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Monday 11 April 2016
Former Nashville Airport Official Sentenced to Two Years in Prison for Fraud and Bribery SchemeRead the Press Release
John T. Howard, Jr., 45, of Nashville, Tenn., was sentenced today to a term two years in prison in connection with his role in a scheme involving fraudulent invoices and the solicitation of a bribe, announced David Rivera, United States Attorney for the Middle District of Tennessee. U.S. District Judge Aleta A. Trauger, who imposed the sentence, also ordered Howard to pay restitution of $1,405,876.07 and to forfeit the proceeds of his crime. The government had sought a prison term of between 57-71 months, in accordance with the U.S. Sentencing Commission Guidelines.
During a hearing on October 1, 2015, Howard, who had been an Assistant Vice President of the Metropolitan Nashville Airport Authority, (“MNAA”) pleaded guilty to one count of conspiring to commit wire fraud, one count of soliciting and receiving a bribe, and one count of money laundering. Howard acknowledged conspiring with certain MNAA contractors to submit fraudulent invoices to MNAA for construction and repair work that they had not performed, overseen, or verified. Howard also admitted asking a contractor to purchase more than $49,000 in airline tickets to Las Vegas for players, coaches, and others affiliated with a youth basketball organization run by Howard, in return for awarding an MNAA cleaning job to this contractor.
On April 4, 2016, Tim Rucker, 49, of Smyrna, Tennessee, was charged with conspiring with Howard to commit money laundering and wire fraud. The charging document alleges that Rucker submitted false invoices to MNAA for work that he had not in fact performed and that he provided the majority of the cash derived from these invoices to John Howard.
The charges against Rucker are merely an accusation and are not evidence of guilt. Rucker is presumed innocent unless and until proven guilty in a court of law.
The case is being investigated by the Federal Bureau of Investigation, the IRS- Criminal Investigation and the Office of the Davidson County District Attorney General. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Former High-Ranking FIFA and CONCACAF Official Pleads Guilty to Racketeering and Corruption ChargesRead the Press Release
Earlier today in federal court in Brooklyn, Alfredo Hawit, a former FIFA vice president and executive committee member, the former president of CONCACAF, and the former president and general secretary of the Honduran soccer federation (FENAFUTH), pleaded guilty to one count of racketeering conspiracy, two counts of wire fraud conspiracy, and one count of conspiracy to obstruct justice in connection with his receipt of bribes in exchange for the awarding of contracts for the media and marketing rights to CONCACAF tournaments and FIFA World Cup qualifier matches. Hawit, who served in high-ranking positions in soccer from 1998 to 2015, also agreed to forfeit $950,000. At sentencing, Hawit faces a maximum sentence of 20 years for each count. Today’s plea proceeding took place before United States District Judge Raymond J. Dearie.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director in Charge, FBI, New York Field Office; and Acting Special Agent in Charge Anthony J. Orlando, IRS Criminal Investigation, Los Angeles Field Office.
According to court filings and facts presented during the plea proceeding, in approximately 2011 and 2012, Hawit negotiated and accepted hundreds of thousands of dollars in bribes in exchange for his agreement to exercise his influence as acting president of CONCACAF to award an Argentine sports marketing company the media and marketing rights to CONCACAF tournaments, including the Gold Cup and the CONCACAF Champions League. Starting in approximately 2008, Hawit also negotiated and accepted hundreds of thousands of dollars in bribes in exchange for his agreement to exercise his influence as the FENAFUTH general secretary to award contracts to Media World, a Florida sports marketing company, for the media and marketing rights to the Honduran national soccer team’s home World Cup qualifier matches for the 2014, 2018, and 2022 editions of the World Cup. Over a period of years, Media World transmitted these bribes from its U.S. bank accounts, through an intermediary, to foreign bank accounts controlled by the defendant’s family members and by a co-conspirator. In addition, after the original indictment in this case was unsealed on May 27, 2015, Hawit engaged in a conspiracy to obstruct justice, and to tamper with witnesses and evidence, by advising a co-conspirator to create sham contracts in order to mask bribe payments already paid and, if asked, deceive law enforcement officers about the true nature and purpose of bribe payments.
The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section, and the Fraud Section, as well as from INTERPOL Washington.
Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Paul Tuchmann, Nadia Shihata, Keith D. Edelman, and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.
The government’s investigation is ongoing.
The Defendant:
ALFREDO HAWIT
Age: 64
Nationality: HondurasE.D.N.Y. Docket No. 15 CR 252 (S-1)
Former Federal Correctional Officer, Inmate Sentenced for Contraband Smuggling ConspiracyRead the Press Release
Memphis, TN – A former federal correctional officer and an inmate have both been sentenced for attempting to smuggle marijuana into a federal prison. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentences today.
According to the indictment, Keair Kemp, 33, of Horn Lake, Mississippi, was employed as a correctional officer at Federal Correctional Institution (FCI) Memphis. Travonte Johnson, 34, of Millington, Tennessee, was an inmate at FCI Memphis.
Between mid-2015 and August 2015, Kemp and Johnson developed a scheme to smuggle marijuana into FCI Memphis. In exchange for cash, Kemp agreed to unlawfully carry marijuana into the prison and deliver it to Johnson, thus violating his official duties as a correctional officer.
In December 2015, Kemp pleaded guilty before U.S. District Judge Sheryl H. Lipman to one count of accepting a bribe in return for smuggling marijuana into a federal prison.
In January 2016, Johnson pleaded guilty to one count of offering a bribe to a public official to smuggle marijuana into a federal correctional institution.
On Friday, April 8, 2016, Kemp was sentenced by Judge Lipman to 12 months and one day imprisonment.
On Monday, April 11, 2016, Johnson was sentenced by Judge Lipman to 30 months imprisonment.
This case was investigated by the Federal Bureau of Investigation, U.S. Department of Justice Office of Inspector General, and the Federal Bureau of Prisons.
Assistant U.S. Attorney Mark Erskine prosecuted this case on the government’s behalf.
Former Erie Resident Admits Robbing Two Local BanksRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to charges of bank robbery, United States Attorney David J. Hickton announced today.
Samuel Louis Dominick, 29, pleaded guilty to two counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that on February 19, 2015, Dominick and a co-defendant were involved in the robbery of $1,565 from the First National Bank, located at 3310 West 26th Street, Erie, Pennsylvania. In addition, on March 5, 2015, Dominick robbed $4,828 from the Marquette Savings Bank, located at 2320 West 12th Street, Erie, Pennsylvania..
Judge Cercone scheduled sentencing for August 1, 2016 at 3:00 p.m. The law provides for a total sentence of 40 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.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Millcreek Township Police Department conducted the investigation that led to the prosecution of Dominick.
Former Bookkeeper Sentenced for Embezzling from Tacoma Charity Thrift StoresRead the Press Release
The former bookkeeper for the St. Vincent de Paul Society Stores of Tacoma, Washington, was sentenced today in U.S. District Court in Tacoma to 45 months in prison and three years of supervised release for wire fraud and aggravated identity theft, announced United States Attorney Annette L. Hayes. ANGELA TONEY SAUCIDO, 44, moved from the Tacoma area to Phoenix in 2007, but continued to work for the charity as its bookkeeper through March 2013. At sentencing U.S. District Judge Benjamin H. Settle ordered SAUCIDO to pay more than $543,000 in restitution to St. Vincent de Paul Society.
“This defendant enriched herself at the expense of those who could afford it least,” said U.S. Attorney Annette L. Hayes. “Because of her conduct, St. Vincent de Paul has had to close a number of its stores and lay off a significant portion of its work force. Those in our community who are down on their luck have fewer places to turn to get a helping hand.”
According to records in the case, the embezzlement scheme involved a variety of frauds. SAUCIDO would transfer funds from the St. Vincent de Paul Society Stores bank accounts to her own bank accounts and falsify entries making it appear the transfers were for legitimate purposes. SAUCIDO forged signatures on checks and made electronic fund transfers to benefit her and her family. SAUCIDO made purchases for her personal use on the St. Vincent de Paul Society Stores Home Depot credit account, and then used the charity’s funds to pay for the purchases. Finally, SAUCIDO used the identities of other employees to make it appear they had received additional pay when in fact she had deposited the money into bank accounts she and her husband controlled.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Matthew Hampton.
Former Archer County Justice of the Peace Sentenced to 24 Months in Federal Prison for Stealing County FundsRead the Press Release
WICHITA FALLS, Texas — Joseph Charles Boyle, 64, the former Justice of the Peace for Precinct 2 in Holliday, Texas, was sentenced today by U.S. District Judge Reed C. O’Connor to 24 months in federal prison, the top end of the U.S. Sentencing Guidelines, following his guilty plea in November 2015 to a felony Information charging one count of theft concerning programs receiving federal funds, announced U.S. Attorney John Parker of the Northern District of Texas.
Boyle was also ordered to pay $133,333.33 in restitution, the total amount of money he stole, embezzled and obtained by fraud from Archer County. Judge O’Connor remanded Boyle to federal custody following this morning’s sentencing hearing.
Boyle resigned his position as Justice of the Peace the day before he entered a guilty plea. In late August 2015, he retired from the Texas Department of Criminal Justice, where he worked as a correctional officer at the James V. Allred Unit in Iowa Park, Texas
According to documents filed in the case, Boyle served in his elected position in Archer County, Texas, since January 2003. As Justice of the Peace, Boyle was authorized to impose fines and assess fees on individuals cited with a variety of violations, such as minor in possession of alcohol, speeding, illegal passing, driving without a valid license, and other traffic violations.
From approximately January 1, 2013, through May 5, 2015, on numerous occasions, Boyle stole, embezzled, and obtained by fraud, funds that he collected as payment of fees, fines and penalties, and failed to turn that money over to its rightful owner, Archer County.
Boyle told individuals who had been cited with a violation that the fine was a certain amount, obtained payment from the individual in that amount, and provided the individual with a receipt in that amount. Boyle, however, then kept a portion of the individual’s payment and falsely reported to Archer County that the fine assessed, and the amount received as payment of the fine, was less than the amount he had actually assessed and received.
To help facilitate his theft, Boyle often requested that individuals pay their fines in cash. Frequently, he kept a portion of the cash the individual paid, and then purchased a money order to make the payment to Archer County, all in an effort to disguise the fact that he had been paid in cash.
The FBI and the Texas Rangers investigated the case. Assistant U.S. Attorney Douglas Brasher was in charge of the prosecution.
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Felon Sentenced to 7+ Years in Prison for Possessing FirearmsRead the Press Release
A 33-year-old Federal Way man was sentenced Friday April 8, 2016 to 90 months in prison and three years of supervised release for two counts of being a felon in possession of firearms, announced U.S. Attorney Annette L. Hayes. ROBBY LEE ROBINSON, was convicted following a bench trial on January 6, 2016. At trial prosecutors presented evidence that in October 2013, ROBINSON had assaulted a 15-year-old boy, pointing a rifle at him and the next day had threatened the boy’s grandmother while armed with a handgun. At sentencing U.S. District Judge Marsha J. Pechman said ROBINSON created “an extraordinarily dangerous situation… where a teenage boy has a gun pointed at him.”
According to records filed in the case, on October 29, 2013, ROBINSON’s girlfriend made a frantic call to 9-1-1 reporting that ROBINSON was assaulting her son and mother. ROBINSON had attacked the grandmother first pinning her against an exterior wall and threatening her with a rifle. When her 15-year-old grandson came to her aid, ROBINSON punched him, threw him down concrete stairs and pointed the rifle at him. The boy and his grandmother were able to get into the house and lock the door, keeping ROBINSON out. ROBINSON fled the scene before police arrived. The next day police were called again when the grandmother reported that ROBINSON had called the home and was threatening to burn the house down. ROBINSON was spotted in a car in the neighborhood, and using pepper spray, police were able to get him out of the car and into custody. Inside the car police found a Ruger, Model Super BlackHawk, .44 Magnum revolver.
ROBINSON has a lengthy criminal history including convictions for Domestic Violence Assault (2003), Violation of a No Contact Order (2004), Possession of Methamphetamine (2007) and Second Degree Assault (2008). He is prohibited from possessing firearms.
The case was investigated by the Federal Way Police Department and was prosecuted by Special Assistant United States Attorney Stephen Hobbs and Assistant United States Attorney Nicholas Manheim. Mr. Hobbs is a Senior Deputy King County Prosecutor specially designated to prosecute firearms cases in federal court.
Federal Jury Finds Crips Gang Leader Guilty of RacketeeringRead the Press Release
Following four weeks of trial, a federal jury in Central Islip, NY, returned a guilty verdict today against Raphael Osborne, also known as “Gusto,” a Crips street gang leader from Roosevelt, NY, on twenty-one counts including racketeering, conspiracy, robbery, attempted murder, witness retaliation, assault with a dangerous weapon, drug conspiracy and brandishing and discharging firearms during the commission of these offenses. Osborne faces a minimum of 115 years and up to life imprisonment as a result of these convictions.
The verdict was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Madeline Singas, Nassau County District Attorney; and Thomas C. Krumpter, Acting Nassau County Police Commissioner.
At trial, the government successfully proved that Osborne led the Roosevelt, NY-based Rollin’ 60s Crips, a racketeering enterprise that engaged in multiple crimes of violence and narcotics trafficking. Between 2003 and 2013, members of the gang followed an “on sight” rule established by Osborne that commanded gang members to attack rival Bloods in Roosevelt whenever possible and by whatever means available. In addition, numerous other shootings and murders were committed at Osborne’s direction. During the trial, the government elicited details of 15 shootings and three homicides that were committed by members of the Rollin’ 60s during Osborne’s reign and established that the gang financed its activities through firearms and narcotics trafficking. Over the course of the conspiracy, the gang was responsible for bringing hundreds of illegal firearms to Long Island, including revolvers, semi-automatic handguns, assault rifles, and submachine guns.
Among other crimes, Osborne was convicted of:
Conspiring to murder and attempted murder of a federal informant in October 2012. Beginning in the spring of 2012, law enforcement, with the aid of a Rollin’ 60s gang member informant, began purchasing firearms from the gang, including some from Osborne’s residence on Debevoise Avenue in Roosevelt. After the informant attempted to purchase a firearm from Osborne in June 2012, Osborne became suspicious and ordered other gang members to kill him. On October 13, 2012, a gang member lured the informant from his Hempstead home to a location where a fellow gang member was waiting. The informant was shot five times at close range, leaving him paralyzed.
The January 2013 attempted murder and assault of a rival Bloods gang member. On January 30, 2013, Osborne and other ranking members of the Rollin’ 60s followed a vehicle occupied by several Bloods gang members to a house on Pleasant Avenue in Roosevelt. As the rivals’ vehicle turned into the driveway of the residence, Osborne and other gang members unleashed a barrage of .40 and .45 caliber bullets that ripped through the vehicle and sent one of the Bloods members to the hospital with a gunshot wound to his abdomen.
Two robberies that he committed with other members of the gang in the fall of 2010. The first robbery involved a gang member stealing marijuana and cash from the victim, while Osborne dragged the victim from his vehicle and pistol whipped him in the street. In the second robbery, Osborne directed gang members to the home of a drug dealer who was robbed at gunpoint.
Conspiring to distribute 280 grams of crack cocaine, 100 grams of heroin, 100 kilograms of marijuana, and quantities of methylone, commonly known as “molly.”
“The crimes that Osborne stands convicted of underscore the wanton violence the Crips street gang unleashed on neighborhoods of Long Island,” stated United States Attorney Capers. “Street gangs such as the Crips infect communities, and we will continue to respond to the Crips’ brutal violence with unwavering investigation and prosecution – they will be brought to justice and prosecuted to the fullest extent of the law.” Mr. Capers extended his grateful appreciation to each of the law enforcement agencies for their assistance in this case, in particular the Special Investigations Squad of the Nassau County Police Department and the FBI’s Long Island Gang Task Force.
Assistant Director-in-Charge Rodriguez stated, “The verdict against Raphael Osborne leaves the area of Roosevelt a little safer today. During his time as a Crips leader, Osborne directed attacks against rival gangs in the Roosevelt area by any means available. The FBI will continue to work with our law enforcement partners to dismantle gangs and the violence they bring to our communities.”
District Attorney Singas stated, “This defendant and his fellow gang members brought illegal guns, deadly drugs, and unbridled violence into communities on Long Island. He oversaw a ruthless enterprise that trafficked in assault weapons, handguns, cocaine, and heroin, and left many victims in its wake. I thank all of our partners who took part in the dangerous and important work to arrest and prosecute this defendant and his associates.”
Acting NCPD Police Commissioner Krumpter stated, “Crime has no boundaries and this case is an example of how partners in law enforcement utilized talented personnel and resources to bring this defendant to justice. Today’s arrest should serve as a deterrent to criminals as we at the Nassau County Police Department are committed to working with our fellow law enforcement partners to ensure public safety.”
Upon sentencing the defendant Osborne faces a potential sentence of up to life imprisonment.
Osborne is the fourteenth member of the gang to be convicted since the inception of this case. Three other members of the gang are pending trial.
The government’s case was prosecuted by Assistant United States Attorneys Nicole Boeckmann, Christopher Caffarone, and Special Assistant United States Attorney Michael Maffei.
The Defendant:
Raphael Osborne (a/k/a Gusto)
Age: 30E.D.N.Y. Docket No. 14-264 (JS)
Erie Man Admits Guilty in Crack Cocaine Trafficking SchemeRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, pleaded guilty in federal court to a charge of violating federal drug laws, United States Attorney David J. Hickton announced today.
Curtis L. Duck, 42, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Duck conspired with a co-defendant to possess with intent to distribute and distribute approximately 40 grams of crack cocaine.
Judge Cercone scheduled sentencing for August 1, 2016 at 1:30 p.m. The law provides for a total sentence of 40 years in prison, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued Duck on bond.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The EAGLE task force, which is comprised of members of the Federal Bureau of Investigation, the Pennsylvania Office of Attorney General Bureau of Narcotics Investigation, and the Erie Police Department conducted the investigation that led to the prosecution of Duck.
Erie Man Admits Distributing Crack CocaineRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to charges of violating federal drug laws, United States Attorney David J. Hickton announced today.
James Darnell Pacely, 37, pleaded guilty to three counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that on November 13, 2012, November 27, 2012 and December 7, 2012, Pacely distributed crack cocaine in Erie.
Judge Cercone scheduled sentencing for August 1, 2016 at 12:45 p.m. The law provides for a total sentence of 60 years in prison, a fine of $3,000,000, 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.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The EAGLE task force, which is comprised of members of the Federal Bureau of Investigation, the Pennsylvania Office of Attorney General Bureau of Narcotics Investigation, and the Erie Police Department conducted the investigation that led to the prosecution of Pacely.
El Paso man pleads guilty to liquid meth possession and distribution conspiracyRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that an El Paso man pleaded guilty last week to conspiring to transport and distribute methamphetamine.
Eduardo Guerrero, 24, of El Paso, Texas, pleaded guilty Friday before U.S. District Judge Robert G. James to one count of conspiracy to possess with intent to distribute methamphetamine. According to the guilty plea, Louisiana State Police troopers conducted a traffic stop on a pickup truck traveling eastbound on Interstate 20 in Ouachita Parish in March of 2015. After a search of the vehicle, two gas tanks were found on the vehicle and one contained 16 gallons of liquid methamphetamine, which is approximately 28.8 kilograms of pure methamphetamine. The driver and passenger did not own the vehicle. Guerrero was determined to be the owner, and the driver said Guerrero had directed him to transport the methamphetamine from El Paso to Atlanta, Ga. State police arrested Guerrero in the New Orleans area while he traveled to retrieve the truck and methamphetamine.
Guerrero faces up to a minimum of 10 years to life in prison, five years of supervised release and a $1 million fine. Sentencing has been set for July 5, 2016.
The DEA, Department of Homeland Security, and Louisiana State Police, Troop F, conducted the investigation. Assistant U.S. Attorneys Allison D. Bushnell and Michael O’Mara are prosecuting the case.
Doctor Sentenced to over Nine Years in Prison for $3.1 Million Health Care Fraud SchemeRead the Press Release
Greenbelt, Maryland - U.S. District Judge Deborah K. Chasanow sentenced physician Paramjit Singh Ajrawat, age 60, Potomac, Maryland, today to 111 months in prison, followed by three years of supervised release for health care fraud, two counts of making a false statement related to a health care program, one count of obstruction of justice, four counts of wire fraud, and one count of aggravated identity theft related to a health care fraud scheme in connection with the pain clinic he owned and operated with his wife. Judge Chasanow also entered an order requiring Ajrawat to forfeit and pay restitution of $3,103,874.58.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Norbert E. Vint, Acting Inspector General of the U.S. Office of Personnel Management; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Special Agent in Charge Robin Blake, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Special Agent in Charge Paul L. Bowman of the U.S. Postal Service, Office of Inspector General.
“This lengthy sentence sends a powerful message that doctors who defraud health insurance programs will be held accountable,” said U.S. Attorney Rod J. Rosenstein.
Ajrawat was a licensed physician in Maryland who specialized in interventional pain management. He and his wife owned and operated Washington Pain Management Center (WPMC) located in Greenbelt. A federal jury convicted Ajrawat and his wife, Sukhveen Kaur Ajrawat, age 57, also a medical doctor, on September 4, 2015. The government moved to dismiss the charges against Sukhveen Ajrawat after her death on February 1, 2016.
According to evidence presented at the eight day trial, from at least January 2011 through May 2014, the Ajrawats defrauded federal health benefit programs including: Medicare, Medicaid, TRICARE, Federal Employees Health Benefits Program and the Office of Workers’ Compensation Programs. The Ajrawats filed claims for procedures that were not performed. Specifically, the Ajrawats performed less expensive procedures but falsely billed for procedures that provided higher reimbursement amounts. The Ajrawats also submitted claims indicating that they had met the requirements for reimbursement, when in fact, they had not met those requirements. Finally, the Ajrawats submitted claims for procedures that had not been performed at all.
For example, the Ajrawats submitted claims that P. Ajrawat had performed nerve block injections with the use of an imaging guidance machine, but P. Ajrawat neither owned nor used such a machine. The Ajrawats also falsely documented patient files to indicate that an imaging guidance machine had been used to verify needle placement and caused the alteration or destruction of patient files to conceal the scheme from auditors and law enforcement.
United States Attorney Rod J. Rosenstein praised DCIS, HHS-Office of Inspector General, OPM-Office of Inspector General, FBI, U.S. Department of Labor-Office of Inspector General, and the U.S. Postal Service-Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Kelly O’Connell Hayes, who prosecuted the case.
Dallas Woman Sentenced to 18 Months in Federal Prison for Structuring TransactionsRead the Press Release
DALLAS — Linda Nell Fantroy, 65, of Dallas, was sentenced this morning by U.S. District Judge David C. Godbey to 18 months in federal prison, following her guilty plea in December 2015 to one count of structuring transactions to evade reporting requirements, announced U.S. Attorney John Parker of the Northern District of Texas.
Fantroy was ordered to surrender to the Bureau of Prisons on June 6, 2016.
The law requires any financial institution that engages with a customer in a currency transaction, such as a deposit or withdrawal, of more than $10,000, to report the transaction to the Internal Revenue Service (IRS). According to the factual resume filed in the case, from January 2010 to late October 2013, Fantroy structured currency deposits to avoid the $10,000 currency reporting requirements. During this time, she made approximately 111 cash deposits totaling more than $580,000. Each of those deposits was made with the intent to avoid the currency reporting requirements, and she violated this law as part of a pattern of illegal activity involving more than $100,000 in a 12-month period.
In a related civil action filed in the Northern District of Texas (3:14-CV-3265) , Senior U.S. District Judge A. Joe Fish entered a final judgment of forfeiture in January 2015, noting the government had probable cause to seize seven properties in the Dallas metroplex area that Fantroy owned.
According to the government’s Verified Complaint for Forfeiture in rem, filed in September 2014, each month, Fantroy, who was employed by the Dallas Independent School District (DISD), received direct payroll deposits from DISD and from the Texas Comptroller Teacher Retirement System of Texas. From January 2007 through November 2009, Fantroy had a total of 10 deposits totaling $6,270 into her Credit Union of Texas accounts.
However, beginning in December 2009, the currency deposits into Fantroy’s accounts increased dramatically. In fact, from December 2009 to August 31, 2013, more than $440,000 in currency, the source of which was unknown, was deposited into Fantroy’s accounts in 94 separate transactions, and each of those deposits was under the $10,000.01 Currency Transaction Report reporting threshold. The majority of structured funds deposited into her accounts during this time frame were used to purchase the seven above-mentioned residential properties that she was required to forfeit to the government.
IRS Criminal Investigation and the U.S. Department of Housing and Urban Development investigated the case. Assistant U.S. Attorney Brian Poe was in charge of the prosecution.
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Crime victim advocates honor Huntington Police Chief Joe Ciccarelli as part of National Crime Victims' Rights WeekRead the Press Release
CHARLESTON, W.Va. – The United States Attorney's Office for the Southern District of West Virginia, along with federal, state and local advocates of crime victims’ rights, presented the 2016 Excellence in Victim Advocacy and Justice Award today to Huntington Police Chief Joe Ciccarelli. The presentation took place at an opening ceremony held in Charleston at the Robert C. Byrd United States Courthouse as part of National Crime Victims’ Rights Week. The purpose of the ceremony was to honor the service of Chief Ciccarelli and to raise awareness about the rights, protections, and services available to crime victims in West Virginia.
Throughout his distinguished public service career, Chief Ciccarelli has worked tirelessly on behalf of crime victims and their families. His dedication has led to significant improvements in how the criminal justice system handles crime victims’ services. His service has had a lasting impact on crime victims’ rights, and the programs he has established to carry on this work reflect his extraordinary advocacy.
Ciccarelli began working with crime victims almost 40 years ago, in October 1977, when he started his career with the Huntington Police Department as a Community Service Officer and Emergency Medical Technician. He was appointed to be a police officer the following year and worked in the Patrol Bureau and Special Investigations Bureau before his appointment as a Special Agent in the FBI in 1984. His 30-year FBI career began with assignments in the St. Louis and Miami areas, and then continued with a return to Huntington in 1998 as the head of the FBI’s Violent Crime and Drug Task Force. In Huntington, Ciccarelli served as the Senior Resident Agent, the Supervisory Senior Resident Agent for Southern West Virginia, and the Team Leader for the FBI’s Northeast Region Child Abduction Rapid Deployment Team. While at the FBI, Ciccarelli helped establish the Special Agents Steering Committee and, most significant, the FBI’s Victim Assistance Program. After retiring from the FBI in 2014, he became an investigator for the West Virginia Supreme Court and, later that same year, was appointed Chief of the Huntington Police Department.
“Chief Joe Ciccarelli’s public service exemplifies the vision and leadership necessary to build trust and restore hope to crime victims. This award represents the gratitude of crime victims, their families, and those of us in the criminal justice system and advocacy community who have been fortunate enough to see how his efforts have made a difference,” stated Acting United States Attorney Carol Casto. “I am privileged to have known and worked with Joe for a number of years, as are all of us gathered today to celebrate his service. His commitment to truth and justice has been remarkable, and his determined advocacy has had an incredible impact on crime victims’ rights right here in our community and throughout our entire criminal justice system.”
The event featured officials working in the criminal justice system, agencies and organizations providing services to crime victims, and crime victims themselves who spoke firsthand about their experiences. Many who could not attend sent letters recognizing Chief Ciccarelli’s public service, including United States Attorney General Loretta Lynch.
This ceremony marks the 16th Annual Operation Reach Out event. Operation Reach Out is a collaborative group of federal, state and local agencies and organizations that work to raise awareness about the rights, protections, and services available to crime victims in West Virginia. The event was made possible through the partnership between Operation Reach Out and the Counseling Connection, an organization that provides counseling, therapy, education, and advocacy throughout West Virginia. The staff of Mt. Olive Correctional Complex was also essential to today’s event.
The event was held in conjunction with the nationwide observance of National Crime Victims' Rights Week, which began on April 10 and runs through April 16, 2016, and locally includes the Walk/Run for Justice 5K on Friday, April 15, 2016, at Haddad Riverfront Park in Charleston. Registration is free and starts at 11:00 A.M. The race begins at noon and there will be plaques presented for the top finishers in the women’s and men’s divisions. For more information on the Walk/Run for Justice 5K, please contact Marla Willcox Eddy at 304-340-3676. The theme of National Crime Victims' Rights Week this year is "Serving Victims. Building Trust. Restoring Hope."
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Charleston man sentenced to Federal prison for gun crimeRead the Press Release
CHARLESTON, W.Va. – A Charleston man was sentenced today to two years in federal prison for a gun crime, announced Acting United States Attorney Carol Casto. Richard Howard King II, 21, previously pleaded guilty in January 2016 to possession of a firearm by an unlawful user of a controlled substance.
King admitted that on July 16, 2015, he was carrying a concealed handgun when he was approached by Charleston Police Department officers. After King informed the officers that he was armed, the officers removed a Glock Model 22, .40 caliber pistol from his waistband. King also admitted that he possessed four other firearms from July 5, 2013, through July 16, 2015, one of which was stolen. At the time he possessed the firearms, King admitted that he was a habitual, unlawful user of marijuana.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Charleston Police Department. Assistant United States Attorney Haley Bunn is in charge of the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
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Attorney General Loretta E. Lynch Announces Bill Baer to Serve as Acting Associate Attorney GeneralRead the Press Release
Attorney General Loretta E. Lynch released the following statement announcing that Bill Baer, who currently serves as Assistant Attorney General of the Antitrust Division, will serve as Acting Associate Attorney General effective April 17, 2016. The Associate Attorney General is the Justice Department’s third-ranking post.
“Bill Baer is an extraordinary public servant, an outstanding attorney and a champion of all those who look to the law for empowerment and protection,” said Attorney General Lynch. “From his work at the Federal Trade Commission to his leadership of the Justice Department’s Antitrust Division, he has demonstrated keen intelligence, strong judgment and consummate skill. In the last few years alone, he has led the Antitrust Division to new heights – unlocking $400 million in relief for consumers in a case against Apple’s price-fixing of e-books; achieving a record $2.5 billion in fines in a case that exposed a scheme by Citicorp, JPMorgan Chase, Barclays and the Royal Bank of Scotland and others to rig the foreign currency exchange spot market; and standing up against corporate behavior that would have damaged our markets and hurt consumers in industries from beer and wine to airlines and phone companies. With his hard work and unwavering dedication, he has earned the trust and respect of Justice Department employees at every level. I could not imagine a better individual to fill Stuart Delery’s shoes as Associate Attorney General of the United States.”
Saturday 9 April 2016
Two Leaders of El Monte Street Gang Plead Guilty to Federal Racketeering Offenses, including Narcotics TraffickingRead the Press Release
LOS ANGELES – A Mexican Mafia member who is also a member of the El Monte Flores street gang, and another man who was a “shotcaller” of the gang, have pleaded guilty to federal racketeering offenses.
The two gang leaders pleaded guilty Thursday in United States District Court after they were indicted in 2014 in a racketeering indictment that focused on the El Monte Flores gang, an organization that takes direction from the Mexican Mafia prison gang and controls criminal activity in the cities of El Monte and South El Monte.
James “Chemo” Gutierrez, 53, of El Monte, who is the Mexican Mafia member and the lead defendant in the indictment, and Kenneth Cofer, 36, also of El Monte, each pleaded guilty to conspiring to violate the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. They also each pleaded guilty to conspiring to distribute controlled substances, including methamphetamine and heroin, and conspiring to launder money. Additionally, Cofer pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime.
Gutierrez and Cofer pleaded guilty before United States District Judge John A. Kronstadt, who is scheduled to sentence Gutierrez on July 28 and Cofer on September 8. If Judge Kronstadt accepts the plea agreements in the case, Gutierrez and Cofer will each be sentenced to 15 years in federal prison.
The indictment in the case alleged that members of the El Monte Flores gang members committed crimes that included acts of violence (ranging from battery to murder), drug trafficking, robbery, burglary, carjacking, witness intimidation, kidnapping, weapons trafficking, credit card fraud, identity theft, and money laundering. The indictment outlined a dispute between Gutierrez and other members of the Mexican Mafia who were vying for control over the gang.
“We have effectively targeted criminal enterprises that operate as street gangs for two decades, using the federal racketeering statute to dismantle the leadership structure and incarcerate street-level operatives,” said United States Attorney Eileen M. Decker. “Street gangs present one of the most dangerous criminal elements in Southern California, and we will use every tool at our disposal to restore order to neighborhoods affected by their violence and other criminal activity.”
In his plea agreement, Gutierrez admitted that he “regularly received extortionate ‘tax’ payments from individuals trafficking narcotics in the neighborhoods controlled by the El Monte Flores gang.” Gutierrez “knew that the narcotics traffickers would be subject to violent attacks if they failed to pay the extortionate taxes to the El Monte Flores gang.” Gutierrez acknowledged in his plea agreement that he authorized an attack on a rival gang member.
Cofer admitted in his plea agreement that he “managed and supervised the extortion and drug trafficking activities…[and] directed the use of violence on behalf” of the criminal enterprise. Cofer specifically admitted that he authorized the shooting of a person who had a dispute with another member of the gang.
Gutierrez and Cofer admitted their roles in threats to use violence to extort “taxes” from drug dealers and fraudulent document vendors at “Crawford’s Plaza” (at Valley Boulevard and Garvey Avenue).
In addition to Gutierrez and Cofer, 19 other defendants named in the RICO indictment have pleaded guilty to date.
The investigation into the El Monte Flores gang was conducted by a task force that included the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; IRS Criminal Investigation; and the El Monte Police Department.
Friday 8 April 2016
Wyoming County Man Pleads Guilty to Gun ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Scott A. Wilcox, 46, of Pike, NY, pleaded guilty to being a felon in possession of a firearm, before U.S. District Elizabeth A. Wolford. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that on January 25, 2015, Wyoming County Sheriff’s deputies searched the defendant’s residence at 7998 Wiscoy Road in Pike and found a Marlin .44 magnum caliber rifle, which belonged to Wilcox. Deputies also found 76 rounds of .44 caliber ammunition in an access panel in a bathroom. The defendant is a three-time convicted felon and is prohibited from legally possession firearms.
The plea is the result of an investigation on the part of the Wyoming County Sheriff’s Office, under the direction of Sheriff Gregory J. Rudolph, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid.Sentencing is scheduled for July 21, 2016, at 12:00 p.m. before Judge Wolford.
Windham Man Fined $3,000 for Unlawfully Entering the United StatesRead the Press Release
Contact: Jim Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Bruce Mayberry, 55, of Windham, Maine was sentenced yesterday in U.S. District Court by Magistrate Judge John Nivison to serve a day in jail and pay a $3,000 fine for failing to present at a border crossing point when he entered the United States from Canada. He also paid a $1,800 civil penalty and a $500 fee associated with impoundment of his automobile.
According to court records, on October 29, 2015, a red Saturn sedan operated by Mayberry triggered sensors and was observed by a U.S. Border Patrol agent entering the United States on a field road leading from New Brunswick into Maine. After the Border Patrol agent conducted a vehicle stop, the driver admitted he had entered through the field road and had been in Canada for a few days. An officer employed by the Canadian Border Services Agency reported that Mayberry, a U.S. citizen, had previously been refused entry into Canada as result of his criminal history.U.S. Attorney Delahanty stated that the Justice Department and the Department of Homeland Security are committed to securing the international border and ensuring that those who seek to enter our country present themselves at designated crossing points and ports of entry.
In imposing sentence, Magistrate Judge Nivison emphasized the importance of border security and the need to deter others from unlawfully crossing our nation’s borders.
The investigation was conducted by the Department of Homeland Security, U.S. Border Patrol.Winchester Woman Sentenced for Embezzling $1 Million from Credit UnionRead the Press Release
ALEXANDRIA, Va. – Donna L. Jennings, 44, of Winchester, was sentenced today to 54 months in prison for embezzling over $1 million from Winchester Community Federal Credit Union. Jennings was also ordered to forfeit and pay $1,059,767.52 in restitution to her victims.
Jennings pleaded guilty on Dec. 18, 2015. According to court documents, Jennings admitted to stealing over $1 million in funds from Winchester Community Federal Credit Union where she was employed as its manager. From 2001 through 2014, Jennings took cash from teller drawers, fraudulently opened financial accounts, conducted financial transactions without customers’ knowledge, made false entries into accounting records, and approved loans without authority. Jennings funneled the proceeds of her fraud into accounts she controlled and used the stolen funds to purchase gifts for herself and pay credit card bills. When federal bank examiners questioned Jennings about suspicious transactions, she made false statements and altered Board of Director meeting minutes to support her lies. As a result of Jennings’ conduct, the National Credit Union Administration placed Winchester Community Federal Credit Union into a restricted status and invited another financial institution to merge with it for the protection of its membership and the National Credit Union Administration insurance fund.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney Uzo Asonye 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. 1:15-cr-358.
West Seneca Man Sentenced for Oxycodone DistributionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Fred Suchan, 33, of West Seneca, NY, who was convicted of distribution of oxycodone, was sentenced to 12 months home detention and three years probation by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney Frank T. Pimentel, who handled the case, stated that on three dates in September and October 2010, the defendant sold or attempted to sell OxyContin and Opana tablets to an undercover police officer in a commercial parking lot on Abbott Road in Orchard Park. On the last occasion, officers seized a 9 mm rifle, a loaded 9 mm magazine, and additional 9 mm ammunition from Suchan’s vehicle.
The sentencing is the result of an investigation on the part of the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division, and the Orchard Park Police Department, under the direction of Chief Mark Pacholec.
Wells Fargo Bank Agrees to Pay $1.2 Billion for Improper Mortgage Lending PracticesRead the Press Release
Wells Fargo Bank Admits That It Certified that Loans Were Eligible for FHA Mortgage Insurance When They Were Not, and That It Did Not Disclose Thousands of Faulty Mortgage Loans to HUD
The Department of Justice announced today that the United States has settled civil mortgage fraud claims against Wells Fargo Bank, N.A. (Wells Fargo) and Wells Fargo executive Kurt Lofrano, stemming from Wells Fargo’s participation in the Federal Housing Administration (FHA) Direct Endorsement Lender Program. In the settlement, Wells Fargo agreed to pay $1.2 billion and admitted, acknowledged and accepted responsibility for, among other things, certifying to the Department of Housing and Urban Development (HUD), during the period from May 2001 through December 2008, that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the Government having to pay FHA insurance claims when some of those loans defaulted. The agreement resolves the United States’ civil claims in its lawsuit in the Southern District of New York, as well as an investigation conducted by the U.S. Attorney’s Office for the Southern District of New York regarding Wells Fargo’s FHA origination and underwriting practices subsequent to the claims in its lawsuit and an investigation conducted by the U.S. Attorney’s Office for the Northern District of California into whether American Mortgage Network, LLC (AMNET), a mortgage lender acquired by Wells Fargo in 2009, falsely certified and submitted ineligible residential mortgage loans for FHA insurance.
The settlement was approved today by U.S. District Judge Jesse M. Furman for the Southern District of New York.
“This settlement is another step in the Department of Justice’s continuing efforts to hold accountable FHA approved lenders that unlawfully submitted false claims at the expense of American homeowners and taxpayers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “In addition to today’s resolution with Wells Fargo, the department has pursued similar misconduct by numerous other lenders, returning more than $4 billion to the FHA fund and the Treasury and filing suit where appropriate. We remain committed to protecting the public fisc from all who seek to abuse it, whether they do business on Wall Street or Main Street.”
“This Administration remains committed to holding lenders accountable for their lending practices,” said Secretary Julián Castro for HUD. “The $1.2 billion settlement with Wells Fargo is the largest recovery for loan origination violations in FHA’s history. Yet, this monetary figure can never truly make up for the countless families that lost homes as a result of poor lending practices.”
“Today, Wells Fargo, one of the biggest mortgage lenders in the world, has been held responsible for years of reckless underwriting, while relying on government insurance to deal with the damage,” said U.S. Attorney Preet Bharara for the Southern District of New York. “Wells Fargo has long taken advantage of the FHA mortgage insurance program, designed to help millions of Americans realize the dream of home ownership, to write thousands and thousands of faulty loans. Driven to maximize profits, Wells Fargo employed shoddy underwriting practices to drive up loan volume, at the expense of loan quality. Even though Wells Fargo identified through internal quality assurance reviews thousands of problematic loans, the bank decided not to report them to HUD. As a result, while Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust. With today’s settlement, Wells Fargo has finally resolved the years-long litigation, adding to the list of large financial institutions against which this office has successfully pursued civil fraud prosecutions.”
“Misconduct in the mortgage industry helped lead to a destructive financial crisis that spanned the globe,” said Acting U.S. Attorney Brian Stretch for the Northern District of California. “American Mortgage Network’s origination of FHA-insured loans that did not comply with government requirements also caused major losses to the public fisc. Today’s settlement demonstrates the Department of Justice’s resolve to pursue remedies against those who engaged in this type of misconduct.”
“This matter is not just a failure by Wells Fargo to comply with federal requirements in FHA’s Direct Endorsement Lender program – it’s a failure by one of our trusted participants in the FHA program to demonstrate a commitment to integrity and to ordinary Americans who are trying to fulfill their dreams of homeownership,” said Inspector General David A. Montoya for HUD.
According to the second amended complaint filed in Manhattan federal court, the government had alleged:
Wells Fargo has been a participant in the Direct Endorsement Lender program, a federal program administered by FHA. As a Direct Endorsement Lender, Wells Fargo has the authority to originate, underwrite and certify mortgages for FHA insurance. If a Direct Endorsement Lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder or servicer of the loan may submit an insurance claim to HUD for the outstanding balance of the defaulted loan, along with any associated costs, which HUD must then pay. Under the Direct Endorsement Lender program, neither the FHA nor HUD reviews a loan for compliance with FHA requirements before it is endorsed for FHA insurance. Direct Endorsement Lenders are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance and maintaining a quality control program that can prevent and correct any deficiencies in their underwriting. The quality control program requirements include conducting a full review of all loans that go 60 days into default within the first six payments, known as “early payment defaults”; taking prompt and adequate corrective action upon discovery of fraud or serious underwriting problems; and disclosing to HUD in writing all loans containing evidence of fraud or other serious underwriting deficiencies. Wells Fargo failed to comply with these basic requirements.
First, between at least May 2001 and October 2005, Wells Fargo, the largest HUD-approved residential mortgage lender, engaged in a regular practice of reckless origination and underwriting of its FHA retail loans, all the while knowing that it would not be responsible when the defective loans went into default. To maximize its loan volume (and profits), Wells Fargo elected to hire temporary staff to churn out and approve an ever increasing quantity of FHA loans, but neglected to provide this inexperienced staff with proper training. At the same time, Wells Fargo’s management applied pressure on its underwriters to approve more and more FHA loans. The bank also imposed short turnaround times for deciding whether to approve the loans, employed lax underwriting standards and controls and paid bonuses to underwriters and other staff based on the number of loans approved. Predictably, as a result, Wells Fargo’s loan volume and profits soared, but the quality of its loans declined significantly. Yet, when Wells Fargo’s senior management was repeatedly advised by its own quality assurance reviews of serious problems with the quality of the retail FHA loans that the Bank was originating, management disregarded the findings and failed to implement proper and effective corrective measures, leaving HUD to pay hundreds of millions of dollars in claims for defaulted loans.
Second, Wells Fargo failed to self-report to HUD the bad loans that it was originating, in violation of FHA program reporting requirements. During the period 2002 through 2010, HUD required Direct Endorsement Lenders to perform post-closing reviews of the loans that they originated and to report to HUD in writing loans that contained fraud or other serious deficiencies. This requirement provided HUD with an opportunity to investigate the defective loans and request reimbursement for any claim that HUD had paid or request indemnification for any future claim, as appropriate. During this nine-year period, Wells Fargo, through its post-closing reviews, internally identified thousands of defective FHA loans that it was required to self-report to HUD, including a substantial number of loans that had gone into “early payment default.” However, instead of reporting these loans to HUD as required, Wells Fargo engaged in virtually no self-reporting during the four-year period from 2002 through 2005 and only minimal self-reporting after 2005.
In his capacity as Vice President of Credit-Risk – Quality Assurance at Wells Fargo, Lofrano executed on Wells Fargo’s behalf the annual certifications required by HUD for the Bank’s participation in the Direct Endorsement Lender program for certain years. Lofrano also organized and participated in the working group responsible for creating and implementing Wells Fargo’s self-reporting policies and procedures. In contravention of HUD’s requirements, that group failed to report to HUD loans that Wells Fargo had internally identified as containing material underwriting findings. Moreover, Lofrano received Wells Fargo quality assurance reports identifying thousands of FHA loans with material findings – very few of which Wells Fargo reported to HUD.
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As part of the settlement, Wells Fargo has admitted, acknowledged and accepted responsibility for, among other things, the following conduct: During the period from May 2001 through, on or about Dec. 31, 2008, Wells Fargo submitted to HUD certifications stating that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the Government having to pay FHA insurance claims when certain of those loans defaulted. From May 2001 through January 2003, Wells Fargo’s quality assurance group conducted monthly internal reviews of random samples of the retail FHA mortgage loans that the Bank had already originated, underwritten, and closed, which identified for most of the months that in excess of 25 percent of the loans and in several consecutive months, more than 40 percent of the loans, had a material finding. For a number of the months during the period from February 2003 through September 2004, the material finding rate was in excess of 20 percent. A “material” finding was defined by Wells Fargo generally as a loan file that did not conform to internal parameters and/or specific FHA parameters, contained significant risk factors affecting the underwriting decision and/or evidenced misrepresentation.
Wells Fargo also admitted, acknowledged and accepted responsibility for the following additional conduct: Between 2002 and October 2005, Wells Fargo made only one self-report to HUD, involving multiple loans. During that same period, the Bank identified through its internal quality assurance reviews approximately 3,000 FHA loans with material findings. Further, during the period between October 2005 and December 2010, Wells Fargo only self-reported approximately 300 loans to HUD. During that same period, Wells Fargo’s internal quality assurance reviews identified more than 2,900 additional FHA loans containing material findings that the Bank did not self-report to HUD. The government was required to pay FHA insurance claims when certain of these loans that Wells Fargo identified with material findings defaulted.
Lofrano admitted, acknowledged, and accepted responsibility for, among other things, the following matters in which he participated: From Jan. 1, 2002, until Dec. 31, 2010, he held the position of Vice President of Credit Risk – Quality Assurance at Wells Fargo; in that capacity, he supervised the Decision Quality Management group; in 2004, he was asked to organize a working sub-group to address reporting to HUD; in or about October 2005, he organized a working group that drafted Wells Fargo’s new self-reporting policy and procedures; and during the period October 2005 through Dec. 31, 2010, based on application of the Bank’s new self-reporting policy and by committee decision, Wells Fargo did not report to HUD the majority of the FHA loans that the Bank’s internal quality assurance reviews had identified as having material findings.
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Principal Deputy Assistant Attorney General Mizer thanked the U.S. Attorney’s Office for the Southern District of New York and the U.S. Attorney’s Office for the Northern District of California for their diligent pursuit and successful resolution of this matter and the Commercial Litigation Branch, HUD’s Office of General Counsel and HUD’s Office of Inspector General, for their extraordinary support.
The case settled by today’s settlement is captioned United States v. Wells Fargo Bank, N.A., et. al., 12-cv-7527 (S.D.N.Y.)
United States Attorney’s Office Provides Training on Sexting to Guam Department of Education StaffRead the Press Release
Alicia A.G. Limtiaco, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that the U.S. Attorney’s Office sponsored training on Child Sexual Exploitation, Child Pornography, Sexting, Internet Dangers and Safety Tips, on April 6, 2016. The presenters at the training were U.S. Attorney Alicia Limtiaco, and U.S. Department of Homeland Security/Homeland Security Investigations Special Agents Avery Cepeda and Richard Flores.
The training was attended by over 60 school officials, including administrators, principals, vice principals, psychologists, program coordinators, and others.
Photos:
U.S. Attorney Alicia Limtiaco U.S. Attorney Alicia Limtiaco addressing the Guam Department of Education participants at the training HSI Special Agents Avery Cepeda and Richard Flores during their presentationUnited States Attorney Emily Gray Rice to Speak at Events Honoring Crime Victims and Victim AdvocatesRead the Press Release
CONCORD, NEW HAMPSHIRE: United States Attorney Emily Gray Rice will address crime victims and crime victim advocates at two events being held during the week of April 10 to April 16, 2016 which has been designated as National Crime Victims’ Rights Week. The theme of National Crime Victims’ Rights Week this year is “Serving Victims, Building Trust, and Restoring Hope.”
The New Hampshire Crime Victims’ Rights Celebration will be held April 11 at 9:30 a.m. at St. Paul’s Church in Concord, New Hampshire. The event will feature United States Attorney Rice and New Hampshire Attorney General Joseph Foster. This event is a co-sponsored by the United States Attorney’s Office for the District of New Hampshire, the New Hampshire Attorney General’s Office, the New Hampshire Coalition Against Domestic and Sexual Violence, AmeriCorps Victims Assistance Program and Victims, Inc. The event is open to the public.
United States Attorney Rice will also speak at the Tri-State Advanced Victim Assistance Academy, an annual training event jointly sponsored by the United States Attorney’s Offices in Maine, Vermont and New Hampshire. The Academy is hosted this year by the United States Attorney for the District of New Hampshire and will be held on April 12 and 13, 2016 in Concord. The two day conference will build on the knowledge and skills advocates receive in basic and foundational trainings. The goal is to educate and support victim advocates and individuals who work closely with victims of crime. Additional information for victim support can be found at https://www.justice.gov/usao-nh/programs/victim-witness-assistance-program or by contacting Victim Witness Specialist Jennifer Hunt at the United States Attorney’s Office.
United States Attorney Rice stated: “Crime victims deserve to be treated with empathy and respect. During National Crime Victims’ Rights Week we honor the goals of providing assistance and support to crime victims and the advocates who spend countless hours helping victims every day. As the United States Attorney for the District of New Hampshire and an advocate for the protection and support of all victims, I look forward to working closely with federal, state and local law enforcement and victim advocates to make sure victims’ voices are heard, their concerns addressed, and their role as victims of crime are recognized. Together we can ensure justice for victims and support their healing.”
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U.S. Customs and Border Protection Officers Arrest Pair Attempting to Smuggle Marijuana into the Virgin IslandsRead the Press Release
St. Thomas, USVI – Sierra Wimberly, 25, and Noelle Bishopel, 27, both Atlanta, Georgia residents, made their initial appearances on April 7, 2016, before U.S. Magistrate Judge Ruth Miller after being charged in separate complaints with possession with intent to distribute marijuana, United States Attorney Ronald W. Sharpe announced. Wimberly and Bishopel were both released on unsecured $10,000 bonds pending further proceedings.
According to the complaints, on April 6, 2016, at the Cyril E. King Airport, St. Thomas, Virgin Islands, a U.S. Customs and Border Protection (CBP) K-9 detected narcotics in checked bags belonging to Wimberly and Bishopel, who had arrived on a Delta Airlines flight from Atlanta. When Wimberly and Bishopel de-planed the aircraft, they were taken to secondary inspection where their checked bags were examined. CBP officers seized and field-tested approximately 4.9 kilograms of marijuana from Wimberly’s bag and approximately 10.25 kilograms of marijuana from Bishopel’s bag.
Under federal law if convicted of possession with intent to distribute marijuana, Wimberly and Bishopel each face a maximum of five years in prison and a $250,000 fine. This case is being investigated by CBP and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). It is being prosecuted by Assistant United States Attorney Everard Potter.
United States Attorney Sharpe reminds the public that a complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
U.S. Attorney’s Office Supports National Crime Victims’ Rights WeekRead the Press Release
KNOXVILLE, Tenn. - The Office for Victims of Crime (OVC) helps lead communities throughout the country in their annual observances of National Crime Victims’ Rights Week (NCVRW) every April by promoting victims’ rights, and honoring crime victims and those who advocate on their behalf. This year’s NCVRW will be held April 10-16, 2016. The theme -- Serving Victims. Building Trust. Restoring Hope. -- presents the opportunity to highlight the importance of providing needed services at the earliest stage of victimization. Early intervention helps prevent both further victimization and involvement in the criminal justice system, thus addressing the cycle of violence and restoring hope for the future.
Beginning at 10:00 a.m., on Wednesday, Apr. 13, 2016, various agencies, including the U.S. Attorney’s Office for the Eastern District of Tennessee, will celebrate NCVRW with displays in the courtyard of the Howard Baker Federal Courthouse, Knoxville. These displays will commemorate the advancement of victims’ rights by honoring all champions in advocating for expanded support and services to communities affected by crime.
NCVRW honors and celebrates the achievements of the past 30 years in securing rights, protections, and services for victims. The bipartisan Victims of Crime Act (VOCA), passed by Congress in 1984, created a national fund to ease victims’ suffering. Financed by fines and penalties paid by offenders, the Crime Victims Fund supports services for victims of all types of crime, including assistance for homicide survivors, survivors of child sexual abuse and victims of human trafficking, as well as rape crisis centers and domestic violence programs among others. VOCA also funds victim compensation programs that pay victims’ out-of-pocket expenses such as counseling, funeral expenses, and lost wages.
“If victims are to trust that the criminal justice system will work for them, we must meet them where they are—physically, culturally, and emotionally,” said Joye E. Frost, Director, OVC, U.S. Department of Justice. “When we take the time to focus on the victim in the aftermath of crime—to address their needs for safety and justice—we can begin to build trust and restore the hope of those victims and their communities. We all play a role in helping victims as they rebuild their lives.”
OVC encourages widespread participation in the week’s events and in other victim-related observances throughout the year. For additional ideas on how to support victims of crime, visit the Office for Victims of Crime website, www.ovc.gov.
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U.S. Attorneys for the Northern District of California and Southern District of New York Announce $1.2 Billion Settlement of Claims Against Wells Fargo Bank, N.A., for Improper Mortgage Lending PracticesRead the Press Release
Brian J. Stretch, the United States Attorney for the Northern District of California, Preet Bharara, United States Attorney for the Southern District of New York, Benjamin C. Mizer, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division, Julián Castro, Secretary of the U.S. Department of Housing and Urban Development (HUD), and David A. Montoya, Inspector General of HUD (HUD-OIG), announced today that the United States has settled civil mortgage fraud claims against Wells Fargo Bank, N.A. (“Wells Fargo” or the “Bank”), and Wells Fargo executive Kurt Lofrano (Lofrano), stemming from Wells Fargo’s participation in the Federal Housing Administration (FHA) Direct Endorsement Lender Program. In the settlement, Wells Fargo agreed to pay $1.2 billion and admitted, acknowledged, and accepted responsibility for, among other things, certifying to HUD, during the period from May 2001 through December 2008, that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the Government having to pay FHA insurance claims when certain of those loans defaulted. The agreement resolves an investigation conducted by the U.S. Attorney’s Office for the Northern District of California into whether American Mortgage Network, LLC (AMNET), a mortgage lender acquired by Wells Fargo in 2009, falsely certified and submitted ineligible residential mortgage loans for FHA insurance. The agreement also resolves the United States’ civil claims in its lawsuit in the Southern District of New York as well as an investigation conducted by the U.S. Attorney’s Office for the Southern District of New York regarding Wells Fargo’s FHA origination and underwriting practices subsequent to the claims in its lawsuit.
Northern District of California U.S. Attorney Brian Stretch said: “Misconduct in the mortgage industry helped lead to a destructive financial crisis that spanned the globe. American Mortgage Network’s origination of FHA-insured loans that did not comply with Government requirements also caused major losses to the public fisc. Today’s settlement demonstrates the Department of Justice’s resolve to pursue remedies against those who engaged in this type of misconduct.”
Manhattan U.S. Attorney Preet Bharara said: “Today, Wells Fargo, one of the biggest mortgage lenders in the world, has been held responsible for years of reckless underwriting, while relying on government insurance to deal with the damage. Wells Fargo has long taken advantage of the FHA mortgage insurance program, designed to help millions of Americans realize the dream of home ownership, to write thousands and thousands of faulty loans. Driven to maximize profits, Wells Fargo employed shoddy underwriting practices to drive up loan volume, at the expense of loan quality. Even though Wells Fargo identified through internal quality assurance reviews thousands of problematic loans, the Bank decided not to report them to HUD. As a result, while Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust. With today’s settlement, Wells Fargo has finally resolved the years-long litigation, adding to the list of large financial institutions against which this Office has successfully pursued civil fraud prosecutions.”
HUD Secretary Julián Castro said: “This Administration remains committed to holding lenders accountable for their lending practices. The $1.2 billion settlement with Wells Fargo is the largest recovery for loan origination violations in FHA’s history. Yet, this monetary figure can never truly make up for the countless families that lost homes as a result of poor lending practices.”
Principal Deputy Assistant Attorney General Benjamin C. Mizer said: “This settlement is another step in the Department of Justice’s continuing efforts to hold accountable FHA approved lenders that knowingly submit false claims at the expense of American homeowners and taxpayers. In addition to today's resolution with Wells Fargo, the Department has pursued similar misconduct by many other lenders, returning more than $4 billion to the FHA fund and the U.S. Treasury, and filing suit where appropriate. We remain committed to protecting the public fisc from all who seek to abuse it, whether they do business on Wall Street or Main Street.”
HUD Inspector General David A. Montoya said: “This matter is not just a failure by Wells Fargo to comply with federal requirements in FHA’s Direct Endorsement Lender program – it’s a failure by one of our trusted participants in the FHA program to demonstrate a commitment to integrity and to ordinary Americans who are trying to fulfill their dreams of homeownership.”
According to the Second Amended Complaint filed in Manhattan federal court:
WELLS FARGO has been a participant in the Direct Endorsement Lender program, a federal program administered by FHA. As a Direct Endorsement Lender, WELLS FARGO has the authority to originate, underwrite, and certify mortgages for FHA insurance. If a Direct Endorsement Lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder or servicer of the loan may submit an insurance claim to HUD for the outstanding balance of the defaulted loan, along with any associated costs, which HUD must then pay. Under the Direct Endorsement Lender program, neither FHA nor HUD reviews a loan for compliance with FHA requirements before it is endorsed for FHA insurance. Direct Endorsement Lenders are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance and maintaining a quality control program that can prevent and correct any deficiencies in their underwriting. The quality control program requirements include conducting a full review of all loans that go 60 days into default within the first six payments, known as “early payment defaults”; taking prompt and adequate corrective action upon discovery of fraud or serious underwriting problems; and disclosing to HUD in writing all loans containing evidence of fraud or other serious underwriting deficiencies. WELLS FARGO failed to comply with these basic requirements.
First, between at least May 2001 and October 2005, WELLS FARGO, the largest HUD-approved residential mortgage lender, engaged in a regular practice of reckless origination and underwriting of its FHA retail loans, all the while knowing that it would not be responsible when the defective loans went into default. To maximize its loan volume (and profits), WELLS FARGO elected to hire temporary staff to churn out and approve an ever increasing quantity of FHA loans, but neglected to provide this inexperienced staff with proper training. At the same time, WELLS FARGO’s management applied pressure on its underwriters to approve more and more FHA loans. The Bank also imposed short turnaround times for deciding whether to approve the loans, employed lax underwriting standards and controls, and paid bonuses to underwriters and other staff based on the number of loans approved. Predictably, as a result, WELLS FARGO’s loan volume and profits soared, but the quality of its loans declined significantly. Yet, when WELLS FARGO’s senior management was repeatedly advised by its own quality assurance reviews of serious problems with the quality of the retail FHA loans that the Bank was originating, management disregarded the findings and failed to implement proper and effective corrective measures, leaving HUD to pay hundreds of millions of dollars in claims for defaulted loans.
Second, WELLS FARGO failed to self-report to HUD the bad loans that it was originating, in violation of FHA program reporting requirements. During the period 2002 through 2010, HUD required Direct Endorsement Lenders to perform post-closing reviews of the loans that they originated and to report to HUD in writing loans that contained fraud or other serious deficiencies. This requirement provided HUD with an opportunity to investigate the defective loans and request reimbursement for any claim that HUD had paid or request indemnification for any future claim, as appropriate. During this nine-year period, WELLS FARGO, through its post-closing reviews, internally identified thousands of defective FHA loans that it was required to self-report to HUD, including a substantial number of loans that had gone into “early payment default.” However, instead of reporting these loans to HUD as required, WELLS FARGO engaged in virtually no self-reporting during the four-year period from 2002 through 2005, and only minimal self-reporting after 2005.
In his capacity as Vice President of Credit-Risk – Quality Assurance at WELLS FARGO, LOFRANO executed on WELLS FARGO’s behalf the annual certifications required by HUD for the Bank’s participation in the Direct Endorsement Lender program for certain years. LOFRANO also organized and participated in the working group responsible for creating and implementing WELLS FARGO’s self-reporting policies and procedures. In contravention of HUD’s requirements, that group failed to report to HUD loans that WELLS FARGO had internally identified as containing material underwriting findings. Moreover, LOFRANO received WELLS FARGO quality assurance reports identifying thousands of FHA loans with material findings – very few of which WELLS FARGO reported to HUD.
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As part of the settlement, Wells Fargo has admitted, acknowledged, and accepted responsibility for, among other things, the following conduct: During the period from May 2001 through on or about December 31, 2008, Wells Fargo submitted to HUD certifications stating that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the Government having to pay FHA insurance claims when certain of those loans defaulted. From May 2001 through January 2003, Wells Fargo’s quality assurance group conducted monthly internal reviews of random samples of the retail FHA mortgage loans that the Bank had already originated, underwritten, and closed which identified for most of the months that in excess of 25 percent of the loans, and in several consecutive months, more than 40 percent of the loans, had a material finding. For a number of the months during the period from February 2003 through September 2004, the material finding rate was in excess of 20%. A “material” finding was defined by Wells Fargo generally as a loan file that did not conform to internal parameters and/or specific FHA parameters, contained significant risk factors affecting the underwriting decision, and/or evidenced misrepresentation.
Wells Fargo also admitted, acknowledged, and accepted responsibility for the following additional conduct: Between 2002 and October 2005, Wells Fargo made only one self-report to HUD, involving multiple loans. During that same period, the Bank identified through its internal quality assurance reviews approximately 3,000 FHA loans with material findings. Further, during the period between October 2005 and December 2010, Wells Fargo only self-reported approximately 300 loans to HUD. During that same period, Wells Fargo’s internal quality assurance reviews identified more than 2,900 additional FHA loans containing material findings that the Bank did not self-report to HUD. The Government was required to pay FHA insurance claims when certain of these loans that Wells Fargo identified with material findings defaulted.
Lofrano admitted, acknowledged, accepted responsibility for, among other things, the following matters in which he participated: From January 1, 2002, until December 31, 2010, he held the position of Vice President of Credit Risk – Quality Assurance at Wells Fargo; in that capacity, he supervised the Decision Quality Management group; in 2004, he was asked to organize a working sub-group to address reporting to HUD; in or about October 2005, he organized a working group that drafted Wells Fargo’s new self-reporting policy and procedures; and during the period October 2005 through December 31, 2010, based on application of the Bank’s new self-reporting policy and by committee decision, Wells Fargo did not report to HUD the majority of the FHA loans that the Bank’s internal quality assurance reviews had identified as having material findings.
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Mr. Stretch and Mr. Bharara thanked HUD’s Office of General Counsel, HUD-OIG, and the Commercial Litigation Branch of the U.S. Department of Justice’s Civil Division for their extraordinary assistance with the prosecution and settlement of this case.
This resolution with Wells Fargo is the latest in a string of civil fraud cases pursued by the United States in recent years alleging fraudulent lending practices by residential mortgage lenders.
The American Mortgage Network investigation was handled by Assistant U.S. Attorney Sara Winslow with assistance from Jacqueline Hollar.
U.S. Attorney Polite Announces Events in Honor of National Crime Victims’ Rights WeekRead the Press Release
U.S. Attorney Kenneth A. Polite announced that his Office will observe National Crime Victims’ Rights Week through the following special events and programs:
Saturday, April 9, 2016 Crime Victim’s Rights Informational Table
4:00 pm – 7:00 pm Walmart Superstore, 1901 Tchoupitoulas St. New Orleans
Wednesday, April 13, 2016 Crime Victim’s Rights Informational Table
5:00 pm – 8:00 pm Young Leadership Council Wednesday at the Square,
Lafayette Square, 601 S Maestri Place, New Orleans
Thursday, April 14, 2016 Crime Victim’s Rights Informational Table
10:00 am Washington-St. Tammany Parish Crime Victim’s Recognition Ceremony
Washington-St. Tammany Parish Justice Center
701 N. Columbia St., Covington
Friday, April 15, 2016 Crime Victim’s Rights Informational Table
10:00 am -1:00 pm Circle Food Store, 1522 St. Bernard Avenue, New Orleans
Saturday, April 16, 2016 Crime Victim’s Rights Informational Table
9:00 am – 12:00 pm The Good Shepherd Nativity School
Community Health & Wellness Fair
Kingsley House Gymnasium
1600 Constance St., New Orleans
Members of the U.S. Attorney’s Office will be on-hand at each of these events. All members of the public are welcome to attend, where they can obtain information on victims’ rights and federal resources through the DOJ’s Office for Victims of Crime (“OVC”) and the Crime Victims Fund.
National Crime Victims’ Rights Week, celebrated nationally from April 10-16, 2016, honors and celebrates the achievements of the past thirty years in securing rights, protections, and services for victims. This year’s theme—Serving Victims. Building Trust. Restoring Hope.—presents the opportunity to highlight the importance of providing needed services at the earliest stage of victimization. Early intervention helps prevent both further victimization and involvement in the criminal justice system, thus addressing the cycle of violence and restoring hope for the future.
OVC encourages widespread participation in the week’s events and in other victim-related observances throughout the year. The U.S. Department of Justice will host OVC’s annual Service Awards Ceremony on Tuesday, April 12, in Washington, DC, to honor outstanding individuals and programs that serve victims of crime. For additional information about this year’s National Crime Victims’ Rights Week and how to assist victims in your community, please contact The U.S. Attorney’s Office, Eastern District of Louisiana Victim/Witness Unit at 504-680-3000 or visit www.usdoj.gov/usao/lae. For additional ideas on how to support victims of crime, visit the Office for Victims of Crime website, www.ovc.gov.
Two Men Sentenced for Armed Robbery of Fast Food RestaurantRead the Press Release
STATESVILLE, N.C. – Two men responsible for the armed robbery of an area fast food restaurant were sentenced to prison yesterday, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Dashawn Raquan Hunt, 27, and Davon Santario McKnight, 26, both of Charlotte, were sentenced to 192 and 87 months in prison, respectively. They were also each ordered by U.S. District Judge Richard L. Voorhees to spend three years under court supervision after they are released from prison.
“Over the past year, efforts have been aimed at crime prevention. However, the vigorous prosecution of violent criminals who spread fear in our communities and put innocent lives at risk remains a priority for my office. I would like to thank our local and federal law enforcement partners for their thorough investigation of this case that resulted in two dangerous criminals being taken off our streets,” said U.S Attorney Rose.
According to filed court documents and court proceedings, on February 5, 2014, Hunt and McKnight, wearing hoodies, masks, gloves, and brandishing handguns, entered a Firehouse Subs restaurant located at 14039 East Independence Boulevard in Indian Trail, N.C. The two men ordered some restaurant employees and patrons to get on the floor at gunpoint and told other employees to hand them money from the cash register and the safe. Hunt and McKnight then then fled the scene in a Ford Crown Victoria with $1,000 in cash. According to court records, a concerned citizen saw the pair leaving the restaurant and thinking their behavior was suspicious called 9-1-1. A police officer responding to the call stopped the vehicle and after approaching the car he noticed that one person was in the driver’s seat and another was lying down in the back seat. Court records show while the police officer called for back-up the two robbers took off in their car and sped away toward Charlotte. According to court records, Hunt and McKnight were arrested shortly thereafter, after the driver crashed his car into another vehicle.
According to court records, four days prior to this armed robbery, Hunt, assisted by Toburia Qunita Bennett, robbed at gunpoint a McAllister’s Deli located in Mooresville, N.C. According to court documents, on February 1, 2014, at about 4:00 a.m., Hunt approached a deliveryman who was making a delivery at the restaurant. Court records show that Hunt pointed his gun at the deliveryman and directed him inside the restaurant, where he ordered the victim to put the store’s safe on a dolly and wheel it out to the parking lot. Hunt then tied up the deliveryman inside the store and fled. Court records indicate that the deliveryman was able to get loose and call the police. Officers later found the store’s safe still sitting on the dolly in the restaurant’s parking lot.
According to court records, law enforcement located Bennett’s vehicle at a nearby gas station. Bennett denied to law enforcement any involvement in the robbery and was arrested at the scene for driving with an expired license. Court records indicate that while Bennett was sitting in her car, Hunt went to a nearby QT gas station, pointed a gun at the cashier and demanded the keys to the attendant’s car. The attendant handed over the keys to Hunt, who fled the scene in the stolen vehicle.
Bennett, 28, of Charlotte, later admitted to knowing that Hunt had committed other robberies and that he used a gun to carry out those robberies. She pleaded guilty to conspiracy to commit armed robbery and was sentenced in February 2016 to 43 months in prison and three years of supervised release.
Hunt and McKnight pleaded guilty to robbery charges in April 2015. Hunt also pleaded guilty to carjacking and use of a firearm in furtherance of a crime of violence in connection with the McAllister’s Deli robbery. They are both currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
U.S. Attorney Rose thanked John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Chief Damon Williams of the Mooresville Police Department; Sheriff Eddie Cathey of the Union County Sheriff’s Office; Chief M.E. Plyler, Jr. of the Stallings Police Department; Chief Kerr Putney of the Charlotte-Mecklenburg Police Department; and Chief Rob Hunter of the Matthews Police Department for investigating the case.
Assistant U.S. Attorney Robert Gleason of the U.S. Attorney’s Office in Charlotte was in charge of the prosecution.
Two Men Plead Guilty in Major Cocaine ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Javier Pagan, Jr. and Samuel Hernandez pleaded guilty to conspiracy to possess with intent to distribute, and to distribute, cocaine, before U.S. District Judge Elizabeth A. Wolford. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that between 2013 and June 10, 2015, law enforcement officers have been investigating a drug trafficking organization led by defendants David Jesus Pagan and Rafael Burgos, Jr. During the course of the investigation, it was determined that the defendants distributed multiple kilograms of cocaine throughout the Dunkirk area.
Javier Pagan and Hernandez were arrested in June of 2013 along with David Jesus Pagan, Burgos, as well as Alvin Torres, Jr. and Angel Pierluissi. Search warrants were executed at the time of the arrests at six properties which resulted in the recovery of more than seven kilograms of cocaine and approximately $175,000 in cash as well as an AR-15 assault rifle with a 30 round magazine.
Charges are pending against David Jesus Pagan, Burgos, Alvin Torres, Jr. and Angel Pierluissi. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The indictments are the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office, the Dunkirk Police Department, under the direction of Chief David C. Ortolano, the Chautauqua County Sheriff’s Office, under the direction of Sheriff Joseph A. Gerace, the Cattaraugus County Sheriff’s Office, under the direction of Sheriff Timothy S. Whitcomb, and the Chautauqua County District Attorney’s Office, under the direction of Patrick Swanson.
Hernandez will be sentenced on July 19, 2016 at 4:00 p.m. before Judge Wolford. Sentencing for Pagan will be scheduled at a later date.
Two Defendants Plead Guilty to Child ExploitationRead the Press Release
SACRAMENTO, Calif. — Jason S. Wymer, 44, of Citrus Heights, pleaded guilty today to sexual exploitation of children, United States Attorney Benjamin B. Wagner announced. Previously, on March 25, 2016, co-defendant Stormy M. Avers, 36, of Placerville, pleaded guilty to sexual exploitation of children.
According to court documents, the case began when a parent accidentally texted a photo of her eight-year-old to a wrong number who turned out to be Wymer. Thinking he received the picture from a child, Wymer responded and began a dialog. The parent brought the cellphone to the FBI, and an undercover employee, pretending to be an eight-year-old child, continued the dialog with Wymer, whom investigators were subsequently able to locate.
Upon his arrest, law enforcement found photos of Wymer and co-defendant Avers molesting a child, who was approximately three years old, in order to create child pornography. Avers had custody and control of the child at the time. In pleading guilty, Wymer admitted to this conduct, and also to a separate instance of sexual exploitation of a four-year-old child in August of 2011.
A third defendant, Jolene Davis, 40, of Stockton, is charged with having participated with Wymer in the sexual exploitation of a child of whom she had control or custody. Davis is scheduled to appear for a status conference before Judge Burrell on April 22, 2016. The charges against Davis are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Wymer is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on July 29, 2016. Wymer faces up to 30 years in federal prison. Ayers is scheduled to be sentenced on June 24, 2016. She faces up to 20 years in federal prison. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the Federal Bureau of Investigation and the Sacramento Internet Crimes against Children Task Force. Assistant United States Attorney Matthew G. Morris is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Texas Man Pleads Guilty in Drug ConspiracyRead the Press Release
Aldrin Javier Espinoza, 23, of Pharr, Texas, pled guilty today for his part in a three-count indictment charging him with Conspiracy to Distribute Controlled Substance, James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced. Espinoza’s sentencing hearing has been set for June 24, 2016, and he faces penalties of no less than 10 years in federal prison, a fine of up to $10,000,000, at least 5 years supervised release and a $100 special assessment.
Evidence in support of this prosecution was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. The case was investigated by the Drug Enforcement Administration and prosecuted by Assistant United States Attorney Deirdre A. Durborow.
Tampa Man Pleads Guilty to Federal Drug ChargesRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Raheem Lavontae Bryant (23, Tampa) has pleaded guilty to five counts of distributing crack cocaine and powder cocaine. He faces a minimum mandatory penalty of 5 years, up to 40 years, in federal prison. A sentencing date has not yet been set.
According to court documents, between December 2015 and January 2016, Bryant sold crack and powder cocaine, on five separate occasions, to undercover detectives from the Hillsborough County Sheriff’s Office. The transactions took place in the parking lots of various businesses in Tampa and Thonotosassa.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hillsborough County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Taylor G. Stout.
This is another case prosecuted as part of the Department of Justice’s Project Safe Neighborhoods (PSN) Comprehensive Anti-Gang Initiative (CAGI). The program’s objective is to reduce criminal gangs, violent crime, illegal drugs, and guns through combined enforcement, prosecution, prevention, and re-entry efforts.
Superseding Indictment Charges Duell with Five Counts of Perjury in Schenectady Arson Homicide CaseRead the Press Release
ALBANY, NEW YORK – A superseding indictment filed today charges Jennica Duell with five counts of making false declarations before a federal grand jury, announced United States Attorney Richard S. Hartunian and Special Agent in Charge Delano Reid of the Bureau of Alcohol, Tobacco, Firearms & Explosives.
The superseding indictment alleges that the false declarations were made before a grand jury conducting an investigation into the fire on or about May 2, 2013 at 438 Hulett Street in Schenectady, New York, that caused the deaths of David Terry and three young children, seriously injured another child, and destroyed the building and the personal property inside.
The superseding indictment alleges that Duell testified under oath before the federal grand jury on May 24, 2013 and January 31, 2014 and knowingly made material declarations on each date which were irreconcilably contradictory and inconsistent to the degree that one of them was necessarily false. Each count alleges that on May 24, 2013, Duell testified regarding specific events that occurred May 1-2, 2013, and then, on January 31, 2014, gave irreconcilably contradictory testimony about those events. The specific events alleged included declarations about: Duell’s relationships with David Terry and another man; Duell and others traveling from Saratoga Springs to 438 Hulett Street; Duell and others getting gasoline; how the fire at 438 Hulett Street was started, and by whom; and discussion that the story for Duell and others would be that they were in Saratoga Springs when the fire was started.
Duell, age 28, of Schenectady, New York, is detained pending trial. Her arraignment on the superseding indictment is scheduled for Tuesday, April 19, 2016, at 12:30 pm before U.S. Magistrate Judge Christian F. Hummel in U.S. District Court in Albany, New York. The scheduled trial date is May 16, 2016 in Albany.
The superseding indictment is merely an accusation and the defendant is presumed innocent unless and until proven guilty in a court of law. If convicted, Duell faces a maximum sentence of imprisonment for five years and a $250,000 fine on each count, and a term of supervised release of up to three years.
The charges resulted from an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives of the U.S. Department of Justice, the Schenectady Police Department, and the Schenectady Fire Department. The case is being prosecuted by First Assistant U. S. Attorney Grant C. Jaquith and Assistant United States Attorney Wayne A. Myers.
Further questions or inquiries may be directed to First Assistant U.S. Attorney Jaquith at 518-431-0247.
The Bureau of Alcohol, Tobacco, Firearms and Explosives notes that there is a reward of up to a total of $40,000 for information leading to the arrest and conviction of the person(s) responsible for the arson that occurred on May 2, 2013 at 438 Hulett Street in Schenectady, resulting in personal injury and death. All information will be treated confidentially and the callers will remain anonymous if requested. Anyone having information should call the ATF Albany Field Office at 518-431-4182, or email [email protected].
St. Albans Man Held on Federal Gun ChargeRead the Press Release
The Office of the United States Attorney for the District of Vermont stated today that Derrick D. Jones, age 33, appeared in Federal Court today at his arraignment on a Grand Jury indictment charging him with possessing a .32 cal Smith & Wesson handgun as a convicted felon.
According to court filings, on March 7, 2016, the Vermont State Police, St. Albans Barracks (“VSP”) executed a State search warrant at Jones’s St. Albans, Vermont apartment. Officials seized 85 Oxycodone pills; a 25 gram bag of cocaine; $1,607 in cash; several counterfeit $50 and $100 bills; and a loaded .32 caliber Smith & Wesson revolver. Jones was charged with drug violations in State court and released on conditions. Because he has a prior felony conviction in New York State, the VSP contacted the Bureau of Alcohol, Tobacco & Firearms and the U.S. Attorney’s Office.
On March 31, 2016, a federal Grand Jury indicted Jones for possessing the .32 cal. handgun as a convicted felon. On April 7, 2016, the VSP arrested Jones on the federal warrant at his St. Albans apartment. Finding him with 20 more Oxycodone pills, the VSP obtained another search warrant. Officials found in his apartment 2.7 grams of heroin; four grams of crack cocaine; 19 grams of marijuana; and handgun ammunition.
At a hearing today before U.S. Magistrate Judge John M. Conroy, Jones was detained in the custody of the U.S. Marshal’s Service pending trial. Meanwhile, the VSP filed new State charges based upon the drugs seized on April 7.
The maximum penalty for the federal firearms charge is 10 years imprisonment. Jones is represented by Assistant Federal Public Defender Elizabeth Quinn. The United States is represented by Assistant U.S. Attorney Bill Darrow. The indictment is an accusation only and that the defendant is presumed innocent until and unless proven guilty.
Southern Illinois Residents Charged with Methamphetamine OffenseRead the Press Release
Union and Williamson County residents were indicted on April 5, 2016, for a methamphetamine offense, Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Troy A. Smith, 44, of Jonesboro, and Jeremiah Lee Jae Sadler, a/k/a "Jeremiah L. Sadler, 36, of Marion, are charged in a one-count indictment charging conspiracy to distribute methamphetamine. The indictment alleges that the offense occurred between 2015 and February 2016, in Union and Williamson Counties. Sadler made his initial appearance in federal court on April 7, 2016. He is being held without bond pending an April 11, 2016, detention hearing. Smith is scheduled to make his initial appearance on April 11, 2016.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The methamphetamine offense carries a maximum penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Southern Illinois Enforcement Group, Southern Illinois Drug Task Force, and Drug Enforcement Administration. The Union and Williamson County State’s Attorney’s Offices also assisted in the investigation.
Roseville Resident Sentenced for Loan Modification and Foreclosure Rescue Scam That Targeted Spanish-Speaking CommunityRead the Press Release
SACRAMENTO, Calif. — Ligia Sandoval Spafford (Sandoval), 48, of Roseville, was sentenced Thursday by U.S. District Judge Troy L. Nunley to two years and three months in prison for a scheme to defraud distressed homeowners, United States Attorney Benjamin B. Wagner announced. Sandoval was ordered to self-surrender on June 9, 2016.
Sandoval paid $115,065.00 in restitution, the full amount of restitution ordered by the Court, to compensate the victims for the losses that they incurred as a result from this fraud scheme. In February 2015, Sandoval and her then husband, Martin Wayne Flanders, 51, of Roseville, pleaded guilty to mail fraud for the fraud scheme. On October 29, 2015, Flanders was sentenced to six years and five months in prison.
In sentencing, Judge Nunley stated: “She knew what was going on and enticed these people to become part of this scheme. They trusted her. … She ruined some peoples’ lives. That she paid restitution does not do anything to take away from the anxiety and fear they [the victims] had at the time that this was occurring. These victims were devastated.”
According to court documents, between 2008 and 2010, Flanders charged clients advance fees in exchange for a number of financial services, including loan modifications, mortgage loan audits, credit repair, debt relief, bankruptcy filings, and a program to sell homes to “investors” with a rent-to-own option. Sandoval and Flanders marketed these services to economically distressed homeowners with particular emphasis on those who were Spanish speakers. Sandoval, a Spanish-speaker, promoted the services she and Flanders, who was not a fluent Spanish speaker, offered during a radio program that aired twice weekly on a Bay Area Spanish‑language Christian radio station, Radio Luz. Sandoval who was a licensed real estate agent, further assisted Flanders in the fraud scheme by interacting with and explaining the services to Spanish-speaking clients. The services offered by Flanders and Sandoval were also advertised on a Spanish-language television station, Univision, and in Spanish-language magazines. About 98 percent of the defendants’ clients were of Hispanic descent, some of whom spoke little to no English.
Sandoval and Flanders made numerous false statements to investors as to the success of the programs being offered or refunds that would be available if the programs were not successful. “Ghost offers” – i.e., fictitious offers to purchase the victim’s property through short sale – and “skeleton bankruptcies” – i.e., sham bankruptcy petitions that were quickly dismissed by the bankruptcy court – were also used by Sandoval or Flanders to try to stall the foreclosure process. At least 25 to 30 individuals paid for services and did not receive them or did not receive refunds when the programs failed to deliver as promised. The total loss to the victims is at least $115,000. Some homeowners who were not able to obtain relief were foreclosed upon by their lenders.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Todd A. Pickles and Shelley Weger prosecuted the case.
Rosebud Man Sentenced for Assault with a Dangerous Weapon and Assaulting a Federal OfficerRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rosebud, South Dakota, man convicted of Assault with a Dangerous Weapon and Assaulting, Resisting, Opposing and Impeding a Federal Officer was sentenced on April 4, 2016, by U.S. District Judge Roberto A. Lange.
Eric Joseph Oliver, age 34, was sentenced to 40 months in custody, folllowed by two years of supervised release, and a $200 special assessment to the Federal Crime Victims Fund.
Oliver was indicted by a federal grand jury on July 14, 2015, for Assault with a Dangerous Weapon, Assault Resulting in Serious Bodily Injury, Assault by Strangulation and Suffocation, and Assaulting, Resisting, Opposing, and Impeding a Federal Officer. He pled guilty to Assault with a Dangerous Weapon and Assaulting a Federal Officer on January 7, 2016.
On the evening of May 30, 2015, Oliver and his girlfriend, the victim, were at a home in Rosebud. An argument ensued between the couple and Oliver would not let the victim leave. Oliver hit the victim in the face with his hands and stabbed her with a sharp instrument. The victim sustained two shallow stab wounds; one to the right side of her neck and one to the top of her head. The victim was able to escape and call Rosebud Sioux Tribe Law Enforcement Services for assistance. The victim was transported to the Indian Health Services Hospital in Rosebud to receive medical care.
Two officers responded to the call, and Oliver was non-compliant with them. Oliver was escorted out of the house and once outside of the home, he kicked one of the officers twice and spat at another officer’s face.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services and Federal Bureau of Investigation. Assistant U.S. Attorney Carrie G. Sanderson prosecuted the case.
Oliver was immediately turned over to the custody of the U.S. Marshals Service.
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Rocklin Identity Thief Sentenced to 3 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Melvin Lee Gregory, 33, of Oroville, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to three years in prison: two years for participating in a bank fraud and identity theft scheme and one year for violating terms of probation, United States Attorney Benjamin B. Wagner announced.
According to court documents, on April 2, 2015, Gregory was released from federal prison after serving a four-year sentence for a previous conviction. Between April 2, 2015, and August 22, 2015, while on probation, Gregory opened a bank account and deposited several forged checks. On August 22, 2015, Gregory was observed attempting to break into and steal U.S. Mail from a Roseville mailbox, and minutes later he successfully stole U.S. Mail from a Rocklin mailbox. When Gregory was arrested by Rocklin Police, he was in possession of stolen U.S. Mail, burglary tools, and stolen identification documents. Gregory pleaded guilty on November 17, 2015.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated: “We are working closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those responsible for complex Identity Fraud Schemes and to protect postal customers’ mail and personal information from theft.”
This case was the product of an investigation by the United States Postal Inspection Service and the Rocklin Police Department. Assistant United States Attorney Michelle Rodriguez prosecuted the case.
Richfield man sentenced to prison for possessing child pornographyRead the Press Release
A Richfield man was sentenced to 6 1/2 years in prison for receiving child pornography, Acting U.S. Attorney Carole S. Rendon said.
Khalid Farmer Black was sentenced to 78 months in prison. He pleaded guilty earlier this year to one count of receipt of visual depictions of minors engaged in sexually explicit conduct.
This case was prosecuted by Assistant U.S. Attorney Michael A. Sullivan following an investigation by the FBI
Repeat Sex Offender Sentenced to 30 Years in Prison for Creating Video of His Rape of a ChildRead the Press Release
A repeat sex offender who repeatedly raped a child left in his care was sentenced today in U.S. District Court in Seattle to 30 years in prison and lifetime supervised release, announced U.S. Attorney Annette L. Hayes. LEROY ANTHONY WILLIAMS, 33, was arrested in September 2014, when the victim’s mother called Auburn Police after finding a video of a sexual assault of a child on his phone. WILLIAMS attempted to destroy the phone before police arrived, but was unsuccessful. At sentencing U.S. District Judge Robert S. Lasnik said WILLIAMS’ conduct was “horribly depraved and awful…. We need to get you off the streets and away from children.”
According to records filed in the case, an Auburn resident called 9-1-1 on September 29, 2014 after finding a video on WILLIAMS’ phone showing him raping an 11-year-old child. WILLIAMS has a prior conviction as a juvenile for sexually assaulting a 6-year-old child and has repeatedly failed to register as a sex offender as required by law. Because of his prior conviction WILLIAMS is subject to a 25-year mandatory minimum prison term.
Federal charges were brought in October 2014. WILLIAMS pleaded guilty on December 17, 2015. Following today’s sentencing he will be transferred to King County to face charges for the rape of the child in this case.
The case was investigated by the Auburn Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
The case was prosecuted by Assistant United States Attorney Matthew Hampton.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc
Rapid City Woman Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that Rapid City, South Dakota, woman convicted of Conspiracy to Distribute a Controlled Substance was sentenced on March 25, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Susan Land, age 43, was sentenced to 36 months in custody, followed by four years of supervised release, and a $100 special assessment to the Federal Criminal Victims Fund.
Land was indicted for conspiracy to distribute methamphetamine by a federal grand jury on November 19, 2014. She pled guilty on December 4, 2015.
On September 22, 2014, Land conspired and agreed with other persons, and travelled from North Dakota, to intentionally distribute 83 grams of methamphetamine to South Dakota. Land distributed more than 200 grams of methamphetamine during the course of this conspiracy.
This case was investigated by the Unified Narcotics Enforcement Team, United States Drug Enforcement Administration, South Dakota Division of Criminal Investigation, Pennington County Sheriff’s Office, and the Rapid City Police Department. Assistant U.S. Attorney Ted L. McBride prosecuted the case.
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Pine Ridge Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a Pine Ridge, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on March 25, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Jay Dooley, age 23, was sentenced to 120 months in custody, followed by 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. He pled guilty on December 11, 2015.
Beginning in February of 2014, Dooley obtained methamphetamine from Corey Thompson and others, which he intended to distribute within South Dakota. Dooley distributed more than 500 grams of methamphetamine during the course of this conspiracy.
This case was investigated by the Unified Narcotics Enforcement Team, United States Drug Enforcement Administration, South Dakota Division of Criminal Investigation, Pennington County Sheriff’s Office, and the Rapid City Police Department. Assistant U.S. Attorney Ted L. McBride prosecuted the case.
Dooley was immediately turned over to the custody of the U.S. Marshals Service.
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Pair Convicted on Health Care Fraud, Conspiracy ChargesRead the Press Release
ABINGDON, VIRGINIA – A pair of lab professionals who billed Medicaid, Medicare, TennCare, and a variety of other health care providers and insurance companies, were convicted yesterday of federal conspiracy and health care fraud charges following a bench trial, announced United States Attorney John P. Fishwick Jr. and Virginia Attorney General Mark R. Herring.
Beth Palin, 49, and Joseph D. Webb Jr., 55, both of Bristol, Tenn., were convicted on April 7, 2016 following a bench trial of one count each of conspiracy to commit health care fraud and health care fraud.
“These two individuals abused the healthcare system and billed programs and insurance companies for unnecessary tests for no other reason than to line their own pockets,” United States Attorney John P. Fishwick Jr. said today. “I am thankful for the work of the Virginia AG’s Office, Medicaid Fraud Control Unit and all of our law enforcement partners who worked on this case. It is important for us to keep fraud and abuse out of these very important social programs.”
“Heroin and prescription opioid addiction is touching families in every corner of the state, and Southwest Virginia has been hit as hard as anywhere,” said Attorney General Mark Herring. “It’s unconscionable that anyone would exploit this epidemic to enrich themselves on such a massive scale. Virginians are dying every single day from heroin and prescription drug overdose, and fraud schemes like this can make it harder for people who are trying to get treatment and make a change in their lives.”
“Clinical labs play a critical role in providing care for people on Medicare,” said Nick DiGiulio, Special Agent in Charge for the Office of Inspector General at the U.S. Department of Health and Human Services. “Lab professionals who aim to get rich quick by cheating patients and taxpayers, as in this case, can expect to pay a high price for their crimes.”
According to evidence presented during the bench trial by Assistant Attorney General and Special Assistant United States Attorney Janine Myatt, Webb and Palin owned Bristol Labs, which was a lab that specialized in urine drug screen testing. Bristol Labs worked with Dr. Charles Kim Wagner, a medical doctor licensed by the Drug Enforcement Administration to prescribe Suboxone. Wagner opened what purported to be a substance abuse treatment program that involved only medication assisted treatment using Suboxone in Bristol, Virginia. His practice accepted cash payment only and charged $250 for an initial visit and $100-$110 each week thereafter. Wagner’s office was located next to Bristol Labs in an adjacent office suite within the same physical building as Bristol Labs. Drug screenings were required for Wagner’s patients at each weekly visit and Wagner sent 100 percent of his patients to Bristol Labs for their drug screenings.
Although patients often paid cash for doctor’s appointments, they could use Medicare or Medicaid to pay Bristol Labs for prescriptions and the cost of urine drug screenings. The type of drug screening Wagner ordered depended solely on the method of payment. If a patient was uninsured or “self-pay,” Wagner ordered a $25 dip-stick or “quick cup” urine drug screen from Bristol Labs. However, if a patient was paying via insurance, Medicaid or Medicare, Wagner ordered two separate, automated screens performed by Bristol Labs and by another confirmation Lab in Denver, Colorado. These patients paid nothing out of pocket, however Medicare, Medicaid or their insurance company would be billed between $120-$1,800 for these tests each week. These tests were medically unnecessary and Wagner did not use the results of the tests to direct patient care.
Palin and Webb eventually opened their own addiction practice in Gate City, Virginia, called Mtn. Empire Medical Care. Palin and Webb instituted a nearly identical drug testing protocol to the one at Wagner’s practice, self-pay patients paid an extra $25 and got a quick cup test while insured patients got two automated screens which were billed to their insurance companies and paid nothing out of pocket. These expensive tests were medically unnecessary.
In total, this conspiracy fraudulently billed Virginia Medicaid, TennCare, Medicare, Aetna, Optum/United Health Care, Anthem/Blue Cross-Blue Shield of Virginia, Anthem/Blue Cross-Blue Shield of Tennessee and Cigna, $14,278,340 for medically unnecessary urine screens.
Dr. Wagner died during the course of this investigation and was therefore not charged in this matter.
The investigation of the case was conducted by Virginia Office of the Attorney General’s Medicaid Fraud Control Unit, United States Health and Human Services-Office of Inspector General, the Tennessee Bureau of Investigation, the Internal Revenue Service, the Bristol, Virginia Police Department, The Virginia State Police, the Bristol, Tennessee Police Department, the Scott County Sheriff’s Office and the United States Marshals Service. Assistant Attorney General and Special Assistant United States Attorney Janine Myatt and Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Owner of Pizza Franchises Acknowledges Submitting False Tax Return that Omitted Income from Skimmed CashRead the Press Release
BIRMINGHAM – Federal prosecutors on Thursday charged the owner and operator of dozens of pizza franchise restaurants in Alabama, Georgia and Louisiana for filing a false federal income tax return that did not include money he skimmed from his Little Caesars restaurants, announced U.S. Attorney Joyce White Vance and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot.
The U.S. Attorney’s Office charged RAMON S. ARIAS, 64, of Mountain Brook, with one count of making a false tax return. In a plea agreement reached between Arias and the government, he agrees to plead guilty to the charge, pay $224,290 in restitution to the IRS, and to cooperate with the IRS Civil Division in filing accurate amended tax returns for 2010 through 2013.
Arias owned, controlled and operated 26 to 45 Little Caesars franchises in the three states from 2010 through 2013, according to the plea agreement. The stores were incorporated under various business names, with other individuals owning percentages of the businesses, but Arias was primarily responsible for running the businesses and managing the finances, the plea agreement states.
It says Arias operated a scheme to divert cash from the gross receipts of some of the businesses, primarily two to four of the restaurants in Alabama, during the four years. Arias used a certified public accountant to prepare his business and individual income tax returns, but did not provide the accountant with any information about the skimmed money, according to the plea agreement.
The amounts of skimmed cash under-reported on Arias’ individual returns for 2010, 2011, 2012 and 2013 were $238,664, $265,413, $312,955 and $287,023, respectively, according to the plea agreement.
The maximum penalty for making a false tax return is three years in prison and a $250,000 fine.
IRS-CI investigated the case, which Assistant U.S. Attorney J. Patton Meadows is prosecuting.
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Norwegian Shipping Company Sentenced in Alabama to Pay $2.5 Million for Illegally Discharging Oil into the OceanRead the Press Release
The Norwegian shipping company DSD Shipping (DSD) was sentenced to pay a total corporate penalty of $2.5 million as a result of its convictions in Mobile, Alabama, for obstructing justice, violating the Act to Prevent Pollution from Ships (APPS), tampering with witnesses and conspiring to commit these offenses. The company was ordered to pay $500,000 of the penalty to the Dauphin Island Sea Lab Foundation to fund marine research and enhance coastal habitats in the Gulf of Mexico and Mobile Bay.
In addition, DSD was placed on a three year term of probation and was ordered to implement an environmental compliance plan to ensure the company’s vessels obeyed domestic and international environmental regulations in the future. The sentence was announced by Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division and U.S. Attorney Kenyen R. Brown for the Southern District of Alabama.
The operation of commercial marine vessels generates large quantities of waste oil, oil-contaminated waste water and garbage. International and U.S. law forbid the discharge of waste oil and garbage into the ocean and require that these vessels use pollution prevention equipment, known as an oily-water separator, to prevent the discharge of oil-contaminated waste water. Should any overboard discharges occur, they must be documented in either an oil record book or a garbage record book, logs that are regularly inspected by the U.S. Coast Guard.
The evidence demonstrated at trial that DSD operated the M/T Stavanger Blossom, a 56,000 gross ton crude oil tanker, from 2010 to 2014 without an operable oily-water separator as required by law. On Jan. 29, 2010, an internal corporate memorandum written by a vessel engineer warned DSD that the pollution prevention equipment did not work. The memo further warned that if the problem was not addressed, “some day, it might end up that someone is getting caught for polluting.” However, rather than repair or replace the oily-water separator, DSD operated the vessel illegally for the next 57 months before the conduct was identified by U.S. Coast Guard inspectors in November 2014. As the testimony at trial revealed, DSD illegally discharged approximately 20,000 gallons of oil-contaminated waste water and plastic bags containing 270 gallons of sludge into the ocean during the last two-and-a-half months of the vessel’s operation.
The evidence also established that DSD lied about these activities by maintaining fictitious record books aboard the vessel. These records omitted the illegal discharges of oil and garbage and falsely claimed that pollution prevention equipment was used when it was not. Further, when the U.S. Coast Guard examined the ship, DSD’s senior ship officers lied about the discharges and ordered their subordinates to do the same.
In court documents filed prior to sentencing, prosecutors informed the court that despite convictions for eight felony offenses, DSD continued to deny wrongdoing in Norwegian press accounts. Prosecutors also noted that previous deficiencies in the operation of pollution prevention equipment had been identified in other DSD vessels while they were in international ports.
Three senior engineering officers employed by DSD to operate the ship were also sentenced. Defendant Bo Gao, chief engineer of the vessel, and Xiaobing Chen, second engineer of the vessel, were both sentenced to six months imprisonment as a result of their conduct. Defendant Xin Zhong, fourth engineer of the vessel, was sentenced to two months imprisonment. All three also face the loss of their marine engineering license and exclusion from employment in the merchant marine. A fourth DSD employee, Daniel Paul Dancu, pleaded guilty in October 2015, and will be sentenced on April 11, 2016.
“We will continue to aggressively prosecute and hold accountable those shipping companies who flout the laws that protect our oceans and coastal waterways from harmful vessel pollution and waste,” said Assistant Attorney General Cruden. “It is fitting that a portion of this penalty will go towards repairing and protecting the Gulf coastal environment that is threatened by these illegal discharges. This egregious abuse of the seas we share as a nation and an international community must stop.”
“We are very pleased with the fines and custody sentences imposed by the court in the case today,” announced U.S. Attorney Brown. “The fine and probation imposed against DSD, and the custody sentence imposed on the engineering officers reflect the seriousness of the offenses committed against the United States and the environment. The U.S. Attorney’s Office will continue to investigate and prosecute environmental crimes. It is incumbent upon all individuals and corporations to protect our environment and the resources along the Northern Gulf of Mexico.”
“The Coast Guard will not tolerate the pollution of our marine environment,” said Rear Admiral Dave Callahan for the Eighth Coast Guard District Commander. “The individuals committing environmental crimes are putting our natural resources at risk and they must be held accountable. I am thankful for the hard work and dedication that Coast Guard Sector Mobile, the Coast Guard Investigative Service, the Department of Justice, and the Environmental Protection Agency have put into the investigation and prosecution of this case.”
“The Coast Guard Investigative Service is deeply committed to protecting our nation’s waters and ensuring that those within the commercial shipping industry are good stewards of the marine environment,” said Director Michael Berkow for the Coast Guard Investigative Service. “Sadly, although entirely preventable, pollution from vessels remains all too common. We hope the sentences in this case deter others from committing similar conduct. We are grateful to our investigative partners for their assistance in the prosecution of this case.”
“When a company fails to comply with our nation’s environmental laws, it can have a devastating effect on both public health and wildlife,” said Special Agent in Charge Andy Castro of EPA’s criminal enforcement program in Alabama. “The defendants knowingly discharged oily waste from a vessel into the open water and then tried to cover up their crimes by falsifying entries in the vessel’s log books. This successful prosecution is another example of the effective partnership between the Department of Justice, the Coast Guard and EPA to protect the environment and our natural resources.”
This case was investigated by the U.S. Coast Guard Sector Mobile, U.S. Coast Guard District Eight, the Coast Guard Investigative Service, and the EPA’s Criminal Investigations Division. Assistant U.S. Attorney Michael D. Anderson, with the U.S. Attorney’s Office for the Southern District of Alabama, and Trial Attorney Shane N. Waller, with the Department of Justice’s Environmental Crimes Section, prosecuted the case.
Northampton Man Charged with Child Exploitation OffenseRead the Press Release
BOSTON – A Northampton man was charged yesterday in U.S. District Court in Springfield with offering to distribute child pornography.
James J. Smith, 37, was charged in a complaint with one count of offering to distribute material involving the sexual exploitation of children. During an initial appearance in court yesterday, Smith was detained pending a detention hearing on April 12, 2016.
According to the complaint, on Jan. 8, 2015, a search warrant executed at Smith’s residence recovered a cell phone containing a storage card. After waiving his Miranda rights, Smith unlocked the phone and law enforcement officers found approximately 110 images of child pornography, including images of an eight-year-old girl. The phone also contained e-mail addresses and Craigslist correspondence concerning children engaged in sexually explicit conduct. Law enforcement officers recovered e-mails in which Smith offered to distribute, and did distribute, child pornography involving children aged 10 and younger as well as e-mails in which Smith offered to receive, and did receive, child pornography. Smith also sent messages in which he expressed a sexual interest in a16-year-old girl.
The charging statute provides for a minimum mandatory sentence of 15 years and no greater than 30 years in prison, up to a lifetime of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Northampton Police Chief Jody Kasper; and Easthampton Police Chief Bruce McMahon, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Members of the public who have questions, concerns or information related to this case, or any information relating to the sexual exploitation of children, should call (617) 748-3274.
Niagara Falls Man Arrested on Gun ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that James Smith, 24, of Niagara Falls, NY, was arrested and charged by criminal complaint with being a felon in possession of a firearm. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that according to the complaint, on February 25, 2016, New York State Parole Officers and others conducted a search at Smith’s residence on Orleans Avenue in Niagara Falls. The defendant is under the supervision of New York State Parole following a July 2010 federal conviction and an August 2014 Niagara County Conviction.
As officers entered, Smith attempted to go into the basement. The defendant was stopped and the basement was searched. Officers recovered a Colt, .32 caliber semi-automatic handgun with a magazine loaded with two rounds of ammunition. As a result of his previous convictions, Smith is prohibited from legally possessing a firearm.
The defendant made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroder. He is being detained.
The complaint is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, and .
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
New York Man Pleads Guilty to Fake Lottery ScamRead the Press Release
BOSTON – A New York man pleaded guilty today in U.S. District Court in Boston in connection with his role in a bogus lottery scheme in which the victims were told they had won millions of dollars in lotteries but must first pay the taxes in order for their winnings to be released to them.
Wilder Vladimir Merelan, of West Hempstead, NY, 29, pleaded guilty to an Information charging him with one count of conspiracy to commit mail and wire fraud. U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for Aug. 10, 2016.
From 2012 to 2015, Merelan’s Jamaican co-conspirators solicited victims, who ranged in age from 69 to 91. The victims were told that they had won millions of dollars in a lottery but had to pay taxes on their winnings to the IRS before the funds could be released to them. Victims mailed checks or wired funds to Merelan, who kept a portion for himself and then distributed the rest as directed by his co-conspirators. Merelan was described to these victims as a “sub agent” for the IRS. Approximately 16 victims, including a Massachusetts man, sent more than $830,000 to Merelan in an effort to secure their supposed lottery winnings. Some of the funds were stopped by banks or intercepted by the U.S. Postal Service. However, Merelan received $733,999.
After depositing the checks and receiving the wire transfers into his bank accounts, Merelan withdrew cash, wired funds to individuals in the United States and Jamaica, and purchased reloadable prepaid cards, essentially draining his accounts of the funds he had received.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss, whichever is greater. 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Shelly Binkowski, Inspector in Charge of the Postal Inspection Service; and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
New Mexico HOPE Initiative Launches Community Education ProgramRead the Press Release
ALBUQUERQUE – Millions of Americans from coast to coast struggle daily with the negative effects of the nation’s opioid and heroin crisis, but few states are harder hit with overdose deaths than New Mexico. To tackle this growing crisis, Chancellor Paul B. Roth of UNM’s Health Sciences Center and U.S. Attorney Damon P. Martinez launched the New Mexico HOPE – Heroin and Opioid Prevention and Education – Initiative in January 2015.
This initiative is already seeing results. More people are receiving treatment for addiction, and more criminals are being prosecuted for drug trafficking. Now, those efforts will be more fully supported by a comprehensive education program.
“Drug abuse exacts a terrible toll on our community,” said Dr. Roth, a longtime emergency room physician. “This initiative is an important collaboration between our health system and law enforcement to find creative solutions to help people find their way out of the maze of drug addiction.”
“This epidemic does not discriminate. It impacts the lives of the infant born addicted to opioids, and the high school athlete who becomes addicted to opioid painkillers prescribed for an injury and later dies from a heroin overdose, and the grandparent who ends up addicted to opioid painkillers following a medical procedure and doesn’t know where to turn for help. And it impacts the lives of families who are devastated by their loved ones’ addiction and overdose deaths,” said U.S. Attorney Damon P. Martinez. “Through this Initiative, the medical and law enforcement communities are working together to bring hope to New Mexico by educating our communities about the dangers of prescription painkillers and heroin to prevent more New Mexicans from succumbing to this epidemic.”
The HOPE Initiative’s education efforts will be aimed at preventing abuse and addiction in our state’s youth, as well as helping those who are currently suffering from addiction, to find help and hope of recovery. It will also offer support for families struggling to find treatment and other resources for their loved ones who are addicted. Neighbors, coworkers, and others who feel that their safety may be jeopardized by someone’s addiction to or trafficking of opioid painkillers and heroin, can also find help and resources under this program.
UNM Health Sciences Center and the U.S. Attorney’s office, in collaboration with the Drug Enforcement Administration, Bernalillo County Opioid Accountability Initiative and Healing Addiction in our Community (HAC), a non-profit organization, will be utilizing a newly launched website, billboards, social media, the news media, and community and student education programs to reach the public with messages of prevention, treatment, public safety, and hope.
To view the website, go to hopeinitiativenm.org. Billboards are located at 15 locations in Bernalillo County, most within the vicinity of high schools. An image of the billboard and a list of the billboard locations are attached. Interested New Mexicans can follow HOPE on https://twitter.com/USAO_NM and https://www.facebook.com/usaonm/. For information on scheduling an educational event, contact [email protected]. Upcoming event schedules will be available on the website.
HOPE Billboard HOPE Billboard Locations