Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Friday 15 April 2016
St. Petersburg Real Estate Agent Sentenced for His Role in Mortgage Fraud ConspiracyRead the Press Release
Tampa, Florida - U.S. District Judge James S. Moody has sentenced Gary Blankenship (45, St. Petersburg) to eight months in federal prison for conspiracy to commit wire and bank fraud. He pleaded guilty on February 4, 2016.
According to his plea agreement, in 2005, entities controlled by co-conspirators entered into a contract to purchase The Arbors, an apartment complex in Hillsborough County. The new owners then engaged in a plan to convert the complex from rental apartments to condominium units.
Blankenship’s co-conspirator, Brendan Bolger, aided the developers in the sale of numerous condominium units through his company, Capital Management Guarantee, LLC. In order to induce buyers to purchase units, Bolger created an addendum to the purchase contract offering buyers various incentives, such as rental supplements, money to defray maintenance costs, and a design credit to upgrade the units’ amenities. When the buyers cancelled the design credit within 10 days of signing the addendum, Bolger paid them a kickback from his company’s bank account for the amount of the design credit. Blankenship’s role in the conspiracy as a realtor consisted of marketing The Arbors units by promising buyers undisclosed incentives. In this manner, Bolger, Blankenship and other co-conspirators failed to disclose material facts to buyers’ mortgage lenders about the financing of the condominium sales.
This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of Inspector General. It was prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay Hoffer.
Santa Barbara County Man Named in Federal Case Alleging Production of Child Pornography by Enticing Minors over InternetRead the Press Release
LOS ANGELES – A man who resided in Carpinteria has pleaded not guilty after being named in a federal grand jury indictment that charges him with producing, receiving, distributing and possessing child pornography in 2015 – crimes he allegedly committed soon after completing a state prison term as a result of other child pornography offenses.
Christopher Robin Coates, 41, was taken into federal custody Wednesday afternoon by federal authorities after the grand jury charged him on Tuesday. Coates was turned over by local authorities in Santa Barbara County, where an extensive investigation occurred resulting in him being charged by Santa Barbara County District Attorney Joyce E. Dudley with multiple child exploitation crimes. The District Attorney’s Office dismissed the state charges after the federal indictment was filed – an indictment that brings the possibility of a life sentence for Coates.
Coates was arraigned Thursday afternoon in United States District Court in Los Angeles. At the arraignment, Coates pleaded not guilty to nine felony offenses in the indictment, and he was ordered to stand trial on May 24 before United States District Judge George W. Wu.
Coates is specifically charged with two counts of producing child pornography by using Kik Messenger to entice two minor boys to engage in sexually explicit conduct last year. Coates also is charged with two counts of receiving child pornography after enticing the victims to engage in the illicit conduct.
The indictment further charges Coates with three counts of using Kik Messenger to distribute child pornography (one count involves one of the victims allegedly enticed by Coates to send images), and one count of possessing child pornography involving a victim under the age of 12.
The indictment alleges that Coates was convicted in Santa Barbara Superior Court in 2011 and in 2013 of possessing child pornography, as well as sexual battery of a disabled adult in 2010. Count nine of the indictment charges Coates with producing child pornography while being required to register as a sex offender as a result of his prior convictions.
“This defendant, if he is convicted, faces a lengthy period of incarceration in federal prison – which would be warranted by his history of crimes against children,” said United States Attorney Eileen M. Decker. “As this case unfortunately illustrates, child pornography is not a victimless crime; on the contrary, it victimizes the most vulnerable among us.”
On July 15, 2015, law enforcement officers conducted a parole search of Coates’ residence. During the search, authorities recovered a Samsung tablet under a mattress that contained hundreds of images and videos of child pornography.
“Protecting children from crimes of sexual abuse and exploitation is a priority for the U.S. Postal Inspection Service,” stated Robert Wemyss, Inspector in Charge for the Los Angeles Division. “I'm proud of the work of the Postal Inspection Service and our investigative partners to bring child predators to justice. U.S. Postal Inspectors have investigated these crimes for more than a century. While the predators' use of sophisticated technology has evolved, the core harm has not changed: a child's lost innocence. We will not lose sight of this, and remain steadfast in our efforts to investigate, apprehend, and assist in the prosecution of those who seek to exploit children via the U.S. Mail.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If he is convicted in this case, Coates faces a potential sentence of life without parole in federal prison. Because of his prior convictions, Coates also faces enhanced mandatory minimum sentences, including a minimum sentence of 35 years for the production counts, a minimum sentence of 15 years for the distribution and receipt counts, and a minimum sentence of 10 years for the possession count. The charge of committing child exploitation offenses while being require to register as a sex offender carries a mandatory consecutive sentence of 10 years in federal prison.
“Protecting the most vulnerable members of society from predators is paramount, and the potential sentence in this case reflects the seriousness of the charges and the repeated harm he caused through the exploitation of children,” said James L. Struyk, Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Unfortunately the actions of this previously convicted child predator will never truly be erased from the Internet or from the minds of his young victims. This investigation is an excellent example of federal agencies working closing with the Santa Barbara District Attorney’s Office and taking swift action to protect our children.”
The investigation into Coates was conducted by the United States Postal Inspection Service and the Federal Bureau of Investigation. The Santa Barbara Sheriff’s Department and the California Department of Corrections and Rehabilitation provided substantial assistance. The investigation is the result of a tip to the Postal Inspection Service by the National Center for Missing & Exploited Children.
Roseville Podiatrist Sentenced to 3 Years in Federal Prison for Health Care Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Neil Van Dyck, 64, of Roseville, was sentenced today by United States District Judge Garland E. Burrell Jr. to three years in prison and a $10,000 fine for committing healthcare fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Van Dyck was a California-licensed podiatrist who operated a podiatry practice in Roseville called Placer Podiatry. Van Dyck offered “spa”-like treatments and performed routine foot care at his practice. Between 2009 and 2014, however, Van Dyck submitted over $2.8 million in fraudulent claims for reimbursement to Medicare, Medi-Cal, Tricare and private insurers. He falsely claimed that he performed more expensive procedures than he actually performed, or that the routine foot care that was provided was justified because of illness or symptoms that were not present. Often the treatments were performed by unlicensed staff, sometimes when Van Dyck was not present at his practice. Additionally, Van Dyck altered a single-use skincare patch by cutting it into pieces and billed Medicare for multiple applications. In 2011, in response to a request for documents from an investigator for Medicare, Van Dyck altered patients’ medical records to justify his fraudulent bills. Medicare, Medi-Cal, Tricare, and the private insurers paid Van Dyck over $1 million for his fraudulent claims.
“Van Dyck schemed to increase his profits at the expense of patients and taxpayers,” said Steven Ryan, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Instead, along with our law enforcement partners, my agents ensured that he ended up paying a high price, indeed, for his criminal actions.”
The Court previously entered an order requiring Van Dyck forfeited $1.2 million from a retirement account into which proceeds of the healthcare fraud scheme were traced. Most of this money is expected to be used to pay restitution to the insurance victims. The date for a further restitution hearing is set for May 27, 2016.
This case was the product of an investigation by the Department of Health and Human Services and the Federal Bureau of Investigation. Assistant United States Attorney Todd A. Pickles prosecuted the case.
Quincy Man Arrested for Scam Targeting Law FirmsRead the Press Release
BOSTON – A Quincy man was arrested today for using counterfeit cashier’s checks to defraud victims, including law firms, of at least $1 million.
Manuel Ponce Vazquez, 59, was arrested this morning and charged by complaint with one count of mail fraud.
As alleged in the complaint, beginning in August 2013, Vazquez defrauded law firms and other victims by sending them counterfeit cashier’s checks, then convincing them to forward a portion of the checks’ supposed value to a bank account he opened using an alias. Once the checks were discovered to be fraudulent, the victims’ bank accounts were debited, and the victims were left with thousands of dollars in losses, having unwittingly forwarded their own money to Vazquez.
In one scam described in the complaint, Vazquez or a co-conspirator allegedly posed as a member of a London architectural firm seeking to retain a California law firm to help him collect a debt. Before the law firm took any action to collect the supposed debt, it received a cashier’s check, ostensibly from the debtor, fully repaying the debt. At the direction of Vazquez or his co-conspirator, the law firm deposited the check, kept a small portion as a fee, and forwarded the remainder—$97,035—to a bank account Vazquez had opened in an assumed name. Within a day of receiving the money, the complaint alleges, Vazquez had withdrawn almost all of it from bank branches in and around Braintree. When the law firm’s bank discovered that the cashier’s check was fraudulent, the bank debited the value of the check from the law firm’s account.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss involved in the scam, and restitution. 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 Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistance was also provided by Braintree Police Department and the Norfolk District Attorney’s Office. This case is being prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Puerto Rico and Dominican Republic Men Convicted by Jury of Drug Conspiracy and Firearms ChargesRead the Press Release
St. Thomas, USVI – After a four-day trial, a federal jury found Alexandro Gerandino-Aracena, 39, of the Dominican Republic, and Ricardo Cardona, 35, of Puerto Rico, guilty of conspiracy to possess with intent to distribute cocaine and various firearms possession charges, United States Attorney Ronald W. Sharpe announced today.
According to evidence presented at trial, on the morning of September 3, 2015, Gerandino-Aracena and Cardona traveled from Fajardo, Puerto Rico, to St. Thomas in a private vessel equipped with a hidden compartment to purchase 150 kilograms of cocaine. Gerandino-Aracena and Cardona docked their vessel at the Marine Center Dock at the University of the Virgin Islands, where they met other members of the drug trafficking organization to collect the cocaine in exchange for $250,000 and three assault rifles. Earlier that day in Puerto Rico, U.S. Drug Enforcement Administration (DEA) agents seized $1.4 million dollars in cash, which was partial payment for the cocaine. Gerandino-Aracena and Cardona each face a minimum of 10 years in prison and a maximum of life imprisonment, and a maximum fine of $10,000,000.
On the fourth day of trial, co-defendant Marco Asala Belgar, 35, of the Dominican Republic, pleaded guilty to misprision of a felony and faces a maximum of three years’ imprisonment and a maximum fine of $250,000. Co-defendant Pedro Beltre Guzman, 36, of the Dominican Republic, also pleaded guilty during the trial to possession of firearms by an illegal alien and faces a maximum of 10 years’ imprisonment and a maximum fine of $250,000.
On March 29, 2016, co-defendant Jose Luis Ponce-Pagan, 36, of Puerto Rico, pleaded guilty to conspiracy to possess with the intent to distribute 100 kilograms of cocaine and faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and a $10,000,000 fine. All defendants remain in custody pending sentencing, which is scheduled for August 24, 2016.
This case is the result of a joint investigation by the DEA, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives and U.S. Customs and Border Protection. It was prosecuted by Assistant United States Attorneys Sigrid M. Tejo-Sprotte and Delia L. Smith.
Prince George’s County Pimp Pleads Guilty to Transportation of a Minor to Engage in ProstitutionRead the Press Release
Greenbelt, Maryland –Michael Andrew Davila, age 27, of Berwyn Heights, Maryland, pleaded guilty on April 14, 2016, to transportation of a minor for prostitution. His mother, Maria Elena Davila, age 51, of Germantown, Maryland, pleaded guilty to conspiracy to commit evidence tampering in connection with the case.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Chief Hank Stawinski of the Prince George’s County Police Department.
According to Michael Davila’s plea agreement, in early January 2015, Michael Davila recruited a 15 year old female through Instagram to engage in prostitution. Later in January, the victim turned 16 years old. Between January and March 2015, Davila arranged for the victim to engage in acts of prostitution, advertised the victim online for sexual services in Maryland, Washington, D.C., and Virginia, using a false name and age for the victim, and transported or arranged for transportation of the victim throughout Maryland, DC. and Virginia to engage in commercial sex acts. Davila kept a portion of the proceeds earned by the victim for engaging in commercial sex acts.
According to their plea agreements, Davila and co-defendant Elsie Pazmino answered text messages and calls from clients seeking to engage in sexual acts with the victim and arranged “dates” for the victim with those clients. Davila educated the victim on how to arrange dates with customers for sexual services and set the prices that Victim 1 would charge for such services. On at least one occasion in January 2015, Pazmino admitted that she answered a telephone call from a potential customer in front of the victim, so that the victim could learn how to talk to potential customers and set up dates. According to their plea agreements, Davila and Pazmino arranged and paid for hotel rooms in which the victim engaged in prostitution.
Davila and co-defendant John Hamlett transported the victim, and other females Davila was prostituting, to locations within and outside Maryland to engage in prostitution. Davila paid Hamlett $50 to $100 per night of driving females working for Davila, including the victim.
During the time that the victim engaged in acts of prostitution, Davila provided her with a cellular phone to communicate with Davila and potential customers. Law enforcement’s review of the contents of the victim’s cellular phone revealed numerous text messages between Davila and the victim regarding proceeds earned by the victim from prostitution, locations where she was engaging in acts of prostitution, and the posting of ads online to advertise the victim for prostitution. Davila communicated with the victim through the use of cellular phone chat applications KIK and Pinger.
According to their plea agreements, Davila was arrested on April 20, 2015, on federal charges relating to the sex trafficking of a minor, at a motel in Laurel, Maryland, where he was staying with his mother, Maria Davila,. After his arrest, Maria Davila admitted that she accessed and erased the contents of Michael Davila’s KIK account, which he had used to communicate with the victim. Maria Davila also repeatedly tried to access and delete Michael Davila’s Pinger account, which he had also used to communicate with the victim while he was prostituting her. On April 21, 2015, Michael Davila had several phone calls with Maria Davila, while he was in pretrial detention at the Chesapeake Detention Facility in Baltimore, Maryland. During those calls, Michael and Maria Davila discussed the need to erase the KIK and Pinger accounts and Maria Davila’s efforts to delete the accounts. Michael Davila provided multiple passwords for Maria Davila to try to access his Pinger account so that it could be erased. Davila also sent a letter to Maria Davila, which stated in part, “Please keep tryna log into the Kik and Pinger” and then listed multiple passwords, many of which were the same as the passwords that Davila provided to his mother over the phone as captured in recorded jail calls.
As part of his plea agreement, Michael Davila must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Michael and Maria Davila and the government have agreed that if the Court accepts their plea agreements Michael Davila will be sentenced to between 120 and 175 months in prison and Maria Davila will be sentenced two years in prison. U.S. District Judge George J. Hazel has scheduled sentencing for Michael Davila on August 29, 2016, at 2:30 p.m. and for Maria Davila on August 1, 2016 at 9:30 a.m. Michael and Maria Davila remain detained.
Elsie Liseth Pazmino, age 29, of Berwyn Heights, and John David Hamlett, age 33, of Laurel, Maryland, previously pleaded guilty to their roles in the sex trafficking. Hamlett was sentenced to 30 months in prison. Pazmino faces a maximum sentence of five years in prison. U.S. District Judge George J. Hazel has scheduled Pazmino’s sentencing on June 2, 2016 at 2:30 p.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein commended the FBI and Prince George’s County Police Department for their work in the investigation and thanked the Anne Arundel County Police Department for its assistance. Mr. Rosenstein thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, who are prosecuting the case.
Pittsburgh-area Woman Admits Purchasing Gun for FelonRead the Press Release
PITTSBRUGH – An Allegheny County resident pleaded guilty in federal court to a charge of falsification of a firearms purchase form, United States Attorney David J. Hickton announced today.
Edwina Yancey, 31, of East Pittsburgh, Pa. pleaded guilty to one count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that on or about July 28, 2014, Edwina Yancey, with the intent to deceive a licensed firearms dealer, made a false statement in connection with her purchase of a Glock, Model 23, .40 caliber pistol. Following her purchase of the pistol, Edwina Yancey transferred it to a person she knew to be a convicted felon, who was prohibited from possessing the pistol.
Judge Hornak scheduled sentencing for Aug. 11, 2016. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued the defendant’s bond.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Edwina Yancey.
Pair Sentenced for Roles in Methamphetamine ConspiracyRead the Press Release
CHARLOTTESVILLE, VIRGINIA – Two men who played roles in trafficking methamphetamine into the Charlottesville area were sentenced this week in separate hearings in the United States District Court for the Western District of Virginia in Charlottesville, United States Attorney John P. Fishwick Jr. announced today.
Today in District Court, John Mark Fisher, 54, of Roanoke, Virginia, who pled guilty in January 2016 to possession with the intent to distribute and distributing 50 grams or more of methamphetamine, was sentenced to 132 months in federal prison. A second defendant, Alfonso Lopez-Rios, 33, of Charlottesville, Va., pled guilty in August 2015 to possession with the intent to distribute and distributing 50 grams or more of methamphetamine. Thursday in District Court, Lopez-Rios was sentenced to 58 months in Federal Prison.
“The use of methamphetamine has a dramatic effect on communities all across the Western District of Virginia and we will continue to work with our partners in law enforcement to stop the trafficking of this very addicting and destructive drug,” United States Attorney John P. Fishwick Jr. said today.
According to evidence presented at previous hearings by Assistant United States Attorney Christopher Kavanaugh, Lopez-Rios admitted to participating in a larger conspiracy in which he would travel from Charlottesville, Virginia to North Carolina to obtain large quantities of methamphetamine. In his travels, Lopez-Rios would also drive to Roanoke to sell half-pound and pound quantities of methamphetamine to Fisher, another high-level distributor in the Roanoke area.
Lopez-Rios, Fisher, along with a third man, Jose Alfredo Gonzalez-Martinez, are being prosecuted as part of Operation Ice Storm, a multi-agency operation headed by the Drug Enforcement Administration and in partnership with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The operation’s goal is to target larger distributors and traffickers of methamphetamine into Charlottesville and surrounding areas.
The investigation of the case was conducted by the Drug Enforcement Administration and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant United States Attorney Christopher Kavanaugh prosecuted the case for the United States.
Owners of Tax Preparation Business Get Multi-Year Prison Sentences for Filing Bogus Tax Returns for Prison InmatesRead the Press Release
The owners of a tax preparation business that filed fraudulent tax returns on behalf of inmates at various New Jersey prisons were each sentenced today to multi-year prison sentences, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Paul J. Fishman for the District of New Jersey.
Kamal J. James aka Bro Messiah Aziz El, 34, of Seaford, Delaware, and Crystal G. Hawkins aka Sis. Crystal Gabri El, 39, of Laurel, Delaware, were sentenced to 96 and 48 months in prison, respectively. They were previously charged in a superseding indictment with one count of conspiracy, 16 counts of making false claims and three counts of mail fraud. They were convicted on all counts following a one-week trial before U.S. District Judge Peter G. Sheridan for the District of New Jersey, who imposed the sentences today in Trenton, New Jersey federal court.
According to the superseding indictment and the evidence presented at trial:
Between October 2011 and October 2013, James and Hawkins operated Release Refunds, a purported tax preparation business – previously based in Brick, New Jersey, and in Seaford – through which they solicited current and former New Jersey prison inmates as clients and then filed fraudulent tax returns on their behalf. The company is no longer in business.
James and Hawkins sent Release Refunds “promotional” flyers to inmates at various New Jersey prisons and halfway houses offering tax return preparation services. The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign income tax returns and other Internal Revenue Service (IRS) documents, but not to include any information about their income or withholdings. James and Hawkins then filled in the missing income information on the return forms, fabricating the inmates’ earnings to trigger fraudulent and inflated refunds.
During the course of the investigation, an undercover IRS-Criminal Investigation agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins. They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents. James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns – including false income information that James and Hawkins provided – to be filed on behalf of the agent for tax years 2010 through 2012. The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee for the defendants.
In addition to the prison terms, Judge Sheridan sentenced both James and Hawkins to three years of supervised release and ordered them to pay restitution in the amount of $570,897.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentences. They also thanked the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge James V. Buthorn and the New Jersey Department of Corrections, under the direction of Commissioner Gary M. Lanigan, for their roles in the case.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton and former Trial Attorney Thomas Jaworski of the Tax Division.
Owners of Tax Preparation Business Get Multi-Year Prison Sentences for Filing Bogus Tax Returns for Prison InmatesRead the Press Release
TRENTON, N.J. – The owners of a tax preparation business that filed fraudulent tax returns on behalf of inmates at various New Jersey prisons were sentenced today to multi-year prison sentences, U.S. Attorney Paul J. Fishman and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
Kamal J. James, a/k/a “Bro Messiah Aziz El,” 34, of Seaford, Delaware, and Crystal G. Hawkins, a/k/a “Sis. Crystal Gabri El,” 39, of Laurel, Delaware, were sentenced to 96 and 48 months in prison, respectively. They were previously charged in a superseding indictment with one count of conspiracy, 16 counts of making false claims and three counts of mail fraud. They were convicted on all counts following a one-week trial before U.S. District Judge Peter G. Sheridan, who imposed the sentences today in Trenton federal court.
According to the superseding indictment and the evidence at trial:
Between October 2011 and October 2013, James and Hawkins operated Release Refunds, a purported tax preparation business – previously based in Brick, New Jersey, and in Seaford – through which they solicited current and former New Jersey prison inmates as clients and then filed fraudulent tax returns on their behalf. The company is no longer in business.
James and Hawkins sent Release Refunds “promotional” flyers to inmates at various New Jersey prisons and halfway houses offering tax return preparation services. The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign income tax returns and other IRS documents, but not to include any information about their income or withholdings. James and Hawkins then filled in the missing income information on the return forms, fabricating the inmates’ earnings to trigger fraudulent and inflated refunds.
During the course of the investigation, an undercover IRS-Criminal Investigation agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins. They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents. James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns – including false income information that James and Hawkins provided – to be filed on behalf of the agent for tax years 2010 through 2012. The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee for the defendants.
In addition to the prison terms, Judge Sheridan sentenced both James and Hawkins to three years of supervised release and ordered them to pay restitution of $570,897.
U.S. Attorney Fishman and Acting Assistant Attorney General Ciraolo credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentences. They also thanked the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge James V. Buthorn; and the N.J. Department of Corrections, under the direction of Commissioner Gary M. Lanigan, for their roles in the case.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton and former Trial Attorney Thomas Jaworski of the Justice Department’s Tax Division.
Defense counsel:
James: Pro se; (Bruce Throckmorton Esq., Trenton, standby counsel)
Hawkins: Pro se; (Andrea Bergman Esq. Assistant Federal Public Defender, Trenton, standby counsel)
Ohio Valley students design and execute mock trial to highlight teen dating violence prevention and educationRead the Press Release
WHEELING, WEST VIRGINIA – In recognition of National Crime Victims’ Rights Week, observed between April 10 and April 16, 2016, local community and student leaders hosted an educational mock trial event designed to highlight the realities of teen dating violence, United States Attorney William J. Ihlenfeld, II, announced.
The interactive mock trial, which took place in the United States Federal Courthouse in Wheeling before an audience of local high school students, was developed by the YWCA Wheeling Family Violence Prevention Program in collaboration with the U.S. Attorney’s Office for the Northern District of West Virginia. Students from John Marshall and Wheeling Park High Schools led the effort to design the underlying premise and content of the mock trial. U.S. District Judge John Preston Bailey presided over the trial and students portrayed several crucial roles, including the victim, the defendant, a witness, and members of the jury.
YWCA Wheeling Family Violence Prevention Program Director Patricia Flanigan described the mock trial as a “unique opportunity to educate our younger generation on the reality of the consequences of committing a crime of dating violence or domestic violence. We were very excited to use National Crime Victims’ Rights Week as a platform to demonstrate to local youth the criteria of a federal dating violence crime.” Flanigan commended the students involved in the mock trial, noting that they “took an active role in planning and developing this insightful educational event.”
Each year, the Office for Victims of Crime leads the observance of National Crime Victims’ Rights Week, designed to recognize victims of crime and highlight the work of victim advocates and service providers. This year, the theme for National Crime Victims’ Rights Week is Serving Victims. Building Trust. Restoring Hope. This theme is designed to emphasize the importance of early intervention and victim services. Individuals interested in learning more about National Crime Victims’ Rights Week are encouraged to visit the Office for Victims of Crime website at http://ovc.ncjrs.gov/ncvrw/.
Miami-Dade County Residents Sentenced for Possession of Counterfeit Access Devices and Aggravated Identity TheftRead the Press Release
On April 11, 2016, Robert Diaz, a resident of Miami, Florida, was sentenced to 60 months in prison, to be followed by three years of supervised release. On April 12, 2016, Maritza Conde Moreno, a resident of Miami, Florida, was sentenced to 74 months in prison, to be followed by three years of supervised release.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcements Homeland Security Investigations (ICE-HSI), Miami Field Office, and Tony Pustizzi, Chief, Coral Springs Police Department, made the announcement.
Diaz and Moreno each plead guilty on January 28, 2016 to one count of conspiracy to commit access device fraud in violation of Title 18, United States Code, Section 1029(b)(2), one count of possession of fifteen or more counterfeit access devices, in violation of Title 18 United States Code, Sections 1029(a)(3) and 2, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2.
According to court documents, in or around August and September 2013, numerous unauthorized purchases were made using fraudulent credit cards at BJ’s Wholesale (BJ’s) in Hialeah Gardens, Florida. Surveillance video captured Diaz, among others, making these fraudulent purchases. On February 2, 2014, a BJ’s employee recognized Diaz in the store and notified the Hialeah Gardens Police Department. Officers arrived at the location and conducted a traffic stop, resulting in Diaz and Moreno being taken into custody. An inventory search was conducted of their vehicle and a bag containing 78 counterfeit credit cards and numerous receipts from BJ’s and Home Depot were found on the floorboard.
Beginning on or around April 2014 through on or around July 2014, at a Home Depot in Coral Springs, Florida, Diaz, Moreno, and co-defendant Jose Luis Conde Varela used counterfeit credit cards in self-checkout lines to make unauthorized purchases.
On October 22, 2015, law enforcement executed a search warrant at the residence of Diaz and Moreno and, pursuant to a complaint, arrested Diaz, Moreno and Varela. As a result of the search of the residence, law enforcement uncovered, among other things, over 4,993 stolen credit card numbers, 311 fraudulent credit cards and a credit card encoder. In addition, at the time of his arrest, Diaz was in possession of a flash drive with 484 stolen credit card numbers.
Co-Defendant Jose Luis Conde Varela pled guilty on February 23, 2016 to one count of conspiracy to commit access device fraud in violation of Title 18, United States Code, Section 1029(b)(2), one count of use of one or more unauthorized access devices to obtain anything of value aggregating $1,000 or more, in violation of Title 18 United States Code, Sections 1029(a)(2) and 2, and one count of Aggravated Identity Theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2. Varela is scheduled to be sentenced on May 11, 2016.
Mr. Ferrer commended the investigative efforts of ICE-HSI and the Coral Springs Police Department. The case was prosecuted by Assistant United States Attorney Joshua S. Rothstein.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. 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.
Member of Alleged International Organization of Money Launderers for the Largest Drug Cartels Extradited to the United StatesRead the Press Release
Earlier today, Jhon Jairo Hincapie-Ramirez, a citizen of Colombia, was arraigned at the federal courthouse in Brooklyn, New York, for his alleged role in an international money laundering organization that brokered financial transactions designed to conceal the source of illegal narcotics trafficking by using the Chinese and Hong Kong financial system and the shipment of counterfeit goods around the world to launder over $5 billion for drug cartels based in Mexico and Colombia.[1] Hincapie-Ramirez was arrested in Colombia in August 2015, on a provisional arrest warrant issued from the Eastern District of New York, and was extradited to the United States on April 14, 2016.
The arraignment was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.
As alleged in the superseding indictment, the investigation determined that from approximately January 1, 2004 through December 31, 2014, members of the organization conspired to carryout trade-based money laundering activities in China, Colombia, Panama, the United States, Spain, Ecuador, Venezuela, and elsewhere. The group was led by Colombian nationals based in Guangzhou, China (the Guangzhou Enterprise). The Guangzhou Enterprise laundered money through bank accounts in Hong Kong and China on behalf of drug trafficking organizations in Mexico and Colombia to fund purchases of counterfeit goods in China, which were then shipped to Colombia and elsewhere for resale.
The Guangzhou Enterprise typically paid Colombian pesos to the drug traffickers in exchange for their U.S. dollar proceeds of drug trafficking at a heavily discounted exchange rate, which reflected the risks incurred by the money brokers. The Enterprise then located Colombian or other South American customers – usually businesses – that needed U.S. dollars to pay for imported goods or services. They then sold the U.S. dollars to those customers, who used the money to purchase goods and services in China for resale.
United States Attorney Capers thanked the Drug Enforcement Administration, New York Division; Internal Revenue Service-Criminal Investigation, New York Field Office; the Department of Justice, Office of International Affairs; DEA Dallas Field Office; New York City Police Department; New York State Police; DEA Beijing Country Office; DEA Hong Kong Country Office; IRS Beijing Country Office; IRS Hong Kong Country Office; the Financial Investigations Group of the Hong Kong Customs and Excise Department; and the Chinese Ministry of Public Security for their assistance in this case.
The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Tyler J. Smith and Ameet B. Kabrawala are in charge of the prosecution.
The Defendant:
JHON JAIRO HINCAPIE-RAMIREZ
Alias: El Profe
Age: 55
Nationality: ColombianE.D.N.Y. Docket No. 15-CR-81 (CBA)
[1] The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Massachusetts Man Sentenced to Prison for Role in Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Filed Fraudulent Income Tax Returns Using the Stolen Identities of Puerto Rican U.S. Citizens
A Lawrence, Massachusetts, resident pleaded guilty today to one count of conspiracy to defraud the United States, 14 counts of conversion of government property, two counts of access device fraud and 14 counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Carmen M. Ortiz for the District of Massachusetts, Special Agent in Charge Joel Garland of the Internal Revenue Service–Criminal Investigation’s (IRS-CI) Boston Field Office and Special Agent in Charge Stephen A. Marks of the U.S. Secret Service.
According to the indictment and documents filed with the court, between 2011 and 2015, Juan Santiago, 38, and another individual used the personal identifying information of Puerto Rican U.S. citizens to file fraudulent federal income tax returns. The fraudulent tax returns resulted in the issuance of tax refunds in the form of U.S Treasury checks, which were mailed to addresses in Massachusetts and elsewhere, controlled by Santiago and the other individual. The scheme resulted in thousands of fraudulent income tax returns filed with the IRS during the prosecution years. Santiago distributed a list of 100 stolen identities that were associated with approximately $333,540 in fraudulent tax refunds.
Sentencing is set for July 15. Santiago faces a statutory maximum sentence of five years in prison on the conspiracy charge, five years in prison on each count of conversion of government property and five years in prison on each count of access device fraud. For each count of aggravated identity theft, Santiago faces a mandatory minimum prison term of two years, which will run consecutive to any other term of imprisonment he receives. Santiago also faces monetary penalties.
Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation and the U.S. Secret Service, who investigated this case and Senior Litigation Counsel Corey Smith of the Tax Division, who prosecuted this case in conjunction with the U.S. Attorney’s Office’s Public Corruption Unit.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Massachusetts Man Pleads Guilty to Transporting Child PornographyRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Matthew McElroy, 39, of Chicopee, Massachusetts, pled guilty today in U.S. District Court to transporting child pornography.
According to court records, in January 2016, a federal agent was investigating the distribution and production of child pornography over the internet when he received an email message attaching three child pornography images from an individual later identified as McElroy, who claimed that the images depicted his niece and that he had sexual contact with her. A search warrant was obtained for McElroy’s Chicopee residence and he was arrested on a criminal complaint. McElroy later admitted that he used his email account to trade child pornography.
McElroy faces between five and 20 years in prison, a $250,000 fine and supervised release of between five years and life. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Chicopee Police Department.
Married Couple Sentenced for Crimes Connected to Fatal Shooting of Off-Duty MPD OfficerRead the Press Release
Memphis, TN – A married couple has been sentenced to federal prison for crimes they committed in connection to the fatal shooting of an off-duty Memphis Police officer. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentences today.
According to information presented in court, Lorenzo Clark, 36, of Memphis, unlawfully possessed a Glock 9mm pistol on Sunday, October 11, 2015. The firearm was used by the defendant in the fatal shooting of 31-year-old Terence Olridge, an officer with the Memphis Police Department (MPD). Olridge was off duty at the time of the shooting.
Last October, MPD officers responded to a shooting call at Lorenzo Clark’s Cordova residence. Officers later recovered the Glock 9mm used in the shooting from the defendant. Lorenzo Clark admitted to possessing the Glock 9mm prior to and during the shooting with Olridge. Officers also recovered a shotgun, a high-powered rifle, more than 390 rounds of ammunition and a bulletproof vest during their search of the residence.
In January 2016, Lorenzo Clark pled guilty before U.S. District Judge Sheryl H. Lipman to one count of felony firearm possession.
On Friday, April 15, 2016, Judge Lipman sentenced Clark to 51 months in federal prison. The sentence was above his guideline range due to the additional firearms and ammunition law enforcement recovered from his home.
Lorenzo Clark’s wife, Natalie Clark, 37, of Memphis, was also charged in the October indictment for providing all three aforementioned firearms to Lorenzo Clark despite knowing he had been convicted of a felony.
In January 2015, Natalie Clark pled guilty before Judge Lipman to one count of disposing of a firearm to a felon.
On Friday, Judge Lipman sentenced her to one year and one day in federal prison.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), along with the MPD.
Assistant U.S. Attorney Marques Young prosecuted this case on the government’s behalf.
Man who Assaulted Girlfriend and Child on Tulalip Tribal Land Sentenced to Nearly Six Years in PrisonRead the Press Release
A 26-year-old man who resided with his girlfriend and their two children on Tulalip Tribal land has been sentenced in U.S. District Court in Seattle to 70 months in prison and three years of supervised release for a series of assaults and threats against the woman and her children, announced U.S. Attorney Annette L. Hayes. JOSHUA CARL VANDERWEL pleaded guilty to assault by strangulation, felony harassment and assault in the third degree on December 3, 2015. VANDERWEL was arrested and originally charged in Tulalip Tribal court following the assaults in September 2014. The case was charged federally in December 2014.
At the sentencing hearing, U.S. District Judge Robert S. Lasnik recommended that VANDERWEL undergo intensive drug treatment for his methamphetamine addiction while incarcerated and on supervised release. The judge noted that VANDERWEL’s girlfriend suffered an “extended period of hell on earth…” with VANDERWEL assaulting her, “threatening to push her off a cliff and slash her throat.”
According to records filed in the case, during the week of September 20, 2014, VANDERWEL repeatedly assaulted and threatened his girlfriend. The assaults included strangling her, hitting her with a metal pipe, throwing knives and lamps at her, and threatening to kill her and burn the house down with her small children inside. VANDERWEL kept the woman captive in the home, not allowing her to use the phone or go to work.
VANDERWEL was arrested by Tulalip Tribal Police, and the case was originally prosecuted as part of a pilot project authorized by the Violence Against Women Reauthorization Act of 2013 (VAWA 2013). The Tulalip Tribes of Washington is one of the first Tribes in the nation to exercise special criminal jurisdiction over certain domestic violence crimes, regardless of the defendant’s Indian or non-Indian status.
The case was investigated by the Tulalip Tribal Police. The case was prosecuted by Assistant United States Attorneys Ye-Ting Woo and Rebecca Cohen and by Special Assistant United States Attorney Sharon Jones Hayden. Ms. Hayden is a Tulalip Tribal Prosecutor specially designated to prosecute cases in federal court.
Los Lunas Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Joseph Baldonado, 30, of Los Lunas, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to a methamphetamine trafficking charge. Under the terms of the plea agreement, Baldonado will be sentenced to 60 months in federal prison followed by four years of supervised release.
Baldonado was arrested in Jan. 2016, on a criminal complaint charging him with distribution of methamphetamine in Valencia County, N.M. According to the complaint, Baldonado sold quantities of methamphetamine to an undercover agent on the following dates: 58.2 ounces on Jan. 6, 2016, 58.8 ounces on Jan. 12, 2016, and 57.2 ounces on Jan. 22, 2016.
Baldonado was subsequently indicted on Feb. 9, 2016, and charged with three counts of distribution of methamphetamine on Jan. 6, 12, and 22, 2016, in Valencia County.
During today’s proceedings, Baldonado pled guilty to Count 3 of the indictment charging him with possession of methamphetamine with intent to distribute. In entering the guilty plea, Baldonado admitted possessing more than 50 grams of methamphetamine on Jan. 22, 2016, and selling it to another person for $1,600. Baldonado remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the HIDTA Region I Narcotics Task Force and is being prosecuted by Assistant U.S. Attorney Eva M. Fontanez.
The HIDTA Region I Narcotics Task Force is comprised of the Albuquerque Police Department, Albuquerque office of the DEA, Pojoaque Tribal Police Department, Rio Rancho Police Department, Sandoval County Sheriff’s Office and the Valencia County Sheriff’s Office. 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.
Lawrence Man Pleads Guilty to Cashing $146,000 in Stolen Tax Refund ChecksRead the Press Release
BOSTON – A Lawrence man pleaded guilty today in connection with receiving stolen U.S. Treasury checks.
Rolfi Espinal, 49, pleaded guilty to three counts of receipt of stolen public money. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for June 19, 2016. Espinal was charged in December 2015.
From September to December 2011, Espinal accepted fraudulent U.S. Treasury checks totaling $146,698, which he cashed through his girlfriend’s bank account. In January 2013, Espinal falsely told federal agents that he received the checks as payment for used cars that he had sold to an individual, when, in fact, the individual did not exist and Espinal knew that the checks were obtained fraudulently. Furthermore, Espinal told the agents that he paid taxes on all of the income when he had only paid taxes on $34,000 of business receipts for the 2011 tax year.
The charge of receipt of stolen public moneys provides for a sentence of no more than 10 years in prison, three years of supervised release and a fine of $250,000. If the Court accepts the plea agreement, Espinal will be sentenced to 15 to 21 months in prison and ordered to pay $13,500 in restitution to the IRS. 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; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations Boston; and Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service, made the announcement today. Lawrence Police Department and the Massachusetts State Police also assisted with the investigation. The case is being prosecuted by Assistant U.S. Attorney Seth B. Kosto of Ortiz’s Cybercrime Unit.
Landscaper Sentenced in Union, Unemployment Fraud CaseRead the Press Release
PROVIDENCE, R.I. – Steven F. Pagliarini, 57, Executive Vice-President and Treasurer of Central Landscaping Construction Company, located in Johnston, R.I., and Executive Vice-President of Central Nurseries, Inc., located in Chepachet and Johnston, R.I., was sentenced today to 3 years probation for orchestrating a scheme to avoid paying union benefits, and for providing false information to the State of Rhode Island to ensure some of his employees were paid unemployment compensation to which they were not entitled.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Pagliarini to pay restitution totaling $171,695.22. Pagliarini pleaded guilty on January 28, 2016, to three counts of falsification of documents and one count of wire fraud.
Pagliarini’s sentence is announced by United States Attorney Peter F. Neronha; Cheryl Garcia, Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region; Susan A. Hensley, Regional Director, U.S. Department of Labor Employee Benefits Security Administration; Todd Damiani, Special Agent in Charge of Region One U.S. Department of Transportation Office of Inspector General; Christina D. Scaringi, Special Agent in Charge of the Northeast Region of the U.S. Department of Housing and Urban Development Office of Inspector General; and Scott Jensen, Director of Rhode Department of Labor and Training (RIDLT).
According to information presented to the court, at various times between January 2007 and December 2010, Pagliarini submitted false documents to union welfare and pension plan administrators of two unions that represent construction equipment operators and other employees of Central Landscaping. The documents did not accurately reflect the actual number of hours worked by some employees and the actual amount of wages paid to those employees. The employees worked on federally-funded projects at the Hartford Park Project in Providence and the I-195 Relocation Project.
Additionally, according to information presented to the court, in order to avoid paying wages to some employees between November 2009 through April 2010, Pagliarini falsely reported to the RIDLT that the employees of Central Nurseries had been laid-off because of a lack of work. Pagliarini required the employees to work part-time but did not pay them. Based on documents filed with RIDLT, employees were paid a total of $68,487 in unemployment compensation.
The case was prosecuted by Assistant U.S. Attorney Dulce Donovan.
The matter was investigated by the United States Attorney’s Office; U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation; U.S. Department of Labor Employee Benefits Security Administration; U.S. Department of Transportation Office of Inspector General; U.S. Department of Housing and Urban Development Office of Inspector General; and the Rhode Island Department of Labor and Training.
###
Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Lancaster County Man sentenced to more than 15 years for dealing cocaineRead the Press Release
Contact Person: William K. Witherspoon (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Mitchell Narada Kelly, a/k/a "Duncey", age 36, of Lancaster County, South Carolina was sentenced yesterday in federal court in Columbia, South Carolina, for possession with the intent to distribute and distribution of a quantity of cocaine, a violation of 18 U.S.C. §§ 841(a)(1), 841(b)(1)(C) and 851. United States District Judge Mary Geiger Lewis of Columbia sentenced Kelly to 188 months (15 years and 8 months) in prison, followed by 6 years of supervised release and a special assessment of $100.
Evidence presented at the change of plea hearing established that members of the Lancaster County Sheriff’s Department Narcotics Unit, FBI and ATF developed informants that agreed to make a controlled purchase of cocaine from Kelly. The officers sent the individuals to Kelly’s residence where they purchased cocaine from Kelly on April 9, 2015, June 3, 2015 and June 24, 2015. The cocaine purchased in each controlled buy weighed between one and three ounces. Based upon these controlled buys, the officers obtained a search warrant to search Kelly’s house where they found digital scales, a small amount of cocaine, various types of ammunition and a .40 caliber Ruger model SR40C pistol. During his guilty plea hearing, Kelly admitted to having five (5) prior felony drug convictions before these purchases.
The case was investigated by agents of the Federal Bureau of Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives and Lancaster County Sheriff's Department. Assistant United States Attorney William K. Witherspoon of the Columbia, South Carolina office prosecuted the case.
This case was a part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases.
#####
Lakeland Drug Dealer Pleads GuiltyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Donavan Antwan Daniels (36, Lakeland) has pleaded guilty to one count of conspiracy to possess with intent to distribute 28 grams or more of crack cocaine. He faces a minimum mandatory penalty of 5 years, up to 40 years, in federal prison. A sentencing date has not yet been set.
According to the plea agreement, during June and July 2015, Daniels sold crack cocaine to a law enforcement confidential source on four separate occasions. These transactions took place in Lakeland.
This case was investigated by the Drug Enforcement Administration and the Lakeland Police Department. It is being prosecuted by Assistant United States Attorneys Maria Chapa-Lopez and Taylor G. Stout.
Justice Department Seeks to Shut Down Florida Tax Return Preparers and Owner of “Tax MD” Tax Preparation BusinessRead the Press Release
Businesses Allegedly Prepare Fraudulent Tax Returns While Charging Customers Undisclosed, Unconscionable Fees
The United States filed a civil injunction suit seeking to bar Patrick Clarke of Hallandale Beach, Florida, and Ruby Rodriguez of Orlando, Florida, from owning, operating, or franchising a tax return preparation business and preparing tax returns for others, the Justice Department announced today.
The complaint also requests that the court order Clarke and Rodriguez to disgorge the fees that they obtained through the alleged fraudulent tax return preparation. According to the complaint, Clarke owns and operates Tax MD, a tax return preparation business with stores in Florida and North Carolina. Rodriguez allegedly manages one of Clarke’s stores located in Orlando.
According to the complaint, Clarke’s preparers, including Rodriguez, target primarily low to moderate income customers with misleading advertisements, prepare and file fraudulent tax returns to improperly increase their customers’ refunds and profit through unconscionable, exorbitant and often undisclosed fees—all at the expense of their customers and the U.S. Treasury.
The complaint alleges that Clarke’s preparers, including Rodriguez, engage in fraudulent activity, including:
- Falsely claiming the Earned Income Tax Credit;
- Claiming improper filing status (i.e. head of household for married individuals);
- Fabricating businesses and related business income and expenses;
- Fabricating Schedule A deductions, including for unreimbursed employee business expenses; and
- Charging deceptive and unconscionable fees
According to the complaint, Clarke was previously a franchisee of LBS Tax Services. This is one of 10 lawsuits that the Justice Department has filed in Florida against former LBS franchisees or related individuals, including Walner Gachette, Douglas Mesadieu, Jean Demesmin, Kerny Pierre-Louis, Demetrius Scott, Jason Stinson, Wilfrid Antoine, Tonya Chambers, Jehoakim Victor, Lauri Rodriguez, Milot Odne, Christopher Lawrence and Kenneth Aikens.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Jacksonville Man Accused of Burying His Dead Mother in Her Yard and Then Stealing Her Social Security and Pension BenefitsRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Brian Lee Adams (56, Jacksonville) with one count of bank fraud, one count of theft of government property, and four counts of aggravated identity theft. If convicted, he faces up to 30 years in federal prison for the bank fraud count, up to 10 years for the theft of government property count, to be followed by two years’ imprisonment for the aggravated identity theft counts. The indictment also notifies Adams that the United States is seeking a money judgment in the amount of $35,345.36, the proceeds from the alleged activity.
According to the indictment, Adams’s mother, whose initials are J.Y.A., died in an unknown manner at some time prior to July 4, 2014. Adams buried her in the yard of her Green Cove Springs residence to conceal the event, cause, and circumstances of her death. Adams then stole his deceased mother’s pension funds and Social Security benefits until June 2015, when authorities discovered what he had done with her body.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Social Security Administration, Office of the Inspector General; the United States Secret Service; the U.S. Department of Health and Human Services, Office of Inspector General; the Florida Department of Law Enforcement; and the Clay County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Mac D. Heavener, III.
IRS Employees Arrested for Fraudulent Tax Returns, Two Others Charged for Tax EvasionRead the Press Release
SACRAMENTO, Calif. — This week, prior to the annual tax return filing deadline, four individuals, including two current IRS employees, were charged in separate cases with federal tax crime, United States Attorney Benjamin B. Wagner announced today.
Longtime IRS Employees Arrested Today in Fresno
Two long-time IRS employees were arrested today at the IRS facility in Fresno as they came to work. On April 14, 2015, a 38-count indictment was brought against Della Ornelas, 48, and Randall Ruff, 52, both of Fresno, charging them with aiding others in the preparation of false tax returns, and making their own fraudulent tax returns as employee of the United States. According to the indictment, Ornelas and Ruff are married to each other, and are longtime employees of the Internal Revenue Service in Fresno. They are charged with helping themselves, family and friends file false tax returns that claimed false dependents, generating large tax refunds that were diverted into bank accounts they controlled. They allegedly defrauded the United States of approximately $146,561 over a seven-year period.
This case is the product of an investigation by the Treasury Inspector General for Tax Administration and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorney Mark J. McKeon is prosecuting the case. (case # 1:16-cr-054)
Fairfield Resident Indicted for Tax Evasion
On Thursday, April 14, 2016, a federal grand jury returned an indictment against Bobby Louis Sanders, 52, of Fairfield, charging him with two counts of tax evasion. According to the indictment, Sanders failed to pay the tax due of $31,061 for tax years 2009 and 2010 and failed to file tax returns for tax years 2009 and 2010. The indictment alleges that Sanders willfully provided false information on W-4 forms claiming exemptions he was not entitled to claim.
This case is the product of an investigation by the Internal Revenue Service. Assistant U.S. Attorney William S. Wong is prosecuting the case. (case # 2:16-cr-081)
Citrus Heights Man Indicted for Failure to File Tax Returns
On April 12, 2016, Donnie Francis Schroeder, 52, of Citrus Heights, was charged with four-counts of failure to file income taxes for tax years 2009 through 2012. According to court documents, between 2009 and 2012, Schroeder willfully did not file income taxes on income he earned as a 50 percent partner in a sweeping and cleaning business that operates in Sacramento and Reno, Nevada.
This case is the product of an investigation by the Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorney André M. Espinosa is prosecuting the case. (case # 2:16-cr-080)
If convicted, Ornelas and Ruff face a maximum statutory sentence of three years in prison for each count of aiding and abetting false tax returns and five years in prison for making fraudulent tax return by an employee of the United States. If convicted, Sanders faces a maximum statutory penalty of five years in prison and a $100,000 fine on each count. If convicted, Schroeder faces a maximum statutory penalty of one year in prison and a $25,000 fine for each count. Any sentence, however, would 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.
The charges against each of the foregoing defendants are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
In addition to the above, so far in 2016, eight individuals have been indicted, five have been convicted and 14 were sentenced for either submitting false claims for refunds or evading taxes. For more information, see the press release also issued this week.
Head of Methamphetamine Organization Sent to Prison for Twenty-Five YearsRead the Press Release
A man who was responsible for distributing pounds of ice methamphetamine and tampering with witnesses was sentenced today to 25 years in federal prison.
Martin Lawrence, 53, from Cedar Rapids, Iowa, received the prison term after an October 28, 2015, jury verdict finding him guilty of three counts: conspiracy to distribute at least 50 grams of ice methamphetamine; possession of at least 5 grams of ice methamphetamine with the intent to distribute; and witness tampering.
Evidence at trial showed Lawrence was the head of a drug trafficking organization responsible for distributing significant quantities of ice methamphetamine, a highly pure, crystalized form of methamphetamine, in Eastern Iowa. Lawrence obtained the drug from a source of supply located in Omaha, Nebraska, and transported it back to Iowa for redistribution. Lawrence relied on a network of retail-level distributors who distributed the drug throughout northeast Iowa.
Investigators learned of the organization after Lawrence’s step-son brought a stuffed animal containing methamphetamine to his elementary school. During the investigation of this case, law enforcement seized additional methamphetamine, cash, and numerous luxury vehicles from Lawrence including a Mercedes, BMW, Corvette, and Porsche.
After his arrest on federal charges, Lawrence instructed government witnesses to avoid contact with law enforcement in order to prevent these witnesses from testifying at their trial. Based on these instructions, Lawrence was found guilty of witness tampering.
During the same trial, Troy Lawrence was also convicted of conspiracy to distribute at least 50 grams of ice methamphetamine; distribution of at least 5 grams of ice methamphetamine with the intent to distribute; and witness tampering. On January 14, 2016, Troy Lawrence was sentenced to a 262 month term of imprisonment.
Lawrence was sentenced in Cedar Rapids by United States District Court Senior Judge Mark W. Bennett. Lawrence was sentenced to 300 months imprisonment. A special assessment of $300 was imposed. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
Lawrence is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case is being prosecuted by Assistant United States Attorney Lisa C. Williams and was investigated by the Cedar Rapids Police Department, Drug Enforcement Administration, Linn County Sheriff’s Office, and the Dubuque Drug Task Force.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-0069.
Follow us on Twitter @USAO_NDIA.
Glen Burnie Man Sentenced to over Four Years in Prison for Leading a Drug Distribution ConspiracyRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Alex Raymond Valerio, age 36, of Glen Burnie, Maryland, today to 51 months in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute crack cocaine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; and Anne Arundel County Police Chief Tim Altomare.
According to Valerio’s plea agreement, from at least May 2013 through July 23, 2014, he was the leader of a conspiracy to distribute crack cocaine, heroin, and powder cocaine in Baltimore and Anne Arundel County, Maryland. His co-conspirators included Joseph Melendez, Marc Gaston, Moises Rosario, Eddie Eusebio Mateo, Ronald Francis Wosk Jr., James Maurice McCants, Keith Joseph Herring, Robert James Bookhamer, Dartanon Antione Gaines, Marvin Michael Desormeaux, and others.
Valerio obtained heroin and cocaine from Melendez, Gaston, and others in the New York area. Valerio either met with these suppliers personally or directed Rosario or Mateo to meet with them on his behalf. Valerio coordinated the quantity and price of the drugs to be purchased directly with the suppliers. Valerio converted some of the cocaine obtained from these suppliers into crack cocaine at his residence in Glen Burnie. Valerio’s customers, including Wosk, McCants, Herring, Bookhamer, Gaines, Desormeaux, and others, were in direct contact with Valerio to coordinate the purchase of heroin, cocaine, or crack cocaine. Valerio arranged for the price and quantity of these drug transactions and either met with the customers personally or directed Rosario or Mateo to conduct the transactions.
From March through July 2014, Valerio and his co-conspirators were intercepted in telephone calls and text messages discussing their drug trafficking activities. Law enforcement also observed Valerio meeting with his co-conspirators to conduct drug transactions.
On July 23, 2014, investigators executed search warrants at residences of the co-conspirators and other locations connected with the conspiracy. From Valerio’s home law enforcement recovered: two hydraulic presses; spoons with cocaine residue; drug paraphernalia including cutting agent and packaging material; a hand press; approximately 30.9 grams of cocaine; and $24,000 in cash. From Bookhamer’s home in Baltimore law enforcement recovered: $7,108 in cash; plastic bags with approximately 22 grams of cocaine; drug paraphernalia and packaging materials; a .45 caliber handgun with two magazines; a rifle with a large capacity magazine; a box of .45 caliber ammunition; and multiple cell phones. Investigators recovered from Mateo and Rosario’s home in Pikesville: a six ton shop press, a dye press, five bundles of heroin (totaling approximately 11.7 grams), scales with cocaine reside, marijuana seeds, and twenty marijuana plants.
James Maurice McCants, age 43, of Baltimore, was sentenced to 92 months in prison; Joseph Melendez, age 28, of Brooklyn, New York, and Marc Gaston, age 37, of New York, New York, were each sentenced to five years in prison; Moises Rosario, age 33, and Eddie Eusebio Mateo, age 31,both of Pikesville, Maryland, were sentenced to two years in prison and 18 months in prison, respectively; Keith Joseph Herring, age 27, of White Marsh, Maryland, was sentenced to 21 months in prison; and Robert Bookhamer, age 37, of Baltimore, was sentenced to time served.
Dartanon Antione Gaines, age 36, of Owings Mills, Maryland, Ronald Francis Wosk, Jr., age 29, of Baltimore, and Marvin Michael Desormeaux, age 41, of Aberdeen, Maryland, also pleaded guilty to their roles in the drug conspiracy and are awaiting sentencing.
United States Attorney Rod J. Rosenstein commended the DEA and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kenneth S. Clark, who is prosecuting this Organized Crime Drug Enforcement Task Force case.
Georgia DOT Foreman Pleads Guilty to Allowing Illegal Dumping at Atlanta SitesRead the Press Release
George H. Bell, a former Georgia Department of Transportation maintenance foreman, entered a guilty plea in federal court to accepting bribe payments in exchange for allowing more than 38,000 cubic yards of unsuitable dirt to be dumped at DOT sites in metro-Atlanta.
“As a DOT supervisor, Bell accepted thousands of dollars in bribes in exchange for allowing others to dump unsuitable dirt, all at the expense of the environment and the people of this district,” said U. S. Attorney John A. Horn. “His criminal conduct resulted in environmental damage and has already left Georgia taxpayers with a staggering $2.5 million clean-up bill.”
“Public corruption comes in many forms but, at its core, established rules and policy are intentionally ignored, often for personal gain. That was the case here and it comes at great expense to the taxpaying public. It is because of the serious consequences as seen here that public corruption remains the FBI’s number one criminal program priority,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“The Georgia DOT reported the issue and has cooperated fully with all agencies involved in the investigation to ensure that all responsible parties are held accountable and prosecuted to the fullest extent of the law for these illegal actions,” said Georgia DOT Commissioner Russell R. McMurry. “We are appalled by the corrupt actions of this lone former employee that in no way reflect the hard work and commitment displayed by more than 4,000 GDOT employees.”
According to U.S. Attorney Horn, the charges and other information presented in court: Bell worked for the Georgia Department of Transportation (“GA DOT”) for approximately 15 years. By the end of his career, Bell served the GA DOT in a supervisory role as an Assistant Area Maintenance Foreman. In that capacity, Bell oversaw various transportation projects under the control of the GA DOT, including the maintenance and repairs of Georgia roadway system.
From approximately April to December 2014, Bell accepted cash bribe payments from the owners of a dirt hauling company that is not identified in court proceedings (“Owners”). In exchange for those bribe payments, Bell allowed the Owners to dump unsuitable dirt at various GA DOT locations around metro-Atlanta. Unsuitable dirt is dirt that is removed during construction or landscaping projects that cannot be built upon in the future. In this case, the dirt contained construction debris, including: nails, concrete fragments, and various pieces of metal.
More specifically, in April 2014, one of the Owners asked Bell if the GA DOT would accept multiple loads of dirt. Bell allowed the unsuitable dirt to be dumped at a GA DOT site, but then charged the Owner $600 to dump the dirt. Bell used GA DOT personnel and equipment to spread the dirt after the Owners had dumped it. After that, Bell and the Owners agreed that Bell would charge the Owners about $5 per load (if the Owners spread the dirt themselves) and $7 per load (if Bell used GA DOT personnel and equipment to spread the dirt). For several months thereafter, Bell accepted bribe payments from the Owners in exchange for allowing the Owners to illegally dump unsuitable dirt at a GA DOT location. In total, the Owners paid Bell approximately $15,000 in cash bribe payments.
Bell allowed the Owners to dump well over 1000 dump truck loads of unsuitable dirt at the GA DOT sites located at: (1) Hugh Howell Road and Stone Mountain Highway, in Stone Mountain; (2) North Decatur Road and I-285, in DeKalb County; (3) 805 George Luther Drive, in DeKalb County; and (4) Chamblee Dunwoody Road and I-285, in DeKalb County. Bell permitted over 38,000 cubic yards of dirt to be dumped at the GA DOT location near Hugh Howell Road alone. Unfortunately, Bell also allowed the Owners to dump the dirt at a protected wetland site and at a site where the dirt entered Stone Mountain Lake. Based on the massive amount of unsuitable dirt that Bell allowed to be dumped, the clean-up costs associated with his criminal acts have already exceeded $2.5 million.
On August 11, 201, Bell, 49, of Lithonia, Georgia, was indicted by a federal grand jury on bribery charges. Under federal law, conspiring to accept bribe payments carries a maximum sentence of five years in prison and a fine of up to $250,000.
The sentencing hearing for Bell has been scheduled for June 29, 2016, before U.S. District Judge Thomas. W. Thrash, Jr.
This case is being investigated by the Federal and Georgia Bureaus of Investigation.
Assistant United States Attorney Jeffrey W. Davis is prosecuting the case. Former Assistant United States Attorney Jamie L. Mickelson previously prosecuted the case.”
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Gainesville Pharmacy Technician Arrested and Charged with Attempted Online Enticement of A Child to Engage in Illegal Sexual ActivityRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Matthew Bryan Caniff (32, Gainesville) has been arrested and charged by a federal criminal complaint with using the Internet to attempt to entice a minor to engage in sexual activity. He faces a minimum mandatory penalty of 10 years, and up to life, in federal prison. His detention hearing is scheduled for today at 3:00 p.m. before United States Magistrate James R. Klindt.
According to the complaint, between March 31 and April 1, 2016, Caniff engaged in a series of online text conversations with a person he believed to be a 13-year-old child. This "child" was actually an undercover FBI agent. During the course of these conversations, Caniff discussed in graphic detail his desire to meet and have sex with the “child” at “her” home. He also sent several explicit photos of himself to the “child,” and told “her” that he would bring prescription drugs with him to share with “her.” Caniff confirmed that the “child” was alone at the residence and that “her” parent was going to be out of town for several days. During the early morning hours on April 1, 2016, Caniff drove from Gainesville to a home in St. Johns to meet the “child” for sex. He was arrested by deputies from the St. Johns County Sheriff's, and a knife and several pills were found in his possession.
This case was investigated by the St. Johns County Sheriff’s Office, the Alachua County Sheriff’s Office, and the Federal Bureau of Investigation. 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 the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Freedom Mortgage Corporation Agrees to Pay $113 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
Freedom Mortgage Corporation has agreed to pay the United States $113 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting single family mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements for the FHA insurance program, the Justice Department announced today. Freedom Mortgage Corporation is headquartered in Mt. Laurel, New Jersey.
“It is imperative that mortgage lenders that participate in the FHA insurance program follow the rules and requirements set forth by HUD,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to work with our partners at HUD, its Office of Inspector General, and U.S. Attorneys around the country to protect homeowners and taxpayers from those who knowingly seek to abuse the FHA program for their own gain.”
“Freedom Mortgage did not properly comply with FHA rules for the mortgages it was generating and did not adequately monitor early payment defaults,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “It also failed to report to HUD the defaults it did discover, as required by its participation in the program. Today’s settlement recognizes those failures and imposes an appropriate sanction.”
During the time period covered by the settlement, Freedom Mortgage Corporation participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and endorsing mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that Freedom Mortgage Corporation failed to comply with certain FHA origination, underwriting and quality control requirements. As part of the settlement, Freedom Mortgage Corporation admitted to the following facts: Between Jan. 1, 2006 and Dec. 31, 2011, it certified mortgage loans for FHA insurance that did not meet HUD underwriting requirements and were therefore not eligible for FHA mortgage insurance. Additionally, Freedom Mortgage Corporation did not adhere to FHA’s quality control (QC) requirements. Between 2006 and 2008, Freedom Mortgage Corporation did not share its early payment default (EPD) QC reviews with production and underwriting management, nor did it require responses to its EPD QC findings from its production or underwriting staff. Due to staffing limitations between 2008 and 2010, Freedom Mortgage Corporation did not always perform timely QC reviews or perform audits of all EPD loans, as required by HUD. An EPD is a loan that becomes 60 days past due within the first six months of the loan. The EPD QC reviews that Freedom Mortgage Corporation did perform revealed high defect rates, exceeding 30 percent between 2008 and 2010. Yet, between 2006 and 2011, Freedom Mortgage Corporation did not report a single improperly originated loan to HUD, despite its obligation to do so. Additionally, in 2012, after identifying hundreds of loans that “possibly should have been self-reported to HUD,” it reported only one. As a result of Freedom Mortgage Corporation’s conduct, HUD insured hundreds of loans that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured and subsequently incurred substantial losses when it paid insurance claims on the ineligible loans approved by Freedom Mortgage Corporation.
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and demonstrates HUD OIG’s continued efforts to combat fraud in the origination of single family mortgages insured by the FHA,” said HUD Inspector General David A. Montoya.
“FHA-approved lenders have a responsibility to comply with underwriting standards,” said HUD’s General Counsel Helen Kanovsky. “We are gratified that Freedom Mortgage Corporation has accepted responsibility for its actions.”
The settlement was the result of a joint investigation conducted by HUD, HUD OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of New Jersey.
Freedom Mortgage Corp. Agrees to Pay $113 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
NEWARK, N.J. – Freedom Mortgage Corp. has agreed to pay the United States $113 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting single family mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements for the FHA insurance program, the Justice Department announced today. Freedom Mortgage is headquartered in Mt. Laurel, New Jersey.
“Freedom Mortgage did not properly comply with FHA rules for the mortgages it was generating and did not adequately monitor early payment defaults,” U.S. Attorney Paul J. Fishman for the District of New Jersey said. “It also failed to report to HUD the defaults it did discover, as required by its participation in the program. Today’s settlement recognizes those failures and imposes an appropriate sanction.”
“It is imperative that mortgage lenders that participate in the FHA insurance program follow the rules and requirements set forth by HUD,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to work with our partners at HUD, its Office of Inspector General, and U.S. Attorneys around the country to protect homeowners and taxpayers from those who knowingly seek to abuse the FHA program for their own gain.”
During the period covered by the settlement, Freedom Mortgage participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and endorsing mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that Freedom Mortgage failed to comply with certain FHA origination, underwriting and quality control requirements.
As part of the settlement, Freedom Mortgage admitted to the following facts:
Between Jan. 1, 2006, and Dec. 31, 2011, it certified mortgage loans for FHA insurance that did not meet HUD underwriting requirements and were therefore not eligible for FHA mortgage insurance. Freedom Mortgage did not adhere to FHA’s quality control (QC) requirements. Between 2006 and 2008, Freedom Mortgage did not share its early payment default (EPD) QC reviews with production and underwriting management, nor did it require responses to its EPD QC findings from its production or underwriting staff. Due to staffing limitations between 2008 and 2010, Freedom Mortgage did not always perform timely QC reviews or perform audits of all EPD loans, as required by HUD. An EPD is a loan that becomes 60 days past due within the first six months of the loan. The EPD QC reviews that Freedom Mortgage did perform revealed high defect rates, exceeding 30 percent between 2008 and 2010. Yet, between 2006 and 2011, Freedom Mortgage did not report a single improperly originated loan to HUD, despite its obligation to do so. In 2012, after identifying hundreds of loans that “possibly should have been self-reported to HUD,” it reported only one. As a result of Freedom Mortgage’s conduct, HUD insured hundreds of loans that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured and subsequently incurred substantial losses when it paid insurance claims on the ineligible loans approved by Freedom Mortgage.
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and demonstrates HUD OIG’s continued efforts to combat fraud in the origination of single family mortgages insured by the FHA,” HUD Inspector General David A. Montoya said.
“FHA-approved lenders have a responsibility to comply with underwriting standards,” HUD’s General Counsel Helen Kanovsky said. “We are gratified that Freedom Mortgage Corporation has accepted responsibility for its actions.”
The settlement was the result of a joint investigation conducted by HUD, HUD OIG, the Civil Division’s Commercial Litigation Branch, and Senior Litigation Counsel Anthony J. LaBruna and Assistant U.S. Attorney Mark Orlowski of the Civil Division of the U.S. Attorney’s Office for the District of New Jersey.
Frederick Cocaine Dealer Sentenced to Eight Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Trevin Montrez Sampson, a/k/a “Bucket,” age 30, of Frederick, Maryland, today to eight years in prison, followed by four years of supervised release, for conspiracy to distribute and possess with intent to distribute cocaine. Sampson was the third member of the conspiracy to be sentenced for distributing cocaine in and around Frederick.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Frederick Police Department Chief Edward G. Hargis.
According to their plea agreements, from October 2014 through December 6, 2014, Trevin Sampson, his brother, Jacoby Sampson, and Peter Nicholson participated in a conspiracy to distribute cocaine in and around Frederick. During the investigation, Frederick Police initiated wiretaps on the Sampson brothers’ telephones and intercepted a series of calls in which the brothers arranged for Nicholson to transport a large amount of cocaine from Baltimore County to Frederick. On November 24, 2014, Nicholson was stopped in his vehicle by law enforcement as he was en route to deliver cocaine to Trevin and Jacoby Sampson, as well as other customers. Nicholson attempted to run away and in the course of his flight, placed a white cloth bag into an empty recycling bin. Nicholson was arrested and the white cloth bag was recovered by law enforcement. The bag contained multiple smaller bags which contained a total of 609.5 grams of cocaine. Two of the smaller bags were labeled “T,” for Trevin Sampson, and “Luv,” for Jacoby Sampson.
The Sampsons and Nicholson spent the evening of November 25, 2014 and the following morning attempting to locate the white cloth bag, finally concluding, in a series of intercepted phone calls, that the bag had probably been seized by law enforcement. Later on November 26, 2014, Trevin Sampson persuaded Nicholson to transport additional cocaine to Frederick, which Nicholson agreed to deliver the next day. On November 27, 2014, officers conducted surveillance as Nicholson traveled from Baltimore County to Frederick in a taxi. The officers initiated a traffic stop and as the taxi was coming to a stop, Nicholson ran from the car towards the nearby woods, tossing one package as he ran and throwing another package over a fence before he was taken into custody. The packages were retrieved and found to contain a total of 60.48 grams of cocaine, which Trevin Sampson admits was intended for him.
On December 1, 2014, Trevin Sampson exchanged a series of text messages with one of his customers and arranged to meet the customer at a residence in Frederick. Officers conducting surveillance saw the customer enter the residence and leave a short time later with Trevin Sampson. Officers subsequently stopped the customer at a parking lot in Hagerstown, Maryland and recovered 125.8 grams of cocaine, which the customer had purchased from Trevin Sampson.
During their participation in the drug conspiracy, Trevin Sampson and his co-conspirators admitted to distributing at least 500 grams of cocaine.
Peter Andrew Nicholson, a/k/a “White Boy Pete,” age 32, of Rosedale, Maryland, previously pleaded guilty and on December 23, 2015, was sentenced to nine years in prison for conspiracy to distribute and possess with intent to distribute cocaine. Jacoby Olajuwon Sampson, a/k/a “Luv/Luva,” and “Coby,” age 27, of Frederick, pleaded guilty to the same charge and was sentenced to five years in prison.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and the Frederick Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Peter J. Martinez, who prosecuted the case.
Four Charged with Distributing Heroin in DubuqueRead the Press Release
Four men have been charged with distributing heroin in Dubuque in 2016. The charges are contained in four Complaints unsealed yesterday in United States District Court in Cedar Rapids.
The Complaints allege distributions of heroin on the following dates by the following individuals:
Derrick Jermaine Brown on February 1, 2016;
Tywone Derrel Matthews on March 29, 2016;
Antrell D. Lewis on March 31, 2016; and
D’Anthony Lamont Moore on April 11, 2016.
If convicted, each man faces a possible maximum sentence of 20 years’ imprisonment, a $1,000,000 fine, $100 in special assessments, and up to a lifetime term of supervised release following any imprisonment.
All four men appeared Thursday in federal court in Cedar Rapids and were held without bond. Their next appearances for detention hearings are set for 4:30 p.m. on Monday, April 18, 2016.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the Dubuque Drug Task Force and Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Cedar Rapids Police Department; the Linn County Sheriff's Office; the Marion Police Department; the Iowa City Police Department; and the Iowa Division of Narcotics Enforcement, and is being prosecuted by Assistant United States Attorney Dan Chatham.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are:
Derrick Brown – 16-MJ-102
Tywone Matthews – 16-MJ-104
Antrell Lewis – 16-MJ-106
D’Anthony Moore – 16-MJ-107.
Follow us on Twitter @USAO_NDIA.
Former U.S. Postal Service Employee Sentenced to Probation for Conviction on Destruction of Mail Misdemeanor ChargeRead the Press Release
ALBUQUERQUE – Phillip Duran, 33, of Las Vegas, N.M., pleaded guilty yesterday in federal court to an opening and destruction of mail misdemeanor charge. After entering his guilty plea, Duran was sentenced to one year of probation and ordered to pay an $800 fine.
Duran was charged in a misdemeanor information on March 16, 2016, with unlawfully opening mail not directed to him while employed as a U.S. Postal Service officer. According to the information, Duran committed the crime between Nov. 19, 2015 and Jan. 7, 2016, in San Miguel County, N.M.
During yesterday’s hearing, Duran pled guilty to the information and admitted that from Nov. 19, 2015 through Jan. 7, 2016, he intentionally opened other people’s mail when he was not supposed to do so.
This case was investigated by the U.S. Postal Inspection Service and is being prosecuted by Assistant U.S. Attorney Eva M. Fontanez.
Former U.S. Coast Guard Serviceman Sentenced to 235 Months in Prison for Production of Child PornographyRead the Press Release
A former United States Coast Guard serviceman was sentenced on Tuesday, April 12, 2016, to 235 months in prison by United States District Judge Jose E. Martinez for producing child pornography.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Rear Admiral Scott Buschman, United States Coast Guard Seventh District, and Thomas E. Robarge, Special Agent in Charge, United States Coast Guard Investigative Service (CGIS) Southeast Region, made the announcement.
Drew Alexander Young, 24, of Key West, previously pled guilty to one count of production of visual depictions of sexual exploitation of minors, in violation of Title 18, United States Code, Sections 2251(a) and (e). After his release from According to court documents and information disclosed during the court proceedings, CGIS investigators executed a military search authorization and searched Young’s Samsung Galaxy S5 cellular telephone as part of a sexual harassment investigation. Investigators found over twenty video files containing suspected child pornography in Young’s phone. Investigators also discovered a number of sexually explicit Kik Messenger chats between the defendant and girls as young as thirteen-years-old. Kik Messenger is a web-based instant messaging application. During their review of the Kik Messenger chats, investigators discovered chats in which Young repeatedly solicited and received sexually explicit pictures of the minor girls.
This case is 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.
Mr. Ferrer commended the investigative efforts of CGIS. This case was prosecuted by Assistant United States Attorney Christopher B. Browne.
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.
Former U.S. Army Sergeant Sentenced to Federal PrisonRead the Press Release
In El Paso today, 46–year-old former U.S. Army Sergeant 1st Class Michael Hall, Jr., was sentenced to four years in federal prison for possession of child pornography announced United States Attorney Richard L. Durbin, Jr., and Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso.
In addition to the prison term, United States District Judge Kathleen Cardone ordered that Hall be placed on supervised release for a period of five years after completing his prison term and to register as a sex offender.
On June 3, 2015, HSI Cyber Crimes Unit agents and El Paso County Sheriff’s deputies executed a federal search warrant at the defendant’s residence and seized various items including two laptop computers and various electronic media. A forensic analysis of the seized items revealed the presence of 23,050 images and 22 videos which depict minors engaged in sexually explicit conduct.
On January 20, 2016, Hall pleaded guilty to one count of possession of child pornography.
This case was investigated by HSI with assistance from the El Paso County Sheriff’s Office. Assistant United States Attorney Rifian Newaz prosecuted this case on behalf of the Government.
Former U.S. Army Corps of Engineers Employee Sentenced to 30 Years in Prison for Transportation and Possession of Child PornographyRead the Press Release
HARRISONBURG – A former regional chief of public affairs for the U.S. Army Corps of Engineers was sentenced to 30 years in prison yesterday in the United States District Court for the Western District of Virginia in Harrisonburg for charges involving the sexual exploitation of children, announced United States Attorney John P. Fishwick Jr.
On Oct. 6, 2015, Michael Steven Beeman, 62, of Winchester, Virginia, pleaded guilty to one count of transportation of child pornography and four counts of possession of child pornography. U.S. District Court Judge Michael F. Urbanski of the Western District of Virginia sentenced Beeman and also ordered him to serve a lifetime term of supervised release.
According to documents filed with the plea agreement, in and around the late 1980s, Beeman was a U.S. Air Force employee in a public affairs position at Patrick Air Force Base in Florida and during that time, engaged in sexual acts with a minor on multiple occasions and sometimes recorded the abuse. In 2014, Beeman’s dog walker discovered images of naked minors on one of Beeman’s devices and called the Frederick County, Virginia, Sheriff’s Office, according to the plea document. Beeman further admitted that, in January 2014, he had more than 50 items, including VHS tapes, DVDs, desktop and laptop computers, tablets, external hard drives and thumb drives, at his home that contained thousands of images of child sexual exploitation.
At sentencing, Judge Urbanski found that Beeman sexually abused two minors on multiple occasions and later downloaded images of similar victimization of other children for his own interests.
The Page County, Virginia, Sheriff’s Office; the Northern Virginia/Washington, D.C., Internet Crimes Against Children Task Force and Evidence Recovery Section; the Frederick County Sheriff’s Office; the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Virginia Attorney General’s Office’s Computer Evidence Recovery Section; the Virginia State Police’s High Tech Crimes-Computer Recovery Section; the Air Force Office of Special Investigations; the U.S. Army Corps of Engineers – Middle East District; and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) High Tech Investigative Unit investigated the case. CEOS Trial Attorney Herbrina D. Sanders and Assistant U.S. Attorney Nancy S. Healey of the Western District of Virginia prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former Richmond Man Pleads Guilty to Bank FraudRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Howard Hoffman, 53, formerly of Richmond, Maine, pled guilty today in U.S. District Court to bank fraud.
According to court records, in March 2007, Hoffman’s childhood friend died while abroad. Over a year later, Hoffman used his deceased friend’s personal identifying information to gain access to the friend’s bank account and change the address on the account to his residence in Richmond. Over the next few weeks, Hoffman caused two checks, totaling about $80,000, to be issued from his friend’s account. Hoffman deposited the checks into a bank account of a company he controlled. Hoffman did not have authority to access his friend’s account or cause the bank to issue the two checks.
Hoffman faces up to 30 years in prison, a $1,000,000 fine and five years of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the U.S. Secret Service.
Former Nurse at Wilkes-Barre Veterans Administration Medical Center Charged Federally with Reckless EndangermentRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Richard Pieri, age 59, Drums, Pennsylvania, a former registered nurse with the Wilkes-Barre Veterans Administration Medical Center, was charged with reckless endangerment in a criminal complaint filed with the U.S. District Court in Scranton.
According to United States Attorney Peter Smith, on February 4, 2016, Pieri allegedly committed a violation of Pennsylvania law by placing a patient at the medical center in danger of death or serious bodily injury when Pieri participated in a surgical procedure while under the influence of alcohol. Under the Federal Assimilated Crimes Act, violations of state law can be prosecuted in the federal system if the alleged offense takes place in areas within federal jurisdiction. The medical center is a federal facility.
The case is being investigated by the U.S. Department of Veterans Affairs Police. Prosecution is assigned to Assistant United States Attorney Todd K. Hinkley. The matter arose initially out of an investigation by the Luzerne County District Attorney’s Office.
Pieri is no longer employed at the medical center.
Criminal complaints, like indictments, are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty for the offense under federal law is 2 years, a term of supervised release following imprisonment, and a $5,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Former Law Firm IT Engineer Convicted in Computer Intrusion Case is Sentenced to 115 Months in Federal PrisonRead the Press Release
DALLAS — A former Information Technology (IT) engineer for a Dallas-headquartered law firm, who was convicted at trial in September 2015 on felony offenses stemming from his unauthorized access to the firm’s computer network, has been sentenced, announced U.S. Attorney John Parker of the Northern District of Texas.
Anastasio N. Laoutaris, 41, of Spring, Texas, was sentenced yesterday afternoon by U.S. District Judge Jane J. Boyle to 115 months in federal prison and ordered to pay $1,697,000 in restitution. The jury convicted Laoutaris on two counts of knowingly accessing a computer network without authorization and intentionally issuing commands and codes that caused damage to the network. Laoutaris was remanded into federal custody following that verdict.
Laoutaris, who was an IT engineer for Locke Lord LLP from 2006 to August 2011, accessed the firm’s computer network without authorization on December 1, 2011, and December 5, 2011, and on both occasions, issued instructions and commands that caused significant damage to the network, including deleting or disabling hundreds of user accounts, desktop and laptop accounts, and user e-mail accounts
The law firm, Locke Lord LLP, has offices throughout the U.S. and the world; its headquarters is located in Dallas. The U.S. Attorney’s Office wishes to thank them for their support and cooperation throughout the investigation and prosecution.
The U.S. Secret Service investigated the case. Assistant U.S. Attorneys Paul Yanowitch and Nick Bunch prosecuted.
# # #
Former Guard Sentenced for Having Sex with InmateRead the Press Release
HOUSTON – A former guard at the federal prison camp in Bryan will now be on the other side of prison bars following his conviction on one count of sexual abuse of a ward, announced U.S. Attorney Kenneth Magidson. Marshall Thomas, 35, of College Station, pleaded guilty to the charges Jan. 7, 2016.
Today, U.S. District Judge Gray Miller handed Thomas a 18-month sentence to be immediately followed by 10 years of supervised release. He must also register as a sex offender.
Thomas was charged with engaging in a sexual relationship in July 2014 with two different inmates while he was employed as a correctional officer.
Beginning in March 2014, Thomas began supervising a female inmate at federal prison camp. Soon after, he began making inappropriate comments to her and began to hug, kiss and touch her inappropriately whenever they would be alone. On or about July 19, 2014, Thomas directed her to go into the back of the dry storage room behind several boxes. At that time, Thomas began to kiss her, unzipped his pants and pulled down her pants. She resisted his efforts to have intercourse, but he did it anyway.
Thomas told her that if she reported any of the inappropriate conduct he would “flag” her and that “it was his career and her good time.”
Previously released on bond, Thomas was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of an investigation conducted by the Department of Justice - Office of the Inspector General. Assistant United States Attorneys Ruben R. Perez and Jill Stotts are prosecuting the case.
Federal Prosecutions Serve as Reminder to Comply with Tax Obligations as Filing Deadline ApproachesRead the Press Release
CHICAGO — Federal authorities today announced criminal charges against four Chicago-area residents for a variety of alleged income tax frauds. With tax season in full swing, the prosecutions serve as a warning to avoid dishonest tax-return preparers, and to remind taxpayers that each individual is responsible for the contents of his or her own return.
Two Chicago-area tax preparers were charged with assisting clients in obtaining hundreds of thousands of dollars in fraudulent refunds. The preparers fraudulently reduced their clients’ tax liabilities by misrepresenting their eligibility to claim tax credits, such as dependent exemptions, education and child credits.
In addition, two individuals were indicted for filing hundreds of fraudulent income tax returns that claimed refunds totaling more than $2.1 million. The fraudulent returns were filed electronically with the Internal Revenue Service.
“Tax preparers and individuals who willfully file false returns will be held accountable,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “Although tax prosecutions occur throughout the year, it is especially important with Tax Day looming to remind the public of the importance of proper compliance with their tax obligations.”
“IRS Criminal Investigation is committed to ensuring that honest taxpayers are not cheated and that all taxpayers pay their fair share,” said James D. Robnett, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. “With the filing deadline approaching, individuals who might be thinking about cheating should think twice or they will risk the consequences.”
According to statistics available from the Treasury Inspector General for Tax Administration, U.S. taxpayers filed approximately 150 million returns in 2014. The IRS found that more than 2.1 million of those returns claimed fraudulent refunds totaling more than $15.7 billion.
In addition to criminal penalties, including incarceration, fines and the costs of prosecution, convicted defendants remain responsible for all taxes and interest due, as well as civil penalties, U.S. Attorney Fardon noted. Individuals making false claims against the government may be required to pay restitution and could be sued civilly for an amount greater than the fraudulent claims, he added.
In one of the prosecutions announced today, TAMITHA BROWN, 50, of Bolingbrook, was charged with preparing and filing false and fraudulent income tax returns. Brown, a tax preparer who owned Bolingbrook-based E&T Tax Services Inc., filed the returns for the years 2008 through 2012, resulting in tax losses of approximately $189,856, according to the indictment. The government in Brown’s case is represented by Assistant U.S. Attorneys Jeannice Appenteng and Cornelius Vandenberg.
Another tax preparer, BARBARA GARRETT, who co-owned Chicago-based Preferred Financial, was charged with filing seven individual income tax returns that she knew contained false and fraudulent information. Garrett, 45, of Chicago, filed the returns on behalf of various taxpayers for the tax year 2009. The false information included invalid business losses and education credits, according to the indictment. The government in Garrett’s case is represented by Assistant U.S. Attorney Sean Driscoll.
Two individuals, TANYEA MACK and KATRINA WALLS, were charged with filing hundreds of fraudulent individual income tax returns. Mack, 40, of Waukegan, filed approximately 232 false returns in the names of various individuals, claiming refunds totaling more than $1.15 million, according to the indictment. Walls, 41, of Chicago, filed approximately 177 false returns in the names of various individuals, claiming refunds totaling $983,798, according to the indictment. Assistant U.S. Attorney Derek Owens represents the government in the Mack and Walls cases.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are 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 U.S. Sentencing Guidelines.
For tips and guidelines to assist taxpayers in choosing a reputable tax professional and for preparing their own taxes, visit the official IRS website by logging on to: https://www.irs.gov/uac/Choose-Your-Tax-Preparer-Wisely.
Farmington Man Pleads Guilty to Federal Heroin Trafficking ChargesRead the Press Release
ALBUQUERQUE – Allen Goosen, 30, of Farmington, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to heroin trafficking charges. The guilty plea was entered without the benefit of a plea agreement.
Goosen was arrested in Feb. 2016, on a criminal complaint charging him with trafficking heroin in San Juan County, N.M. According to the complaint, Goosen sold approximately 6.03 grams of heroin to an undercover agent on Dec. 17, 2014. The complaint further alleges that on Jan. 5, 2015, Goosen was in possession of 5.95 grams of heroin packaged in six-single gram packages when he was arrested on a felony arrest warrant.
Goosen was subsequently indicted on March 8, 2016, and charged with distribution of heroin on Dec. 17, 2014, and possession of heroin with intent to distribute on Jan. 5, 2015. The indictment included forfeiture allegations requiring Goosen to forfeit at least $600 to the United States.
During today’s proceedings, Goosen pled guilty to both counts of the indictment. At sentencing, Goosen faces a maximum statutory penalty of 20 years in federal prison. He remains in custody pending a sentencing hearing which has yet to be scheduled.
The case was investigated by the Albuquerque office of Homeland Security Investigations and the HIDTA Region II Task Force. The HIDTA Region II Narcotics Task Force is comprised of officers and investigators from the Farmington Police Department, San Juan County Sheriff’s Office, Bloomfield Police Department and Aztec Police Department, and is part of the High Intensity Drug Trafficking Area (HIDTA) program that 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.
The case is being prosecuted by Assistant U.S. Attorney Alexander M. Uballez as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with Bernalillo County, DEA, Healing Addiction in our Community (HAC) and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Fabens, TX Man Sentenced to Federal Prison for Receipt and Distribution of Child PornographyRead the Press Release
In El Paso today, 34-year-old Corey Gosnell was sentenced to seven years in federal prison for receipt and distribution of child pornography announced United States Attorney Richard L. Durbin, Jr., and Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso.
In addition to the prison term, United States District Judge Kathleen Cardone ordered that Gosnell be placed on supervised release for a period of ten years after completing his prison term and to register as a sex offender.
On January 19, 2016, Gosnell pleaded guilty to one count of receipt and distribution of child pornography. By pleading guilty, Gosnell admitted he downloaded child pornography to his computer and made it available to others. According to court documents, HSI agents executed a search warrant at the defendant’s residence on May 19, 2015, based on information obtained from the New Mexico Attorney General’s Office. A subsequent forensics examination of the defendant’s computer and related media revealed the presence of 239 images and 52 videos depicting child pornography.
Assistant United States Attorney Rifian Newaz prosecuted this case on behalf of the Government.
Dominican National Sentenced to Time Served for Making A False Claim to U.S. CitizenshipRead the Press Release
CONCORD, N.H. – Pedro Julio Alcantar-Bernabel a/k/a Francis Villar de la Santos, a citizen of the Dominican Republic who pleaded guilty to one count of Social Security Number Misuse and one count of Making a False Claim to United States Citizenship on January 7, 2016, was sentenced to time served, announced United States Attorney Emily Gray Rice. Alcantar-Bernabel has been in custody since his arrest on July 1, 2015.
Alcantar-Bernabel applied for a driver’s license at the Department of Motor Vehicles in Manchester, New Hampshire on July 1, 2015, using another person’s name, date of birth, and Social Security number. He also indicated on the application that he was a United States citizen. When Alcantar-Bernabel produced an altered Social Security card as a means of identification, the New Hampshire State Police were called to investigate. Upon further investigation, it was discovered that Alcantar-Bernabel was encountered by the United States Coast Guard in August 2000 off the coast of Puerto Rico. At that time, he admitted that he was a citizen of the Dominican Republic and was given a voluntary return to that country. Fingerprint analysis confirmed that the individual claiming United States citizenship on the New Hampshire driver’s license application was the same individual who was returned to the Dominican Republic in 2000.
Alcantar-Bernabel was sentenced by United States District Court Judge Paul J. Barbadoro. He will face deportation upon his release from custody.
The case was investigated by the United States Department of Homeland Security Immigration and Customs Enforcement, and prosecuted by Special Assistant United States Attorney Karen Burzycki.
###
Defendants Guilty of BP Fund Fraud ClaimsRead the Press Release
Father and daughter, who filed fraudulent claims against the Gulf Coast Claims Facility for lost income purportedly suffered as a result of the oil spill, pled guilty to mail fraud, in violation of Title 18, United States Code, Sections 1341and 2.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
On April 11, 2016, Caridad Rioseco Alejandrez, 50, of Key West, Florida, pled guilty for her involvement in the filing of a false claim in connection with the Deepwater Horizon explosion and pollution incident in the Gulf of Mexico in April 2010. Alejandrez faces a possible term of imprisonment of up to twenty years on the mail fraud charge, a criminal fine of up to $250,000 or twice the intended gain or loss caused by the relevant conduct, and a period of supervised release of up to five years. Additionally, Alejandrez may be ordered to make restitution to the identifiable victims of her crime. Alejandrez is scheduled to be sentenced before United States District Court Judge Jose E. Martinez on July 11, 2016, at 1:30 p.m., in Key West.
On April 12, 2016, Raul Rioseco, 73, of Stock Island, Florida, was sentenced to one year and a day in prison, in connection with his involvement in a similar false claim. Rioseco was also ordered to serve six months of house arrest and at three year term of supervised release, upon his release. Rioseco was further ordered to make restitution payments to the Deepwater Horizon Fund, the successor to the GCCF, in the amount of $144,606.57, which represented the money he unlawfully received from the GCCF and the amounts received by certain other individuals based on fraudulent documents Rioseco provided in support of other fraudulent claims. Additionally, Rioseco was ordered to surrender to the State of Florida and the federal government all his permits and licenses associated with commercial fishing activities.
According to court filings and proceedings, in June 2010, BP established the Gulf Coast Claims Facility (GCCF) for the purpose of administering and settling certain claims of individuals and businesses for costs, damages, and other losses incurred as a result of oil discharges due to the April 20, 2010, explosion and fire on the Deepwater Horizon, an oil exploration rig operating in the Gulf of Mexico. In August 2010, the GCCF began receiving and processing such claims of individuals and businesses for costs, damages, and other losses they had incurred as a result of the Deepwater Horizon incident, paying the claims from a $20 billion private Trust Fund established for that purpose.
Alejandrez and her father, Rioseco, filed fraudulent claims against the fund, in their own names, which resulted in them receiving $35,900 and $55,000, respectively, from the GCCF. The scheme to defraud the GCCF was carried out through mailings and through the use of the internet, to open the claims and to provide required forms and documentation, including employment verification letters and tax return documents. Alejandrez, produced and provided the documents to the GCCF, on behalf of herself and her father. The documents were materially false and fraudulent and claimed Alejandrez and Rioseco were adversely affected by the spill and lost income in the months following the incident, when this was not in fact, the truth.
Rioseco represented himself to the GCCF to be a commercial fisherman, when in fact he was retired and had not been an active fisherman for many years. A lobster boat, licenses, and permits in his name were in fact being used by others, and Rioseco suffered no loss of income or other adverse effect from the oil spill. Additionally, Rioseco admitted that he facilitated the filing of other false claims, in addition to his own fraudulent claims, by signing and providing notarized “Crewshare Statements” for at least five other individuals attesting that he had employed and paid wages to those persons as boat crewmembers during periods relevant to the GCCF claims process. The fraudulent statements were produced to support claims for compensation which were filed by Alejandrez with the GCCF, claiming approximately $89,000 for economic losses purported to have been suffered as a result of the Deepwater Horizon incident, despite the fact that none of the individuals were crewmembers aboard the vessel or had been fishing during the relevant time period. Additionally, according to the Florida Fish & Wildlife Conservation Commission, the oil spill had little if any effect on the Key West fishing industry, with commercial landings in 2010, the year of the spill, and every year since.
Alejandrez created false income tax returns which she provided to the GCCF in support of her claim that her tax and document preparation business, located on Stock Island, lost income after the oil spill because her customers, primarily fishermen operating out of Stock Island, could no longer afford her services. To maximize her compensation, Alejandrez significantly increased her claimed income on returns for 2008 and 2009, over the income actually reflected in the tax returns filed with the Internal Revenue Service for those years. Alejandrez provided similar false documentation in the support of claims for many other individuals. A U.S. Postal Service document analyst evaluated Alejandrez’ bank records and found that contrary to the sworn statements on her claim forms, her income had increased substantially after the oil spill. The United States advised the Court that records established an actual loss, due to the fraudulent claims, of approximately $500,000, and that the amounts claimed, although not all paid, approached $1.5 million.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, the Department of Commerce, National Oceanic and Atmospheric Administration, Office of Law Enforcement, the United States Coast Guard Investigative Service, U.S. Immigration and Customs Enforcements Homeland Security Investigations and the support provided by the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Thomas Watts-FitzGerald, Deputy Chief of the Economic and Environmental Crimes Section.
Members of the public can report fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, including the 2010 Deepwater Horizon oil spill, to the National Center for Disaster Fraud (NCDF) by calling 877-NCDF-GCF (877-623-3423), sending a fax to (225) 334-4707, or emailing [email protected].
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. 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.
Clear Lake Felon and Drug User Sentenced to PrisonRead the Press Release
A man who accidentally shot his girlfriend was sentenced yesterday to more than five years in federal prison.
Norris O’Dell Hughes, age 30, from Clear Lake, Iowa, received the prison term after a December 2, 2015, guilty plea to possession of a firearm by a felon. He was also an illegal user of controlled substances.
The evidence showed that on February 24, 2015, Hughes accidentally shot his girlfriend at a residence in Forest City, Iowa. After being alerted to the shooting by a neighbor, officers stopped a vehicle occupied by Hughes and his girlfriend. Officers observed Hughes’ girlfriend had a gunshot wound to the leg. Officers recovered Hughes’ loaded handgun from the vehicle, which was determined to be stolen. Hughes was prohibited from possessing a firearm because he had a prior felony conviction for burglary and was an illegal user of marijuana and meth.
Hughes was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Hughes was sentenced to 70 months imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. Hughes is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by the Hancock County Sheriff’s Office, and the Bureau of Alcohol, Tobacco and Firearms.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-3037.
Follow us on Twitter @USAO_NDIA.
Clarksburg woman sentenced for heroin traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Brittany Hurst, 25, of Clarksburg, was sentenced today to 30 months in prison for heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Hurst was discovered in possession of heroin in late 2014 in Harrison County, West Virginia. She pled guilty in February 2015 to one count of “Possession with Intent to Distribute Heroin – Aiding and Abetting.”
Assistant U.S. Attorneys Stephen Warner and Andrew Cogar along with former Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge Irene M. Keeley presided.
Citizen of China Pleads Guilty to Trafficking in Counterfeit Computer ChipsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that Daofu Zhang, 40, of Shenzen, China, pleaded guilty today in New Haven federal court to conspiring to sell counterfeits of sophisticated integrated circuits to a purchaser in the United States.
According to court documents and statements made in court, Zhang and his two co-conspirators each operated businesses in China that bought and sold electronic components, including integrated circuits (“ICs”). In the summer of 2015, Zhang’s co-conspirator, Xianfeng Zuo asked the other co-conspirator, Jiang Yan, to locate and purchase several advanced ICs made by Xilinx Corp., which had military applications, including radiation tolerance for uses in space. Yan then asked a U.S. individual to locate the Xilinx ICs and sell them to Yan. The U.S. individual explained that the ICs cannot be shipped outside the U.S. without an export license, but Yan still wished to make the purchase. When the U.S. individual expressed concern that the desired ICs would have to be stolen from military inventory, Yan proposed to supply the U.S. source with “fake” ICs that “look the same,” to replace the ones to be stolen from the military. In November 2015, Zhang shipped from China to the U.S. individual, two packages containing a total of eight counterfeit ICs, each bearing a counterfeit Xilinx brand label. After further discussions between Yan and the U.S. individual, Yan, Zhang, and Zuo flew together from China to the U.S. in early December 2015 to complete the Xilinx ICs purchase. On December 10, 2015, the three conspirators drove to a location near Route 95 in Milford, Connecticut, where they planned to meet the U.S. individual, make payment, and take custody of the Xilinx ICs. Federal agents arrested all three at the meeting location. Zhang pleaded guilty to one count of conspiracy to traffic in counterfeit goods. He is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny in Hartford on July 8, 2016, at which time he faces a maximum term of imprisonment of 10 years and a fine of up to $2 million fine. On March 7, 2016, Yan, 33, pleaded guilty to one count of conspiracy to traffic in counterfeit goods, and one count of attempt to export integrated circuits without the required export license. On March 16, 2016, Zuo, 38, pleaded guilty to one count of conspiracy to traffic in counterfeit goods. They await sentencing. This matter is being investigated by the Defense Criminal Investigative Service, the Department of Homeland Security, the Department of Commerce, the Federal Bureau of Investigation, and the Air Force Office of Special Investigations. The case is being prosecuted by Assistant U.S. Attorney Henry Kopel and U.S. Department of Justice Counterintelligence and Export Control Section Trial Attorney Casey Arrowood.Catskill Man Receives 57 Months in Prison for Benefits FraudRead the Press Release
ALBANY, NEW YORK – John W. Caltabiano, Jr., age 49, of Catskill, New York, was sentenced today to serve 57 months in prison after a jury found him guilty in October of fraudulently obtaining federal and state disability benefits. He was immediately taken into custody.
The announcement was made by United States Attorney Richard S. Hartunian and Edward J. Ryan, Special Agent in Charge for the Social Security Administration ("SSA") Office of the Inspector General.
On October 16, 2015, following a two-week trial, a jury found Caltabiano and co-defendant Colleen McCarten guilty of conspiracy to commit mail fraud, five counts of mail fraud, and theft of government property. Between April 2008 and October 2010, Caltabiano and McCarten conspired to steal Social Security Disability and Workers’ Compensation benefits by falsely representing to the SSA, the New York State Workers’ Compensation Board, and Travelers Insurance that an on-the-job injury had left him almost completely blind. In reality, as demonstrated in videos taken during the investigation and presented at trial, he was able to drive, shop, go to the gym, and otherwise move about without the assistance that a blind person would need.
At the sentencing, Judge D’Agostino said, "And had he not been caught, I have no doubt that Mr. Caltabiano would still have someone leading him into any proceedings or any hearings as though he couldn’t see a darn thing when we all know that he was seeing well enough to carry out his ordinary activities, to drive, to go to convenience stores, all of that."
U.S. Attorney Richard S. Hartunian stated: "If Caltabiano had not been stopped, he would have been able to steal more than one-half a million dollars based on his life expectancy. His sentence reflects the magnitude of his fraud and sends a message that those who steal benefits face significant prison sentences. My office will continue to prosecute benefits fraud aggressively so that that taxpayer-funded government benefits go to people who truly need them."
Edward J. Ryan, Special Agent in Charge for the SSA Office of the Inspector General, stated: "As guardians of the public trust we vigorously pursue incidents of fraud against SSA programs. We continue to investigate allegations of fraudulent disability claims to combat fraud in federal and state government sponsored disability programs. Our successful criminal prosecutions protect the SSA trust funds for those who truly deserve disability benefits. Our office greatly appreciates the continued support and the priority given to these cases by the United States Attorney’s Office for the Northern District of New York."
United States District Judge Mae A. D’Agostino also sentenced Caltabiano to serve 3 years of post-imprisonment supervised release, and to pay $27,784 in restitution to the SSA. At today’s sentencing hearing, Judge D’Agostino described his criminal history as "extremely disturbing." She referred to Caltabiano’s many prior convictions, four of which involved his sexual assault or attempted abduction of teenage girls.
McCarten’s sentencing is scheduled for April 20, 2016 in Albany before Judge D’Agostino.
This case was investigated by the Social Security Administration, Office of the Inspector General, and the Office of the New York State Workers’ Compensation Fraud Inspector General, and was prosecuted by Assistant U.S. Attorney Jeffrey C. Coffman and Special Assistant U.S. Attorney Jason W. White.