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2 June 2016
North Carolina Man Sentenced for Tax Evasion and Serving as a Pilot without a LicenseRead the Press Release
A North Carolina man was sentenced yesterday to 21 months in prison for tax evasion and four counts of serving as a pilot without an airman’s certificate, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Ripley Rand for the Middle District of North Carolina.
Paul Douglas Tharp, from 2012 through 2014, attempted to evade payment of an outstanding federal income tax debt by filing false documents, including false tax returns, with the Internal Revenue Service (IRS), according to court documents. After Tharp failed to file tax returns for the years 2003 through 2006, the IRS assessed federal income taxes for those years. In 2014, Tharp provided a false Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, signed under penalty of perjury, on which Tharp failed to report that he owned an airport and an investment firm and concealed his business bank accounts and rental income. In 2012 and 2014, Tharp also filed tax returns for the 2011 through 2013 tax years on which he omitted significant income that he received from his airport and rental properties.
As part of his plea, Tharp also admitted that he served as a pilot without the required certification on four different occasions in 2012. Tharp surrendered his pilot certificate on Aug. 2, 2012. After that date, Tharp flew four flights in and out of Davidson County Airport in Lexington, North Carolina, without valid registration and while his pilot certificate was suspended.
In addition to his prison term, Tharp was ordered to pay restitution in the amount of $285,028.47 to the IRS.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS-Criminal Investigation, who investigated the case and Assistant U.S. Attorney Anand Ramaswamy of the Middle District of North Carolina and Trial Attorney Nathan Brooks of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Newark Man Pleads Guilty to Bank Fraud and Money LaunderingRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that Akeem Harris, age 26, of Newark, Delaware pleaded guilty to one count of bank fraud and one count of money laundering before U.S. District Judge Sue L. Robinson in connection with the theft of more than $450,000. Harris is scheduled to be sentenced on September 13, 2016.
According to court records and statements made in open court, in or around May 2015, using the business name of Wolf Distribution, Harris opened a bank account and subsequently deposited an altered check in the amount of approximately $439,000.00, written from the account of a New York-based health services provider. In the two weeks following the deposit of that altered check, Harris conducted a series of cash withdrawals and obtained bank checks, made payable to himself as well as other individuals and entities associated with him. In January 2015, Harris also received a fraudulent wire transfer in the amount of $40,000 from the account of a community development investment foundation based in Maryland. Using the proceeds of that fraudulent wire transfer, Harris then purchased an official bank check and otherwise depleted those funds through a series of cash withdrawals. Harris also agreed to the forfeiture of approximately $33,000.00, which the government anticipates will be returned to the victims of his crimes.
The maximum sentence for bank fraud is up to 30 years in prison followed by five years of supervised release and a fine of $1,000,000. The maximum sentence for money laundering is up to 10 years in prison followed by three years of supervised release and a fine of $250,000.
U.S. Attorney Oberly stated, “Mr. Harris’s actions compromise both the integrity of financial institutions and the soundness of the organizations that rely upon them. His willingness to participate in a variety of schemes shows a callous disregard for the law.”
“Money laundering is tax evasion in progress. It is fuel for criminals to conduct their criminal affairs and is used to manipulate and erode our financial systems," said Akeia Conner, Special Agent in Charge IRS Criminal Investigation.
This case is the result of an investigation conducted by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Lesley Wolf.
Nevada Man Pleads Guilty to $5 Million Investment Fraud SchemeRead the Press Release
NEWARK, N.J. - A Nevada man today admitted defrauding investors out of more than $5 million, U.S. Attorney Paul J. Fishman announced.
Lee Vaccaro, 44, of Las Vegas, Nevada, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to a two-count information charging him with conspiracy to commit securities fraud and securities fraud.
According to documents filed in this case and statements made in court:
Vaccaro was the chief marketing officer and vice president of investor relations for eAgency, a California-based company developing mobile security products. Vaccaro admitted that he and an individual identified as “Conspirator #1” sold investors interests in companies they controlled, and falsely represented to investors that the companies held warrants in eAgency. Warrants are derivative securities that give the holder the right to purchase common stock at a specific price within a certain time frame.
Vaccaro also admitted that he and Conspirator #1 made oral and written misrepresentations concerning the existence, number, validity, and term of eAgency warrants purportedly owned by the investment companies, as well as about the amount of money Conspirator #1 had personally invested in and raised for eAgency, and Conspirator #1’s current position at eAgency.
In addition, Vaccaro admitted that he and Conspirator #1 created and showed to investors numerous forged documents purporting to reflect the issuance of warrants to entities controlled by Vaccaro, and the transfer of those warrants to a company controlled by Conspirator #1. He admitted that most of the eAgency warrants purportedly transferred by Vaccaro to Conspirator #1’s company had, in fact, never been issued.
Beginning in January 2011, the dollar amount of interests Vaccaro and Conspirator #1 sold in the investment companies began to surpass the dollar amount of valid warrants held by the investment companies. Neither Vaccaro nor Conspirator #1 disclosed to investors the risk that their investments would be diluted by the sale of additional interests in the companies.
Vaccaro and Conspirator #1’s actions defrauded investors of more than $5 million.
The conspiracy to commit securities fraud count to which Vaccaro pleaded guilty carries a maximum potential penalty of five years in prison and a fine of up to $250,000, or twice the gross gain or loss from the offense. The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for Sept. 13, 2011.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s guilty pleas. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Sanjay Wadhwa and the New Jersey Bureau of Securities, under the direction of Laura Posner.
The government is represented by Assistant U.S. Attorney Daniel Shapiro and Deputy Chief Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.
Today’s plea is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
Defense counsel: Robert C. Scrivo, Esq., Newark
Muskogee Woman Pleads Guilty to Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that SAMANTHA LEE SMITH, age 21, of Muskogee, Oklahoma, pled guilty to DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A), punishable by not less than 10 years or more than life imprisonment, up to a $10,000,000.00 fine or both.
The superseding indictment alleged that beginning in or about the end of 2013, the exact date being unknown to the Grand Jury, and continuing until on or about January 27, 2016, within the Eastern District of Oklahoma and elsewhere, the defendant and others did knowingly and intentionally conspire, confederate and agree with each other, and with others known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The Investigation revealed that Cody McClendon, an Indian Brotherhood (IBH) gang member, while an inmate with the Oklahoma Department of Corrections in McAlester, Oklahoma was utilizing a contraband cellular phone that he kept hidden on his person and inside his prison cell to facilitate the sale and distribution of methamphetamine. McClendon was doing this by using the cellular phone to communicate with co-conspirators via audio phone calls, text messages, and by communicating on the social media website Facebook. SMITH was a methamphetamine distributor as well as a drug and money courier for the organization.
The charges arose from a joint investigation by the Oklahoma Bureau of Narcotics, the Tahlequah Police Department, the Muskogee Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the Drug Enforcement Administration. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led, and coordinated by, the Office of the United States Attorney.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, accepted the defendant’s guilty plea, and ordered the completion of a presentence report. Sentencing will be scheduled upon its completion. The defendant will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Shannon Henson represented the United States.
Milton Truck Driver Pleads Guilty to Federal Child Pornography CrimesRead the Press Release
PENSACOLA, FLORIDA – Andre M. Straughn, 39, of Milton, Florida, pled guilty today to receipt and transportation of child pornography, as well as making a false statement to a federal agent. The guilty plea was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
In July 2015, law enforcement agents became aware of online child pornography files that were linked to Straughn’s online activities. Law enforcement agents conducted an investigation and determined that Straughn was a truck driver who traveled to other states with his cellular device and laptop and used multiple electronic platforms to engage in online child pornography. After Straughn returned home from a trip, agents searched Straughn’s residence. Straughn told law enforcement agents that he did not have an online storage account, did not use the social media application Kik, and could not remember the password to his cellular telephone. A forensic review of Straughn’s electronic devices revealed that Straughn did maintain online storage accounts and a Kik account. In total, Straughn’s online storage account, laptop, and other electronic devices revealed more than 50,000 images and videos of child pornography, dating back approximately 10 years.
For each child pornography charge, Straughn faces a mandatory minimum of 5 years and a maximum of 20 years in prison. For the false statement charge, Straughn faces a maximum of 8 years in prison. The sentencing hearing is scheduled for August 18, 2016, at 12:30 p.m. at the United States Courthouse in Pensacola.
The case was investigated by the United States Immigration and Customs Enforcement Homeland Security Investigations, Pensacola Police Department, and other agencies that are part of the North Florida Internet Crimes Against Children Task Force. Assistant United States Attorney David L. Goldberg is prosecuting the case.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Massachusetts Company Sentenced in Connection with Disadvantaged Business FraudRead the Press Release
BOSTON – Transit Safety Management, Inc., a Georgetown, Mass. consulting company, was sentenced today to making a false statement in connection with its certification for favored contracting status.
Transit Safety Management, Inc. (TSM) was sentenced by U.S. District Court Judge Nathaniel M. Gorton to five years of probation and a fine of $84,000 In February 2016, TSM pleaded guilty to one count of making a false statement to a state agency in order to maintain its status as a "disadvantaged business enterprise" (DBE).
In order to qualify as a DBE, a company’s management must be controlled by a socially or economically disadvantaged individual such as a woman or minority. The purpose of the program is to give an economic advantage to minorities and women who run their own companies. However, the manager of the DBE cannot also engage in employment that would prevent him or her from devoting sufficient attention to the affairs of the DBE. In this case, investigators discovered that TSM’s purported owner was a full-time employee of a federal agency and the business was really operated by her husband making it ineligible for certification as a DBE.
TSM provided consulting services to the railroad industry, focusing on safety and operations management. Shortly after it was founded in 1999, TSM's owner certified the company as a "disadvantaged business enterprise". As such, TSM was able to take advantage of federal regulations aimed at promoting the participation of minority and disadvantaged businesses in federally-funded public construction contracts. Under the DBE regulations, a contractor to transportation projects must either subcontract a percentage of its work to a DBE or show that it made a good faith effort to subcontract work to a DBE but was unable to do so. This requirement makes the DBE status a valuable and potentially lucrative designation.
In order to maintain its DBE certification, TSM had to make yearly affirmations that it was still eligible and that nothing had changed that would affect its eligibility for the favored DBE status. Despite this, TSM lied about whether it met the criteria for DBE status. According to court documents, TSM’s owner was hired as a full-time employee with a federal agency in 2005. As a full time federal employee, TSM’s purported manager could not control TSM under the regulations. Nevertheless, TSM failed to disclose this change and continued to make its yearly affirmations to maintain is DBE status. TSM admitted to making approximately $160,000 in profits.
United States Attorney Carmen M. Ortiz; Todd Damiani, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.
Manhattan U.S. Attorney and FBI Announce Return of Stolen Inverted Jenny StampRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, Assistant Director-in-Charge New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the return of a rare “Inverted Jenny” stamp to the American Philatelic Research Library (“APRL”), the assignee of Ethel B. McCoy, the owner from whom it was stolen. The stamp, one of four stolen from McCoy in 1955, was recently recovered by the FBI. It is the third of the four McCoy Inverted Jennys to be recovered to date.
Manhattan U.S. Attorney Preet Bharara said: “The treasured Inverted Jenny stamp returned today has been missing for more than 60 years since it was stolen. We are proud to be able finally to return this Inverted Jenny to its rightful owner. We hope that someday soon we can celebrate the return of the final missing McCoy Inverted Jenny as well, and encourage anyone with information regarding its whereabouts to come forward.”
Assistant Director-in-Charge Diego Rodriguez said: “More than 60 years ago, a block of four of the most famous error stamps in philatelic history – the Inverted Jenny – was stolen from an exhibition. There were no witnesses, no suspects and little evidence to pursue. Today, the FBI is proud to assist in the return of the third Inverted Jenny stamp to the American Philatelic Research Library. This is just one example of the FBI’s commitment to restore significant arts and antiques to their rightful owners.”
According to court filings and other publically available information:
The Inverted Jenny stamp returned today (the “Stamp”) is from a sheet of 100 24-cent stamps issued by the United States Postal Service in 1918. The stamps contained the image of a Curtiss Jenny JN-4HM, a biplane specially modified for shuttling mail, to commemorate the Postal Service’s first airmail flight, which took place on May 15, 1918. Significantly, this particular sheet (the “Inverted Jenny Sheet”) was misprinted, with the airplane image upside down, or “inverted.” It was sold on or about May 14, 1918, to collector William T. Robey of Washington, D.C.
Robey eventually sold the Inverted Jenny Sheet for $15,000 to a noted Philadelphia dealer named Eugene Klein, who in turn sold it for $20,000 to collector H. R. Green. Green, on the advice and with the help of Klein, subsequently broke up the Inverted Jenny Sheet and sold many of the individual stamps to other collectors. Prior to breaking up the Inverted Jenny Sheet, Klein and Green lightly penciled a number on the back of each stamp so that each stamp’s original position on the sheet could later be identified. The Stamp returned today is position 76 from the Inverted Jenny Sheet.
Ethel B. Stewart McCoy, a philatelist and daughter of Charles Bergstresser, one of the founders of Dow Jones & Co., purchased a block of four stamps from the Inverted Jenny Sheet, specifically positions 65, 66, 75, and 76 (the “McCoy Block”), from New York City stamp dealer Spencer Anderson in 1936 for $16,000. On or about September 23, 1955, during an exhibition at a convention of the American Philatelic Society in Norfolk, Virginia, the McCoy Block, including the Stamp, was stolen by an unknown thief or thieves.
Before her death in 1980, McCoy assigned all of her right, title, and interest in the stolen McCoy Block to the APRL. The FBI recovered the stamp in position 75 from the McCoy Block in 1977, and recovered the stamp in position 65 in 1982, and both were returned to the APRL.
The Stamp remained missing until April of this year, when it was consigned to Spink USA, Inc. (“Spink”), by an individual named Keelin O’Neill. Spink sent the Stamp to the Philatelic Foundation in New York to be authenticated, and personnel of the Foundation identified it as one from the stolen McCoy block. They then alerted the FBI and the APRL. The FBI approached O’Neill, who stated that he had received the Stamp in or about October 2013 from his grandfather, who is now deceased. Once he was advised that the Stamp was stolen, O’Neill voluntarily agreed to relinquish the Stamp to the APRL.
The fourth and final Inverted Jenny from the McCoy block remains missing.
The return today to the APRL is being made pursuant to a stipulated agreement entered between the Government, the APRL, and Mr. O’Neill, and so ordered by the Honorable Jesse M. Furman, United States District Court Judge for the Southern District of New York.
Mr. Bharara thanked the FBI for their outstanding work on this matter.
The case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorney Alexander J. Wilson is in charge of the case.
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Man Sentenced to Three Years for Threatening A Witness in His Brother's Federal CaseRead the Press Release
GRAND RAPIDS, MICHIGAN – Jermaine Carr, 34, of Riverdale, Illinois, received a three-year sentence in federal prison for tampering with a witness in his brother’s federal case. The witness was assisting law enforcement officers with the investigation into Jermaine Carr’s brother, Daniel Carr, for heroin trafficking. Jermaine Carr called the witness and threatened to burn his house down and told him he was going to die. The three-year term of imprisonment represented the maximum sentence that could be imposed for tampering with a witness. Carr pled guilty to the offense in January 2016. His brother, Daniel Carr, pled guilty in April 2016 to conspiracy to distribute heroin.
At the sentencing hearing, U.S. District Judge Janet T. Neff emphasized the importance of federal witnesses being protected against threats and harassment by angry defendants and family members. She stated that Carr is a danger to society based not only on the seriousness of this offense but also in part on a long string of domestic violence assaults, including with strangulation.
In announcing the sentence, U.S. Attorney Patrick Miles stated, “When we work with witnesses in federal cases, we make their safety a priority. Any threats or harassment of our witnesses will be dealt with seriously.”
This case was investigated jointly by the Battle Creek Police Department and the DEA. Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the case.
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Long Time Skagit County Violent Drug Dealer Sentenced to Ten Years in PrisonRead the Press Release
A long-time Skagit County, Washington drug dealer and gang member was sentenced today in U.S. District Court in Seattle to ten years in prison for conspiracy to distribute controlled substances and possessing a firearm in furtherance of drug trafficking, announced U.S. Attorney Annette L. Hayes. CRISTOBAL ORTIZ, a/k/a Filero, 27, of Mount Vernon, Washington, was arrested in February 2015 following a Drug Enforcement Administration (DEA) undercover investigation. When court authorized search warrants were served at ORTIZ’ residence law enforcement recovered four firearms, methamphetamine, cocaine, and nearly $130,000 in cash. At the sentencing hearing U.S. District Judge Robert S. Lasnik pointed out that those who are selling heroin and methamphetamine in Skagit County are having a “horrible impact.”
“This defendant has long jeopardized community safety in Skagit County with violent, threatening behavior toward both law enforcement and members of the public,” said U.S. Attorney Annette L. Hayes. “With four prior felony convictions – three involving firearms – this federal prison sentence will effectively protect the community.”
ORTIZ has a 14 year history of crime in Skagit County and is well known to local police. In addition to drug distribution, ORTIZ has three prior convictions arising from incidents where he or an associate fired one or more guns. ORTIZ came to the attention of federal law enforcement in a 2013 wiretap investigation of a group of drug traffickers operating in Skagit, Snohomish, and Whatcom Counties. In early January and February 2015, a person working with law enforcement purchased highly pure heroin from ORTIZ and co-defendant Miguel Reyes Bravo. When law enforcement searched the homes of both men they seized heroin, methamphetamine, cocaine and multiple stolen firearms.
Reyes Bravo was sentenced to six years in prison on April 15, 2016. ORTIZ pleaded guilty on March 10, 2016.
“This violent career criminal has been shut down and no longer will use his gang affiliations for illicit drug distribution,” stated DEA Special Agent in Charge Keith Weis.
Writing to the court, Mount Vernon Chief of Police Jerry Dodd noted that ORTIZ had been involved with a violent gang operating in Skagit County and had more than 150 contacts with law enforcement.
The case was investigated by the Drug Enforcement Administration (DEA) with assistance from the Mount Vernon Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Skagit County Interlocal Drug Enforcement Unit (SCIDEU), the Bellingham Police Department, the Whatcom Gang and Drug Task Force and U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI).
The case was prosecuted by Assistant United States Attorneys Karyn Johnson and Steven Masada.
Long Island Fisherman Pleads Guilty to Falsifying Documents and Lying to Federal InvestigatorsRead the Press Release
James Kaminsky, a fisherman from Mattituck, New York, pleaded guilty today in federal court in Central Islip, New York, to federal felonies stemming from his role in systematically covering up the landing and sale of illegal fluke (summer flounder), scup and black sea bass that were overharvested in violation of New York state quotas and the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.
Kaminsky pleaded guilty to one count of aiding and abetting false documents and one count of oral false statements in connection with a scheme that ran from May through August 2011. During this period, Kaminsky utilized the RSA Program as a mask for unlawful quota overages. He then sold his illegal catch to Mark Parente, a federal fish dealer and a defendant in a related case. Federal fish dealers are required to accurately report their purchases to the National Oceanic and Atmospheric Administration (NOAA), regardless of whether the fish originated from a state or federal fishery. NOAA utilizes these reports to assess fish stocks and to set quotas in conjunction with regional fisheries councils. False information inputted into fisheries statistical models reduces their effectiveness and could result in unexpected, corrective quota reductions years after the illegal catch because actual fishing effort had been undercounted by the models. Such quota reductions can have negative effects on the legitimate fishing fleet.
In order to cover up the illegal harvest and transactions, Kaminsky and Parente agreed to falsify government documents. As such Kaminsky falsified approximately 30 fishing vessel trip reports and Parente falsified a corresponding number of dealer reports. To further obscure the illicit conduct, almost all of the payments were made in cash, with Parente and Kaminsky meeting at a pre-determined spot off the Long Island Expressway in Nassau or Suffolk Counties. The scheme omitted or misidentified approximately 6,900 pounds of fluke, 50,000 pounds of scup and 12,000 pounds of black sea bass. The wholesale value of the fish was stipulated as $78,000. The second charge stems from material, false statements that Kaminsky made to NOAA criminal investigators during a November 2014 proffer session with a federal prosecutor.
As part of the plea deal, the defendant agreed to pay a total financial penalty of $150,000. He also agreed to five years of probation and six months of home detention. Agreed-upon probation terms include relinquishment of commercial fishing permits, ban from the RSA Program and divestiture and ban from any interest in a commercial fishing vessel. Kaminsky’s sentencing is scheduled for Nov. 2.
Kaminsky is “Fisherman Y,” as that term is used in the related Mark Parente case. Kaminsky is the tenth defendant to be prosecuted as part of NOAA’s ongoing Long Island RSA Fraud Investigation. The case was investigated by agents of NOAA’s National Marine Fisheries Service. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.
Lima man indicted on child pornography chargeRead the Press Release
An indictment was filed charging Richard Hack, 27, of Lima, with receipt and distribution of material involving the sexual exploitation of children, said Carole S. Rendon, Acting U.S. Attorney for the Northern District of Ohio.
The conduct took place between 2011 and 2015, according to the indictment
If convicted, the defendant sentence will be determined by the court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Federal Bureau of Investigation, in Toledo. The case is being handled by Assistant United States Attorney Tracey Ballard Tangeman.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Leader of Drug Trafficking Organization Admits Distributing Kilograms of Marijuana and Laundering the Proceeds Through Luxury Auto PurchasesRead the Press Release
CHICAGO — The leader of a Chicago drug trafficking organization pleaded guilty in federal court today to distributing more than 1,000 kilograms of marijuana and laundering the proceeds by purchasing luxury cars and leasing high-rent properties.
JONATHAN TANKSON admitted in a plea agreement that he coordinated bulk shipments of marijuana from large-scale growers in California. Between December 2010 and December 2013, Tankson flew to California at least twice per month, typically bringing with him on the plane $400,000 to $500,000 in cash. Tankson often purchased 100 to 200 pounds of marijuana at a time, with the drugs being shipped on vans and tractor trailers to stash houses in Chicago, according to the plea agreement. One of the stash houses was located in the Lincoln Park neighborhood of Chicago, while another was set up in a penthouse apartment in the city’s River West neighborhood.
Tankson, 32, of Evanston, pleaded guilty to one count of conspiracy to possess a controlled substance with the intent to deliver, and one count of conspiracy to commit money laundering. The conviction carries a maximum sentence of 40 years in prison and a maximum fine of $1.5 million.
U.S. District Judge Matthew F. Kennelly scheduled a sentencing hearing for August 25, 2016, at 1:30 p.m.
According to the plea agreement, Tankson used drug proceeds to purchase several luxury automobiles through straw purchasers. Between June 2011 and December 2013, Tankson orchestrated the purchases of a Porsche Cayenne sport utility vehicle for $140,000, a Mercedes-Benz S63 sedan for $108,000, an Audi A8 sedan for $80,000, and several other expensive vehicles, according to the plea agreement. Tankson acknowledged in the plea agreement that the auto transactions were intended to conceal the source of the drug proceeds.
Tankson was arrested in December 2013. During a search of his Lincoln Park stash house, law enforcement discovered more than $1 million in cash, approximately 75 kilograms of cannabis stuffed into numerous plastic bags, five suitcases filled with cannabis, 20 rounds of 9mm ammunition and two 9mm pistol magazines, according to a federal criminal complaint filed against him in January 2014.
Investigators thereafter began an extensive money laundering investigation that led to charges against two other defendants. An alleged straw buyer of the vehicles, SONGHANE TRAORE, of Chicago, is charged with one count of conspiracy to possess a controlled substance with the intent to deliver, one count of conspiracy to commit money laundering, and one count of money laundering. JEROME B. MARSHALL, of Chicago, is charged with one count of money laundering for allegedly helping Tankson to fraudulently lease the Lincoln Park apartment.
Traore and Marshall have pleaded not guilty to the charges. Traore’s next court appearance before Judge Kennelly is scheduled for June 3, 2016, at 1:00 p.m., while Marshall will next appear before Judge Kennelly on June 13, 2016, at 10:00 a.m.
Tankson’s guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery Magee, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division; and Eddie T. Johnson, Chicago Police Superintendent.
The government is represented by Assistant U.S. Attorney Kartik K. Raman.
Plea Agreement
Lame Deer Man Sentenced to More Than 17 Years in Prison for RapeRead the Press Release
BILLINGS – Olaf James Haugen, 29, of Lame Deer was sentenced today to 210 months in prison and 10 years’ supervised release for rape. Federal District Court Judge Susan P. Watters issued the sentence.
Haugan was convicted of aggravated sexual abuse following a two-day jury trial in Billings in December of 2015. Haugen was indicted by a grand jury in January on the single count of aggravated sexual abuse in January 2015. At trial, the government introduced evidence that Haugen physically and sexually assaulted the victim in August of 2013. A dispute started when the victim confronted Haugen about his drug abuse. Haugen became angry. He threatened to kill the victim with a pocket knife, raped her, hit her several times and bit her on the back. The assault started on the evening of August 31 and continued into the next morning.
The assault was heard by an individual in the adjoining room, but was not reported by that individual. Later, another individual came to the house and overheard the assault continuing. She reported the assault to the BIA and an officer responded to the scene. When the officer arrived, the victim opened a window and asked the officer to help her because Haugen was beating her up. Haugen initially refused to allow the officer into the room and threatened to stab himself, but eventually calmed down and was arrested.
The victim was examined by Indian Health Services after the assault. Her injuries included abrasions and contusions consistent with being struck, a large bite mark on her back and an abrasion on her throat consistent with having a knife held against it. The victim did not initially disclose the rape but was convinced by a family member to do so and reported the rape two days later. Haugen claimed the intercourse was consensual but gave conflicting accounts of the incident at trial and to investigating officers following his arrest.
The case was prosecuted by Assistant U.S. Attorney John Sullivan. The case was investigated by the FBI and the Bureau of Indian Affairs.
Kansas Sex Offender Charged with Transporting Virginia Teen for SexRead the Press Release
KANSAS CITY, KAN. – A registered sex offender from Kansas was charged in federal court here Thursday with picking up a 16-year-old girl in Virginia and taking her across state lines to have sex with him, Acting U.S. Attorney Tom Beall said today.
Logan Viquesney, 20, Kansas City, Kan., was charged with one count of interstate transportation of a minor to engage in sexual activity.
An affidavit filed in the case alleges the victim was staying with her grandparents in Virginia when she and Viquesney began communicating over the Internet. On May 30, the victim was reported missing from her grandparents’ home. Investigators learned that Viquesney had driven to Virginia, picked up the girl, and taken her with him on a trip that took them from Virginia to Maryland, Illinois, Missouri and Kansas. While on the trip, Viquesney had sex with the girl.
Viquesney was arrested after he arrived in Kansas City, Kan., with the girl.
If convicted, he faces a penalty not less than 10 years in federal prison. Investigating agencies include the Kansas City, Kan., Police Department, the Lenexa Police Department, the Kansas Bureau of Investigation and the FBI. Assistant U.S. Attorney Chris Oakley is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Justice Department and Dutch Authorities Announce Simultaneous Enforcement Actions Against International Mass-Mailing Fraud Schemes Targeting the ElderlyRead the Press Release
Thousands of U.S. Victims Defrauded Out of Over $18 Million Annually
The United States filed a civil complaint in the U.S. District Court for the Eastern District of New York against an individual and two Dutch companies that allegedly engaged in multiple international mail fraud schemes that have defrauded elderly and vulnerable U.S. victims out of tens of millions of dollars, the Department of Justice announced. The Department sought a temporary restraining order, which was entered by the court yesterday, as well as preliminary and permanent injunctions to prevent the defendants from further victimizing U.S. consumers.
According to the complaint, U.S. residents received fraudulent direct mail solicitations that falsely claimed that the individual recipient had won, or would soon win cash or valuable prizes or otherwise come into great fortune. Victims sent payments through the U.S. and international mail systems to defendants Trends Service in Kommunikatie B.V. (Trends) and Kommunikatie Service Buitenland B.V. (KSB), both in Utrecht, Netherlands, and both owned and operated by defendant Erik Dekker, 54, of Langbroek, Netherlands.
At the same time that the Justice Department took this law enforcement action, Dutch law enforcement agents executed search warrants on the business address used by both companies and on Dekker’s home address. The Dutch authorities also took control of the Dutch P.O. boxes used by the defendants to receive victim funds. The coordinated U.S. and Dutch enforcement actions seek to immediately stop the use of Dutch P.O. boxes to receive payments from fraud victims and to immediately stop the defendants from continuing to victimize the elderly. Learn more about the actions taken by Dutch authorities at: https://www.om.nl/actueel/nieuwsberichten/@94702/fiod-and-us-doj/
“Schemes targeting elderly victims are increasingly international in scope, but geographic distance will not prevent us from seeking justice and holding bad actors accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Dutch authorities have done a great service to U.S. residents and elderly victims worldwide by addressing fraud facilitated within their borders. The Justice Department will continue to work with our international law enforcement partners to put a stop to fraud schemes that exploit vulnerable Americans.”
“As alleged in the complaint, defendants act as the clearinghouses for multiple international mail fraud schemes, taking money from thousands of elderly and vulnerable victims not only in this district but also throughout the United States,” said U.S. Attorney Robert L. Capers for the Eastern District of New York. “Together with the U.S. Postal Inspection Service and our international partner, the Fiscal Intelligence and Investigation Division of the Netherlands, we will track down, and stop, the schemes wherever they lead.”
“No one should ever be told they must pay a fee, or make a worthless purchase, to collect a prize,” said Inspector in Charge Regina L. Faulkerson of the U.S. Postal Inspection Service’s Criminal Investigation Group. “When that happens, it’s fraud - plain and simple - and Postal Inspectors work to keep those falsehoods out of the U.S. mail.”
The complaint filed June 1 in U.S. federal court in the Eastern District of New York alleges that, since at least 2012, Trends, KSB and Dekker have used P.O. boxes in the Netherlands to receive payments from various predatory mass-mailing fraud schemes. Solicitations are mailed from locations around the globe to residents in the United States. The solicitations purport to be personalized to each individual recipient, even though they are form letters mailed to hundreds of thousands of potential victims. Some solicitations instruct recipients to pay a processing fee in order to receive lottery winnings or other prizes; other solicitations urge recipients to purchase goods or services based on false promises that they will guarantee future lottery wins.
As alleged in the complaint, victims responded to the solicitations by completing a form and submitting a payment, usually around $15 to $55, via U.S. mail. The solicitations contain pre-addressed envelopes in which victims send payments. The envelopes are addressed to P.O. boxes in the Netherlands. Trends and KSB operate more than 50 of these P.O. boxes. Like other so-called “caging services,” Trends and KSB open the payment envelopes, remove the contents, enter payment and other personal information from the victims into a database and handle victim payments. The U.S. government estimates that U.S. victims mail more than $18 million annually to the defendants’ P.O. boxes.
The government is seeking an injunction under the Anti-Fraud Injunction Statute immediately shutting down the defendants’ role in the fraudulent schemes in order to protect U.S. victims from further harm. The injunctions sought by the United States would enjoin the defendants from using the U.S. mail or causing the U.S. mail to be used, to distribute the fraudulent solicitations or to collect victim payments, and from selling lists of American victims who have responded to the solicitations. If granted, a permanent injunction would allow the U.S. Postal Service to intercept mail heading to the defendants, and return that mail—along with any money being sent to the defendants—to U.S. victims.
U.S. District Court Judge I. Leo Glasser for the Eastern District of New York set a hearing on the preliminary injunction on July 18 at 10 a.m.
The Justice Department’s case is being handled by Trial Attorney Kerala Thie Cowart of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney John Vagelatos of the U.S. Attorney’s Office in the Eastern District of New York and Postal Inspector Joseph R. Bizzarro of the U.S. Postal Inspection Service.
The claims made in the complaints are allegations only, and there has been no determination of liability.
A copy of the complaint, case # 16-CV-2770, can be found here: https://www.justice.gov/opa/file/863501/download
More information on fraud against the elderly is available here: https://www.justice.gov/elderjustice/.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.
Justice Department and Dutch Authorities Announce Simultaneous Enforcement Actions Against International Mass-Mailing Fraud Schemes Targeting the ElderlyRead the Press Release
The United States filed a civil complaint in the U.S. District Court for the Eastern District of New York against an individual and two Dutch companies that allegedly engaged in multiple international mail fraud schemes that have defrauded elderly and vulnerable U.S. victims out of tens of millions of dollars, the Department of Justice announced. The Department sought a temporary restraining order, which was entered by the court yesterday, as well as preliminary and permanent injunctions to prevent the defendants from further victimizing U.S. consumers.
According to the complaint, U.S. residents received fraudulent direct mail solicitations that falsely claimed that the individual recipient had won, or would soon win, cash or valuable prizes or otherwise come into great fortune. Victims sent payments through the U.S. and international mail systems to defendants Trends Service in Kommunikatie, B.V. (Trends), and Kommunikatie Service Buitenland, B.V. (KSB), both in Utrecht, Netherlands, and both owned and operated by defendant Erik Dekker, 54, of Langbroek, Netherlands.
At the same time that the Justice Department took this law enforcement action, Dutch law enforcement agents executed search warrants on the business address used by both companies and on Dekker’s home address. The Dutch authorities also took control of the Dutch P.O. boxes used by the defendants to receive victim funds. The coordinated U.S. and Dutch enforcement actions seek to immediately stop the use of Dutch P.O. boxes to receive payments from fraud victims and to immediately stop the defendants from continuing to victimize the elderly. Learn more about the actions taken by Dutch authorities at: https://www.om.nl/actueel/nieuwsberichten/@94702/fiod-and-us-doj/
“As alleged in the complaint, defendants act as the clearinghouses for multiple international mail fraud schemes, taking money from thousands of elderly and vulnerable victims not only in this district but also throughout the United States,” said U.S. Attorney Robert L. Capers for the Eastern District of New York. “Together with the U.S. Postal Inspection Service and our international partner, the Fiscal Intelligence and Investigation Division of the Netherlands, we will track down, and stop, the schemes wherever they lead.”
“Schemes targeting elderly victims are increasingly international in scope, but geographic distance will not prevent us from seeking justice and holding bad actors accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Dutch authorities have done a great service to U.S. residents and elderly victims worldwide by addressing fraud facilitated within their borders. The Justice Department will continue to work with our international law enforcement partners to put a stop to fraud schemes that exploit vulnerable Americans.”
“No one should ever be told they must pay a fee, or make a worthless purchase, to collect a prize,” said Inspector in Charge Regina L. Faulkerson. “When that happens, it’s fraud - plain and simple - and Postal Inspectors work to keep those falsehoods out of the U.S. mail.”
The complaint filed June 1 in U.S. federal court in the Eastern District of New York alleges that, since at least 2012, Trends, KSB and Dekker have used P.O. boxes in the Netherlands to receive payments from various predatory mass-mailing fraud schemes. Solicitations are mailed from locations around the globe to residents in the United States. The solicitations purport to be personalized to each individual recipient, even though they are form letters mailed to hundreds of thousands of potential victims. Some solicitations instruct recipients to pay a processing fee in order to receive lottery winnings or other prizes; other solicitations urge recipients to purchase goods or services based on false promises that they will guarantee future lottery wins.
As alleged in the complaint, victims responded to the solicitations by completing a form and submitting a payment, usually around $15 to $55, via U.S. mail. The solicitations contain pre-addressed envelopes in which victims send payments. The envelopes are addressed to P.O. boxes in the Netherlands. Trends and KSB operate more than 50 of these P.O. boxes. Like other so-called “caging services,” Trends and KSB open the payment envelopes, remove the contents, enter payment and other personal information from the victims into a database, and handle victim payments. The U.S. government estimates that U.S. victims mail more than $18 million annually to the defendants’ P.O. boxes.
The government is seeking an injunction under the Anti-Fraud Injunction Statute immediately shutting down the defendants’ role in the fraudulent schemes in order to protect U.S. victims from further harm. The injunctions sought by the United States would enjoin the defendants from using the U.S. mail, or causing the U.S. mail to be used, to distribute the fraudulent solicitations or to collect victim payments, and from selling lists of American victims who have responded to the solicitations. If granted, a permanent injunction would allow the U.S. Postal Service to intercept mail heading to the defendants, and return that mail - along with any money being sent to the defendants - to U.S. victims.
U.S. District Court Judge I. Leo Glasser for the Eastern District of New York set a hearing on the preliminary injunction on July 18 at 10 a.m.
The United States’ case is being handled by Assistant U.S. Attorney John Vagelatos of the U.S. Attorney’s Office in the Eastern District of New York, Trial Attorney Kerala Thie Cowart of the Civil Division’s Consumer Protection Branch, and Postal Inspector Joseph R. Bizzarro of the U.S. Postal Inspection Service.
The claims made in the complaints are allegations only, and there has been no determination of liability.
A copy of the complaint can be found here: The Complaint and exhibits
More information on fraud against the elderly is available here: https://www.justice.gov/elderjustice/.
For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.
E.D.N.Y. Docket No. 16-CV-2770 (ILG)(SMG)
Jury Convicts Peculiar Man of Tax EvasionRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Peculiar, Mo., man was convicted by a federal jury today of tax evasion.
Harold R. Stanley, 62, of Peculiar, was found guilty of one count of tax evasion and one count of endeavoring to obstruct and impede the due administration of the internal revenue laws.
Stanley, an electrical engineer, was hired by companies as a consultant and received $971,604 from self-employment from 2005 to 2009 as an independent contractor. Stanley failed to file any tax returns for 2005 and 2006. For tax years 2007 through 2009, Stanley filed substantially correct returns but left the tax line entry blank and failed to submit any payment.
The total tax loss for 2005 through 2009 is $259,900.
Stanley submitted fake money orders for payment to the Internal Revenue Service, returned documents to the Internal Revenue Service claiming that the tax assessments were satisfied because they were “Accepted for Value,” filled out payment vouchers with his name in all capital letters but didn’t submit payment and submitted a false criminal referral to IRS – Criminal Investigation.
Under federal statutes, Stanley is subject to a sentence of up to eight years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for less than half an hour before returning the guilty verdict to U.S. District Judge Roseann Ketchmark, ending a trial that began Tuesday, May 31, 2016.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by IRS-Criminal Investigation.
Joint EU-U.S. Press Statement Following the EU-U.S. Justice and Home Affairs Ministerial MeetingRead the Press Release
Today the EU-U.S. Ministerial Meeting on Justice and Home Affairs, hosted by the Netherlands Presidency of the Council of the European Union, took place in Amsterdam. This meeting is held usually twice a year, to evaluate and advance Trans-Atlantic cooperation in the areas of freedom, security and justice.
Attorney General Loretta E. Lynch joined Dutch Minister of Security and Justice Ard van der Steur, U.S. Deputy Secretary of Homeland Security Alejandro Mayorkas, and Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos and Commissioner for Justice, Consumers and Gender Equality, Věra Jourová, representing the European Union.
In this Ministerial meeting, the EU and the United States reaffirmed their commitment to closer cooperation, especially in the context of evolving and shared challenges that affect the security and rights of citizens on both sides of the Atlantic.
Today’s signing of the "Umbrella" agreement[1] represented a major step forward in EU-U.S. relations. The agreement sets high standards for the protection of personal data transferred by law-enforcement authorities. It also strengthens legal certainty and enhances the rights of citizens which in turn will facilitate EU-U.S. cooperation to combat crime, including terrorism. The EU and the U.S. are committed to work together in the implementation of this agreement to ensure that it benefits both citizens and law enforcement cooperation. The next step will be to seek approval by the European Parliament.
During the ministerial meeting, the delegations focused on ways to address the migration crisis, on their respective visa policies, and on information sharing in the context of security, on counterterrorism policies and terrorist financing, on money laundering, data protection and on practical cooperation to tackle transnational organised crime. The exchange of views covered issues including the protection of refugees, global resettlement efforts, effective border management and dismantling organised criminal migrant smuggling networks.
The EU and the U.S. first discussed ways to address global migration by developing safe, regular and orderly migration processes whilst ensuring international protection for those who need it. The discussion focused on opportunities to mutually reinforce and coordinate their actions in this respect while also establishing high security standards. They agreed that the current migration and refugee challenges require global solutions through increased international cooperation and regional action. In this respect they reaffirmed their commitment to work together in the lead-up to the upcoming United Nations General Assembly high level meeting addressing large movements of refugees and migrants and to the U.S. hosted Leader-Level Refugee Summit, to be held in September 2016 in New York.
The EU and U.S. exchanged views on visa issues and the respective legal frameworks. They agreed to maintain their constructive dialogue at all levels to achieve mutually beneficial solutions.
The EU and the U.S. discussed initiatives to improve counterterrorism efforts, including border security, screening of travellers and information sharing, as well as cooperation to better identify terrorist and foreign fighter travel. They also agreed to reinforce their dialogue on chemical, biological, radioactive and nuclear material and on its possible use by terrorist networks. They discussed legislative initiatives to improve information sharing, and to streamline efforts to combat terrorist financing and money laundering.
They also discussed a five year review of the 2010 EU-U.S. Mutual Legal Assistance Treaty, a key mechanism for transatlantic criminal justice cooperation. The EU and the U.S. confirmed that the treaty is working effectively and identified areas for further practical improvement. The U.S. and the EU committed to implementing those recommendations. These recommendations include enhancing training and specialisation of practitioners, improving the way joint investigation teams work together, using technology to avoid delays, and making it easier to track criminal proceeds by identifying bank accounts. Facilitating access to electronic evidence is a particular concern of the review, and the participants committed to improving their practices through which they obtain such evidence.
Following up to the commitment made at the EU–U.S. Summit in March 2014, the EU and the U.S. reiterated their desire to tackle jointly the issue of transnational child sex offenders, acknowledging the operational conclusions of an EU–U.S. expert meeting held in September 2015. The EU and the U.S. recognized the importance of improving operational cooperation to protect children from transnational sex offenders.
Concluding the discussions, Europol and the U.S. jointly presented the results of a successful EU–U.S. operation that brought together law enforcement authorities from across Europe and the US to dismantle an important drug trafficking network and seize the proceeds of their crimes.
The EU and the U.S. committed to continuing their regular dialogue and to hold another ministerial meeting in the second half of 2016.
[1] Agreement between the European Union and the United States of America on the protection of personal data when transferred and processed for the purpose of preventing, investigating, detecting or prosecuting criminal offences, including terrorism
Honduran National Pleads Guilty to Immigration OffenseRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ROGER AGUIRRE-SAGASTUME, age 29, a native of Honduras, pled guilty today to a one-count Indictment for illegal entry of a removed alien, in violation of Title 18, United States Code, Section 1326(a).
According to court documents, AGUIRRE-SAGASTUME was previously removed from the United States on August 4, 2009. He was found in the Eastern District of Louisiana on March 17, 2016, and had not received permission from the Attorney General of the United States or the Secretary of the Department of Homeland Security to reenter.
AGUIRRE-SAGASTUME faces a maximum term of imprisonment of two (2) years, as well as a fine of $250,000. U.S. District Judge Nannette Jolivette Brown set sentencing for July 28, 2016.
U.S. Attorney Polite praised the work of the United States Immigration and Customs Enforcement agency in investigating this matter. Assistant United States Attorney Jon Maestri is in charge of the prosecution.
Hermosa Man Sentenced for Assault with a Dangerous WeaponRead the Press Release
United States Attorney Randolph J. Seiler announced that a Hermosa, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on May 27, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Anthony Two Bulls, age 44, was sentenced to 24 months’ custody, 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Two Bulls pleaded guilty to Assault with a Dangerous Weapon on February 12, 2016.
The conviction stems from Two Bulls assaulting his mother with a trophy and his foot while wearing boots on December 1, 2015, at Red Shirt. This assault resulted in her receiving staples to close a laceration.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services. Assistant U.S. Attorney Megan Poppen prosecuted the case.
Two Bulls was immediately returned to the custody of the U.S. Marshals Service.
Haines City Woman Indicted for $250,000 Social Security FraudRead the Press Release
Tampa, Florida– United States Attorney A. Lee Bentley, III announces the return of an indictment charging Tameka O’Hara ( 36, Haines City) with four counts of theft of government money, four counts of making false statements to or concealing material facts from the Social Security Administration, and one count of making a false statement to a federal agency. If convicted, she faces a maximum penalty of 10 years in federal prison for each count of theft of government money and up to 5 years’ imprisonment on each of the other counts. The indictment also notifies O’Hara that the United States intends to forfeit any monies and property that are traceable to proceeds of the offense.
According to the indictment, O’Hara concealed or lied about material facts concerning her household’s true composition, income, and assets, as well as the ownership of her residence, in an effort to maximize or maintain eligibility for Supplemental Security Income benefits for herself and other members of her household. The total loss to the federal government is alleged to exceed $250,000.
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 Office of the Inspector General for the Social Security Administration. It will be prosecuted by Assistant United States Attorney Eric K. Gerard.
Fresno- and Visalia-Based Health Care Company President Charged with Fraud, Embezzlement and Money LaunderingRead the Press Release
FRESNO, Calif. — A federal grand jury returned a 20-count indictment today against Mark Merrill Reynolds, 60, of Fresno, charging him with embezzlement, mail fraud, and money laundering, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Reynolds was the president and sole shareholder of Ben-E-Lect and Ben-E-Lect of Visalia. These companies operated in Fresno and Tulare Counties. Ben-E-Lect processed health care claims on behalf of its clients, which were small- to medium-sized businesses that purchased high deductible, fully insured group medical plans from independent insurance carriers and then self-insured beneficiaries for amounts up to the amount of the high deductible. Ben-E-Lect processed the claims using funds that its clients paid into an account known as the Ben-E-Lect Employer Elect account. Ben-E-Lect was required to hold these funds in a fiduciary capacity and to withdraw clients’ funds only for specific purposes, none of which included Ben-E-Lect’s own operational expenses or Reynold’s personal gain.
According to the indictment, Reynolds embezzled funds from the Ben-E-Lect Employer Elect account over a five-year period. He allegedly used the embezzled funds for Ben-E-Lect’s business operating expenses, personal mortgage payments, personal vehicle loan payments, personal credit card payments, the purchase of a 30 percent interest in a payroll company, deposits into a personal investment account, and cash withdrawals. All the funds diverted from the Ben-E-Lect Employer Elect account were allegedly first moved into different accounts to conceal their source before being used and spent. The indictment alleges that Reynolds embezzled approximately $6,089,500 from the Ben-E-Lect Employer Elect account, but reimbursed that account approximately $1,613,500, netting a loss of approximately $4,476,000. During the time period alleged in the indictment, Ben-E-Lect serviced over 3,200 clients across 22 states.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Department of Insurance. Assistant United States Attorneys Mark J. McKeon and Patrick Delahunty are prosecuting the case.
If convicted of embezzlement, Reynolds faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted of mail fraud, Reynolds faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. If convicted of money laundering, Reynolds faces a maximum statutory penalty of 20 years in prison and a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater. 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 are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Four-Time Convicted Felon Sentenced for Multiple Armed RobberiesRead the Press Release
NORFOLK, Va. – Sherrod Cannon, 25, of Portsmouth, was sentenced today to 130 months in prison for his role in three separate armed robberies committed in Portsmouth and Chesapeake in April 2015. Cannon was also ordered to pay $731.55 in restitution to his victims, and ordered to serve five years of supervised release after his prison sentence.
Cannon pleaded guilty on Feb. 25, 2016, to conspiracy to interfere with commerce by means of robbery and to brandishing a firearm during a crime of violence. According to court documents, videotape surveillance at the third 7-Eleven that was robbed showed Cannon’s co-conspirator casing the store just minutes before Cannon entered and pointed a revolver at the employees. Shortly after the robbery, officers identified two suspects matching the description provided by the victim, who later identified Cannon as the gunman. Police found cash matching the amount taken from the registers evenly split between Cannon and his co-conspirator. Cannon also had a $2 bill, which the victim confirmed was stolen from the cash register during the robbery. Police later recovered the loaded .38 caliber revolver that was used during the armed robbery near a Little League baseball field.
The date and location of each robbery is listed below:
Date
Location
April 10, 2015
7-Eleven, 5001 Portsmouth Boulevard, Portsmouth
April 13, 2015
7 Eleven, 3445 Western Branch, Chesapeake
April 27, 2015
7-Eleven, 3500 Deep Creek Boulevard, Portsmouth
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Michael Boxler, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) Washington Field Division; Kelvin L. Wright, Chief of Chesapeake Police; and Tonya D. Chapman, Chief of Portsmouth Police, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen. Assistant U.S. Attorneys Andrew C. Bosse and Joseph E. DePadilla, and Special Assistant U.S. Attorney John F. Butler prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-121.
Four Men Sentenced for Multi-State Meth Distribution ConspiracyRead the Press Release
HELENA – Ryan Scot Frankforter, 38, of Helena was sentenced to 30 months in prison and 3 years’ supervised release, Deejay Poynter, 37, of East Helena was sentenced to 70 months in prison and 3 years’ supervised release, Calvin Sturdivant Craver, 29, of Dallas, OR was sentenced to 120 months in prison and 5 years supervised release, and Joseph Dean Jayne Jr., 33, of Tucson, AZ was sentenced to 150 months in prison and 5 years’ supervised release. Federal District Court Judge Charles C. Lovell issued the sentences.
All four men were sentenced following an August 2015, eleven-count indictment. Frankforter and Poynter were sentenced for distribution of methamphetamine and Craver and Jayne were sentenced for conspiracy to possess with intent to distribute methamphetamine. In documents filed with the court, Assistant U.S. Attorney Paulette Stewart stated that the government was prepared to show that the four had been involved, in various capacities, in a months-long conspiracy to transport and distribute methamphetamine across state lines.
From approximately December 2014 until May 2015, between 3 and 12 pounds of methamphetamine was transported from Arizona to Montana by Jayne and another co-conspirator and was redistributed by Poynter and Frankforter. In December of 2014, law enforcement purchased various amounts of methamphetamine from Poynter and Frankforter. Both Poynter and Frankforter ultimately admitted to their roles in the sales.
In February of 2015, Craver was arrested in Townsend following a traffic complaint. Following his arrest, a search warrant was executed on his vehicle. Law enforcement seized approximately three ounces of methamphetamine. Craver’s co-defendants told law enforcement that Craver and another co-conspirator had been given approximately 8 ounces of methamphetamine to transport from Arizona to Montana, of which the remaining three ounces were found by law enforcement in Craver’s vehicle.
Also in February of 2015, Jayne supplied a co-conspirator with methamphetamine to transport to Montana. Jayne also personally transported approximately one pound of methamphetamine from Arizona to Montana. Law enforcement saw Jayne in Montana City but he fled before he could be apprehended. Law enforcement obtained a search warrant for Jayne’s vehicle and recovered approximately a pound of methamphetamine. Jayne was subsequently involved in a vehicle pursuit with law enforcement on February 20, 2015. He again fled the scene while a co-conspirator was arrested. A gun was found in their vehicle. After being arrested in Oregon in May 2015, Jayne admitted to his role in the conspiracy and that the gun found in the vehicle was his. Jayne stated that he made three or four trips to Montana transporting one to three pounds of meth on each trip. Jayne stated that approximately one pound of meth originated in Oregon while the rest was transported from Arizona.
This case was investigated by the Missouri River Drug Task Force, the Federal Bureau of Investigation, Homeland Security Investigations, the Drug Enforcement Administration, the Montana Division of Criminal Investigation, the Helena Police Department, and the Lewis and Clark County Sherriff’s Office. The case was prosecuted by Assistant U.S. Attorney Paulette Stewart.
Fort Wayne Men Indicted for Firearms TraffickingRead the Press Release
FORT WAYNE –United States Attorney David A. Capp announced that a federal grand jury in Fort Wayne returned a 12-count indictment against Carlos Sanchez, 30, and Matthew Warner, 21, both of Fort Wayne, Indiana.
Sanchez and Warner were charged with the following:
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Both were charged with one count of conspiracy to manufacture or deal in firearms without being a licensed dealer of firearms.
Warner was also charged with one count of knowingly possessing or receiving a firearm that had been shipped or transported in interstate commerce with an obliterated serial number.
Sanchez was charged with one count of each of the following:
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Not being a licensed dealer of firearms while engaging in the business of importing, manufacturing and dealing in firearms;
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Being a felon in possession of a firearm;
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Knowingly open, lease, rent and maintain a place for the purpose of distributing and using a controlled substance; and
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Possessing a firearm in furtherance of a drug trafficking crime.
Sanchez was also charged with three counts of each of the following:
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Knowingly possessing or receiving a firearm that had been transported or shipped in interstate commerce with an obliterated serial number; and
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Knowingly selling or providing a firearm to a felon.
According to court filings, Warner supplied firearms that were illegally trafficked. Sanchez was a prohibited person and could not legally obtain firearms. Warner tried to conceal his criminal conduct from law enforcement.
Both Sanchez and Warner were detained pending trial.
This investigation was conducted by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. This case is being prosecuted by Assistant United States Attorney Lesley Miller-Lowery.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
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Former daycare employee sentenced in child pornography caseRead the Press Release
INDIANAPOLIS – United States Attorney Josh J. Minkler announced the sentencing of an Indianapolis man after being convicted in February 2016, on four child pornography charges. Ali Al-Awadi, 22, Indianapolis, was sentenced today by U.S. District Judge Tanya Walton Pratt to 27 years imprisonment.
“I want to thank and commend the victim and her family for standing up and bravely confronting this child molester on the day she was victimized and again two years later in a federal courthouse,” said Minkler. “While no sentence will bring back the innocence or relieve the pain she suffered, her brave deeds undoubtedly saved more children that would have been victimized by the defendant. I would encourage anyone victimized by a child molester to immediately report the crime to law enforcement.”
Al-Awadi worked as a day care provider at Children’s Choice Learning Center at St. Vincent Hospital in Indianapolis. While caring for several children, he molested a four year old girl while she was napping and took several sexually explicit photos of her on his cell phone. She testified at trial that he fondled her and hurt her.
This case was investigated by the Indianapolis Metropolitan Police Department. U. S. Attorney Minkler was especially grateful to Detectives Grant Melton and Eli McAllister for their dedication and professionalism in assisting with the prosecution of this case.
Al-Awadi has also been charged by the Marion County Prosecutor’s Office with on one count of child molesting, a level three felony. He faces an additional sentence of up to 16 years if convicted of that charge.
Minkler further reminded all individuals that Indiana’s law is very clear about reporting requirements when child abuse of any kind is suspected. If you suspect a child has been or is being abused, contact your local police department immediately or call the Indiana Child Abuse Hotline at 1-800-800-5556.
According to Assistant United States Attorneys Kristina Korobov and Bradley Shepard who prosecuted this case for the government, Al-Awadi faces 15 years of supervised release after his sentence.
Former Treasurer Admits Guilt in Scheme to Defraud Sorority Alumnae AssociationRead the Press Release
DES MOINES, IA - On June 2, 2016, Andrea G. Baker waived indictment and pleaded guilty to one count of mail fraud announced Acting United States Attorney Kevin E. VanderSchel. Baker, age 50, admitted to engaging in a scheme to defraud the Ames Chi Omega Alumnae Association in Ames, Iowa ("Association"), from approximately July 2000 until August 2014. Baker admitted she used her position as treasurer to obtain Association funds for her own benefit. As part of the scheme, Baker mailed checks from the Association’s account to pay for personal credit card statements. Baker also deposited Association funds into a personal bank account, and obtained cash from the Association for her personal use. Baker acted without the Association’s permission or knowledge, and made false entries and omissions in the Association’s financial records to conceal her use of funds. Baker admitted she received and attempted to receive a total of at least $954,410 from the Association from 2000 to 2014.
Baker faces a statutory sentence of up to twenty (20) years in prison, a fine of up to $250,000, and a term of up to three (3) years of supervised release to follow any term of imprisonment. As part of the plea agreement, Baker agreed to pay restitution in an amount to be determined by the court at sentencing. Sentencing is scheduled for 9:00 a.m. on October 6, 2016, before United States District Court Judge Rebecca Goodgame Ebinger, at the United States Courthouse in Des Moines.
Former Landover Company Employee Sentenced to 6 Years in Prison for Fraudulently Obtaining Business ExpensesRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced James Charlton Davis, III, age 57, of Anderson, South Carolina, today to six years in prison followed by five years of supervised release for wire fraud arising from an elaborate scheme to defraud his employer of at least $240,000. Judge Chuang also ordered Davis to pay restitution of $240,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
According to his plea agreement, from May 7, 2012 to March 13, 2013, Davis was the director of the electrical division for a small company in Landover, Maryland that provided construction and preconstruction services to federal agencies. When applying for his job, Davis falsely represented that he had earned a Ph.D. from the Massachusetts Institute of Technology (MIT), when in fact Davis had not attended MIT. Part of his duties as director was to develop new business for the company.
Davis falsely told company executives that he knew executives at several corporate entities, and that he was pursuing contracts with these corporate entities. Davis created and falsely registered online domain names that closely resembled legitimate domain names associated with several of these corporate entities. Davis used these falsely-registered domains to send emails to himself and others at his employer to legitimize the fictional contracts he claimed to obtain on his employer’s behalf. Davis also assumed the identity of an individual who investigation revealed was a contractor with a technology company. Davis had previous interactions with this individual during his previous employment.
In July 2012, Davis told his employer that he had procured contracts with the technology company, headquartered in San Jose, California, to construct cell towers in Alpharetta, Georgia. Davis communicated with himself via email using the stolen identity of the individual, in connection with fictitious contracts with the tech company, and with other corporate entities for supposed upgrades to their data centers. Davis represented that he was working with this individual to perform these contracts. For several of the contracts, Davis sent communications to himself and/or others at his employer, or caused others at his employer’s company to send emails to various personas he had created—some of whom appear to refer to actual employees of the corporate entities with whom Davis claimed to be negotiating contracts.
Related to his supposed efforts to obtain and perform contracts with these corporate entities, Davis traveled extensively and incurred bills for expensive dinners and accommodations. Davis sought and obtained reimbursement from his employer for travel, meals, equipment and labor costs. In fact, however, Davis did not pursue any legitimate business and did not have interactions with any of these corporate entities on behalf of his employer.
Because of Davis’s fraudulent emails, his employer believed that demand for its services had grown exponentially. As a result, his employer stopped pursuing additional contracts, sought larger lines of credit and hired additional personnel.
In March of 2013, his employer learned of the fraud scheme when none of the invoices being submitted to these corporate “clients” - the fictional contacts at these companies - were being paid. Davis’s employer started contacting these “clients” independently, and they all confirmed that they had no business dealings with Davis’s employer or with Davis.
In determining his sentence, the court considered the defendant’s 30 year criminal history, including six previous convictions for theft and making false statements.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorneys Thomas M. Sullivan and Ray D. McKenzie, who prosecuted the case.
Former Human Resource Manager for Franklin-Based Company Pleads Guilty to Wire FraudRead the Press Release
Kimberly Richardson Bates aka Kimberly D. Richardson, 36, of Spring Hill, Tenn., pleaded guilty yesterday to wire fraud, after being charged with fraudulently transferring money from a Franklin-based company’s employees’ 401k accounts into her personal checking account, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
According to the charging document and plea agreement, Bates was the human resource manager for EML, a calibration and facility support company based in Franklin, Tenn. Bates used her position and authority to access the retirement accounts of other employees and submitted fraudulent withdrawal documents to John Hancock, the company’s 401k service provider. During the period between August 2013 and September 2014, Bates submitted numerous fraudulent withdrawal requests and directed the withdrawals to be deposited into her personal checking account. In total, Bates embezzled $48,411.01 from EML and former EML employees.
Wire fraud carries a maximum penalty of up to 20 years in prison and a $250,000 fine. Bates will be sentenced by U.S. District Judge Aleta A. Trauger on September 2, 2016. Her sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
This case was investigated by the United States Secret Service and is being prosecuted by Assistant U.S. Attorney Henry Leventis.
Former Hudson resident sentenced to nearly seven years in prison for leading marijuana and money laundering conspiracyRead the Press Release
A former Hudson resident was sentenced to nearly seven years in prison for leading a conspiracy that sent marijuana from California to the Cleveland area, then laundered the drug proceeds and sent the money back to California, said Carole S. Rendon, Acting U.S. Attorney for the Northern District of Ohio.
James Sorgi, 35, was sentenced to 80 months in federal prison. He also forfeited more than $86,000 in cash and money orders.
Sorgi operated a drug trafficking organization that shipped marijuana from California to Cleveland. He grew the marijuana in California and also obtained marijuana from other growers. Sorgi then worked with Robert Serina and Stuart Pflaum to direct others to receive multi-pound shipments of marijuana in Ohio and sell it there, according to court documents.
Sorgi, working with Serina, Pflaum and others, then directed people to collect the drug proceeds and make cash deposits into various bank accounts. Sorgi, through Pflaum and Serina, then directed people to convert the cash into money orders and send the money to California, according court documents.
This took place between June 2013 and Februay 2015, according to the indictment.
The case against Serina is pending. Pflaum has pleaded guilty to his role in the conspiracy and is awaiting sentencing.
This case is being prosecuted by Assistant U.S. Attorneys Michelle Baeppler and Margaret Sweeney following an investigation by the Northern Ohio Law Enforcement Task Force and the U.S. Postal Inspection Service. The NOLETF is a task force comprised of investigators from the Federal Bureau of Investigation, Cleveland Division of Police, Cuyahoga Metropolitan Housing Authority, Drug Enforcement Administration, Internal Revenue Service, Cuyahoga County Sheriff’s Office, Ohio Bureau of Criminal Investigation and the police departments of Cleveland Heights, Euclid, Lakewood, the Regional Transit Authority, Westlake and Shaker Heights. The NOLETF is also one of the initial Ohio High Intensity Drug Trafficking Area initiatives, which supports and helps coordinate numerous Ohio drug task forces in their efforts to eliminate or reduce drug trafficking in Ohio.
Former Horizons Hospice Chief Operating Officer Pleads Guilty to Health Care FraudRead the Press Release
PITTSBURGH - A Cambria County resident pleaded guilty in federal court to a charge of health care fraud, United States Attorney David J. Hickton announced today.
Mary Ann Stewart, 48, of Carrolltown, Pennsylvania, pleaded guilty to one count before Senior United States District Judge Terrence F. McVerry.
“Protecting citizens from health care fraud schemes that can devastate lives, undermine the integrity of our health care system, and drive up costs for all consumers is a worthy priority for our office,” said U.S. Attorney Hickton.
“This was a case where millions of dollars were paid out due to fraudulent billings,” Pennsylvania Attorney General Kathleen Kane said. “We are pleased that the defendant is accepting responsibility for her actions and acknowledging the personal benefits that she received through this fraud.”
In connection with the guilty plea, the court was advised that Stewart was the chief operations officer for Horizons Hospice LLC, which provided end-of-life hospice care to eligible patients. A significant number of patients were eligible for Medicare and Medicaid. Stewart admitted orchestrating a scheme whereby she caused her staff to place non-qualifying patients into hospice care that were not appropriate, and then recertified the patients for continued hospice care.
Judge McVerry scheduled sentencing for Sept. 9, 2016, at 1:30 p.m. The law provides for a total sentence of 10 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued the defendant’s bond.
Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, United States Department of Health and Human Services – Office of the Inspector General, and the Medicaid Fraud Control Section of the Pennsylvania Office of Attorney General conducted the investigation that led to the prosecution ofMary Ann Stewart.
Former DEA Agent Pleads Guilty to Child Pornography ChargesRead the Press Release
HOUSTON – A Massachusetts man who formerly resided in McAllen has entered a guilty plea to one count of access with intent to view child pornography, announced U.S. Attorney Kenneth Magidson. James Patrick Burke, 39, was a former special agent with the Drug Enforcement Administration (DEA).
Burke came to the attention of law enforcement after investigators found evidence he was accessing files from a website known to contain child pornography. A search warrant was executed at Burke’s McAllen residence on Aug. 14, 2015, at which time investigators seized a laptop computer and a desktop computer. Burke admitted downloaded and viewed child pornography from the Internet, but would use forensic wiping software to delete the images and movies.
The forensic examination revealed remnants of the TOR browser which Burke had used to access the child pornography website as well as forensic wiping software. Agents also found remnants of the movie titles that are suggestive of child pornography.
An examination of what was collected from the server side of the website showed that Burke had accessed a total of 77 threads which contained 345 contact sheets with approximately eight images of child pornography per sheet. These images included children under the age of 12, bondage and acts of violence. Some of the images are of known victims as identified through the National Center for Missing and Exploited Children.
Burke entered his guilty plea before U.S. District Judge Alfred H. Bennett who set sentencing for Oct. 20, 2016. At that time, Burke faces up to 10 years imprisonment and a possible $250,000 maximum fine. He was permitted to remain on bond pending that hearing.
The charges are the result of an investigation by the FBI.
This case, prosecuted by Assistant U.S. Attorneys Kimberly Ann Leo, Linda Requenez and Alexandro Benavides, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Caltrans Employee Sentenced to 6.5 Years in Prison for Bid Rigging and Contracting FraudRead the Press Release
SACRAMENTO, Calif. — Clint Gregory, 53, of Sacramento, was sentenced today by United States District Judge Morrison C. England Jr. to six and a half years in prison for a mail fraud scheme involving bid rigging in connection with contracts issued by the California Department of Transportation (Caltrans), Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, Gregory worked for Caltrans in Stockton as a Senior Transportation Engineer Supervisor. Over a five-year period, Gregory received cash, a Persian rug, a cellphone, and other gifts in exchange for awarding Caltrans contracts to a primary corporate contractor. Gregory and others also arranged for third-party companies to submit straw bids for contracts for which the primary contractor was also competing, permitting Gregory to award the contracts to either a straw bidder or the primary contractor and create the illusion of true competition. The straw companies, who performed no work, were paid a commission for their assistance, and this arrangement was not disclosed to Caltrans. As a result of the fraud, Caltrans incurred a loss of more than $1.2 million.
According to Gregory’s guilty plea, he used his authority at Caltrans to approve fraudulent invoices submitted by the primary contractor and others. As a result, the primary contractor and the straw-bidder companies received payment for work that was never performed. He also requested that the primary contractor provide him with a fictitious invoice to conceal an unlawful purchase he made for parts for his personal airplane.
In imposing sentence, the Court found that Gregory had obstructed justice by making false statements to law enforcement about specific purported bribe payments made to accounts he had set up in the name of shell companies. A restitution hearing has been scheduled for July 21, 2016.
This case was the product of an investigation by the FBI and the San Joaquin County District Attorney’s Office. Caltrans assisted with the investigation. Assistant United States Attorneys Philip A. Ferrari, Michele M. Beckwith, and André M. Espinosa prosecuted the case.
First Assistant U.S. Attorney Grant C. Jaquith Awarded Top DOJ HonorRead the Press Release
ALBANY, NEW YORK – First Assistant U.S. Attorney Grant C. Jaquith received the Department of Justice Director’s Award for Executive Achievement yesterday at the annual Director’s Awards ceremony in Washington, D.C.
Mr. Jaquith was recognized for his work as a prosecutor and supervisor during his 27-year career at the U.S. Attorney’s Office for the Northern District of New York. Mr. Jaquith, who has served as the First Assistant U.S. Attorney since 2010, oversees all aspects of the operation of the U.S. Attorney’s Office. He also represents the Office in its relations with federal, tribal, state, local and Canadian law enforcement agencies.
Mr. Jaquith received his award from Deputy Attorney General Sally Yates and Monty Wilkinson, Director of the Executive Office for U.S. Attorneys, during a ceremony in the Great Hall of the Department of Justice building. He was one of only two people to receive the Executive Achievement Award, and among 160 Director’s Award recipients from U.S. Attorney’s Offices across the country.
In her prepared remarks, Deputy Attorney General Yates told the awardees yesterday: “The achievements being recognized today reflect the breadth of the department’s responsibilities, and some of our most significant challenges. From dismantling dangerous gangs, drug cartels and human trafficking operations to tackling political corruption, white collar crimes, and international terrorism, these awardees have taken on our toughest cases. And the citizens of our country are safer because of their work.”
U.S. Attorney Richard S. Hartunian, who attended the Director’s Awards ceremony with First Assistant Jaquith and his family, stated after the event: “Grant is the epitome of the ideal Department of Justice executive who does his work in an exceptionally outstanding matter, never seeking credit and always considering the best interests of the Office and the Department. Not only is he relentless in his pursuit of justice, but he consistently supports everyone in the Office with his unwavering good cheer and encouragement. His is a career of consistent and continuing excellence, and he is an example to us all at the U.S. Attorney’s Office. I am very pleased that his work has been recognized.”
First Assistant Jaquith joined the U.S. Attorney’s Office in August 1989 and has held the positions of Narcotics Chief, Organized Crime Drug Enforcement Task Forces (OCDETF) Coordinator, Criminal Chief and now First Assistant U.S. Attorney. In addition to overseeing the U.S. Attorney’s Office, First Assistant Jaquith also continues to prosecute complex criminal cases. This year, for instance, First Assistant Jaquith obtained perjury convictions against two people in the ongoing investigation into a May 2013 arson in Schenectady, New York, which caused the deaths of four people including three young children, and seriously injured another child.
The annual Director’s Award Ceremony recognizes excellent work at U.S. Attorney’s Offices across the country. In 2014, four Assistant U.S. Attorneys from the Northern District of New York were recognized for prosecuting a complex financial fraud based in Albany and violent, drug-dealing gang members in Syracuse.
Final Individuals Sentenced as Part of Johnson City Drug ConspiracyRead the Press Release
GREENEVILLE, Tenn.– William Corey McAllister and Phillip Eugene Woolwine, both of Johnson City, Tenn., were sentenced on May 31, 2016, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 90 months, and 60 months, respectively, in federal prison. Both previously pleaded guilty to conspiracy to distribute, and possess with the intent to distribute, 28 grams or more of a mixture and substance containing a detectable amount of cocaine base (“crack”). There is no parole in the federal system.
From March 2012 to April 2013, McAllister, Woolwine, and numerous others participated in a massive conspiracy which was responsible for the distribution of multi-kilogram quantities of crack cocaine throughout Johnson City. To accomplish this, participants procured powder cocaine from sources of supply in Georgia, transported the contraband to Tennessee, and then manufactured it into crack cocaine. Once that process was complete, countless facilitators, couriers, and distributors collaborated to sell the product throughout the area. More details of the conspiracy are found in the plea agreements on file with U.S. District Court.
This year-long investigation was the product of a partnership between the Johnson City, Tennessee Police Department, First Judicial District Drug Task Force, and Drug Enforcement Administration. Assistant U.S. Attorney Nick Regalia represented the United States.
In total, 21 individuals were charged as part of this investigation. Those previously sentenced include:
- Demetrius Antwan Dalton, 35, of Atlanta, Ga., 240 months;
- Tavares Lashaun Dalton, 36, of Covington, Ga., 240 months;
- Marcus Lavoya Holliman, 36, of Atlanta, Ga., 210 months;
- Karim Abdullah Hasan, 44, of Elizabethton, Tenn., 192 months;
- Eullis Monroe Goodwin, 43, of Elizabethton, Tenn., 188 months;
- Micah Antwan Still, 34, of Covington, Ga.,120 months;
- Derrick Henry Connor, 40, of Sherills Ford, N.C., 120 months;
- Devin Deonte Blalock, 20, of Jonesboro, Ga., 120 months;
- Kwanza Tarveze Worthy, 20, of Atlanta, Ga.,120 months;
- Don Juan Glass, Jr., 22, of Atlanta, Ga., 120 months;
- Robert Nelson Racanelli, 27, of Johnson City, Tenn., 120 months;
- Uhamma Castillo Delgado, II, 24, of Johnson City, Tenn.,120 months;
- Justin Levon Bookwalter, 22, of Johnson City, Tenn.,96 months;
- Robert Edward Dudley, 73, of Johnson City, Tenn., 96 months;
- June Gemini Lopez, 38, of Johnson City, Tenn.,78 months;
- Demario Jenard Serchion, 29, of Atlanta, Ga., 77 months;
- Daisy Loretta Grindstaff, 58, of Elizabethton, Tenn., 70 months;
- Cody Alan Sherrill, 22, of Jonesborough, Tenn., 41 months; and
- Kandace Marie Haywood, 33, of Atlanta, Ga., time served.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (“OCDETF”) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Federal Jury Convicts Dorchester Man for Attempting to Kill Suspected Federal WitnessRead the Press Release
BOSTON – A federal jury convicted a Dorchester man with witness tampering by attempting to kill a man, and for his role in a multi-state sex trafficking ring.
Jaquan Casanova a/k/a “Cass,” “Joffe,” “Joffy,” and “Joffy Joe,” 24, of Dorchester, was convicted following a seven-day trial of tampering with a witness by attempting to kill him and lying to a federal agent about his involvement in the sex trafficking ring. U.S. District Court Judge Denise J. Casper scheduled sentencing for Sept.14, 2016.
On April 30, 2013, Casanova shot Darian Thomson (“Bo”) in the head to prevent him from communicating with federal law enforcement. Casanova was a member of a multi-state criminal organization involved in sex trafficking, drug trafficking, and fraudulent check cashing headed by Raymond Jeffreys. In March 2013, Thomson was indicted on federal sex trafficking charges while in custody in New Jersey on unrelated charges. In April 2013, Thomson was released and returned to Boston, where Casanova attempted to kill him. Jeffreys and other members of the criminal organization erroneously believed that Thomson had been released as a result of his cooperation with federal law enforcement, and that he would continue to provide information about their criminal activities.
On May 19, 2016, Jeffreys was sentenced to 30 years in prison after pleading guilty to sex trafficking, tampering with a witness by attempting to kill him, and making a false statement to a federal agent.
The charge of tampering with a witness by attempting to kill him or conspiring to do so provides a sentence of no greater than 30 years in prison, five years of supervised release, a fine of $250,000, 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; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Boston Police Commissioner William Evans, made the announcement today. The case was investigated by Homeland Security Investigations, the Boston Police Department’s Human Trafficking and Homicide Units, and the Federal Bureau of Investigation.
The U.S. Attorney’s Office also wishes to recognize and thank Shawn Meehan, Resident Agent in Charge of the Homeland Security Investigations’ Portland, Maine Office; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Aaron Steps, Supervisory Senior Resident Agent in Charge of the FBI Maine Office; the Suffolk County District Attorney’s Office; Cumberland County (Maine) District Attorney’s Office; the United States Attorney’s Office for the District of Maine; the Massachusetts State Police; the Portland (Maine), Old Town (Maine), Braintree, and South Portland (Maine) Police Departments; the Maine Drug Enforcement Agency; and the Cumberland County Sheriff’s Office. This case was prosecuted by Assistant U.S. Attorneys Amy Harman Burkart and David D’Addio of Ortiz’s Civil Rights Enforcement Team and Special Assistant U.S. Attorney David S. Bradley from the Suffolk County D.A.’s Office.
Federal Grand Jury Indicts Man in Conspiracy to Illegally Manufacture Firearms That Were Sent to MexicoRead the Press Release
DALLAS — Gary Busby, 63, formerly of Flower Mound, Texas, made his initial appearance in federal court today on an indictment, returned by a federal grand jury in Dallas last week, charging one count of conspiracy to manufacture firearms without a license and four counts of structuring transactions to evade reporting requirements, announced U.S. Attorney John Parker of the Northern District of Texas.
Busby, who now resides in Ruidoso, New Mexico, also entered a not guilty plea to the indictment and was released on bond.
According to the indictment, in December 2010, Busby and another, unnamed individual met Jose Maria Deleon at a gun show and sold him firearms. (Deleon was prosecuted and convicted in the Northern District of Texas on a federal firearms offense and was sentenced in September 2015 to 60 months in federal prison.) Even though he knew the two did not have federal firearms licenses (FFL), Deleon asked them if they would be willing to manufacture AR-15 and AK firearms receivers into fully-functional firearms for him, and they agreed. In fact, they did so in a series of transactions until December 2011. Deleon provided them with firearms receivers he had acquired from Maxwell Spencer Hodgkins. (Hodgkins was prosecuted and convicted in the Northern District of Texas on a federal firearms offense and was sentenced in February 2014 to 37 months in federal prison.) Sometimes Deleon paid them cash in advance and other times he paid them upon receipt of the manufactured firearms.
At some time during that period, Busby and the other individual became aware that the firearms they were manufacturing, and the firearms they agreed to manufacture, had and would be sent to Mexico. In fact, several firearms traced to Busby were found in or near Mexico.
In February 2012, officers with the Fort Worth Police Department saw Busby at a gun show negotiating gun purchases on behalf of Deleon. They observed a straw purchasing arrangement in which Busby would contact potential sellers, negotiate the price, and then call Deleon to purchase the firearms for cash. To further investigate that matter, officers conducted a traffic stop of Deleon. Busby, who was driving behind Deleon, also pulled over. Officers inventoried the firearms in Deleon’s vehicle and one was later recovered in Mexico.
During a search of Busby’s residence in July 2011, federal agents catalogued all the firearms and ammunition at the residence. That same day, Busby signed a letter putting him on notice that he was to cease and desist in engaging in the business of selling firearms without a license and advising him that several of the firearms he had sold had been recovered during criminal activities. In spite of the notification, one of the firearms catalogued that day at Busby’s residence was later found in Mexico by authorities.
The indictment alleges that from approximately April 2009 to February 2011, Busby lied on ATF forms related to firearms purchases by stating he was the actual transferee/buyer of the firearm, knowing that he would sell or trade those firearms to third parties.
The indictment further alleges that from approximately December 2010 to September 2012, Busby also illegally structured cash transactions to avoid having reports of his cash transactions recorded and reported to the government, so as to disguise the proceeds of illegally manufacturing firearms sent to Mexico.
An indictment is an accusation by a grand jury. A defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the conspiracy count and each of the structuring counts carry a maximum statutory penalty of five years in federal prison and a $250,000 fine.
The Bureau of Alcohol, Tobacco, Firearms and Explosives is investigating the case. Assistant U.S. Attorney Kate Rumsey is in charge of the prosecution.
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Essex County, New Jersey, Man Admits Role in Oxycodone Distribution RingRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man today admitted his role in a conspiracy to illegally obtain and distribute oxycodone in New Jersey, U.S. Attorney Paul J. Fishman announced.
Matthew Policarpio, 28, of Newark, New Jersey, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an indictment charging him with conspiracy to distribute oxycodone.
According to documents filed in this case and statements made in court:
Using confidential sources, physical surveillance, and recorded text messages and telephone calls, investigators with the Drug Enforcement Administration (DEA) discovered that members and suppliers of a drug trafficking organization secured prescriptions for oxycodone and other controlled substances from various doctors in New Jersey, filled them at pharmacies in Belleville and elsewhere, and sold the drugs for a profit. The investigation identified Policarpio as a member of the drug trafficking organization.
Policarpio admitted that from Feb. 5, 2014, to Aug. 13, 2014, he personally purchased pills containing oxycodone from conspirators and then sold the pills to others. He admitted that in one instance, he arranged to buy 180 pills containing oxycodone from conspirators on June 12, 2014. He traveled to a pharmacy in East Orange, New Jersey, with conspirators and gave them $450, which they used to purchase 180 Endocet pills from the pharmacy. The pills were then provided to Policarpio, who resold them.
Oxycodone is a Schedule II controlled substance – meaning that it has a high potential for abuse, has a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence. The Endocet pills obtained and re-sold by Policarpio each contained 10 milligrams of oxycodone.
The charge to which Policarpio pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Sept. 12, 2016.
Of the individuals originally charged with Policarpio, Victoria Horvath, 43, and Ricky Horvath, 54, of Belleville, New Jersey; Monica Horvath, 22, Tony Marco, 47, and Steven Horvath, 45, all of Rutherford, New Jersey, and Justin Farraj, 24, of Newark, New Jersey, have pleaded guilty and await sentencing. Brian Perez, 23, was sentenced to a term of 40 months in prison in September 2014. Luis Rivera, 25, was sentenced to 54 months in prison in August 2015. Daniel Horvath, 27, was sentenced to 27 months in prison and Johnny Horvath, 46, was sentenced to 30 months in prison in April 2016. Charges were dismissed against Belleville pharmacist Vincent Cozzarelli after his death in April 2014.
The indictment remains pending against three other conspirators. The charges and allegations in the indictment against them are merely accusations, and they remain innocent unless and until proven guilty.
U.S. Attorney Fishman credited the DEA’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the OCDETF/Narcotics Unit of the U.S. Attorney’s Office in Newark. This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Defense counsel: Jef Henninger Esq., Tinton Falls, N.J
Dubuque Hosts Forum to Discuss Hate CrimesRead the Press Release
CEDAR RAPIDS, IA – The United States Attorney’s Office for the Northern District of Iowa invited the citizens of Dubuque to participate last night in a forum to discuss hate crimes and bias incidents. A representative from the Department of Justice’s Community Relations Service (CRS) served as the moderator.
Pursuant to the Hate Crimes Protection Act, CRS is authorized to work with communities to help them develop the capacity to prevent and respond more effectively to violent hate crimes allegedly committed on the basis of actual or perceived race, color, national origin, gender, gender identity, sexual orientation, religion, or disability. CRS is a remarkably unique federal component dedicated to assisting state and local units of government, private and public organizations, and community groups develop local capacity to prevent racial and ethnic tensions.
Joining in the forum were representatives from the Federal Bureau of Investigation, Dubuque County Attorney and Sheriff’s Offices, Dubuque Police Department, and the city’s Human Rights Commission. The forum was sponsored by “4 the People, Inc.,” an Iowa nonprofit corporation that focuses on education, civic engagement, economic well-being, safety and health.
United States Attorney Kevin W. Techau expressed appreciation to the agencies involved and the community members attending for their willingness to discuss in a positive way an issue communities across the country sometimes encounter. Techau stated, “The Department of Justice is committed to protecting the rights and freedoms of all people. Last night’s meeting was an opportunity to discuss the topic of hate crimes in a safe environment. Hate crimes represent an attack not just on the individual victim but also on the victim's community. The impact is broader because they send a message of hate. They are intended to create fear. Hate crimes diminish us all. We are committed to working with all communities to address the issue by working to prevent hate crimes as well as investigate and prosecute hate crimes whenever and wherever necessary.”
Assistant U.S. Attorney Tony Morfitt provided information on the federal statutes that criminalize various types of hate crimes. He covered the evolution of federal hate crime law and the recent expansion of the groups protected by federal hate crime laws.
Morfitt emphasized that the defining characteristic of a federal hate crime is that the actions must have been motivated by hate and that an individual cannot be found guilty federally unless the government proves the person acted “because of” the victim’s status as a member of a protected group. As an example, Morfitt pointed to the case of United States of America v. Randy Metcalf, where the government recently proved at trial that a Dubuque resident had assaulted an African American man in a local bar because of his race.
Presentations were made by the Dubuque County Attorney and Sheriff, Chief of Police, FBI Resident Agent in Charge for Iowa-Nebraska, and the local Human Rights Commission. A conciliation specialist with DOJ’s Community Relations Service served as the moderator and engaged the presenters and those attending with fact-building hypotheticals designed to challenge the meaning of hate crimes and bias incidents. Those attending actively engaged the panel in a Q&A session.
Because a recent cross burning in the city is under investigation by local authorities and the FBI, this matter could not be discussed.
To learn more about the Department of Justice’s Community Relations Service, visit: https://www.justice.gov/crs.
USA Kevin W. Techau meets with the press to discuss the purpose of the forum.
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Drug Trafficker Sentenced in Two ConspiraciesRead the Press Release
LAREDO, Texas - The fourth of 20 defendants convicted in a conspiracy to possess with intent to distribute in excess of 1,000 kilograms of marijuana and money laundering scheme has been ordered to prison, announced U.S. Attorney Kenneth Magidson. Juan Manuel Vargas Aguilar aka “Chacalilla,” 46, of Nuevo Laredo, Mexico, previously pleaded guilty for his role in two separate drug conspiracies.
Today, U.S. District Judge Marina Garcia Marmolejo sentenced him for a conspiracy that spanned from June 10, 2011, to June 4, 2013, and for his involvement in a second conspiracy that occurred on Oct. 4, 2014. Judge Marmolejo consolidated the cases for sentencing and ordered he serve 70 months in prison. Not a U.S. citizen, he is expected to face deportations proceedings following his release from prison.
In the first conspiracy, Erasmo Trejo-Nava was the head of a drug trafficking organization that received marijuana loads from Mexico and arranged to transport the marijuana to the Dallas area. The organization used various stash houses and business fronts in the Laredo area to receive and prepare the marijuana for transportation via personal vehicles to a local warehouse where it was unloaded and reloaded onto tractor trailers.
Vargas was identified as a worker for the organization who assisted with virtually anything. He constructed wooden crates for the transportation of marijuana, re-wrapped the drugs, received loads at a local warehouse, assisted at stash houses along with other workers and conducted counter surveillance at stash houses and during the transportation of the narcotics.
Vargas Aguilar was implicated in the transportation of four separate loads of marijuana for the Trejo-Nava drug trafficking organization totaling 6,022 kilograms.
A total of 20 defendants were convicted in the Trejo-Nava conspiracy. A federal jury convicted Rafael Ortega aka Tio, 57, of Laredo, and Baltazar Ibarra Cardona, 55, of Nuevo Laredo, Mexico. Ortega and Ibarra Cardona were each ordered to serve 120 months in federal prison earlier this year. Erika Alvarez, 39, also of Nuevo Laredo, who was identified as Trejo Nava’s niece and pleaded guilty to the money laundering conspiracy received a sentence of 48 months. The court further issued a final order of forfeiture against Alvarez in the amount of $171,240.
The remaining 17 defendants had previously pleaded guilty and are also awaiting sentencing. Erasmo Abdon Trejo Nava, 44, Jose Angel Trejo, 43, Ovidio Rodriguez, 42, Victor Hugo Trejo Nava, 42, Francisco Colin, 42, and Salvador Saldaña-Medrano, 37, all of Laredo; Jaime Enrique Montalvo-Ruiz, 45, of Nuevo Laredo; and Leocadio Ruiz, 48, of Dallas, entered pleas of guilty to conspiring to possess with intent to distribute more than 1,000 kilograms of marijuana and conspiracy to launder drug proceeds. Four others, Mario Albert Rodriguez, 30, and Ricardo Ramirez, 34, both of Laredo; Arturo Lozano, 48, of Dallas; and Joshua Sanchez, 33, of Nuevo Laredo - pleaded guilty to the conspiracy. Gerardo Moreno Recio, 49, of Nuevo Laredo, was convicted of two separate counts of possession with intent to distribute more than 100 kilograms of marijuana, while Laura Heredia Garcia, 51, of Nuevo Laredo; and Raquel Margarita Ramos Jimenez, 45, and Leslie Bernice Trejo, 23, both of Laredo, entered pleas of guilty to one count of conspiracy tolaunder drug proceeds.
Following the arrest of Trejo-Nava in June 4, 2013, Vargas Aguilar moved on to work for another organization. He was arrested Oct. 4, 2014, along with Julio Cesar Valdez Casas at a ranch in North Laredo on Mines Road. Border Patrol agents had observed two vehicles near the area where five unidentified subjects were attempting to load bundles of marijuana weighing a total of 168 kilograms. When agents approached the vehicles, the subjects dropped the drugs and fled to Mexico. Valdez Casas was one of the drivers and arrested at the scene. Vargas Aguilar was driving the second vehicle and fled, but was later apprehended. Valdez Casas, 52, of Nuevo Laredo, was sentenced on March 31, 2015, to 60 months in federal prison.
The charges were the result of a long term Organized Crime Drug Enforcement Task Force Investigation dubbed Operation Trena Sin Trono spearheaded by the Drug Enforcement Administration, High Intensity Drug Trafficking Area Task Force and IRS - Criminal Investigation with the assistance of Homeland Security Investigations, Laredo Police Department, Zavala County Sheriff’s Office. Assistant U.S. Attorney Mary Lou Castillo is prosecuting the case.
Des Plaines Resident Sentenced to Ten Years in Federal Prison for Conspiring to Manufacture Marijuana in Rockford WarehouseRead the Press Release
ROCKFORD — A Des Plaines man was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for his role in a conspiracy to manufacture and distribute marijuana.
JEREMIAH N. CLEMENT, 38, of Des Plaines, was sentenced to 10 years in federal prison, to be followed by 5 years of supervised release. On Oct. 6, 2015, a federal grand jury in Rockford charged Clement and six other individuals, five men and a woman, with conspiring to manufacture, possess and distribute 1,000 or more marijuana plants. The indictment alleges that between Jan. 2, 2013, and Jan. 6, 2015, the defendants conspired to illegally grow and store marijuana in a warehouse located at 1916 11th Street in Rockford. The warehouse was destroyed by a fire on Jan. 6, 2015.
Clement pleaded guilty to the charge on Dec. 18, 2015, admitting that he conspired to manufacture and distribute marijuana with co-defendants GEORGE H. BACUS, 52, of Niles, Ill.; YOUSIF Y. PIRA, 63, of Chicago, Ill.; JUSTIN T. PAGLUSCH, 34, of Ingleside, Ill.; SHLIMON SHIMON, 47, of Chicago, Ill.; CASEY WILLIAMS, 29, of Great Falls, Mont.; and DESTINY FREEMAN, 22, of Palmer, Alaska. According to the written plea agreement, on Jan. 2, 2013, Bacus purchased the warehouse at 1916 11th Street in Rockford, Ill. on installment contract, using money provided by Shimon or an associate of Shimon. Shimon, Bacus and Pira used the warehouse to illegally grow and harvest marijuana plants, then process the marijuana sale to others. Between March and June of 2014, Shimon recruited Clement to join the conspiracy and participate in processing the initial crop.
Clement admitted in the plea agreement that in late July or early August of 2014, a new marijuana crop was planted. On Sept. 12, 2014, at Shimon’s direction, Clement entered into a contract to purchase the warehouse, and the contract that Bacus had entered into was terminated. Shimon provided the money to pay for the warehouse and the use of the warehouse was under Shimon’s control. The plea agreement also states that Shimon retained Bacus to monitor Clement’s activities at the warehouse and report to Shimon.
In addition, the plea agreement states that in August of 2014, Clement recruited Williams to join the conspirators, who in turn recruited Freeman. Clement paid for Williams and Freeman to travel from Montana to Rockford, using money provided by Shimon. With Shimon's permission, Clement allowed Williams and Freeman to live in the warehouse while they assisted in the marijuana growing operation, using money from Shimon to pay for food while they lived in the warehouse. In December of 2014, Clement recruited Paglusch to join the conspiracy.
As further stated in the plea agreement, Shimon provided the plants, equipment and nutrients for growing the new marijuana crop. Williams and Freeman watered and cared for the marijuana crop as it was growing, and Clement supervised them. Shimon came to the warehouse for a few hours a day when he was in the area. Clement, Shimon, Bacus, Williams, Freeman and Paglusch all participated in the processing of the new marijuana crop, which was stored in a vault at the warehouse, with the combination to the lock known by Shimon, but not Clement. The initial marijuana crop and the new marijuana crop totaled more than 1,000 marijuana plants. In addition, as stated in the plea agreement, during the period of the conspiracy, Shimon kept a revolver at the warehouse for protection, which Clement possessed from time to time. At sentencing, Judge Kapala found as an aggravating factor that Clement intentionally set the fire that destroyed the warehouse located at 1916 11th Street on Jan. 6, 2015.
Freeman pleaded guilty on June 1, 2016, and remains free on her own recognizance pending sentencing set for Sept. 15, 2016, at 2:30 p.m. Freeman faces a maximum sentence of 5 years' imprisonment, a term of supervised release following imprisonment of at least 2 years, and a maximum fine of $250,000.
Bacus and Pira were arrested in April 2015 and released pending trial. Williams was arrested in October 2015 and is in federal custody pending trial. Paglusch was arrested this morning in Wichita Falls, Tex., and an initial appearance is pending. An arrest warrant was issued for Shimon, who is still at large.
If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. The public is reminded that an indictment is only a charge and is not evidence of guilt. Each defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The sentencing today was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; Derek Bergsten, Chief of the Rockford Fire Department; and Anthony Scarpelli, Chief of the Skokie, Ill. Police Department. The Winnebago County Sheriff’s Department Narcotics Unit and Rockford Police Department Narcotics Unit assisted in the investigation.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Deming Man Sentenced to Probation for Violating the Archeological Resource Protection ActRead the Press Release
ALBUQUERQUE – Michael Quarrel, 81, of Deming, N.M., was sentenced today in federal court in Las Cruces, N.M., to two years of probation for violating the Archeological Resource Protection Act (ARPA). The sentence was announced by U.S. Attorney Damon P. Martinez and Special Agent in Charge Clark Beene of the U.S. Bureau of Land Management (BLM), Region 5 of Office of Law Enforcement and Security.
While on probation, Quarrel will be banned from lands managed by BLM. Quarrel also was ordered to pay $1,542.48 in restitution to cover the cost of damages he caused to an archaeological resource while committing his crime of conviction.
The sentence was imposed based on a guilty plea entered by Quarrel on Jan. 15, 2016, to a felony information charging him with violating ARPA on Sept. 30, 2013, by excavating, removing and damaging an archaeologic resource located on federal lands in Luna County, N.M. In entering the guilty plea, Quarrel admitted that on Sept. 30, 2013, he violated ARPA by digging on federal land managed by BLM and removing several pieces of broken Mimbres pottery, thus causing damage to the archaeological resource.
Court records reflect that this is Quarrel’s second ARPA conviction. In 2003, Quarrel was sentenced to two years of probation for illegally excavating in an archeological site in the Gila Nation Forest.
ARPA protects archaeological resources on public and Indian lands. It provides felony-level penalties for unauthorized excavation, removal, damage, alteration, or defacement of any archaeological resource, which is defined as material remains of past human life or activities that at least 100 years old. The archaeological resource at which Quarrel committed his crime is located on federal land near the Cedar Mountains in Luna County, contains remains of a Mimbres Mogollon prehistoric habitation site.
This case was investigated by the Las Cruces Field Office of the BLM and the Luna County Sheriff’s Office, and was prosecuted by Assistant U.S. Attorney Anna R. Wright of the U.S. Attorney’s Las Cruces Branch Office.
Commodity Pool Operator Arrested and Charged in Manhattan Federal Court with $23 Million Commodities FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Angel M. Melendez, Special Agent in Charge of the New York Field Office of the Department of Homeland Security, Homeland Security Investigations (“HSI”), announced today that HAENA PARK was arrested this morning on commodities fraud and wire fraud charges stemming from her scheme to defraud more than 20 investors of more than $23 million in which PARK solicited investments for the purpose of trading in a variety of securities and commodities, including off-exchange foreign currency contracts, through the use of false and misleading statements about, among other things, her historical trading performance. PARK was arrested this morning in Manhattan, New York, and was presented today before United States Magistrate Judge Andrew J. Peck.
U.S. Attorney Preet Bharara said: “Haena Park is charged with lying to prospective investors about her remarkably high returns and trading expertise in the forex markets to lure them into investing with her. Through deceit, we’ve alleged, she raised more than $23 million from victims and lost nearly all of it. Then to cover up trading losses, she allegedly sent fictitious statements to investors and used money from new investors to pay other investors back.”
HSI Special Agent in Charge Angel M. Melendez said: “It is alleged that Haena Park defrauded investors and covered up millions of dollars in financial losses with fake documents and lies that may devastate the financial security of these victims. HSI and its El Dorado Task Force partners are committed to investigating those who seek to exploit vulnerabilities in the US Financial System.”
According to the Complaint unsealed today in Manhattan federal court[1]:
From in or about January 2010 through in or about June 2016, HAENA PARK, the defendant, raised more than $23 million from more than 20 individual investors, purportedly for the purpose of trading in a variety of securities and commodities, including equities, futures, and off-exchange foreign currency (“forex”) transactions. In connection with the scheme, PARK made a series of false and misleading representations to investors, including that PARK was an accomplished forex trading advisor earning annualized returns as high as 48.9 percent for her investors. In truth and in fact, PARK was not an accomplished forex trader, her trading was consistently unsuccessful, and the trading results emailed to investors by PARK were false and did not reflect the trading losses actually incurred by PARK. Rather, from in or about January 2010 through in or about June 2016, Park lost approximately $19.5 million of the $20 million that she traded, including in commissions and fees, principally in highly leveraged futures and forex transactions.
To prevent or forestall redemptions by investors, and to continue to raise money from investors to fund her scheme, PARK generated fictitious account statements, which she sent to investors on a monthly basis. Instead of accurately reporting the trading losses PARK was suffering, the account statements indicated that the investors were making money nearly every month. To hide her trading losses, PARK used new investor funds to pay back other investors in a Ponzi-like fashion. In total, PARK distributed approximately $3 million back to investors from funds deposited by new investors.
* * *
PARK, 40, of Manhattan, New York, is charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison and a maximum fine of $1 million, or twice the gross gain or loss from the offense; and one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of HSI and the El Dorado Task Force. He also thanked the Commodity Futures Trading Commission and the Securities and Exchange Commission, each of which filed civil charges against PARK today.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
16-147 ###
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Citizen of Guatemala Gets 3-Year Prison Sentence for Illegally Returning to U.S., Failing to Register as a Sex OffenderRead the Press Release
PITTSBURGH - A citizen of Guatemala has been sentenced in federal court to 37 months imprisonment followed by three years of supervised release on his conviction of illegal re-entry after deportation and failing to register as a sex offender, United States Attorney David J. Hickton announced today.
United States Senior District Judge Gustave Diamond imposed the sentence on Edward Jacinto Garcia, 30, of Guatemala.
According to information presented to the Court on July 6, 2015, Jacinto Garcia, an alien who, on Oct. 6, 2011, had been deported and removed from the United States, and having reentered the United States without permission, was found in Butler County, Pennsylvania, after being arrested and charged with driving under the influence by the Butler Township Police Department. Jacinto Garcia had been deported following conviction in the State of Nebraska of sexual assault of a minor, 1st degree, and serving a period of imprisonment. By reason of this sex offense, Jacinto Garcia was required to register as a sex offender under the provisions of the Sex Offender Registration and Notification Act. Jacinto Garcia had failed, as required, to register in the State of Pennsylvania, the state in which he was employed during the period June 2015 through July 6, 2015.
Assistant United States Attorneys Carolyn J. Bloch and Shaun E. Sweeney prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Homeland Security, Immigration and Customs Enforcement, and the United States Marshals Service for the investigation leading to the successful prosecution of Jacinto Garcia.
Charges filed regarding cash bribes and kickbacks between contractors and Cleveland Housing Network official, as well as improper lead abatementRead the Press Release
Criminal charges were filed in federal court alleging cash bribes and kickbacks between contractors and a Cleveland Housing Network official, as well as improper lead abatement practices at several renovation projects, law enforcement officials said.
Named in the four-count criminal information are: James Todt, 49, of Brecksville; Lizandro Orellana, 56, of Cleveland; Chris Peterson, 42, of Macedonia, and Modern Construction Group LLC.
Todt worked at the Cleveland Housing Network between 2005 and 2014, where his duties included supervising inspectors and project managers, as well as awarding CHN contracts on various projects for the non-profit community development organization. Orellana owned and operated Modern Construction Group LLC and Peterson owned and operated Top Notch Construction, according to the information.
Todt corruptly solicited and accepted things of value from Orellana and Peterson between 2009 and 2014. Peterson paid Todt up to $10,000 in cash in exchange for CHN work that Todt awarded to Top Notch, according to the information.
On numerous occasions, Todt provided Orellana with CHN’s internal cost projections for various projects, which were used to evaluate a contractor’s bid.
Orellana paid another person to do $3,650 worth of electrical work at Todt’s home in November 2012. In October 2013, Todt asked Orellana for assistance building a deck and installing windows at his home. Orellana provided a crew of six Modern employees to construct the deck, and directed employees to install seven windows. The labor cost related to the deck and windows was valued at approximately $8,736, according to the information.
In 2012, Peterson repaired the roof of a home in Seven Hills owned by one of Todt’s relatives, and performed repairs on a rental property owned by Todt in Brecksville, according to the information.
Todt also submitted false invoices and caused two checks totaling $15,280 to be deposited into his personal account, according to the information.
Additionally, Orellana had a lead abatement contractor license issued by the Ohio Department of Health, which allowed Modern Construction to bid on lead-based paint abatement projects for CHN homes. These projects often required Modern to gut a portion or all of a home’s interior, including the removal of doors, windows, walls, moldings and sometimes porches. Orellana understood the work was to be done by workers licensed to perform lead-based paint abatement and comply with federal and state standards, according to the information.
Modern Construction was contracted to conduct lead-based paint abatement on several CHN properties between 2010 and 2012. Orellana, due to his workload and to save time, directed employees to gut homes containing lead-based paint. Items and components covered in lead-based paint were removed without following abatement procedures. The employees directed to gut the homes were not licensed to perform lead-based paint abatement, which Orellana knew, according to the information.
“Sadly, cash bribes and free home improvements from contractors looking to get work on taxpayer-supported projects have not been eradicated from Northeast Ohio,” Acting U.S. Attorney Carole S. Rendon said. “Mr. Orellana also showed no regard for his employees, the environment or our community’s general well-being when he ordered items covered in lead paint to be removed and dumped.”
“These individuals defrauded a federal housing assistance program by conspiring to obtain monies and services for their own personal benefit,” said Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office. “The FBI, along with its partners, will continue to investigate fraud against federally funded programs intended to help those in need.”
“The charges disclosed today prove our continuing resolve to root out fraud and corruption in all forms, especially when the programs involved should have been used to help our neediest families,” said Brad Geary, Special Agent in Charge, the Department of Housing and Urban Development – Office of Inspector General. “It is our continuing core mission to work with our Federal, State, and Local law enforcement partners and the United States Attorney’s Office to protect the integrity of our housing programs and to take strong action against those who seek to personally benefit from taxpayer-funded grants.
“Lead-based paint in homes continues to pose a public health threat, often to children who may be exposed to it,” said Jeffrey Martinez, Acting Special Agent in Charge of EPA's criminal enforcement program in Ohio. “If the proper abatement procedures are not followed, the problem only becomes worse. EPA’s mission of protecting public health and the environment means we will prosecute and punish those who jeopardize public safety for their own personal gain.”
“Accepting bribes and kickbacks is unacceptable, especially when it involves something as important as lead abatement,” Ohio Attorney Mike DeWine said. “The Ohio Attorney General’s Office helped investigate this case, and we’ll continue to work with our federal, state, and local partners to go after those who commit fraud or other crimes.”
Todt, Orellana and Peterson are named in Count 1 – conspiracy to commit bribery concerning programs receiving federal funds. Count 2 and 3, theft concerning programs receiving federal funds, apply only to Todt. Orellana and Modern Construction are named in Count 4, violation of authorized state lead-based paint program requirements.
This case is being prosecuted by Assistant U.S. Attorney Robert J. Patton and Special Assistant U.S. Attorney Brad Beeson. It comes following an investigation by the FBI, HUD-OIG, U.S. EPA, Ohio EPA, Ohio Bureau of Criminal Investigation, Ohio Department of Health – Environmental Compliance Program and the Cleveland Division of Police.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violation.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Central City Woman Charged with Financial Abuse of Her Elderly GrandfatherRead the Press Release
Jessica Lynn Roloson, 40, from Central City, Iowa, has been charged with wire fraud and aggravated identity theft. The charges are contained in an Indictment unsealed earlier this week in United States District Court in Cedar Rapids.
The Indictment alleges that, beginning no later than October 2015, and continuing through about January 2016, Roloson stole her grandfather’s identity and participated in a fraudulent scheme to obtain money and property by means of false and fraudulent pretenses, representations, and promises. It was part of the scheme that Roloson, knowing her grandfather’s social security number, aware of his date of birth, and living in his former home, applied to various credit card companies for accounts in his name. Roloson then used the credit cards on the Internet to purchase goods. She also obtained secondary credit cards in her true name, or a variant thereof, to facilitate in-person transactions at local stores. For example, the Indictment alleges that Roloson used her grandfather’s name and social security number without his permission to apply for an American Express card on October 29, 2015. Then, on November 5, 2015, Roloson used a card bearing the name “JLynn Roloson” to purchase “Pink Yoga Pants,” a “Pink Knit Top,” and a “Bombshell Push Up Brasierre” at a Victoria’s Secret store in Cedar Rapids.
If convicted on all charges, Roloson faces a mandatory minimum sentence of two years’ imprisonment and a possible maximum sentence of 32 years’ imprisonment, a $1 million fine, $200 in special assessments, and three years of supervised release following any imprisonment.
Roloson appeared earlier this week in federal court in Cedar Rapids and was released pending trial. Roloson’s next appearance for a status conference is set for July 6, 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 prosecuted by Assistant United States Attorney Tim Vavricek and was investigated by the Linn County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-43-LRR.
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California Man Pleads Guilty to Cocaine Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – A California man today admitted his role in a conspiracy to traffic approximately 12 kilograms of cocaine from California to New Jersey, U.S. Attorney Paul J. Fishman announced.
Jesus Raul Iribe, 38, of Riverside, California, pleaded guilty before U.S. District Court Judge Kevin McNulty to an information charging him with one count of conspiring to distribute more than 500 grams of cocaine.
According to documents filed in this case and statements made in court:
On Feb. 8, 2013, law enforcement recorded and observed meetings between Iribe and other conspirators in which they allegedly planned to use a tractor-trailer to transport cocaine from California to New Jersey and other destinations along the East Coast. Eventually, law enforcement followed the tractor trailer to Bronx, New York, where they recovered a produce box containing 12 kilograms of cocaine.
Today, Iribe admitted that he conspired with others to traffic the cocaine from California to New Jersey. He must also forfeit $446,310 in cash, three handguns, and an AR-1 assault rifle that were recovered when he was arrested in March 2015.
The distribution charge to which Iribe pleaded guilty carries a mandatory penalty of five years in prison, a maximum potential penalty of 40 years in prison, and $5 million fine. Sentencing is scheduled for Oct. 4, 2016.
U.S. Attorney Fishman credited special agents and task force officers of the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski in Newark, the DEA Los Angeles Field Office, and the Fontana, California Police Department.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office General Crimes Unit.
Defense Counsel: Michael R. Mcdonnell, Esq. of La Habra, California
Bulgarian Citizen Sentenced to More Than Three Years in Prison for Role in $6 Million Tax Refund SchemeRead the Press Release
NEWARK, N.J. – A citizen of the Republic of Bulgaria was sentenced to 46 months in prison today for his involvement in a $6 million fraudulent tax return scheme that used personal identifying information stolen from multiple accounting firm networks, U.S. Attorney Paul J. Fishman announced.
Vanyo Minkov, 33, previously pleaded guilty before U.S. District Judge Jose L. Linares to a superseding information charging him with one count of conspiring to file false and fraudulent tax returns. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
In late 2012, Minkov and his conspirators hacked into the networks of at least four accounting firms and stole the 2011 tax filings for over 1,000 of the firms’ clients. Minkov and others then used the stolen information to file fraudulent tax returns in the clients’ names for the 2012 tax year or sold the information to others for the same purpose. To date, the IRS has identified over $6 million in fraudulent claims made in connection with the scheme.
In addition to the prison term, Judge Linares ordered Minkov to serve two years of supervised release and pay restitution of $2,702,555.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Jeffrey Wood, and special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s plea. U.S. Attorney Fishman also thanked the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, the Justice Department’s Office of International Affairs in Washington, as well as the Supreme Cassation Prosecutor’s Office of the Republic of Bulgaria and its law enforcement partners, for their support.
The government is represented by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
Defense counsel: Jack Arseneault Esq., Chatham, New Jersey
Attorney General Loretta E. Lynch Statement on Planned Departure of Solicitor General Donald B. Verrilli Jr.Read the Press Release
Attorney General Loretta E. Lynch released the following statement on the departure, effective June 24, of Solicitor General Donald B. Verrilli Jr. Attorney General Lynch also announced that Principal Deputy Solicitor General Ian Gershengorn will serve as Acting Solicitor General effective June 25.
Attorney General statement on the departure of Solicitor General Verrilli:
“Don Verrilli is a brilliant lawyer, a devoted public servant and one of the most consequential Solicitors General in American history,” said Attorney General Loretta Lynch. “Since he began his service in the Obama Administration in February of 2009, Don has been at the center of the foremost legal challenges of our time, most notably through his arguments in a series of groundbreaking cases before the Supreme Court. He led the case against the Defense of Marriage Act and for the Fourteenth Amendment’s guarantee of marriage equality, breaking down barriers that had divided us from one another and extending the reach of America’s promise. He secured a landmark victory in Arizona v. United States, helping to strike down harsh anti-immigration laws and prevent the separation of countless families looking for a better life. And he successfully defended the constitutionality of the Affordable Care Act, preserving a law that has helped millions of Americans obtain health insurance.
“Through these and many other cases – and through his thoughtful counsel and principled advocacy – Don has built a legacy of inclusion, expanding opportunities and civil rights for all Americans and moving our country forward. I could not be more proud to call him a colleague and a friend. I thank him for his extraordinary service to the Department of Justice and to the nation and I wish him well in all of his future endeavors.”
Attorney General Lynch statement on Ian Gershengorn assuming the position of Acting Solicitor General:
“In his two tours of duty with the Department of Justice, Ian Gershengorn has earned a reputation as an exceptionally talented attorney and a gifted defender of the Constitution,” said Attorney General Loretta Lynch. “From his service in the Clinton Administration as a special assistant and counsel to the Deputy Attorney General under Attorney General Janet Reno, to his work over the course of this administration since 2009, Ian has displayed his unwavering dedication to public service and his irreproachable commitment to the rule of law. He has played a key role in some of our most high-profile cases, including as head of the Federal Programs Branch of the department’s Civil Division, where he personally argued in defense of the Affordable Care Act during district court challenges. I have no doubt that Ian is well-equipped to build on departing Solicitor General Don Verrilli’s extraordinary record. I am confident that he will advance a trailblazing legacy of excellence and accomplishment. And I am certain that as Acting Solicitor General, he will expand and extend the vital work of the Obama Administration and the American people.”
Aquasent, LLC and Company Officials to Pay $400,000 to Resolve Allegations of Misuse of NSF Grant FundsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Allison C. Lerner, Inspector General of the National Science Foundation (“NSF”), today announced that AQUATIC SENSOR NETWORK TECHNOLOGY, LLC, (“AQUASENT”) and several of its officials and employees, namely Dr. Jun-Hong Cui, Dr. Yong Ma, Dr. Shengli Zhou, Dr. Zhijie Shi, and Juanjuan Liao, have entered into a civil settlement agreement with the government in which the company and the named officials will pay $400,000 to resolve allegations that they violated the federal False Claims Act and the common law in the management of federally-funded grants awarded to AQUASENT by the NSF.
AQUASENT, based in Storrs, Conn., was formed in October 2007 with a focus on the development of underwater wireless communications and networking solutions.
The National Science Foundation (“NSF”) participates in the government’s set-aside Small Business Innovation Research (“SBIR”) Program, which financially supports innovative small businesses through federally funded research and development with the goal of increasing competition, productivity, and economic growth. Grants made pursuant to the NSF’s SBIR Program are also designed to increase the incentive and opportunity for small firms to undertake cutting-edge, high risk, high quality scientific, engineering, or science and engineering education research. The grants are awarded in successive phases (e.g., Phase I, Phase II) with the funding of successive phase grants predicated on compliance with certain requirements that must be met in order to participate and to receive funds from the NSF. The requirements include certifications as to the primary employment of the grantee’s principal investigator; certifications as to the truth and accuracy of information contained in the SBIR Program proposals for funding, including the location and size of the grantees’ facilities and the identities of any third party investors; the submission of a Financial Management Systems Questionnaire (“FMSQ”) that NSF uses to ensure that accounting and timekeeping requirements are understood and followed; and the submission of project reports that are certified as truthful and accurate.
Since 2008, AQUASENT has received approximately $924,618 in federally-funded grants under the NSF’s SBIR Program.
After a lengthy investigation, the government contends that it has certain civil claims against AQUASENT arising from alleged: 1) misrepresentations and false certifications made to NSF, prior to the award of the Phase I grant, involving the principal investigator’s primary employment at AQUASENT and the size and scope of AQUASENT’s facilities; 2) misrepresentations made to NSF prior to the award of the Phase II grant, including the submission of a false FMSQ purporting to detail, among other matters, AQUASENT’s time and effort policies and procedures, including the maintenance of bi-weekly timesheets; 3) misrepresentations made to NSF during the conduct of the Phase I and Phase II grants that resulted in the release of incremental funding, including false certifications as to the Phase I principal investigator’s primary employment with AQUASENT and the submission of Phase II project reports misrepresenting that the funds expended on time and effort were supported by timesheets or other time and effort documentation; 4) misrepresentations to NSF’s Office of Inspector General (“OIG”) in connection with its investigation about the submission of multiple false timesheets in response to OIG’s requests and subpoenas; and 5) misrepresentations to NSF in connection with the identity and number of third party investors, whose investment NSF was asked to match in the Phase IIB grant application.
“In order to ensure that federal research funds are managed wisely and efficiently, all recipients of federal grants must strictly adhere to the regulations applicable to those grants,” said U.S. Attorney Daly. “Failure to do so can result in significant consequences.
“Fraudulent schemes involving companies and individuals who repeatedly make false statements to the government in order to obtain scarce federal SBIR program research dollars will not be tolerated,” said NSF Inspector General Lerner. “I commend the U.S. Attorney's office for its vigorous efforts in reaching a settlement that will return $400,000 to the government.”
U.S. Attorney Daly noted that AQUASENT cooperated with the government’s investigation.
The False Claims Act provides for up to treble damages and penalties of $5,500 to $11,000 per false claim submitted to the Government.
The matter was handled within the U.S. Attorney’s Office by Assistant U.S. Attorney William A. Collier and Auditor Susan N. Spiegel.