 2014. He walked directly towards a teller station and grabbed a note from his pocket. The teller refused to look at the note and asked Clark if he needed help. Clark told the teller to pull out his drawers. When the teller told him the teller drawers were locked, Clark instructed him to get the keys. The teller returned to his teller station, and Clark told him to “give me 100’s, 50’s and 20’s.” The teller grabbed the requested denominations from his teller drawer and gave the money to Clark, who walked swiftly out of the bank’s front door and then ran up Wyandotte Street.
Another bank employee saw Clark go around the corner and then exit a parking garage in a white truck with a concrete company’s sign on the side. Less than half an hour later, police officers located Clark and arrested him after a brief car chase. The stolen money was not recovered at the time of Clark’s arrest.
According to court documents, the owner of the truck told law enforcement investigators that he had driven the vehicle to a meeting earlier that day and offered a ride to Clark, who had done work as an independent contractor for his company. After his meeting he was supposed to take Clark to another location, but when he returned to the parking lot after his meeting, both Clark and his truck were gone.
This case was prosecuted by Assistant U.S. Attorney D. Michael Green. It was investigated by the FBI and the Kansas City, Mo., Police Department.
KC Man Charged with Meth TraffickingRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was charged in federal court today with possessing nearly five kilograms of methamphetamine to distribute. During the law enforcement operation, another individual was fatally shot.
Michael J. Wilkins, 25, of Kansas City, was charged in a criminal complaint filed in the U.S. District Court in Kansas City, Mo., with possessing methamphetamine with the intent to distribute.
According to an affidavit filed in support of today’s criminal complaint, DEA task force officers were conducting a multi-jurisdictional operation on Wednesday, June 8, 2016. Wilkins, a suspected methamphetamine distributer, was seen leaving his residence in a red 1995 Ford Mustang. Investigators followed Wilkins to a residence in the 300 block of S. Bellefontaine Ave., Kansas City, Mo. Wilkins, the only occupant of the vehicle, was seen carrying a black bag as he walked into the residence.
After a short time, the affidavit says, Wilkins left the residence, carrying the black bag as well as a large white box. Wilkins placed both items in the passenger seat of the Ford Mustang and walked around the rear of the vehicle to the driver’s side door. When law enforcement officers approached him, the affidavit says, Wilkins fled on foot. He was subsequently taken into custody and placed under arrest for fleeing/resisting law enforcement.
During the foot chase of Wilkins, law enforcement officers executed a search warrant at the Bellefontaine residence. That operation led to an hours-long standoff when persons inside the house fired shots at law enforcement officers. When an individual who had fired several shots at officers ran from the house with his rifle aimed at the officers, he was fatally shot.
Officers searched the route where Wilkins had fled, the affidavit says, and found a Citadel M1911-A1 CS handgun. Officers also searched Wilkins’s Ford Mustang and found a white Corona beer box, which contained five gallon-sized plastic bags of methamphetamine. A black backpack contained $12,363 and a plastic baggie with methamphetamine. A tool bag also contained methamphetamine. In total, officers found 4.764 kilograms of methamphetamine in the vehicle.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Marquez and Special Assistant U.S. Attorney Matthew Moeder. It was investigated by the Independence, Mo., Police Department, the Jackson County Drug Task Force and the Drug Enforcement Administration.
Justice Department and North Carolina Sue Carolinas Healthcare System to Eliminate Unlawful Steering RestrictionsRead the Press Release
Anticompetitive Restrictions Bar Insurers from Steering Patients to Lower-Cost Competing Providers
The Department of Justice today filed a civil antitrust lawsuit against Carolinas HealthCare System (CHS), challenging CHS’s practice of imposing steering restrictions in its contracts with commercial health insurers in the Charlotte, North Carolina, area.
The Antitrust Division and the state of North Carolina filed the lawsuit in the U.S. District Court for the Western District of North Carolina. The complaint alleges that CHS, with its approximately 50 percent share in the sale of acute inpatient hospital services to health insurers in the Charlotte area, has used its market power to require steering restrictions in its contracts with every major insurer. These provisions have prevented insurers from, among other things, introducing health plans that encourage patients to use medical providers that offer lower priced, higher-quality services.
“Americans should be able to choose a healthcare provider that gives them and their families the most cost-effective and appropriate treatment,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Justice Department’s Antitrust Division. “This lawsuit will stop a dominant hospital from using its market power to undermine its smaller competitors’ efforts to attract patients by competing on the price and quality of their services.”
“Today’s enforcement action seeks to ensure that consumers in the Charlotte area will benefit by identifying the more cost-efficient, quality providers when making the critically important decision of selecting a doctor or hospital,” said U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. “In these times of escalating health care costs, vigilant antitrust enforcement in local healthcare markets such as the Charlotte area is essential to protecting the interests of consumers.”
CHS is the largest healthcare system in North Carolina and one of the largest not-for-profit healthcare systems in the United States. In 2014, CHS had net operating revenue of about $8.7 billion.
Justice Department Reaches Agreement with Milwaukee to Ensure Civic Access for People with DisabilitiesRead the Press Release
The Justice Department reached an agreement today with the city of Milwaukee to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement requires the actions to be completed within three years and the department will actively monitor compliance with the agreement throughout this timeframe.
“Cities and towns must comply with the ADA so that people with disabilities can use public entities and participate fully in their community – from enjoying parks and libraries, to accessing polling places and courthouses,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We applaud Milwaukee’s commitment to ensuring that its entire population can access the city’s public resources and look forward to seeing these critical reforms become a reality.”
The agreement requires the city to modify facilities surveyed by the department so that they are accessible and to retain an independent licensed architect to survey facilities and programs that were not surveyed by the department. The agreement also requires that Milwaukee certify that all remedial actions are compliant with the ADA, provide auxiliary aids and services necessary to ensure effective communication, ensure accessibility of polling places, provide accessible curb ramps throughout the city and ensure that the city’s website will conform with the Website Content Accessibility Guidelines Level 2.0 Level AA.
PCA ensures that people with disabilities have an equal opportunity to participate in civic life. As part of PCA, Justice Department staff survey state and local government facilities, services and programs in communities across the country to identify changes needed in order to comply with the ADA. The agreements detail the actions that a public entity must take to improve access.
People interested in finding out more about the ADA, this agreement with Milwaukee, PCA or the ADA Best Practices Tool Kit for State and Local Governments may access the ADA web page at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Milwaukee Settlement Agreement
Justice Department and North Carolina Sue Carolinas Healthcare System to Eliminate Unlawful Steering RestrictionsRead the Press Release
CHARLOTTE, N.C. – The Department of Justice today filed a civil antitrust lawsuit against Carolinas HealthCare System (CHS), challenging CHS’s practice of imposing steering restrictions in its contracts with commercial health insurers in the Charlotte, North Carolina, area.
The Antitrust Division and the state of North Carolina filed the lawsuit in the U.S. District Court for the Western District of North Carolina. The complaint alleges that CHS, with its approximately 50 percent share in the sale of acute inpatient hospital services to health insurers in the Charlotte area, has used its market power to require steering restrictions in its contracts with every major insurer. These provisions have prevented insurers from, among other things, introducing health plans that encourage patients to use medical providers that offer lower priced, higher-quality services.
“Americans should be able to choose a healthcare provider that gives them and their families the most cost-effective and appropriate treatment,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Justice Department’s Antitrust Division. “This lawsuit will stop a dominant hospital from using its market power to undermine its smaller competitors’ efforts to attract patients by competing on the price and quality of their services.”
“Today’s enforcement action seeks to ensure that consumers in the Charlotte area will benefit by identifying the more cost-efficient, quality providers when making the critically important decision of selecting a doctor or hospital,” said U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. “In these times of escalating health care costs, vigilant antitrust enforcement in local healthcare markets such as the Charlotte area is essential to protecting the interests of consumers.”
CHS is the largest healthcare system in North Carolina and one of the largest not-for-profit healthcare systems in the United States.In 2014, CHS had net operating revenue of about $8.7 billion.
Jury Convicts St. Croix Man of Conspiracy and Bank Robbery OffensesRead the Press Release
St. Croix, USVI – After a six-day trial, on June 8, 2016, a federal jury on St. Croix convicted Damian Lang, Sr., 37, of conspiracy to commit bank robbery and bank robbery, United States Attorney Ronald W. Sharpe announced.
Lang faces a maximum penalty of five years in prison for conspiracy and a maximum penalty of twenty years in prison for bank robbery. Lang was immediately remanded. No sentencing date has been set.
Evidence presented at trial established that on September 2, 2014, Lang and another individual entered the Bank of St. Croix in Gallows Bay, Christiansted, St. Croix, Virgin Islands, wearing hoodies and masks. Lang jumped the teller counter with a plastic bag and took cash from the till of several tellers. The other individual stood guard at the door with a gun pointed at the employees. They both ran out of the bank and into a stolen Chevy Equinox that they abandoned in a nearby lot. The evidence also established that Lang was under house arrest with electronic monitoring in a pending Superior Court case. GPS tracking placed Lang in the bank at the time of the robbery.
This case was investigated by the Virgin Islands Police Department and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Rhonda Williams-Henry and Alphonso Andrews.
Jury Convicts Columbus Gang Members of Racketeering, MurderRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted five Short North Posse gang members of racketeering and murder today following a two-month trial.
Robert B. Ledbetter, 37, Christopher A. Harris, 28, Rashad A. Liston, 26, Deounte Ussury, 31, and Clifford L. Robinson, 38, all of Columbus, were convicted on all counts, which accounted for 10 of 14 previously unsolved homicides. Each defendant faces up to life in prison.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Brad Earman, Acting Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Franklin County Prosecutor Ron O’Brien and Columbus Police Chief Kim Jacobs announced the verdict reached today.
The defendants are five of 20 individuals who were indicted in October 2014 in a racketeering case, with charges that include murders, attempted murders, drug trafficking, weapons offenses, extortion and robbery.
Of the 20 total defendants, nine have pleaded guilty and one has died. The remaining five defendants are scheduled for trials on July 11 and September 26.
“These five men had perpetuated a multi-generational tradition of terrorizing Columbus neighborhoods through violence and intimidation,” Acting U.S. Attorney Glassman said. “The verdict today has sent a clear message that their reign has ended and such behavior will not go unpunished.”
Acting U.S. Attorney Glassman commended the two-year investigation by federal, state and local law enforcement agencies, including the FBI, DEA, ATF, Columbus Police, Franklin County Sheriff Zach Scott’s Office, Franklin County Prosecutor Ron O’Brien’s Office, Fairfield County Prosecutor Gregg Marx, Licking County Prosecutor Kenneth Oswalt, Muskingum County Prosecutor D. Michael Haddox, Ross County Prosecutor Matthew S. Schmidt, law enforcement leaders from those counties, and officials of the Ohio Department of Rehabilitation and Correction, as well as Assistant U.S. Attorneys David DeVillers, Kevin Kelley and Brian Martinez and Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who are representing the United States in this and the related cases.
Indictment: Former Guard Took $200,000 in Bribes for Smuggling Tobacco into Leavenworth PrisonRead the Press Release
KANSAS CITY, KAN. - A former prison guard was indicted Wednesday on federal charges alleging he received more than $200,000 in bribes for smuggling tobacco to prisoners in Leavenworth Penitentiary, Acting U.S. Attorney Tom Beall said.
Marc Buckner, 46, Kansas City, Kan., is charged with one count of accepting bribes. The indictment alleges that from 2005 to 2014 while he worked at the prison he accepted more than $200,000 in bribes. He received approximately $750 from inmates each time he smuggled tobacco into the prison.
If convicted, he faces a penalty of up to 15 years in federal prison and a fine up to three times the value of the contraband. The FBI investigated. Assistant U.S. Attorney Jabari Wamble is prosecuting.
OTHER GRAND JURY INDICTMENTS
Latoya Trent, 34, Kansas City, Mo, is charged with one count of theft of public funds and one count of bank fraud. The crimes are alleged to have occurred from 2012 to 2014 in Johnson County, Kan.
The indictment alleges she was paid more than $43,000 in unemployment benefits that she was not qualified to receive.
If convicted, she faces up to 10 years in federal prison and a fine up to $250,000 on the theft charge, and up to 30 years and a fine up to $1 million on the bank fraud count. The U.S. Department of Labor – Office of Inspector General investigated. Assistant U.S. Attorney Chris Oakley is prosecuting.
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Samfin Ondieki Ogega, 36, a citizen of Kenya, is charged with attempting to evade a lawful order for his removal from the United States. The crime is alleged to have occurred May 26, 2016, in Sedgwick County, Kan.
If convicted, he faces a penalty of up to four years in federal prison and a fine up to $250,000. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Matt Treaster is prosecuting.
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Anthony Barajas, 24, is charged with escaping from custody at the Grossman Residential Reentry Center in Leavenworth, Kan., on May 6, 2016.
If convicted, he faces a penalty of up to five years in federal prison and a fine up to $250,000. The U.S. Marshals Service investigated. Assistant U.S. Attorney David Zabel is prosecuting.
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Ronald Hudson, 58, Mulberry, Kan., is charged with one count of theft of public funds and 11 counts of wire fraud. The crimes are alleged to have occurred from 2008 to 2014 in Crawford County, Kan.
The indictment alleges he received Supplemental Security Income payments to which he was not entitled.
If convicted, he faces up to 10 years in federal prison and a fine up to $250,000 on the theft charge, and up to 20 years and a fine up to $250,000 on each wire fraud count. The Social Security Administration – Office of Inspector General investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
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Azar Reed, 56, Kansas City, Kan., is charged with one count of theft of public funds, one count of making a false statement to the Social Security Administration, and 14 counts of mail fraud. The indictment alleges he received benefits to which he was not entitled. The crimes are alleged to have occurred from 2010 to 2013 in Wyandotte County, Kan.
If convicted, he faces up to 10 years in federal prison and a fine up to $250,000 on the theft charge, up to five years and a fine up to $250,000 on the false statement charge, and up to 20 years and a fine up to $250,000 on each count of mail fraud. The Social Security Administration investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
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Kevin Wayne Clark, 51, Parsons, Kan., is charged with one count of theft of public funds, three counts of mail fraud and three counts of wire fraud. The indictment alleges he received benefits to which he was not entitled. The crimes are alleged to have occurred in 2014 in Labette County, Kan.
If convicted, he faces up to 10 years in federal prison and a fine up to $250,000 on the theft charge, up to 20 years and a fine up to $250,000 on each mail fraud count, and up to 20 years and a fine up to $250,000 on each wire fraud count. The Social Security Administration investigated. Special Assistant U.S. Attorney Erin Tomasic is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Iberia Parish, Louisiana, Sheriff and Two Other Officials Charged with Civil Rights ViolationsRead the Press Release
Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Stephanie A. Finley of the Western District of Louisiana announced today that Iberia Parish, Louisiana, Sheriff Louis Ackal, Lieutenant Colonel Gerald Savoy and former Captain Mark Frederick were charged today in a superseding indictment with civil rights violations arising out of the beatings of two men.
The superseding indictment charges Ackal with one count of conspiracy against rights for conspiring in the spring of 2014 to assault a man who had been arrested on battery charges for allegedly assaulting one of Ackal’s relatives. The superseding indictment also charges Savoy and Frederick with one count of deprivation of rights under color of law for allegedly assaulting another man, a pre-trial detainee at the Iberia Parish Jail (IPJ) in September of 2011. Ackal and Savoy had previously been charged related to beatings of pre-trial detainees at the IPJ on April 29, 2011.
Nine former Iberia Parish Sheriff’s Office employees previously entered guilty pleas in related cases before U.S. District Judge Patricia Minaldi of the Western District of Louisiana. The nine officers are former IPJ Warden Wesley Hayes, former IPJ Assistant Warden Jesse Hayes, former Lieutenant Bret Broussard of the Narcotics Unit, former narcotics agent Wade Bergeron, former narcotics agent Jason Comeaux, former narcotics agent David Hines, former narcotics agent Byron Benjamin Lassalle and former K-9 handlers Robert Burns and Jeremy Hatley.
An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty. If convicted, Ackal, Savoy and Frederick each face a maximum sentence of 10 years in prison for each of the civil rights violations, as well as a potential $250,000 fine for each count.
The case is being investigated by the FBI’s Lafayette Resident Agency. The case is being prosecuted by Senior Litigation Counsel Joseph G. Jarzabek of the Western District of Louisiana and Special Litigation Counsel Mark Blumberg and Trial Attorney Tona Boyd of the Civil Rights Division’s Criminal Section.
Ackal Superseding Indictment
Houston Man and Woman Plead Guilty in Cocaine Smuggling CaseRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ISAAC FORD, age 38, and LACHELSEA KIRKSEY, age 27, both residents of Houston, pled guilty today to a Bill of Information charging possession with intent to distribute cocaine.
According to court records, FORD and KIRKSEY were driving separate vehicles in tandem on I-10 West near New Orleans on September 5, 2014, when they were stopped by Louisiana State Police Troopers. Troopers searched KIRKSEY’s Chevrolet Camaro with her consent and discovered four vacuum-sealed bags hidden in the wheel wells of the car, each containing one kilogram of powder cocaine. FORD then admitted that he had rented both of the vehicles, concealed the cocaine in the Camaro, and promised KIRKSEY $2,000 to drive the Camaro to New Orleans, where he intended to deliver the cocaine.
Sentencing of both defendants is scheduled before U.S. District Judge Jane Triche Milazzo on September 8, 2016. FORD faces a sentence of 5 to 40 years imprisonment, and KIRKSEY faces a sentence of up to twenty years.
U.S. Attorney Polite praised the work of the New Orleans Field Division of the Drug Enforcement Administration. Assistant United States Attorney Michael B. Redmann is in charge of the prosecution.
Hobbs Man Pleads Guilty to Illegally Possessing an Unregistered Short-Barreled ShotgunRead the Press Release
ALBUQUERQUE – Quinton Spurlock, 50, of Hobbs, N.M., pled guilty yesterday afternoon in federal court in Las Cruces, N.M., to violating the federal firearms laws by illegally possessing an unregistered short-barreled shotgun.
Spurlock was arrested on April 6, 2016, on a criminal complaint charging him with possession of an unregistered firearm. According to the complaint, on April 15, 2014, Lea County Drug Task Force (LCDTF) agents executed a search warrant at a residence in Hobbs, and found a handgun and shotgun cases inside Spurlock’s vehicle. Further investigations determined that Spurlock had no weapons registered to him and the firearm was also not registered.
During yesterday’s proceedings, Spurlock pled guilty to a felony information charging him with possession of an unregistered short-barreled shotgun. In entering the guilty plea, Spurlock admitted that on April 15, 2014, he was in possession of a shotgun with an overall barrel length of approximately 16 inches that was not registered to him.
At sentencing, Spurlock faces a statutory maximum penalty of ten years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the LCDTF. Assistant U.S. Attorney Terri J. Abernathy is prosecuting the case.
The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department the Tatum Police Department and the Jal Police Department, and is part of the NM HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Hazleton Man Sentenced to Six Years in Prison for Distributing Crack CocaineRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 56-year-old man who pleaded guilty to distributing crack cocaine in the Hazleton area in September 2013, was sentenced to 72 months in prison yesterday by U.S. District Court Judge Robert D. Mariani in Scranton.
According to United States Attorney Peter Smith, the defendant, Angel Rafael Tejeda-Mejia (also known as “Jose Angeles”), a citizen of the Dominican Republic who resided in the Hazleton area at the time of his arrest, pleaded guilty on November 6, 2015 to distribution of crack cocaine.
Tejeda-Mejia was indicted by a federal grand jury in January 2014, as a result of an investigation by agents of the Federal Bureau of Investigation, the Pennsylvania State Police, and Hazleton Police.
Judge Mariani also ordered the defendant to serve three years on supervised release following his prison sentence. The defendant is also subject to deportation following his prison sentence.
Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
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Green Cove Springs Man Pleads Guilty to Receiving Child Pornography over the InternetRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that James Donald Jacola (53, Green Cove Springs) has pleaded guilty in Jacksonville to receiving child pornography over the Internet. He faces a mandatory minimum penalty of not less than 5 years, up to 20 years, in federal prison and a potential life term of supervision. A sentencing hearing has not yet been set.
According to court documents, FBI agents began an online undercover investigation to identify individuals who were using a particular website to access and receive images and videos depicting child pornography over the Internet. The agents determined that Jacola had accessed this website using a particular Internet Protocol (IP) address. Further investigation with the Internet service provider traced the subscriber information to Jacola’s residence in Green Cove Springs, Florida.
On March 10, 2016, law enforcement executed a federal search warrant at Jacola’s residence and seized two computers. Subsequent forensic analyses of the items revealed that Jacola’s computers contained three videos and at least 784 images depicting child pornography. One of the videos had been downloaded the night before the execution of the search warrant and depicted a toddler being sexually abused. Jacola knowingly downloaded the images and videos of child pornography contained on his computer media over the Internet.
This case was investigated by the Federal Bureau of Investigation and the Clay County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case 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 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.justice.gov/psc.
Great Falls Man Sentenced for Possession of Child PornRead the Press Release
GREAT FALLS – Cassidy Winters, 29, of Great Falls was sentenced today to 28 months in prison and 10 years’ supervised release for possession of child pornography. Winters will also be required to pay $12,500 in restitution for six victims. Federal District Court Judge Brian M. Morris issued the sentence.
Winters was charged by superseding information on February 17, 2016. In documents filed with the court, Assistant U.S. Attorney Cyndee Peterson stated that, if required to prove its case at trial, the government was prepared to introduce evidence that Winters possessed multiple files containing child pornography between December 2012 and May 2015.
In March 2015, agents for the U.S. Secret Service and the Montana Internet Crimes Against Children Task Force downloaded files from an IP address as part of an online investigation to identify individuals sharing child porn over the Internet using a peer to peer file sharing network. They identified the registered subscriber of the IP address as Winters and obtained a search warrant for his home.
On May 27, 2015, agents served the warrant and seized several computers and digital devices from Winters’ bedroom. The items were forensically analyzed and contained image and video files depicting children engaged in sexually explicit conduct. The agents also recovered search terms connected to the software that indicated Winters had sought out known images and series of child pornography. At the sentencing, a witness testified that Winters had engaged in this criminal conduct for five or six years.
The case was prosecuted by Assistant U.S. Attorney Cyndee Peterson and investigated by the United States Secret Service, the Flathead County Sheriff’s Office, and the Montana Internet Crimes Against Children Task Force.
Framingham Man Sentenced for Child Pornography OffensesRead the Press Release
BOSTON – A Framingham man was sentenced yesterday in the U.S. District Court in Boston in connection with child pornography offenses.
Stephen John Hallissey, 38, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 11 years in prison and 10 years of supervised release. In November 2015, Hallissey pleaded guilty to possession and receipt of child pornography.
Hallissey was arrested and charged in March 2015 after federal agents executed a search warrant at his home and found over 450,000 images of child pornography on his computer. Many of the images depicted very young children being raped and sexually assaulted. Hallissey also admitted to repeatedly sexually assaulting two young girls, aged two and four, in California a number of years ago. In email messages Hallissey sent to other child pornography collectors, Hallissey said: “I LOVE hurting kids with sex (rape).” In another message, Hallissey wrote that his favorite age for a victim was two years old.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.
The case was investigated by the FBI's Boston Child Exploitation Task Force (CETF), which is comprised of members from the FBI, the Boston Police Department’s Child Abuse and Human Trafficking Units, the Massachusetts State Police, the Massachusetts Department of Correction, the Arlington, Malden and Norwood Police Departments, and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney David Tobin of Ortiz’s Major Crimes Unit.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by U.S. Attorneys’ Offices and the Department of Justice’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/
Former Tech Products Operations Manager Pleads Guilty to Embezzling SchemeRead the Press Release
COLUMBUS, Ohio – Cheryl L. Emerson-Chase, 52, of Powell, pleaded guilty in U.S. District Court to one count each of wire fraud and money laundering.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the plea entered into before U.S. District Magistrate Judge Smith Terence P. Kemp.
According to the statement of facts presented in this case, Emerson-Chase was employed as the operations manager for PCM, Inc. (formerly known as SARCOM, Inc.), a direct marketer of technology products, services and solutions to businesses, governments, educational institutions and individual consumers.
Emerson-Chase was assigned primarily PCM’s account for Nationwide Mutual Insurance Company and handled the day-to-day operational sales relationship with Nationwide.
The defendant began to steal laptops and tablets from PCM that were intended for delivery to Nationwide and provided fictitious purchase orders to PCM’s employees, instructing them to create false internal sales orders in PCM’s computer system. The two companies identified at least 93 fake purchase orders created in connection with the scheme.
Emerson-Chase then used the ordered computers for her own use or the use of friends and family members, sold them directly to third parties, or delivered them to an associate to sell to third parties.
In total, Emerson-Chase stole more than 600 items of computer hardware having an aggregate value of nearly $597,000.
Wire fraud and money laundering are each crimes punishable by up to 20 years in prison.
Acting U.S. Attorney Glassman commended the investigation of this case by the FBI and Assistant United States Attorney Jessica H. Kim, who is representing the United States in this case.
Former Tech Products Operations Manager Pleads Guilty to Embezzling SchemeRead the Press Release
COLUMBUS, Ohio – Cheryl L. Emerson-Chase, 52, of Powell, pleaded guilty in U.S. District Court to one count each of wire fraud and money laundering.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the plea entered into before U.S. District Magistrate Judge Smith Terence P. Kemp.
According to the statement of facts presented in this case, Emerson-Chase was employed as the operations manager for PCM, Inc. (formerly known as SARCOM, Inc.), a direct marketer of technology products, services and solutions to businesses, governments, educational institutions and individual consumers.
Emerson-Chase was assigned primarily PCM’s account for Nationwide Mutual Insurance Company and handled the day-to-day operational sales relationship with Nationwide.
The defendant began to steal laptops and tablets from PCM that were intended for delivery to Nationwide and provided fictitious purchase orders to PCM’s employees, instructing them to create false internal sales orders in PCM’s computer system. The two companies identified at least 93 fake purchase orders created in connection with the scheme.
Emerson-Chase then used the ordered computers for her own use or the use of friends and family members, sold them directly to third parties, or delivered them to an associate to sell to third parties.
In total, Emerson-Chase stole more than 600 items of computer hardware having an aggregate value of nearly $597,000.
Wire fraud and money laundering are each crimes punishable by up to 20 years in prison.
Acting U.S. Attorney Glassman commended the investigation of this case by the FBI and Assistant United States Attorney Jessica H. Kim, who is representing the United States in this case.
Former Pharmaceutical Company Employees Arrested for Participating in Fentanyl Kickback SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced that JONATHAN ROPER, a former District Manager at a pharmaceutical company (“Pharma Company-1”), and FERNANDO SERRANO, a former sales representative at Pharma Company-1, were charged today with violating the Anti-Kickback Statute in connection with their participation in a scheme to pay doctors thousands of dollars to participate in sham educational programs in order to induce the doctors to prescribe millions of dollars’ worth of a fentanyl-based sublingual spray manufactured by Pharma Company-1 (the “Fentanyl Spray”). ROPER was arrested this morning by FBI agents on Long Island, and SERRANO was arrested this morning by FBI agents in New Jersey. They will be presented before U.S. Magistrate Judge Kevin N. Fox in Manhattan this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “Fentanyl is an incredibly dangerous and highly addictive drug that is finding its way into, and destroying, too many lives in our communities. Because of its deadly power, its legitimate prescription faces significant and severe restrictions. Yet, as alleged, former drug company employees Jonathan Roper and Fernando Serrano corruptly induced doctors to prescribe millions of dollars’ worth of Fentanyl through thousands of dollars in kickbacks disguised as phony educational programs. As alleged, Roper and Serrano helped feed this devastating surge of opioid addictions by tapping into another age-old addiction, greed.”
FBI Assistant Director Diego Rodriguez said: “This case should be something the medical industry and the general public should pay close attention to because it’s one of the reasons we’re experiencing an epidemic of overdoses and deaths in this country. Not only did the defendants in this case allegedly bully sales reps into pushing this highly addictive drug, they paid doctors to prescribe it to patients. The more prescriptions written, the more money the doctors made. Instead of seeing a way to help people who are dealing with extreme pain, they allegedly saw a huge payday that potentially put people’s lives in danger.”
HHS OIG Special Agent in Charge Scott J. Lampert said: “We expect drug company representatives to be part of the prescription drug abuse solution – not part of the problem, as alleged in this case. We will continue to investigate kickback arrangements, which can undermine impartial medical decision-making and worsen the overuse of opioids in this country.”
According to allegations in the Complaints unsealed today in Manhattan federal court:[1]
Fentanyl is a synthetic opioid that is classified as a Schedule II controlled substance and is approximately 100 times more potent than morphine as an analgesic. Because of the risk of misuse, abuse, and addiction associated with prescription products like the Fentanyl Spray, only doctors who have enrolled in a mandated U.S. Food and Drug Administration (“FDA”) program and completed necessary training are permitted to prescribe the Fentanyl Spray.
Pharma Company-1’s Fentanyl Spray was approved by the FDA in or about January 2012, solely for the management of breakthrough pain in cancer patients who are already receiving and who are tolerant to opioid therapy for their underlying persistent pain. The Fentanyl Spray is the only FDA-approved product that Pharma Company-1 currently has on the market. Pharma Company-1 reported approximately $330 million in net revenue from the Fentanyl Spray in 2015.
In order to market the Fentanyl Spray, Pharma Company-1 established a program purportedly to educate healthcare professionals about the Fentanyl Spray (the “Speaker Program”). Doctors selected as speakers at these Speaker Programs by Pharma Company-1 (“Speakers”) were compensated for purportedly providing educational presentations to a peer-level audience of healthcare professionals using a preapproved PowerPoint presentation. In reality, however, many of the Speaker Programs that ROPER and SERRANO organized and attended were predominantly social gatherings at high-end restaurants in Manhattan that involved no education regarding the Fentanyl Spray and no slide presentation at all. Many of the Speaker Programs also lacked an appropriate audience of healthcare professionals. In order to make these Speaker Programs appear legitimate, sign-in sheets for these Speaker Programs – including Speaker Programs organized by ROPER and SERRANO – were frequently forged by adding the names and signatures of doctors to sign-in sheets who had not, in fact, been present at the Speaker Program. Repeat attendees were also commonplace at Speaker Programs organized by SERRANO. In numerous instances, all of the attendees at Speaker Programs organized by SERRANO had previously attended Pharma Company-1 Speaker Programs. Because all legitimate Speaker Programs required use of the same preapproved slide presentation, there was no educational purpose for healthcare professionals to attend Speaker Programs on a repeated basis.
While employed at Pharma Company-1, ROPER and SERRANO were each involved in organizing Speaker Programs for two Manhattan-based doctors (“Doctor-1” and “Doctor-2”), among other doctors. Doctor-1 and Doctor-2 were frequently the purported Speakers at sham Speaker Programs that were social in nature and lacked an educational component. Doctor-1 and Doctor-2 were highly compensated by Pharma Company-1 for acting as Speakers. In 2014 alone, Doctor-1 and Doctor-2 received over $147,000 and $112,000, respectively, in Speaker Program fees. During this same time period, Doctor-1 and Doctor-2 were also two of the largest prescribers of the Fentanyl Spray in the United States. In 2014 alone, Doctor-1 and Doctor-2 prescribed, respectively, over $3 million and over $2 million worth of the Fentanyl Spray that was reimbursed by various private insurance companies, and over $1 million worth of the Fentanyl Spray that was reimbursed by Medicare.
It was well understood among Pharma Company-1 employees that doctors were selected as Speakers in order to induce these doctors to prescribe large quantities of the Fentanyl Spray, and ROPER explicitly instructed the sales force he supervised that this was the case. For example, on or about May 6, 2014, ROPER sent an email to certain sales representatives in which he expressed displeasure that certain doctors who were Speakers were not prescribing sufficient quantities of the Fentanyl Spray:
Where is the ROI [Return on Investment]??!!! All prescribers from this team that are on this list are [Pharma Company-1] speakers. We invest a lot of time, $, blood, sweat, and tears on “our guys” and help spreading the word on treating BTCP [breakthrough cancer pain]. We hire only the best of the best to be apart [sic] of our speaker bureau and dropping script counts is what we get in return?
. . .
This is a slap in the face to all of you and is a good indication as to why NONE of you are climbing in the rankings this quarter. DO NOT be afraid to set your expectations and make them crystal clear as to what they are before, during, and after HIRING these priviliged [sic] set of docs who are fortunate enough to be a part of the best speaker bureau in the market in the world of BTCP [breakthrough cancer pain]. Please handle this immediately as funding will not be given out to anymore [sic] “let downs” in the future. Thanks. $$$$
ROPER decided which doctors would be allocated Speaker Programs in the sales territory that included New York City. ROPER instructed one sales representative that a Speaker would receive fewer Speaker Programs in the future because ROPER was not pleased with the quantity of Fentanyl Spray prescriptions this doctor was writing. ROPER informed the sales representative that he wanted to hit the doctor “in his pocket” in order to try to cause the doctor to start writing more Fentanyl Spray prescriptions. ROPER also once instructed this same sales representative to offer cash to a medical professional in order to induce this medical professional to prescribe the Fentanyl Spray.
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ROPER, 37, of Commack, New York, and SERRANO, 30, of Manalapan, New Jersey, are each charged with one count of conspiracy to violate the Anti-Kickback Statute and one count of violating the Anti-Kickback Statute. Each of the two counts carries a maximum term of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the FBI and the HHS-OIG.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Noah Solowiejczyk is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Employee of the Luzerne County Correctional Facility to Plead Guilty to Extortion and A Firearms ChargeRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Louis Elmy, age 52, of Wilkes-Barre, has been charged with extortion and a firearms violation.
According to United States Attorney Peter Smith, Elmy is charged in a Criminal Information, filed today in the United States District Court in Scranton, with extortion and possession of a firearm in furtherance of a drug trafficking crime, specifically, the possession of and intent to distribute crack cocaine.
The Criminal Information further alleges that, while acting in his official capacity as the work release counselor at the Luzerne County Correctional Facility, Elmy extorted money and other items of value from work release inmates in exchange for giving them special privileges and unauthorized furloughs.
It is alleged that, to have documentation that appeared legitimate, Elmy created court orders, cut and pasted a Luzerne County Judge’s signature from an older order onto the fraudulent order, and then photocopied the document for the file. Elmy allegedly engaged in the conduct between November 2013 and February 2016.
Elmy was arrested in February 2016 on a criminal complaint relating to the firearms charge and was released with conditions of supervision.
The Criminal Information was filed pursuant to a plea agreement with Elmy, which is subject to approval by the court. No date has been scheduled as yet for the entry of Elmy’s guilty plea. Elmy was employed by Luzerne County for approximately 20 years, including work as a corrections officer at the correctional facility prior to being a work release counselor. Elmy also served as a member and president of the Wilkes-Barre Area School Board prior to the time period when the alleged criminal conduct occurred.
The charges are the result of an investigation by the Scranton Office of the Federal Bureau of Investigation. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.
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 guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty under the federal statute for the extortion charge is 20 years’ imprisonment. The firearms charge carries a maximum term of life, with a mandatory minimum sentence of five years’ imprisonment. Each charge also carries a fine of $250,000 and a term of supervised release following any period of incarceration. 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 Dea Supervisor and Employee Convicted of Making False Statements in National Security FormsRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced today that DAVID POLOS, formerly an Assistant Special Agent-in-Charge with the Drug Enforcement Administration (“DEA”), and GLEN GLOVER, a DEA Information Technology Specialist, were convicted of conspiracy and making false statements to the government in national security forms regarding, among other things, their employment at an adult entertainment establishment. POLOS and GLOVER were convicted after a two-week trial before U.S. District Judge Paul G. Gardephe.
Manhattan U.S. Attorney Bharara said: “David Polos and Glen Glover had important and sensitive law enforcement jobs that required honest answers to national security clearance forms. But as a unanimous jury found today, Polos and Glover lied on those national security forms, concealing their secret jobs owning and operating an adult entertainment club. Their actions were not just a betrayal of their oaths as DEA employees, but as the jury found, a violation of federal law.”
According to the allegations in the Complaint and evidence established at trial:
POLOS, who supervised the Organized Crime and Drug Enforcement Strike Force, and GLOVER, an expert in sensitive law enforcement techniques who assisted narco-trafficking investigations domestically and abroad, failed to disclose their employment at, and ownership interests in, an adult entertainment establishment (the “Club”) in Northern New Jersey in connection with a background check to determine their suitability as employees of a federal law enforcement agency with access to classified information. POLOS also failed to disclose his relationship with a dancer at the Club in response to a question about his relationships with foreign nationals. The national security forms POLOS and GLOVER submitted in connection with the background check required disclosure of outside employment in part due to concerns attendant to certain types of employment, including proximity to crime and persons involved in crime and the risk of employee blackmail.
GLOVER and POLOS submitted national security forms in August and September 2011, respectively, which stated, among other things, that they did not have employment other than their DEA jobs within the previous seven years, and that POLOS had not had any close, continuing contact with foreign nationals during that same period of time. In fact, GLOVER was the part owner of, and POLOS had a convertible ownership interest in, the Club. In addition, POLOS had, at the time he submitted his form, begun an intimate relationship with a foreign national from Brazil who worked as a dancer at the Club. POLOS and GLOVER had been warned by others, including Club employees, that at times drug use, drug sales, and illicit sexual activity appeared to be taking place at and outside the Club, which also operated as an all-cash business and did not pay required taxes during its first year in operation.
GLOVER and POLOS both worked regular managerial shifts at the Club in the months prior to and following their submission of the national security forms. They also hired, fired, and paid bartenders, dancers, and bouncers; supervised the Club’s renovation, advertised the Club in local periodicals; manned a back office available only to employees; remotely monitored video camera feed from the Club when not present; and generally tended to various Club-related matters. GLOVER and POLOS at times attended to Club matters during DEA work hours.
Had POLOS and GLOVER truthfully disclosed their employment at the Club, their ownership and involvement in the affairs of the Club would have been investigated as part of their background checks, and the security clearances that they were required to maintain as federal law enforcement employees likely would have been denied.
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POLOS, 51, of West Nyack, New York, and GLOVER, 45, of Lyndhurst, New Jersey, were convicted of one count of conspiracy to make false statements, and were each convicted of one count of making false statements, in connection with their work at the Club. POLOS was convicted of an additional count of false statements in connection with his failure to disclose his relationship with a foreign national. Each count carries a maximum sentence of five 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 defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and the Department of Justice Office of the Inspector General. He also thanked the Internal Revenue Service-Criminal Investigation Division for its assistance.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Martin S. Bell, Andrew D. Goldstein, and Paul M. Monteleoni are in charge of the prosecution.
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Former Davenport Tax Preparer Sentenced to Thirty-Three Months in Prison and Ordered to Pay $115,841.84 in RestitutionRead the Press Release
DAVENPORT, IA – On June 8, 2016, Gregory Scott Alcala, 44, of Davenport, Iowa, was sentenced by Senior United States District Court Judge James E. Gritzner to 33 months in federal prison for each count of preparing and presenting a false tax return, wire fraud, and making a bomb threat in and affecting interstate commerce, announced Acting United States Attorney Kevin E. VanderSchel. The sentences were ordered to be served concurrently, that is, at the same time. Alcala was ordered to serve three years of supervised release following his prison term, pay $300 to the Crime Victims’ Fund, and pay a total of $115,841.84 in restitution to 71 of his victims.
Alcala pled guilty to the crimes on February 24, 2016. According to the plea agreement, in about February 2010, Alcala began operating Alcala Tax Service in Davenport and prepared and filed federal tax returns on behalf of taxpayers. Beginning by at least February 18, 2012, and continuing to at least March 14, 2014, Alcala devised a scheme to defraud by filing altered tax returns. Specifically, Alcala prepared tax returns on behalf of taxpayers, provided a copy of the prepared return to the taxpayers, and then represented to the taxpayers that Alcala had filed that return with the Internal Revenue Service on the taxpayer’s behalf. In reality, Alcala did not file that version but instead—without the knowledge of and authority from the taxpayer—materially altered the taxpayer’s return to create a larger tax refund than the one reflected in the copy of the return Alcala had provided to the taxpayer. Alcala then filed the unauthorized version of the taxpayer’s return and—without the knowledge of and authority from the taxpayer—directed the additional refund amount to Alcala’s own bank account. During tax years 2009 through 2014, Alcala prepared at least 164 tax returns that included false or fraudulent information and directed at least a portion of 159 of those tax refunds to his own bank account without the knowledge of or authority from the taxpayer.
Additionally, on December 26, 2013, a switchboard operator for Badger Mutual Insurance, in Milwaukee, Wisconsin, received a telephone call from Alcala in Davenport. During the call, Alcala threatened the operator by stating he was going to send her a bomb. Alcala knew his communication to the operator would be viewed as threatening.
This matter was investigated by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Florida and Mississippi Men Sentenced for Bribing Public Officials at Georgia Military BaseRead the Press Release
A former agent and a former driver for a large national trucking company were sentenced prison for paying bribes to officials at the Marine Corps Logistics Base (MCLB) in Albany, Georgia, in order to obtain lucrative freight-hauling business, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney G.F. Peterman III of the Middle District of Georgia.
Ivan Dwight Brannan, 61, of Jupiter, Florida, and David R. Nelson, 55, of Lucedale, Mississippi, were sentenced to 48 months and 24 months in prison, respectively, by U.S. District Judge W. Louis Sands of the Middle District of Georgia, who also ordered each man to serve three years of supervised release. Brannan was additionally ordered to forfeit $120,000 and Nelson was ordered to pay a $10,000 fine.
In connection with their guilty pleas, Brannan, the former agent, and Nelson, the former driver, admitted that from 2006 to 2012, they provided cash and other items of value to Mitchell Potts, a former traffic office supervisor for the Defense Logistics Agency (DLA) at MCLB-Albany, and Jeffrey Philpot, another official in the DLA traffic office, to ensure that their trucking company client was awarded millions of dollars in business at MCLB-Albany. From 2006 to 2012, Brannan and Nelson paid at least $120,000 in bribes to Potts and Philpot.
Potts and Philpot both previously pleaded guilty to two counts of bribery of a public official for their roles in this scheme and another similar one. Potts and Philpot were previously sentenced to 10 years and seven years in prison, respectively.
The U.S. Army Criminal Investigation Command, the Naval Criminal Investigative Service and the Defense Criminal Investigative Service investigated the case. Trial Attorney John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia prosecuted the case.
Florida and Mississippi Men Sentenced for Bribing Public Officials at Georgia Military BaseRead the Press Release
WASHINGTON – A former agent and a former driver for a large national trucking company were sentenced prison for paying bribes to officials at the Marine Corps Logistics Base (MCLB) in Albany, Georgia, in order to obtain lucrative freight-hauling business, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney G.F. Peterman III of the Middle District of Georgia.
Ivan Dwight Brannan, 61, of Jupiter, Florida, and David R. Nelson, 55, of Lucedale, Mississippi, were sentenced to 48 months and 24 months in prison, respectively, by U.S. District Judge W. Louis Sands of the Middle District of Georgia, who also ordered each man to serve three years of supervised release. Brannan was additionally ordered to forfeit $120,000 and Nelson was ordered to pay a $10,000 fine.
In connection with their guilty pleas, Brannan, the former agent, and Nelson, the former driver, admitted that from 2006 to 2012, they provided cash and other items of value to Mitchell Potts, a former traffic office supervisor for the Defense Logistics Agency (DLA) at MCLB-Albany, and Jeffrey Philpot, another official in the DLA traffic office, to ensure that their trucking company client was awarded millions of dollars in business at MCLB-Albany. From 2006 to 2012, Brannan and Nelson paid at least $120,000 in bribes to Potts and Philpot.
Potts and Philpot both previously pleaded guilty to two counts of bribery of a public official for their roles in this scheme and another similar one. Potts and Philpot were previously sentenced to 10 years and seven years in prison, respectively.
The U.S. Army Criminal Investigation Command, the Naval Criminal Investigative Service and the Defense Criminal Investigative Service investigated the case. Trial Attorney John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia prosecuted the case.
Felon from Eddy County Pleads Guilty to Unlawful Possession of FirearmRead the Press Release
ALBUQUERQUE – Steven Fryer, 39, of Atoka, N.M., pled guilty today in federal court in Las Cruces, N.M., to being a felon in possession of a firearm. Under the terms of his plea agreement, Fryer will be sentenced to 63 months in federal prison followed by a term of supervised release to be determined by the court.
Fryer was arrested on Feb. 17, 2016, on a criminal complaint charging him with being a felon in possession of a firearm. According to the complaint, Eddy County Sheriff’s Office deputies arrested Fryer on Oct. 29, 2014, after finding him in possession of a firearm following a short pursuit and standoff with the deputies. Fryer was prohibited from possessing firearms or ammunition because of his prior convictions for burglary in an Arizona court.
During today’s proceedings, Fryer pled guilty to a felony information charging him with being a felon in possession of a firearm. In entering the guilty plea, Fryer admitted that on Oct. 29, 2014, in Eddy County, N.M., he was in possession of a shotgun. He further admitted that he was a convicted felon and was therefore prohibited from possessing firearms.
Fryer remains detained pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Eddy County Sheriff’s Office and the Pecos Valley Drug Task Force. Assistant U.S. Attorney Maria Y. Armijo is prosecuting the case.
The Pecos Valley Drug Task Force is comprised of officers from the Eddy County Sheriff’s Office, Carlsbad Police Department and Artesia Police Department and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Federal Jury Convicts Former Army Contracting Official for Filing False Tax ReturnRead the Press Release
BIRMINGHAM – A federal jury on Wednesday convicted a former contracting official for the U.S. Army at Redstone Arsenal in Huntsville for filing a false income tax return, announced U.S. Attorney Joyce White Vance and Internal Revenue Service Criminal Investigation Special Agent in Command Veronica Hyman-Pillot.
Following two and a half days of testimony before U.S. District Judge Madeline Hughes Haikala, the jury convicted WILLIS EPPS, 61, on one count of filing a false tax return.
Before Epps’ indictment in January 2013, he was a high-level contracting official assigned to Army Contracting Command-Redstone. Beginning in 2010, Epps provided contracting support to the Army’s Non-Standard Rotary Wing Aircraft office and was named its director of contracts. He retired in January 2013.
The jury convicted Epps of willfully filing an IRS tax return for 2013 that he knew was false. According to the evidence, Epps knowingly omitted $56,250 in income when he filed a return stating his joint taxable income for 2013 was $182,541.
The facts leading to the IRS-CI investigation of Epps arose during a separate multi-agency investigation into NSRWA. Those investigating agencies were the Special Inspector General for Afghanistan Reconstruction, Defense Criminal Investigative Service, U.S. Army Criminal Investigation Command and the FBI.
Assistant U.S. Attorneys Ramona C. Albin and Henry B. Cornelius Jr. prosecuted the case.
Fall River Man Indicted for EscapeRead the Press Release
BOSTON – A federal inmate was charged today in U.S. District Court in Boston in connection with escaping from Coolidge House, a federal halfway house in Boston.
Jason Barreto, 30, was indicted today on one count of escape from federal custody. In May 2016, Barreto was charged in a criminal complaint.
According to a previously filed complaint, in September 2011, Barreto was convicted in the U.S. District Court in Rhode Island of one count of conspiracy to distribute oxycodone and was sentenced to 70 months in prison. On May 21, 2015, Barreto was transferred from the U.S. Penitentiary Big Sandy in Kentucky, to Coolidge House Residential Reentry Center in Boston to serve the remainder of his sentence. Barreto was scheduled to be released on Nov. 1, 2015.
On Sept. 17, 2015, following an incident at Coolidge House, it is alleged that Barreto walked out of the facility without authorization and did not return. On April 8, 2016, after receiving information regarding Barreto’s location, the U.S. Marshals Service arrested Barreto at Harrah’s Hotel and Casino in Atlantic City, New Jersey.
The charging statute provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and U.S. Marshal John Gibbons of the District of Massachusetts made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Nicholas Soivilien of Ortiz’s Major Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Eastern panhandle man pleads guilty to methamphetamine traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Arturo Jimenez De Los Santos, 33, of Kearneysville, West Virginia, pled guilty today to methamphetamine trafficking, United States Attorney William J. Ihlenfeld, II, announced.
De Los Santos was discovered in possession of crystal methamphetamine in October 2015 in Jefferson County, West Virginia. He pled guilty today to one count of “Possession with Intent to Distribute Methamphetamine.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Special Assistant U.S. Attorney Lara K. Omps-Botteicher, also of the West Virginia Attorney General’s Office, prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
East Hartford Man Sentenced to 71 Months for Arson, Insurance Fraud, Gambling and Extortion OffensesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOHN A. BARILE, 52, of East Hartford, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 71 months of imprisonment, followed by three years of supervised release, for arson, insurance fraud, gambling and extortion offenses.
According to court documents and statements made in court, BARILE was a co-owner of Enzo’s Restaurant and Lounge, which was located on Main Street in Middletown. By 2009, Enzo’s was facing financial difficulty, and BARILE began planning to cause a fire at Enzo’s in order to collect the insurance proceeds. In November 2009, BARILE informed his co-owner about the plan and began consulting with others on how to start the fire to make it look like an accident.
On the evening of January 9, 2010, BARILE met and participated in conversations with others at Enzo’s about causing the fire the next morning. BARILE placed greasy rags in the kitchen around the fryolators and applied grease to the kitchen walls. Later in the evening, after the restaurant had closed, a fire began in the kitchen. BARILE was aware that a fire was burning in the kitchen. Rather than extinguishing the fire, BARILE transferred the fire to one or more of the greasy rags. BARILE intentionally allowed the fire to burn and purposefully did not alert the fire department or anyone else about the fire. BARILE then left the restaurant intending for the fire to damage or destroy the restaurant.
The co-owner was inside Enzo’s at the time of the fire, and two individuals were inside a restaurant next door. The Middletown Fire Department arrived a short time later, forced entry, rescued the co-owner and put out the fire. By the time the fire was put out, the fire had already caused significant damage to the restaurant.
After the fire, BARILE sought payment from an insurance company for losses suffered as a result of the fire, and concealed his role in causing the fire from the insurance company and law enforcement. The insurance company ultimately paid $189,787.69 to BARILE to settle the insurance claims related to the fire.
In addition, from at least 2010 through approximately January 2014, BARILE also conducted an illegal sports-related bookmaking operation. This illegal gambling business involved at least five other people including sub-bookmakers. During this time period, BARILE did not have any other employment or source of income, and the illegal sports-related bookmaking business was BARILE’s main source of income. At times, the gambling business grossed more than $2,000 per day.
One bettor who repeatedly placed bets with BARILE’s gambling business eventually owed him approximately $50,000 from unpaid gambling losses. On November 8, 2011, BARILE, along with two associates, met the bettor at a parking lot in Hartford. At the meeting, BARILE tased the bettor with a Taser or similar device in order to punish him for not paying his debts and enforce collection of the payment.
As part of his sentence, BARILE was ordered to pay restitution to the insurance company in the amount of $189,787.69. BARILE also was ordered to forfeit $165,287.69 that the government seized from BARILE’s bank account in November 2012 pursuant to a civil seizure warrant.
On February 4, 2016, BARILE pleaded guilty to one count of arson, one count of mail fraud, one count of conducting an illegal gambling business and one count of collecting an extension of credit by extortionate means.
BARILE, who is released on a $350,000 bond and under electronic monitoring, was ordered to report to prison on July 12, 2016.
According to court documents, BARILE was previously convicted in 1997 for conspiring to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO) and contempt of court stemming from his involvement in an organized crime-controlled illegal gambling business.
This matter was investigated by the Federal Bureau of Investigation, with the assistance of the Middletown Police Department and the Connecticut State Police. This case was prosecuted by Assistant U.S. Attorneys Anastasia E. King and Neeraj N. Patel.
Eagle Pass Man Sentenced to 18+ Years Imprisonment on Federal Drug ChargeRead the Press Release
In Del Rio this afternoon, 36-year-old Francisco Balderas (aka “Frank”, “El Profe”) was sentenced to 220 months in federal prison for his role in a cocaine distribution conspiracy operating in the Eagle Pass, TX, area, stated United States Attorney Richard L. Durbin, Jr., DEA Special Agent in Charge Joseph M. Arabit, Houston Division, and Homeland Security Investigations Special Agent in Charge Shane Folden, San Antonio Division.
In addition to the prison term, United States District Judge Alia Moses ordered that Balderas pay a $10,000 fine and be placed on supervised release for a period of five years after completing his prison term.
On January 9, 2014, Balderas pleaded guilty to one count of conspiracy to possess a controlled substance with intent to deliver. By pleading guilty, Balderas admitted that he supplied cocaine to other dealers in Eagle Pass from November 2011 until October 2013. During that time, undercover agents purchased approximately 2.6 kilograms of cocaine from Balderas.
Balderas has remained in federal custody since being arrested by federal authorities on October 8, 2013.
The case resulted from a joint investigation by the Drug Enforcement Administration (DEA) and Homeland Security Investigations (HSI). The Texas Department of Public Safety - Criminal Investigations Division, Maverick County Sheriff’s Office and Eagle Pass Police Department also assisted in the investigation. This case was prosecuted by Assistant United States Attorneys Ralph Paradiso and Mike Galdo.
Eagle Butte Man Sentenced for Tampering with a Victim or WitnessRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Tampering with a Victim or Witness was sentenced on June 6, 2016, by U.S. District Judge Roberto A. Lange.
William Willard Miner, age 57, was sentenced to a year and a day in custody, 18 months of supervised release, and a special assessment of $100 to the Federal Crime Victims Fund.
Miner was indicted by a federal grand jury on September 9, 2015. He pled guilty on March 22, 2016.
The conviction stemmed from an incident on June 13, 2015, when Miner, who was at some friends’ house in the White Horse Community, drinking and socializing with them. At some point, Miner and another friend went to Mobridge to get more alcohol. When they returned, the victim was at the residence and Miner walked up to him and threatened him. Miner is related to Sage Miner, who assaulted the victim by hitting and kicking him several times in a separate federal matter. Sage Miner was sentenced to one year and a day in custody.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
Miner was immediately turned over to the custody of the U.S. Marshals Service.
Dunn Man Sentenced to 77 Months for Being A Felon in Possession of A FirearmRead the Press Release
RALEIGH – The United States Attorney’s Office announced that today in federal court, Senior United States District Judge W. Earl Britt sentenced TAUREAN RAHSAAN DAVIS, 27, of Dunn to 77 months imprisonment, followed by 3 years of supervised release.
DAVIS was named in an Indictment filed on June 10, 2014, charging him with being a Felon in Possession of a Firearm and Ammunition. On November 3, 2014, DAVIS pled guilty to the charge.
On February 27, 2014, an officer with the Dunn Police Department, conducted a traffic stop on a vehicle driven by DAVIS. The officer approached the passenger side of the vehicle and observed a box of bullets under DAVIS’ leg. The officer recognized DAVIS as a felon. DAVIS indicated that there was a jar of marijuana under the driver’s seat of the vehicle. The officer seized a jar containing 36 baggies of marijuana (29.99 grams of marijuana) and a .22 caliber pistol loaded with 6 rounds of ammunition adjacent to the marijuana from under the driver’s seat, as well as a box of ammunition and a digital scale.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Dunn Police Department, and the Bureau of Alcohol Tobacco Firearms and Explosives (ATF). Assistant United States Attorney S. Katherine Burnette prosecuted the case for the government.
Delaware Business Owner Sentenced to Prison Term for Skimming Payroll TaxesRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Keith D. Clarke, age 53, of Delmar, Maryland, was sentenced yesterday by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, to a prison term of two months and full restitution. The defendant pleaded guilty to failure to account for and pay over employment taxes, in December 2015.
According to Court filings and statements during the plea hearing, the defendant operated a plumbing and air conditioning business in Laurel, Delaware, named Clark Service Group, LLC, from at least 2000 through early 2012. From the Fourth Quarter of 2009, through the Fourth Quarter of 2011, the defendant withheld at least $131,424.09 in payroll taxes from his employees’ paychecks, but he did not pay those funds over to the Internal Revenue Service. Also, the defendant failed to pay to the IRS the company own portion of the Payroll Taxes, in the amount of at least $81,192.44, from the Fourth Quarter of 2009, through the Fourth Quarter of 2011.
At the same time, the defendant withheld retirement plan contributions from his employee’s paychecks, and he failed to remit at least $23,670.00 of these contributions to the retirement plan provider. Moreover, the defendant failed to remit the Company’s agreed portion of the contributions to the provider, in the amount of $926.70.
Meanwhile, the defendant used company funds to support his personal lifestyle. For example, the defendant spent nearly $160,000 in company funds to pay for golf excursions, vacations, retail purchases, groceries, dining, and other expenditures of a personal nature. The defendant failed to file his own personal federal income tax returns for the years 2009, 2010, and 2011.
U.S. Attorney Oberly stated, “Although the Government sought a sentence of 16 months incarceration, the imposition of a prison term of two months, coupled with restitution and the impact of a felony conviction, will hopefully serve as a deterrent to others who ignore their obligations to properly account for payroll taxes and retirement plan contributions, so as to support a more lavish lifestyle. My office is committed to prosecuting those who want to cheat the IRS and those who fail to fulfil their tax obligations.”
“Business owners looking to enrich themselves at the expense of their employees by not remitting payroll taxes will be held accountable. The programs funded by employment taxes are essential to the American workforce and the Internal Revenue Service, Criminal Investigation has placed a high priority on employment tax compliance.” said Special Agent in Charge, Akeia Conner.
This case is the result of an investigation by the Internal Revenue Service, Criminal Investigation, and the U.S. Department of Labor, Office of Inspector General. This case was prosecuted by Assistant United States Attorney Lauren Paxton.
Corpus Christi Man Convicted of Kidnapping ChildRead the Press Release
CORPUS CHRISTI, Texas – A 20-year-old local man has admitted he kidnapped a six-year-old girl from her Corpus Christi home and intended to take her to Arizona, announced U.S. Attorney Kenneth Magidson.
Austin Carlin, of Corpus Christi, abducted the young child from her residence in the early morning hours of Feb. 22, 2015. Carlin stole a vehicle and drove out of Corpus Christi with the child. The Corpus Christi Police Department (CCPD) immediately disseminated an Amber Alert in pursuit of Carlin and the child. As part of the alert, a Child Abduction Response Team was deployed with the assistance of FBI.
State troopers pulled Carlin over as he drove on Interstate 10 approximately 350 miles west of San Antonio. He was arrested and authorities were able to successfully recover the child and return her to her family. Carlin admitted that his destination was Arizona.
U.S. District Judge Nelva Gonzales Ramos accepted the guilty plea today and set sentencing for Sept. 22, 2016. At that time, Carlin faces a minimum of 20 years and up to life in federal prison and a possible $250,000 maximum fine.
Carlin has been and will remain in custody pending his sentencing hearing.
The charges are the result of the investigative efforts of the FBI, CCPD and the Texas Department of Public Safety. Assistant U.S. Attorney Hugo R. Martinez and Brittany Jensen are prosecuting the case.
Connecticut Man Found Guilty in Multimillion Dollar Stranger-Originated Life Insurance SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, Jonathan Mellone, Acting Special Agent-in-Charge, U.S. Department of Labor – Office of Inspector General, Susan A. Hensley, Regional Director, U.S. Department of Labor – Employee Benefits Security Administration’s Boston Office, and Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP), today announced that U.S. District Judge Robert N. Chatigny has found DANIEL CARPENTER, 62, formerly of Simsbury, guilty of 57 counts of conspiracy, mail and wire fraud, money laundering and illegal monetary transaction offenses stemming from a scheme to defraud insurance companies into issuing insurance policies on the lives of elderly people for the benefit of the defendant and other investors, also known as a stranger-originated life insurance scheme.
The verdict follows a five-week long bench trial before Judge Chatigny in Hartford that began on February 16, 2016 and concluded on March 21, 2016. CARPENTER had waived his right to a trial by jury.
According to the evidence at trial, CARPENTER controlled a series of companies, based in Simsbury and Stamford, that developed the Charter Oak Trust (the “Trust”), an employee welfare benefit plan and trust whose primary objective was to secure insurance policies on the lives of elderly individuals that could be held by CARPENTER’s companies as investments, or resold on the life settlement market, which is a third-party market for life insurance policies. Typically, insurance agents working with, for, or on behalf of CARPENTER and his companies approached elderly individuals (the “Straw Insureds”). The agents promised to provide the Straw Insureds with free life insurance for two years, and, at the end of the two years, would attempt to sell the policies on the life settlement market. In most cases, the agents promised the Straw Insureds that they would receive a portion of any sale proceeds.
The evidence at trial established that CARPENTER, working with insurance agents, caused to be submitted to several insurance providers numerous insurance applications that contained several material misrepresentations, including falsely denying that third-parties were paying the premiums for the insurance, falsely denying discussions about the resale of the policies, falsely inflating the net worth and/or income of the insured, and falsely claiming that the insurance was being purchased for legitimate estate planning-related needs. All applications were signed by CARPENTER’s brother-in-law, who acted as trustee of the Charter Oak Trust, which was to be the “owner” of all policies in the trust. Moreover, the applications purported that the Charter Oak Trust was a bona fide welfare benefit trust under Internal Revenue Code Section 419(e), wherein employers would be making contributions to the Charter Oak Trust in order to fund the life insurance policies for the benefit of certain select employees.
The evidence further established that, in truth, no “employer” or Straw Insured ever paid a premium into the Charter Oak Trust. Rather, the premiums were funded by loans primarily from another company headquartered in Simsbury and controlled by CARPENTER. In many cases, those loans were, in turn, financed by another third-party financing company based in Stamford. The loan arrangements were withheld from the insurance providers, who would not have issued policies had they known the true nature of the Charter Oak Trust, and had the insurance applications been filled out truthfully.
Based on the false applications that were submitted to the insurance providers, the Charter Oak Trust procured 84 insurance policies that had a total aggregate death benefit of more than $459 million on the lives of 76 different Straw Insureds. In addition, another company controlled by CARPENTER received more than $12 million in commissions from the insurance providers, who would not have paid the commissions had they known about the false representations on the insurance applications and the true nature of the Charter Oak Trust.
Finally, the trial evidence showed that one Straw Insured died within the first two years of the issuance of the two insurance policies on his life. Those policies had been issued in late 2006 and early 2007 based on misrepresentations similar to those described above, specifically that his policies were not being funded by a third party and were not intended for resale. The two insurance policies had a combined death benefit of $30 million, which the insurer paid to the Charter Oak Trust in May 2009. At CARPENTER’s direction, the Charter Oak Trust failed to pay the $30 million to the Straw Insured’s beneficiary, and instead used the funds to pay for various expenses, including other insurance premiums that were related to the underlying fraud, as well as to purchase a home in Rhode Island.
Judge Chatigny has scheduled sentencing for August 26, 2016, at which time CARPENTER faces a maximum term of imprisonment of 20 years on each count of mail and wire fraud and conspiracy to commit mail and wire fraud, a maximum term of imprisonment of 20 years on each count of money laundering and conspiracy to commit money laundering, and a maximum term of imprisonment of 10 years on each count of making illegal monetary transactions.
CARPENTER is currently serving a 36-month term of imprisonment for a previous mail and wire fraud conviction in the District of Massachusetts.
This matter is being investigated by the U.S. Department of Labor – Office of the Inspector General, the U.S. Department of Labor – Employee Benefits Security Administration’s Boston Office, and the Special Inspector General for the Troubled Asset Relief Program. The case is being prosecuted by Assistant U.S. Attorneys David E. Novick and Neeraj N. Patel.