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Wednesday 6 April 2016
Man Sentenced to 38 Months in Prison for Threatening Tribal Police OfficersRead the Press Release
PLATTSBURGH, NEW YORK – Roy Redeye, age 39, of Cortland and Akwesasne, New York, was sentenced today to serve 38 months in prison for threatening to injure Saint Regis Mohawk Tribe Police Department Officers.
The announcement was made by United States Attorney Richard S. Hartunian, Saint Regis Mohawk Police Chief Matthew Rourke, and James C. Spero, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations.
U.S. District Judge Lawrence E. Kahn also sentenced Redeye to serve a 3-year term of supervised release, to be served after Redeye is released from prison.
As part of his plea on December 9, 2015, Redeye admitted that in February 2015, he posted messages to Facebook in which he threatened to kill or injure three Saint Regis Mohawk Tribe Police Department Officers.
U.S. Attorney Richard S. Hartunian stated: "The defendant threatened to injure and kill police officers and received a sentence that reflects the seriousness of his crime. This successful prosecution is the result of the excellent and close cooperation among federal, tribal and local law enforcement that my Office has fostered in the Northern District of New York."
Saint Regis Mohawk Tribe Police Chief Matthew Rourke stated: "This was a good outcome for public safety at all levels and the community as a whole. Internet safety is the key, be aware that your actions, including threats, and especially against law enforcement, will be taken seriously." Police Chief Rourke thanked Homeland Security Investigations, the Cortland Police Department, and the United States Attorney for their combined effort.
This case was investigated and assisted by the Saint Regis Mohawk Tribal Police Department, Homeland Security Investigations, the Cortland Police Department, and the Cortland County Sheriff’s Office. Assistant United States Attorney Elizabeth Horsman prosecuted the case under United States Attorney Hartunian’s Indian Country public safety initiative.
Los Angeles drug dealer sentenced to over seven years in Federal prison for methamphetamine crimeRead the Press Release
CHARLESTON, W.Va. – A Los Angeles man was sentenced to seven and a half years in federal prison today for a drug crime, announced Acting United States Attorney Carol Casto. Terry Cunningham, 32, previously pleaded guilty in December 2015 to distribution of methamphetamine.
Cunningham admitted that on July 14, 2015, he shipped a package containing methamphetamine to an undercover Kanawha County Deputy Sheriff working with the Metropolitan Drug Enforcement Network Team. After the undercover officer picked up the package, Cunningham provided instructions for making payment for the shipment using MoneyGram. Cunningham went to pick up the MoneyGram payment at a Walmart in Los Angeles, and immediately texted the undercover officer that he had received payment. Agents conducting surveillance in Los Angeles arrested Cunningham after observing him collecting the payment.
The investigation was conducted by the United States Postal Inspection Service, Homeland Security Investigations, the Metropolitan Drug Enforcement Network Team, and the Kanawha County Sheriff’s Office. The sentence was imposed by United States District Judge Thomas E. Johnston.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat illegal drugs in our communities, including the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and other drugs in communities across the Southern District.
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Kansas Tax Return Preparer Pleads Guilty to Preparing False ReturnsRead the Press Release
The owner of a tax return preparation business in Kansas City, Kansas, pleaded guilty today to preparing false income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Barry Grissom for the District of Kansas.
Antione Dorsey, 38, of Kansas City, and owner of Day-1 Tax Service, pleaded guilty to one count of preparing false tax returns. In his plea, Dorsey admitted including false items on his clients’ income tax returns without their knowledge or authorization. Dorsey falsely inflated taxpayers’ incomes by falsifying gross receipts listed on Schedules C. As a result, taxpayers appeared to qualify for Earned Income Credits that falsely increased their tax refunds. In other instances, Dorsey falsified itemized deductions reported on the taxpayers’ Schedules A to fraudulently increase the taxpayers’ refunds.
Dorsey caused fraudulent refund claims of approximately $74,400 to be made to the Internal Revenue Service (IRS) and approximately $13,980 in fraudulent claims to be made to the Kansas Department of Revenue.
Sentencing is set for June 27. He faces a statutory maximum penalty of three years in prison and restitution. Acting Assistant Attorney General Ciraolo and U.S. Attorney Grissom commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney John T. Mulcahy of the Tax Division and Assistant U.S. Attorney Scott Rask, who prosecuted the case.
Kansas City, Kan., Tax Preparer Pleads Guilty to Preparing False ReturnsRead the Press Release
KANSAS CITY, KAN. - The owner of a tax preparation business in Kansas City, Kan., pleaded guilty today to preparing false income tax returns, U.S. Attorney Barry Grissom and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
Antoine Dorsey, 38, Kansas City, Kan., owner of Day-1 Tax Service, pleaded guilty to one count of preparing false tax returns. In general, Dorsey falsely inflated taxpayers’ incomes by falsifying gross receipts listed on Schedule C. As a result, taxpayers appeared to qualify for the Earned Income Credit that increased their tax refunds.
Dorsey caused fraudulent refund claims of approximately $74,487 to be made to the Internal Revenue Service and approximately $13,980 in fraudulent claims to be made to the Kansas Department of Revenue.
Sentencing is set for June 27, 2016. He faces a maximum penalty of three years in federal prison and an order of restitution. Grissom commended special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Scott Rask and John Mulcahy from the Justice Department Tax Division, who prosecuted the case.
Justice Department Sues to Block Halliburton’s Acquisition of Baker HughesRead the Press Release
Merger would eliminate significant head-to-head competition in oilfield services industry
The Department of Justice filed a civil antitrust lawsuit today seeking to block Halliburton Company’s proposed acquisition of Baker Hughes Inc., alleging that the transaction threatens to eliminate competition, raise prices and reduce innovation in the oilfield services industry.
The department filed its lawsuit in the U.S. District Court for the District of Delaware, where both companies are incorporated. The complaint alleges that the acquisition – which the companies valued at $34 billion when announcing it – would combine two of the three largest oilfield services companies in the United States and the world, eliminating important head-to-head competition in markets for 23 products or services used for on- and off-shore oil exploration and production in the United States.
“The proposed deal between Halliburton and Baker Hughes would eliminate vital competition, skew energy markets and harm American consumers,” said Attorney General Loretta E. Lynch. “Our action makes clear that the Justice Department is committed to vigorously enforcing our antitrust laws. In the days ahead, we will continue to stand up for fair deals and free markets, and for the American people we are privileged to serve.”
“This transaction is unprecedented in the breadth and scope of competitive overlaps and antitrust issues it presents,” said Assistant Attorney General Bill Baer of the department’s Antitrust Division. “Halliburton and Baker Hughes are two of the three largest integrated oilfield service companies across the globe, and they compete to invent and sell products and services that are critical to energy exploration and production. We need to maintain meaningful competition in this important sector of our economy.”
During the department’s investigation, Halliburton proposed to remedy the significant harmful effects of the transaction by divesting a mix of assets extracted from certain business lines of the two companies. According to the complaint, the proposed divestitures would not include full business units but rather would be limited to certain assets, with the merged firm holding onto important facilities, employees, contracts, intellectual property, and research and development resources that would put the buyer of those assets at a competitive disadvantage. The proposed divestures mostly would allow Halliburton to retain the more valuable assets from either company while selling less significant assets to a third party. The complaint further alleges that this divesture would not replicate the substantial competition between the two rivals that exists today.
Halliburton is a Delaware corporation headquartered in Houston. Founded in 1919, Halliburton is the largest provider of services and products to the oil and gas industry in the United States. It has operations in approximately 80 countries and earned revenue of $23.6 billion in 2015.
Baker Hughes is a Delaware corporation headquartered in Houston. It was formed in 1987 with the merger of Baker International and Hughes Tool Company, both founded over 100 years ago. The third-largest provider of oilfield services in the world, Baker Hughes operates in more than 80 countries and earned revenue of $15.7 billion in 2015.
508 Compliant Version of United States v. Halliburton and Baker Hughes ChartJury Convicts Woburn Woman of $1.3 Million FraudRead the Press Release
BOSTON – Following a six-day trial, a Woburn woman was convicted yesterday in U.S. District Court in Boston in connection with defrauding over $1.3 million from investors.
Rosalind Herman, 60, was convicted by a jury on investment adviser fraud, tax fraud, wire fraud and conspiracy. U.S. District Court Judge William G. Young scheduled sentencing for June 29, 2016.
Herman owned and controlled companies in Massachusetts and Nevada that provided investment advice and sold insurance products to individual investors. From 2008 to March 2013, Herman and her business partner, Gregg Caplitz, pitched a new hedge fund company investment to existing clients. The purported investment was billed by Caplitz and Herman as a hedge fund company owned by Herman. No hedge fund ever existed, however, and the investment funds obtained from clients were used to fund personal expenses for Herman, her family and Caplitz. In total, more than a dozen victims lost more than $1.3 million in savings, most of which were retirement savings.
In addition, from 2003 to 2012, Herman failed to file accurate tax returns for herself and her companies, including the $1.3 million in investor funds she took from investors, and also by fabricating business expenses. In many instances during this time period, Herman failed to file any tax returns for herself or her companies.
Caplitz previously pleaded guilty to fraud and tax charges, and testified against Herman at trial. He is scheduled to be sentenced on May 17, 2016.
The charges of investment advisor fraud and conspiracy provides a sentence of no greater than five years in prison, three years of supervised release, a fine of $250,000, or twice the gross gain or loss, whichever is greater. The charge of tax fraud provides a sentence of no greater than three years in prison, one year of supervised release, a fine of $250,000, or twice the gross gain or loss, whichever is greater. The charge of wire fraud provides a sentence of no greater than 20 years in prison, six years of supervised release, a fine of $250,000, or twice the gross 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; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The U.S. Attorney’s Office acknowledges the assistance provided by the Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorneys Sara Miron Bloom and Mary B. Murrane of Ortiz’s Economic Crimes Unit.
Jury Convicts Palm Bay Man of Drug Trafficking and Firearm OffensesRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury yesterday found John Dwayne Riley (39, Palm Bay) guilty of possessing more than 500 grams of cocaine with the intent to distribute it, and possessing a firearm in furtherance of that drug-trafficking crime. He faces a mandatory minimum penalty of 10 years, up to 40 years, in federal prison. The sentencing hearing is set for June 23, 2016. Riley was indicted on November 18, 2015.
According to evidence presented at trial, on June 17, 2015, probation officers with the Florida Department of Corrections went to Riley’s house in response to an anonymous tip that he was dealing drugs. The officers observed powder cocaine inside a car in Riley’s garage, and they also found approximately one kilogram of individually packaged powder cocaine in one of Riley’s kitchen cabinets. During the execution of a search warrant later that evening, officers from the Palm Bay Police Department discovered an additional 5 grams of individually packaged heroin in another kitchen cabinet, and 59 grams of individually packaged crack cocaine in the car. Riley also had several items of drug paraphernalia, and the pans in his kitchen sink contained fresh crack cocaine residue. Officers found $1,000 in cash in Riley’s pocket, and recovered a loaded handgun where Riley had been seated on his living room sofa.
This case was investigated by the Palm Bay Police Department, the Drug Enforcement Administration, and the Florida Department of Corrections. It is being prosecuted by Assistant United States Attorney Embry J. Kidd.
Jamestown Man Charged with Transmitting Threatening CommunicationRead 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 Michael Bush, 35, of Jamestown, NY, was arrested and charged by criminal complaint with transmitting communication containing a threat to injure the person of another. The charge carries a maximum of five years in prison, a fine of $250,000 or both.Assistant U.S. Attorney Caleb J. Petzoldt, who is handling the case, stated that according to the complaint, on February 26, 2016, Bush, a former officer with the Jamestown Police Department, posted a threat on the Jamestown, New York Topix forum page. The post contained a threat against two individuals.
The defendant made an initial appearance this morning before U.S. Magistrate Judge H. Kenneth Schroeder. A detention hearing is scheduled for April 7, 2016.
The complaint is the culmination of an investigation by the Jamestown Police Department, under the direction of Chief Harry Snellings and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.
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.
Jail Employee Sentenced to Probation, Fined for Providing a Phone to an InmateRead the Press Release
JOHNSTOWN, Pa. – A resident of Philipsburg, Pa. has been sentenced in federal court to three years’ probation and a fine of $500 on her conviction of providing contraband to an inmate while an employee at Moshannon Valley Correctional Center.
United States District Judge Kim R. Gibson imposed the sentence on Jennifer L. Robins, 36.
According to information presented to the court, in July 2013 Robins provided a phone to an inmate, which is a prohibited object under prison regulations.
Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.
Mr. Hickton commended the Office of the Inspector General of the United States Department of Justice for the investigation leading to the successful prosecution of Robins.
Indictment: Topeka Man’s Gun Crime Came Within Months of Release from PrisonRead the Press Release
TOPEKA, KAN. - A Topeka man was indicted Wednesday on a federal firearm charge that is alleged to have occurred within months of his release from federal prison in a similar case, U.S. Attorney Barry Grissom said.
Brandon E. Derr, 31, who is being held in the Shawnee County Jail, is charged with one count of unlawful possession of a firearm following a felony conviction. According to the federal Bureau of Prisons, Derr was released Sept. 18, 2015, after serving a 24-month sentence. In that case he was indicted in 2012. He pleaded guilty and was sentenced in 2013.
In the new indictment, it is alleged Derr possessed a Smith & Wesson 9 mm pistol on Nov. 12, 2015, in Topeka.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
OTHER GRAND JURY INDICTMENTS
Jason D. Bulger, 35, who is being held in the Shawnee County Jail, is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Feb. 26, 2016, in Topeka, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
Vondel S. Johnson, 32, who is being held in the CCA facility in Leavenworth, Kan., is charged with one count of unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred March 3, 2016, in Topeka, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The U.S. Marshals Service investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Indictment Charges Ledyard Man with Federal Narcotics OffenseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury in New Haven has returned an indictment charging DAMIEN BRYANT, 41, of Ledyard, with one count of possession with intent to distribute cocaine base (“crack”) and cocaine. The indictment was returned on March 29, 2016.
According to allegations contained in a previously-filed criminal complaint, in February 2016, the Stonington Police Department received information that BRYANT was distributing crack cocaine. On March 9, 2016, members of the Regional Community Enhancement Task Force and the Ledyard Police Department executed a state search and seizure warrant at BRYANT’s residence and seized crack cocaine, cocaine, marijuana, narcotics paraphernalia and more than $14,000 in cash. BRYANT was arrested at that time.
On March 5, 2010, BRYANT was sentenced in Bridgeport federal court to 42 months of imprisonment for distributing crack cocaine and violating the conditions of his supervised release from a prior federal conviction in the District of Rhode Island. He is currently serving a 10-year-term of federal supervised release.
BRYANT appeared yesterday before U.S. Magistrate Judge Robert A. Richardson in Hartford and entered pleas of not guilty to the charge in the indictment, and to violating the conditions of his supervised release.
If convicted, BROWN faces a maximum term of imprisonment of 20 years for the narcotics offense, and an additional term of imprisonment of up to 80 months for violating his supervised release.
BRYANT has been detained since his arrest.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Regional Community Enhancement Task Force, and the Ledyard, Stonington and Groton Town Police Departments. The case is being prosecuted by Assistant U.S. Attorney John H. Durham.
Independence Men Plead Guilty to Producing Child Porn, Face at Least 15 Years in PrisonRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that two Independence, Mo., men pleaded guilty in federal court today to producing child pornography.
Kenneth R. Davis, 35, and Randy Mull, 36, both of Independence, pleaded guilty in separate appearances before U.S. District Judge Roseann Ketchmark to the charge contained in a July 29, 2015, federal indictment.
By pleading guilty today, Davis and Mull each admitted that they aided and abetted each other to produce child pornography on July 15, 2010, by taking a series of pornographic photos of a 14-year-old child victim (identified as “John Doe #2) in their bedroom.
Under the terms of today’s plea agreement, Davis must pay $5,000 in restitution to each of five separate victims whose images of child sexual abuse he received or possessed; or $3,000 to each victim if he can pay restitution within 30 days of the sentencing date.
Under federal statutes, Davis and Mull are each subject to a mandatory minimum sentence of 15 years in federal prison without parole, up to a sentence of 30 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Catherine A. Connelly. It was investigated by the Independence, Mo., Police Department and the Kansas City, Kan., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Husband and Wife Nabbed at Port of Entry in El Paso Sentenced to Federal PrisonRead the Press Release
In El Paso, a husband and wife were sentenced to 188 months and 24 months in federal prison, respectively, for conspiring to possess with intent to distribute approximately four kilograms of cocaine announced United States Attorney Richard Durbin, Jr.; Drug Enforcement Administration (DEA) Special Agent in Charge Will Glaspy, El Paso Division; Homeland Security Investigations (HSI) Special Agent in Charge Waldemar Rodriguez, El Paso; and, U.S. Customs and Border Protection El Paso Port Director Beverly Good.
Yesterday afternoon, United States District Judge Philip Martinez sentenced 52-year-old Manuel Bayona-Montes to 188 months in federal prison followed by five years of supervised release. On March 30, 2016, Judge Martinez sentenced Bayona’s wife, 52-year-old Ruth Bayona-Gandara, to 24 months in federal prison followed by two years of supervised release. Both defendants had previously pleaded guilty to one count of conspiracy to possess with intent to distribute cocaine.
According to court records, on August 12, 2015, U.S. Customs and Border Protection authorities apprehended the defendants at the Paso Del Norte Port of Entry after discovering approximately four kilograms of cocaine concealed within their vehicle.
This joint investigation was conducted by DEA, HSI, U.S. Customs and Border Protection, and Internal Revenue Service-Criminal Investigation together with High Intensity Drug Trafficking Area (HIDTA) task force officers from the El Paso Police Department, El Paso County Sheriff’s Office, Anthony (TX) Police Department and the U.S. Border Patrol.
Honduran National Sentenced for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ALEX JAVIER HERNANDEZ-MEJIA, age 22, a citizen of Honduras, was sentenced today after previously pleading guilty to a one-count Bill of Information for illegal reentry of removed alien.
U.S. District Sarah S. Vance sentenced HERNANDEZ-MEJIA to time served and a $100 special assessment. HERNANDEZ-MEJIA will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, on or about November 9, 2015, HERNANDEZ-MEJIA was found in the United States after having been officially deported and removed on or about April 22, 2014.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, Immigration Enforcement in investigating this matter. Assistant United States Attorney Irene González was in charge of the prosecution.
Honduran National Pleads Guilty to Illegally ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ORLI DAGOBERTO ARGUETA-SANCHEZ, a/k/a Orli Dagoberto Argueta, age 27, a citizen of Honduras, pled guilty today to a one-count Bill of Information for illegal reentry of removed alien.
According to the Bill of Information, on or about January 6, 2016, ARGUETA-SANCHEZ was found in the United States after having been officially deported and removed on or about November 7, 2008.
ARGUETA-SANCHEZ faces a maximum term of imprisonment of two years and a fine of $250,000, one year supervised release after imprisonment, and a $100 special assessment. U.S. District Judge Ivan L.R. Lemelle set sentencing for May 25, 2016.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, Immigration Enforcement in investigating this matter. Assistant United States Attorney Irene González is in charge of the prosecution.
Health Care Fraud Charge Filed in Fayette County Addiction Specialists Inc. CaseRead the Press Release
PITTSBURGH – Four southwestern Pennsylvania residents have been indicted by a federal grand jury in Pittsburgh on multiple charges of distribution and dispensing of Schedule III and Schedule IV controlled substances, conspiracy and health care fraud United States Attorney David J. Hickton announced today.
The 238-count superseding indictment, returned on April 5, named Dr. Dominic W. Dileo, 67, of Uniontown, Pa., Rosalind Sugarmann, 61, of Allison Park, Pa., Brandon S. Eicher, 40, of Smithfield, Pa., and Louis M. Polito, 60, of Uniontown, Pa., as the defendants.
According to the superseding indictment, between January of 2013 and November of 2015, Dr. DiLeo, Sugarmann and Polito unlawfully dispensed or distributed Suboxone or Xanax on more than 200 occasions to Sugarmann and to two other persons whose names were not set forth in the superseding indictment. The superseding indictment further alleges that, from in and around February 2013 until in and around May of 2014, Sugarmann and Eicher defrauded Medicaid in connection with the performance of their duties at Addiction Specialists, Inc. (“ASI”). The superseding indictment describes Sugarmann as an owner of ASI and Eicher as the Clinical Director at ASI. The superseding indictment charges them with defrauding Medicaid by submitting bills to Medicaid for services which they knew were not covered by Medicaid, and by falsifying ASI medical records in preparation for an audit conducted on behalf of Medicaid.
The law provides for a maximum total sentence of 10 years in prison for each instance in which Suboxone was distributed, five years for each instance in which Xanax was distributed, ten years for health care fraud, plus a maximum fine of $250,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Shaun E. Sweeney and Stephen R. Kaufman are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, Drug Enforcement Agency, U.S. Department of Health and Human Service, Office of Inspector General, Internal Revenue Service – Criminal Investigation, and the Pennsylvania Office of Attorney General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Green Bay Man Indicted for Social Security Disability FraudRead the Press Release
United States Attorney Gregory J. Haanstad of the Eastern District of Wisconsin, announced that on April 5, 2016, a federal grand jury returned an indictment against Randall J. Frisque (age: 58) of Green Bay, Wisconsin.
Frisque is alleged to have illegally received approximately $117,500 in Social Security Administration Disability funds, contrary to Title 18, United States Code, Section 641. He faces up to 10 years imprisonment, a $250,000 fine, and 3 years of supervised release.
This case was investigated by the U.S. Social Security Administration and the Office of Inspector General for the Department of Health and Human Services. The case will be prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove him guilty beyond a reasonable doubt.
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Gardiner Man Sentenced to Five Years for Robbing Two PharmaciesRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Rudger S. Ellis, 23, of Gardiner, Maine was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to five years in prison to be followed by three years of supervised release for committing two pharmacy robberies. He was also ordered to pay a $1,000 fine and $726 in restitution.
On February 7, 2015, Ellis entered the Rite Aid Pharmacy located on North Belfast Avenue in Augusta, Maine, wearing a hooded gray sweatshirt, blue and white athletic pants, and gloves and covering his face with a plaid cloth. Ellis approached the counter and demanded that the pharmacist give him oxycodone, Oxycontin, and Ritalin. He told the pharmacy employees to hurry up and said that he had a gun. Ellis absconded with six bottles containing oxycodone.
On February 18, 2015, Ellis robbed the Rite Aid Pharmacy located on Spring Street in Gardiner, again wearing a hooded sweatshirt and gloves and covering his face with a plaid cloth. He approached the pharmacy counter and demanded oxycodone 30 milligram pills. He repeatedly told pharmacy employees to “hurry” and several times commanded: “now, now, now!” Ellis absconded with 11 bottles of oxycodone.
Steven C. Chaput committed the robberies with Ellis. He has pled guilty and awaits sentencing.The investigation was conducted by the Augusta and Gardiner Police Departments and the Federal Bureau of Investigation.
Gang Member Convicted in Meth Case Sentensed to 14 YearsRead the Press Release
LOS ANGELES – A street gang member has been sentenced to 14 years in federal prison after being found guilty of two narcotics trafficking charges in relation to the sale of about two ounces of methamphetamine during an undercover investigation.
Aaron “Droopy” Ramos, 31, a resident of the Florence-Graham district of Los Angeles, was Monday yesterday afternoon to 168 months in federal prison by United States District Judge Christina A. Snyder.
Following a jury trial in December, Ramos was found guilty of conspiracy to distribute methamphetamine and distribution of methamphetamine. (Ramos was also convicted at trial in 2014, but that conviction was reversed by Judge Snyder because of comments made by a juror.)
“Drug trafficking continues to be a core activity of street gangs,” said United States Attorney Eileen M. Decker. “Taking this violent drug trafficker off of our streets both protects the community and cuts off a source of funding for the gang.”
A second defendant in the case – Sharon “Hyper” Paiz, 35, of Lancaster – who obtained the narcotics involved in the transaction, pleaded guilty and faces a mandatory minimum sentence of 10 years in federal prison when she is sentenced by Judge Snyder on June 20.
In court papers, prosecutors argued that Ramos was a high-ranking member of the 18th Street gang and that he was the driver in a fatal drive-by shooting. Ramos “was involved in a drive-by shooting simply for sport,” according to a sentencing memo filed in the case. “The shooting was a gang initiation that resulted in the death of a non-gang member that [Ramos] was supervising in his leadership role.” Ramos was convicted in relation to this shooting in state court and has nearly completed an 8-year prison sentence.
The investigation into Ramos and other 18th Street gang members was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Former Traffic Court Judge Gets Prison Term for Tax ChargeRead the Press Release
PHILADELPHIA - Michael Sullivan, 51, of Philadelphia, was sentenced today to 10 months in prison for one count of failure to report and pay payroll taxes. Sullivan had failed to report and pay payroll taxes for employees of the Fireside Tavern, South Marshall Street, Philadelphia. Sullivan was an owner and operator of the Tavern. Sullivan was a judge for the former Philadelphia Traffic Court.
Sullivan pleaded guilty to the charge on October 20, 2015. In addition to the prison term, U.S. District Court Judge Eduardo Robreno ordered restitution in the amount of $58,314, one year of supervised release, and a $25 special assessment.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service is being prosecuted by Assistant United States Attorney Paul L. Gray.
Former St. Louis Police Officer Pleads Guilty to Violating Civil Rights by Assaulting ArresteeRead the Press Release
A former St. Louis Metropolitan Police officer pleaded guilty today to depriving an arrestee, identified in court documents as M.W., of his civil rights by assaulting him while he was handcuffed, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Tammy Dickinson of the Western District of Missouri.
Thomas Carroll, 52, of St. Louis, pleaded guilty before U.S. District Judge Henry E. Autrey of the Eastern District of Missouri to deprivation of rights under color of law. Carroll was taken into custody immediately upon the conclusion of today’s hearing.
“Each time a law enforcement officer abuses their authority and the power entrusted to them, it erodes the public trust and makes it that much more difficult for good law enforcement officers to do their jobs,” said Principal Deputy Assistant Attorney General Gupta. “The Civil Rights Division is committed to prosecuting those law enforcement officers who abuse their authority, break the law and then attempt to cover up their criminal behavior.”
“I have zero tolerance for the actions of police officers who discard justice for their own angry vendetta,” said U.S. Attorney Dickinson. “I know the vast majority of law enforcement officers join me in repudiating this brand of brutality. This former police officer not only violated the civil rights of a person in police custody, he violated the public trust and his oath of office.”
M.W. was arrested at Ballpark Village on July 22, 2014, because he was unlawfully in possession of a credit card that belonged to Carroll’s daughter. Carroll, who was on duty that night, responded to Ballpark Village and confronted M.W., who was already under arrest, handcuffed and seated in the backseat of another officer’s patrol car. Carroll yelled at M.W., telling him that he made a “huge mistake” and “broke into the wrong girl’s car.”
Another police officer then drove M.W. to the Central Patrol police station, and Carroll followed behind in his own patrol car.
Carroll admitted that, despite orders from a superior officer to stay away from M.W., he entered the interview room where M.W. was handcuffed and shackled to the floor. Carroll began yelling at M.W., questioning him about who broke into his daughter’s car. Carroll threw M.W. into a chair and then picked him up and threw him into a wall. While M.W. was on the ground, Carroll punched M.W. in the torso. M.W. was handcuffed throughout the assault. As a result, M.W. suffered bodily injury.
M.W. never posed a threat to Carroll. Nonetheless, Carroll assaulted M.W. knowing it was wrong and against the law to do so, and knowing that it violated his oath as police officer.
By pleading guilty today, Carroll admitted that he deprived the victim of his constitutional right to be free from unreasonable seizure, which includes the right to be free from unreasonable force by a law enforcement officer.
According to the plea agreement, the government will present evidence at Carroll’s sentencing hearing regarding the severity of the assault, which is in dispute, including evidence that Carroll brandished his gun and put it in M.W.’s mouth as well as evidence regarding the nature and extent of the injuries suffered by M.W. The government will also present evidence that Carroll engaged in obstructive conduct in the days immediately after he assaulted M.W.
Under federal statutes, Carroll is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000.
In a separate but related case, a former prosecutor for the St. Louis Circuit Attorney’s Office pleaded guilty on Oct. 26, 2015, to concealing her knowledge of Carroll’s assault. Bliss Barber Worrell, 28, of Clayton, Missouri, pleaded guilty to misprision of a felony. Worrell was an assistant circuit attorney in the St. Louis Circuit Attorney’s Office Misdemeanor Division from August 2013 through July 2014. Worrell will be sentenced at a later date.
Worrell admitted that she failed to notify authorities of the assault and that she took an affirmative step to conceal the felony. Worrell also admitted that she filed charges without disclosing knowledge of the assault to her colleagues, supervisors or the judge assigned to setting a bond. She admitted that she allowed the charges to stand despite later learning that the facts that made out the charge of attempted escape were fabricated to cover for injuries that the arrestee sustained during the assault.
These cases are being investigated by the FBI’s St. Louis Division. These cases are being prosecuted by First Assistant U.S. Attorney David M. Ketchmark of the Western District of Missouri, who has been appointed as Special Attorney to the U.S. Attorney General, and Trial Attorney Fara Gold of the Civil Rights Division. The U.S. Attorney’s Office of the Western District of Missouri is prosecuting these cases with the Civil Rights Division due to the recusal of the U.S. Attorney’s Office of the Eastern District of Missouri.
Carroll Information
Carroll Plea Agreement
Former No. 2 of Los Angeles Sheriff’s Department Found Guilty of Obstructing Federal Investigation into Misconduct at County JailsRead the Press Release
LOS ANGELES – Paul Tanaka, who was the second in command of the Los Angeles Sheriff’s Department, was found guilty today of two obstruction of justice charges for overseeing efforts to derail a federal investigation into corruption and civil rights violations by sheriff’s deputies at two downtown jail complexes.
After only a few hours of deliberations, a federal jury convicted Tanaka of being the leader of a broad conspiracy to obstruct the federal investigation, a scheme that started when the Sheriff’s Department learned that an inmate at the Men’s Central Jail (MCJ) was an FBI informant. Tanaka directed a conspiracy that has previously resulted in the conviction of eight other former LASD deputies.
In addition to the conspiracy count, Tanaka was found guilty of one substantive count of obstructing justice.
Tanaka, 57, faces a statutory maximum sentence of 15 years in federal prison when he is sentenced by United States District Judge Percy Anderson on June 20.
“Another jury has spoken and sent a clear message that the former leaders of the Sheriff’s Department who abused their positions by encouraging, and then concealing, a corrupt culture, must be held accountable,” said United States Attorney Eileen M. Decker. “Mr. Tanaka joins eight of his former subordinates who have been found guilty of actively working to undermine a federal investigation into illegal conduct at the jails. Law enforcement agencies that house inmates, even dangerous ones, must remain steadfast in upholding the law and protecting the civil rights of all of the individuals in their custody. This is required by both the higher standard to which law enforcement is held and their sworn oath to uphold the law.”
Tanaka was the undersheriff – the number 2 in the LASD – until 2013, and he ran an unsuccessful campaign for sheriff in 2014. As he rose through ranks during a 31-year career with the LASD, Tanaka became well aware of “problem deputies” at the jails, allegations of rampant abuse of inmates and insufficient internal investigations into deputy misconduct. Nevertheless, Tanaka encouraged jail deputies to work in a “gray area,” and he transferred a jail supervisor who sought to implement reforms at the jails, according to the testimony presented during a 10-day trial.
The scheme to disrupt the federal investigation started in August 2011 when unknown deputies recovered a mobile phone from an inmate in MCJ, linked the phone to the FBI, and determined that the inmate was an informant in the FBI’s corruption and civil rights investigation. The phone was given to the inmate as part of an undercover investigation by a corrupt deputy, who subsequently pleaded guilty to a federal bribery charge.
In response to the federal investigation, members of the Tanaka-led conspiracy took steps to hide the cooperator from the FBI and the United States Marshals Service, which was attempting to bring the inmate to testify before a federal grand jury. The evidence presented during the trial showed that the deputies altered records to make it appear that the cooperator had been released from jail, when in fact he had been re-booked into custody under a fake name and moved to secure locations. Members of the conspiracy prohibited FBI access to the informant, and then told the cooperator that he had been abandoned by the FBI.
Over the course of several weeks, members of the conspiracy sought an order from a Los Angeles Superior Court judge to compel the FBI to turn over information about its investigation to the LASD. After the judge refused to issue the order because he had no jurisdiction over the federal law enforcement agency – and even though it was clear that the FBI was acting legally – two LASD sergeants confronted the lead FBI agent at her residence in an attempt to intimidate her. The sergeants threatened the agent with arrest and later reiterated this threat to her supervisor, stating that the agent’s arrest was imminent.
Tanaka oversaw co-conspirators who told fellow deputies not to cooperate in the federal investigation. Members of the conspiracy engaged in witness tampering by telling fellow deputies that the FBI would lie, threaten, manipulate and blackmail them to obtain information about the Sheriff’s Department.
“Mr. Tanaka created a culture of corruption seen only in the movies, and certainly nothing that anyone would expect from the nation’s largest Sheriff’s department,” said David Bowdich, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “My hope is that this conviction is the last chapter in this case so that the dedicated, law-abiding deputies at the L.A. Sheriff's Department, as well as the citizens they're sworn to serve and protect, can move on without distraction.”
Tanaka was indicted last year along with William Thomas Carey, a former LASD Captain who headed the Internal Criminal Investigations Bureau. Carey pleaded guilty last year and is pending sentencing. Now that Tanaka has been convicted, 10 members of the department – including former Sheriff Leroy Baca – have been convicted in relation to the scheme to obstruct justice.
As a result of the federal investigation into the LASD, another nine deputies who held various ranks have been convicted on charges related to the illegal use of force, illegal firearms and bribery. Two additional deputies are scheduled to go on trial May 3 in a case alleging an illegal use of force at the Twin Towers jail.
Former Massey Energy CEO Sentenced to a Year in Federal PrisonRead the Press Release
Don Blankenship Sentenced on Federal Conspiracy Charge
Acting U.S. Attorney Carol Casto announced that former Massey Energy Chief Executive Officer Don Blankenship was sentenced today to a year in federal prison and ordered to pay a $250,000 fine. Blankenship was sentenced for conspiracy to willfully violate mine health and safety standards after a jury returned a guilty verdict on the federal crime.
“This sentence is a victory for workers and workplace safety,” said Acting U.S. Attorney Casto. “It lets companies and their executives know that you can’t take chances with the lives of coal miners and get away with it. Putting the former chief executive officer of a major corporation in prison sends a message that violating mine safety laws is a serious crime and those who break those laws will be held accountable.”
Over the course of the trial, in which jury selection began on Oct. 1, 2015, and the jury returned a guilty verdict on Dec. 3, 2015, the jury heard evidence from 27 witnesses called by the United States. Many of these witnesses were coal miners who worked at the Upper Big Branch (UBB) mine prior to the 2010 explosion and they testified in detail from their firsthand knowledge of the unsafe working conditions at UBB, violations of U.S. Mine Safety and Health Administration (MSHA) regulations and organized efforts to obstruct and interfere with MSHA inspectors. The jury heard from Bill Ross, former Manager of Technical Services at Massey, who testified that he warned Blankenship about the company’s practice of rampant violations and told the defendant prior to the UBB explosion that Massey’s standard tactic of ignoring or defrauding MSHA could not be sustained without the possibility of a serious accident that could have fatalities. The evidence also showed that Blankenship received daily updates on safety violations and helped perpetuate them.
“Putting profits over the safety of workers is reprehensible,” said Acting U.S. Attorney Casto. “The jury acknowledged that with the guilty verdict and the sentence imposed today recognizes that disregarding safety laws has real consequences. From the beginning, the objective of this investigation and this prosecution was to not only show that those who violate safety laws will be held responsible, but also to deter these violations in the future to make everyone’s workplace safer.”
“Today’s sentence marks the culmination of a comprehensive, joint investigation that took over five years to complete and resulted in five criminal convictions.” said Special Agent in Charge Scott S. Smith of the FBI’s Pittsburgh Field Office. “Along with dedicated prosecutors in the U.S. Attorney’s Office and investigators in U.S. Department of Labor’s Office of Inspector General, the FBI is committed to holding those who commit crimes by enabling safety violations and who place profits above the value of human life accountable.”
“Donald Blankenship’s trial and conviction came after an explosion that killed 29 miners at the Upper Big Branch mine,” said Special Agent in Charge John Spratley of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations’ Philadelphia Regional Office. “His sentencing today reaffirms the responsibility of company executives to ensure they adhere to health and safety standards. The Department of Labor’s Office of Inspector General will continue to work with the Mine Safety and Health Administration and our law enforcement partners to investigate criminal worker safety violations that pose a threat to American workers.”
The prosecution was the result of a comprehensive investigation that, including Blankenship, resulted in five criminal convictions. In addition to the convictions of individuals, the outcome of the investigation also included a resolution of over $200 million with Alpha Natural Resources after it acquired Massey. This agreement established a foundation dedicated to mine safety and health research, the first of its kind and set aside nearly $50 million in funding for the foundation. That funding has provided the resources for some of the best and brightest minds in the country to pursue research that will make mines safer all over the world.
This matter was investigated by the FBI and the U.S. Department of Labor’s Office of Inspector General. Assistant U.S. Attorneys Steven R. Ruby, Gregory McVey and Gabriele Wohl, as well as former U.S. Attorney Booth Goodwin, handled the prosecution and tried the case before a federal jury.
The prosecution is part of a sustained effort by the U.S. Attorney’s Office for the Southern District of West Virginia to protect the health and safety of West Virginia workers by vigorously prosecuting workplace safety crimes and holding accountable those responsible for dangerous working conditions.
Former Eugene Property Manager Pleads Guilty to Wire FraudRead the Press Release
EUGENE, Ore. – Eugene property manager, Terry Shockley, 63, pleaded guilty before U.S. District Judge Ann Aiken today for engaging in a scheme to defraud clients and investors through his now-defunct property management company, TS Property Management (TSPM).
According to the plea agreement, Terry Shockley admitted to engaging in a scheme to defraud the clients of and investors in TS Property Management, resulting in a loss of over $3.5 million to his victims. The plea agreement sets forth the details of the scheme, which included operating the company under material false pretenses such as statements claiming that certain amounts were held in trust for clients, statements about the financial health of the company, and lulling statements to the Oregon Real Estate Agency in an attempt to convince the state regulator that nothing was wrong and the business was financially sound. In reality, Shockley had been experiencing financial issues since at least as early as December 2012 and was operating under substantial debt.
Shockley faces a statutory maximum sentence of 20 years in prison for each count of wire fraud. According to the plea agreement, Shockley has agreed to entry of a restitution order taking into account the full amount of his victims’ losses. Shockley will be sentenced on September 6, 2016 at 10:00 a.m.
The Federal Bureau of Investigation, with assistance from the Oregon Real Estate Agency, investigated this case and it is being prosecuted by Assistant U.S. Attorney Nancy M. Olson.
Former Belton Woman Sentenced for Stealing $471,000 from EmployerRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Belton, Mo., woman was sentenced in federal court today for embezzling $471,000 from her employer.
Kimberly Joyce Padgett, 43, of Osawatomie, Kan., formerly of Belton, was sentenced by U.S. District Judge Gary A. Fenner to two years and three months in federal prison without parole. The court also ordered Padget to pay $471,000 in restitution.
On Nov. 12, 2015, Padgett pleaded guilty to five counts of wire fraud. Padgett admitted that she embezzled approximately $471,000 from her employer, Reliant Financial Services in Kansas City, Mo. As part of Padgett’s duties at Reliant Financial Services, she managed the business’s books, paid the bills, managed the accounts receivable, operated the telephones, and prepared the paychecks. Padgett was also a signor on the business’s bank accounts and had use of the business’s credit cards for authorized business expenses. Padgett was terminated from employment in March 2015 when the fraud scheme was discovered.
During 2007 up to and including 2015, Padgett embezzled money from the Reliant Financial Services bank account intended for payroll tax and office supplies. Padgett wrote $350,000 in checks to herself and deposited those funds into her personal PayPal account and her husband’s bank account. Padgett used her PayPal account to pay for trips around America for herself, and at least once for a coworker, the coworker’s daughter, Padgett’s daughter, and others. She also used her company credit card in an unauthorized manner to support a lavish lifestyle by paying expenses for herself and others, including clothing, jewelry, gasoline, vacations, hotels, and restaurants.
From 2012 to 2015, Padgett made little to no payments in payroll taxes. Company owners had no knowledge the payroll taxes were not paid, and did not learn the taxes were not paid until they were contacted by the IRS.
This case was prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the FBI.
Former BVU Board Chairman Pleads GuiltyRead the Press Release
ABINGDON, VIRGINIA – The former Chairman of the Board of Directors for the Bristol Virginia Utilities Authority pled guilty this morning in the United States District Court for the Western District of Virginia in Abingdon to a Federal conspiracy charge, United States Attorney John P. Fishwick Jr. announced.
Bruce J. Clifton Jr., 64, of Bristol, Va., waived his right to be indicted and pled guilty this morning to a one count Information charging him with conspiracy to commit program fraud and having knowledge of the actual commission of felony and concealing such felony from the United States.
“The level of corruption at BVU was overwhelming,” United States Attorney John P. Fishwick Jr. said today. “In cooperation with our partners in law enforcement, we continue to dismantle these corrupt individuals and put those who have profited from corruption in federal prison.”
“The sheer number of FBI investigations and subsequent charges against individuals involved in the Bristol Virginia Utilities Authority should demonstrate the government’s commitment to seeking out and holding accountable those who manipulate the system for their personal gain. Public corruption continues to be the Bureau’s top criminal priority. We encourage the public to continue to report suspicious activity; through their concern and information the FBI strives to wipe out corruption at all levels,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division.
According to evidence presented at today’s hearing by Assistant United States Attorney Zachary T. Lee, Clifton was a citizen member of the BVU Board of Directors from January 2, 2010 through March 27, 2016, having served as the Chairman of the Board from July 2015 to March 27, 2016.
In 2011, BVU entered into an agreement with Company #1. The agreement stated that if BVU signed a contract with Company #1, Company #1 would pay to entertain BVU executives and BVU Board Members in Dallas, Texas. This entertainment included the payment of hotel expenses, limousine services, meals and tickets to an NFL game between the Dallas Cowboys and the Seattle Seahawks on November 6, 2011, in which not only tickets would be provided but also access to a luxury suite would be available. On or about September 29, 2011, a contract was entered into with Company #1 and funds in the amount of $4,496,096 were allocated by BVU to pay Company #1.
On or about November 5, 2011 and November 8, 2011, Wes Rosenbalm, Bruce J. Clifton Jr., and other members of the BVU Board of Directors, traveled to Dallas, Texas. During this trip, these individuals attended a Dallas Cowboys football game, stayed at the Westin Park Central Hotel, were transported by a limousine service, were provided a tour of Dallas, Texas, and were provided multiple meals, all at the expense of Company #1.
The total value of the services and things of value provided to Clifton, individually, was approximately, $2,500. The total costs to Company #1 for providing these services and things of value to Clifton and BVU employees and BVU Board Members, exceeded $10,000. On or about January 9, 2012, Clifton completed his Virginia state mandated financial disclosure form for the year 2011 and did not disclose the payment of expenses and things of value he received from Company #1 for his trip to Dallas, Texas.
In addition, Clifton, who is a general sales manager of Company #2, used his position on the BVU Board of Directors and worked with BVU Employee #3, to ensure that Company #2 secured bids to provide BVU with fleet vehicles. Clifton ensured Company #2 won bids to provide vehicles to BVU by getting information from BVU Employee #3 about each bid submitted and then adjusting the bid from Company #2 to ensure it was the lowest bid. When Employee #3 passed away in April 2011, Clifton approached BVU Employee #4 and explained that Employee #3 would tell Clifton when he was not the low bidder for a contract and when Clifton needed to “sharpen his pencil.”
On or about July 17, 2015, Clifton was interviewed by an agent with the Federal Bureau of Investigation and admitted that Clifton had told another car salesman that he had been provided inside information related to bids received by BVU for the purchase of automobiles.
Clifton admitted today that on September 16, 2013, the BVU Board of Directors met and after entering executive session, discussed the implications of alleged misconduct of Wes Rosenbalm. During that meeting, which BVU Board Members did not know was being recorded, members discussed the fact that many of the board members had engaged in similar activity, including accepting tickets and attending the previous trip to Dallas, Texas, which had been paid for by a vendor. Board members also discussed that many other employees could get wrapped up in a scandal if the information related to Wes Rosenbalm came to light in public. Specifically, Stacey Pomrenke and David Copeland were employees mentioned as potentially being involved in illegal activity associated with vendors of BVU.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Zachary Lee and Special Assistant United States Attorney Kevin Jayne prosecuted the case for the United States.
Federal Jury Convicts Man of Sex Trafficking MinorRead the Press Release
Memphis, TN – After a three-day trial, a federal jury found a man guilty of trafficking a minor for sex. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty verdict today.
According to information presented in court, between May and June 2014, Harold Davis, 27, of Memphis, met a female teenage runaway. Davis obtained a cellphone and a wig for the teen and subsequently put her image on Backpage.com to advertise her for commercial sexual encounters.
The defendant’s activity was discovered when a Shelby County Sheriff’s Deputy stopped Davis’ vehicle for a traffic violation. He noticed the female minor in the backseat of the vehicle. The deputy also observed an unusually large amount of condoms and female hygiene products in the car.
The Federal Bureau of Investigation’s (FBI) Human Trafficking Task Force furthered the investigation into Davis, linking the Backpage ads to Davis through his phone number and email accounts.
On Tuesday, April 5, 2016, a federal jury convicted Davis on one count of sex trafficking a minor and one count of using the internet to conduct an unlawful activity.
Davis is scheduled to be sentenced by U.S. District Judge Samuel H. Mays Jr. on Thursday, July 14, 2016. He faces a mandatory minimum ten-year sentence and up to life in prison.
This case was investigated by the FBI and Shelby County Sheriff’s Department.
Assistant U.S. Attorneys Debra Ireland and Kasey Weiland are prosecuting this case on the government’s behalf.
Employee Sentenced for Using Personal Information Stolen from Her Employers to Obtain Fraudulent Tax Refunds and Credit CardsRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Tricia N. Bryan, age 30, of Gwynn Oak, Maryland, today to 30 months in prison followed by five years of supervised release for wire and bank fraud, and aggravated identity theft. Judge Motz ordered Bryan to pay restitution of $65,356.84, the amount of the actual losses, and forfeit property purchased with the fraudulent credit cards she opened in other peoples’ identities, including a flat screen TV, and a designer Vera Wang sapphire and a diamond engagement ring.
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; Commissioner Kevin Davis of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
From March to November 2010, and from November 2011 to July 2013, Bryan worked for a defense contractor in Columbia, Maryland who provided data entry services for the National Guard Bureau’s Health Readiness Record. From November 2013 to March 2015, Bryan worked at a global investment management firm in Owings Mills, Maryland. At both places of employment, Bryan was entrusted with the personal identity information of individuals, including military personnel.
According to her plea agreement, beginning in March 2010 to June 2013, Bryan engaged in a bank fraud scheme in which she applied for credit cards using personal identity information she stole from work at the defense contractor, including the identity of soldiers. Bryan applied for at least 26 separate accounts, and made at least $14,332.54 in charges on fraudulently obtained credit cards.
On July 18, 2013, state search warrants were executed at her residence. Items seized included credit card applications and credit cards in the names of others, receipts for items purchased with the fraudulently obtained credit cards, and sticky notes Bryan made bearing personal information of soldiers in the Health Readiness Record.
In a separate fraud scheme, from March 2011 to February 2014, Bryan also used personal identity information she stole from work at both places of employment to electronically file at least 61 false federal tax returns and 11 fraudulent state income tax returns. Of these, 18 federal returns and seven state income tax returns were accepted for filing. Three federal refunds and one state refund were attempted to be deposited into closed accounts and the replacement checks never claimed or cashed by Bryan. Overall, Bryan actually received $41,674 in fraudulent federal refunds and $8,849 in fraudulent state refunds.
The total amount of actual loss arising from the bank and tax refund fraud schemes was $65,356.84.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the Defense Criminal Investigative Service, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine and Special Assistant U.S. Attorney Joshua Felsen, a cross-designated Baltimore City Assistant State’s Attorney, who prosecuted the case.
District Man Sentenced to Six Years in Prison for Attacking Girlfriend During ArgumentRead the Press Release
WASHINGTON – Kenneth Charles, 38, of Washington, D.C., was sentenced today to a six-year prison term for a vicious assault on his girlfriend last fall that left her in a coma for months, U.S. Attorney Channing D. Phillips announced.
Charles pled guilty in February 2016, in the Superior Court of the District of Columbia, to a charge of aggravated assault. He was sentenced by the Honorable Todd E. Edelman. Following his prison term, Charles will be placed on three years of supervised release.
According to the government’s evidence, on the evening of Oct. 19, 2015, Charles got into an argument with his girlfriend at the apartment they shared in Southeast Washington. The argument began in the bedroom, but was loud enough so that the victim’s daughter, who was inside the apartment with a friend at the time, could hear the yelling. As the argument ensued, the victim left the bedroom and walked out to the balcony.
When she reached the balcony, the victim tossed Charles’s clothes over the side and onto the ground below. She then immediately sat down in a chair on the balcony. Charles followed the victim out to the balcony, walked over to the edge, looked over and saw his clothes, and then turned to the victim and punched her in the face multiple times. Following the assault on the balcony, he and the victim made their way into the apartment, at which point, the argument and physical struggle continued. Charles punched the victim repeatedly until she lost consciousness. At some point during the altercation, the victim hit her head on a table. Charles, however, continued punching her even after she had fallen into the table and was unconscious.
Charles attempted to clean up the scene before he left the apartment. He did not call police before leaving. A witness called 911. At the hospital, the victim was unconscious and unresponsive. Two months after her arrival in the hospital, the victim slowly began to awaken from her coma. She is still recovering from the attack.
In announcing the sentence, U.S. Attorney Phillips commended the work of those who investigated the case for the Metropolitan Police Department, including detectives of the Criminal Investigations Division Homicide Branch as well as officers and detectives from the Seventh District. He also expressed appreciation for the work of the D.C. Department of Fire and Emergency Medical Services and the U.S. Marshals Service. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Jennifer Clark; Paralegal Specialists Zekiah Wright, Debra Joyner, and Tierra Nanches; Investigative Analyst Zachary McMenamin, and Assistant U.S. Attorney Richard DiZinno. Finally, he commended the work of Assistant U.S. Attorney Robert Eckert and Jessica Brooks, who investigated and prosecuted the case.
Detroit man pleads guilty to interstate heroin traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – James Leon Fisher, 29, of Detroit, Michigan, pled guilty to heroin trafficking in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Fisher, along with thirteen other individuals, conspired to transport heroin across state lines from Detroit, Michigan to Morgantown, West Virginia. The operation was disrupted in February 2016 when a federal grand jury returned three separate heroin trafficking indictments.Specifically, Fisher sold heroin in December 2015 in Monongalia County, West Virginia. He pled guilty to “Distribution of Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Mon Metro Drug and Violent Crime Task Force investigated.U.S. Magistrate Judge Michael John Aloi presided.
Dallas Check Cashing Business Owner Sentenced to 21 Months in Federal Prison for Role in Stolen Tax Refund SchemeRead the Press Release
DALLAS — A Dallas check cashing business owner, Obinna Njoku, who pleaded guilty to his role in a stolen tax refund scheme, has been sentenced by U.S. District Judge Sam A Lindsay to 21 months in federal prison and ordered to pay $309,679 in restitution, announced U.S. Attorney John Parker of the Northern District of Texas.
Njoku pleaded guilty in August 2015 to a superseding information charging one count of conspiracy to launder monetary instruments. At Monday’s sentencing hearing, Judge Lindsay ordered Njoku to surrender to the Bureau of Prisons on May 10, 2016.
According to the factual resume filed in the case, Njoku was the sole director of All-Ways Insurance Group, LLC, and he owned and operated All-Ways Check Cashing, Inc., a money service business licensed in Texas and federally, as an agent of MoneyGram. In 2012, All-Ways had at least two locations in Dallas, including one on Forest Lane. Njoku was also the designated anti-money laundering compliance officer for All-Ways, in its agency for MoneyGram, and represented to MoneyGram that All-Ways had implemented an anti-money laundering compliance policy and would comply with all reporting and recordkeeping requirements.
From January through April 2012, according to the factual resume, Njoku was asked by several individuals to cash, through All-Ways, numerous checks purported to be federal income tax refunds issued to individuals in the Dallas area. The individuals asking Njoku to cash these checks brought “batches” of checks, often eight to 12 at a time, to Njoku at the Forest Lane All-Ways location. These “batches” often had consecutive check numbers, and each check was always for less than $10,000. The individuals who brought the checks to Njoku to cash were not the individuals to whom the checks were payable. The total amount of each “batch” of checks presented to Njoku, as well as the amount of cash released to the respective individual presenting the “batch” of checks, was usually well over $10,000.
Njoku believed, according to the factual resume, that the individuals asking for the checks to be cashed had prepared and filed federal income tax returns for the persons to whom the checks were issued, and those individuals had generated illegally inflated refund amounts. While he believed the checks were likely derived from criminal activity involving fraudulent federal tax returns, Njoku did not ask or seek any details. Instead, Njoku deliberately blinded himself to what he suspected was the source of the checks and deposited the checks into his All-Ways bank accounts at Comerica Bank. As his commission for cashing these checks, Njoku kept 25 to 35 percent of the overall amount of each check “batch” presented to him for cashing, which was much more than the usual three to five percent he collected from other check cashing customers.
The investigation by special agents with Internal Revenue Service Criminal Investigation revealed that the checks presented to Njoku for cashing resulted from fraudulently filed federal income tax returns, and the payees on those checks had their identities stolen by individuals who used their personal information to file fraudulent tax returns and fraudulently claim refunds. These fraudulent federal tax returns submitted in these victims’ names were electronically filed, used an incorrect address for the taxpayer, claimed a refund, and directed the refund to be processed as an e-Collect check. The total amount of the checks obtained through wire fraud and cashed by Njoku through All-Ways was at least $300,000, according to the factual resume.
Internal Revenue Service Criminal Investigation investigated the case. Assistant U.S. Attorney John J. de la Garza was in charge of the prosecution.
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Dallas Carjackers SentencedRead the Press Release
DALLAS — Donshay Jones, 24, of Dallas, was sentenced today by U.S. District Judge Ed Kinkeade to serve a total of 168 months (14 years) in federal prison, following his guilty plea to felony offenses stemming from the February 2014 armed carjacking of a young woman and her young child in Dallas, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Jones pleaded guilty in November 2015 to one count of carjacking and one count of using, carrying, and brandishing a firearm during and in relation to a crime of violence. Jones’ co-defendant, Joshua Sutherland, 22, also of Dallas, pleaded guilty to one count of carjacking and was sentenced last year by Judge Kinkeade to 87 months in federal prison.
According to documents filed in the case, Jones and Sutherland were in an apartment building’s parking lot on Ledbetter Drive in Dallas on February 18, 2014. With Sutherland acting as the “look out,” Jones shoved the woman and her four-year-old son against a wall, pointed and held a firearm on them, and threatened to kill them both unless she turned over her valuables, including her car keys. After the woman pointed out her car to Jones, Jones searched her person, and then he and Sutherland got into her car and drove away.
The Dallas Police Department and the Federal Bureau of Investigation conducted the investigation. Deputy Criminal Chief Assistant U.S. Attorney Lisa J. Dunn prosecuted the case.
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Co-Owner of Company That Originated Millions in Fraudulent Mortgages Sentenced to 21 Months in PrisonRead the Press Release
NEWARK, N.J. - The co-owner of a mortgage company that was responsible for a long-running, large-scale mortgage fraud scheme that caused millions in losses was sentenced today to 21 months in prison, U.S. Attorney Paul J. Fishman announced.
Lester Soto, 59, of Freehold, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with two counts of conspiracy to commit bank fraud. Judge Salas imposed the sentence today in Newark federal.
According to the documents filed in this and other cases, as well as statements in court:
From September 2006 to May 2008, Soto and others, including fake document creators, a complicit lawyer and paralegal, and numerous loan officers, engaged in two related mortgage fraud conspiracies through a company called Premier Mortgage Services (Premier). Soto and his conspirators targeted properties in low-income areas of New Jersey. After recruiting “straw buyers,” Soto and his conspirators used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets and income than they actually did.
Soto and his conspirators then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties. Soto and his conspirators then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (HUD-1s), which hid the true sources and destinations of the mortgage funds provided by financial institutions. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings.
Besides being a part-owner of Premier, Soto also acted as a loan officer on certain Premier mortgage loan applications and took a percentage of Premier’s profits. Soto employed document makers to create false and fraudulent documents and put mortgage brokers at Premier in contact with these document makers to create other false and fraudulent documents. Soto instructed Premier employees to provide him with loan files that Premier employees believed contained suspicious information, and then personally shepherded these loan files through to funding.
Other conspirators, including Isaac DePaula, 36, of Brazil, Adilson Silva, 50, of Union, New Jersey, and Klary Arcentales, 47 of Lyndhurst, New Jersey, were loan officers at Premier. DePaula, Silva, and Arcentales recruited straw buyers, provided false and fraudulent documents to the straw buyers, and incorporated false and fraudulent documents into loan applications to induce financial institutions to fund mortgage loans. The loan officers profited illegally by receiving a commission from Premier for each mortgage loan that they closed and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for themselves, often via shell corporations or nominee bank accounts.
Rodrigo Costa, 35, of Brazil, created false and fraudulent documents, including Verifications of Deposit (VODs) and Verifications of Rent (VORs). Other defendants, including DePaula and Silva, then submitted Costa’s fraudulent documents to support the fraudulent mortgage loan applications of various straw buyers. For his participation, Costa received a portion of the illicit proceeds from the mortgages.
Michael Rumore, 57, of Toms River, New Jersey, was an attorney licensed in the State of New Jersey. Rumore served as the settlement agent on mortgage loans brokered by DePaula, Silva, and Soto for various subject properties. Rumore used his status as an attorney to further the fraudulent scheme, including by convening closings, receiving funds from lenders, and preparing HUD-1s that purported to reflect the sources and destinations of funds for mortgages on subject properties B when in fact, the HUD-1s were neither true nor accurate. Rumore disbursed mortgage loan proceeds directly to Premier, Soto, DePaula, and Silva, including amounts not reflected on the HUD-1s. Rumore received a fee for each fraudulent loan in which he participated.
Antonio Pimenta, 48, of Neshanic Station, New Jersey, owned and managed Kelmar Construction Co. (Kelmar). Kelmar built properties that were then sold to straw buyers utilizing fraudulent mortgage loans brokered by Arcentales.
In addition to the prison term, Judge Salas ordered Soto to serve five years of supervised release and pay restitution of $3,745,344.19.
Arcentales, one of the loan officers who provided fraudulent documents to financial institutions on behalf of straw buyers, was recently sentenced on March 28, 2016 to 18 months in prison. Linda Cohen, 58, of Orange, New Jersey, a paralegal who served as the settlement agent on mortgage loans brokered by Arcentales for various properties, was sentenced on March 30, 2016 to six months in prison.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s sentence. Fishman also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its participation in the investigation.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Zach Intrater of the U.S. Attorney’s Office Criminal Division.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov
Defense counsel: Jeff Smith Esq., of Teaneck, New Jersey
Chaves County Man Pleads Guilty to Federal Firearms Charge and Possessing Contraband in PrisonRead the Press Release
ALBUQUERQUE – Richard Gonzales, 30, of Dexter, N.M., pleaded guilty today in federal court in Las Cruces, N.M., to violating federal firearms laws and possession of contraband in prison.
Gonzales was arrested in Feb. 2016, on a criminal complaint charging him with being a felon in possession of a firearm and ammunition and possessing contraband in prison. According to the complaint, law enforcement officers found Gonzales, who is a convicted felon, in possession of a firearm and ammunition on Nov. 5, 2015, during a routine traffic stop. Thereafter, on Nov. 23, 2015, corrections officers at the Chaves County Detention Center recovered 14.6 grams of methamphetamine from Gonzales during a strip search after he returned to the detention center following his initial appearance in federal court in Roswell, N.M.
During today’s proceedings, Gonzales pled guilty to a felony information charging him with being a felon in possession of a firearm and possession of contraband in prison. In entering his guilty plea, Gonzales admitted that he unlawfully possessed a firearm on Nov. 5, 2015, in Chaves County, N.M. He acknowledged that he was prohibited from possessing firearms or ammunition as a result of his prior convictions for burglary, conspiracy to commit burglary and being a felon in possession of a firearm.
Gonzales also admitted possessing 14.6 grams of methamphetamine on Nov. 23, 2015, while he was incarcerated at the Chaves County Detention Center. Gonzales further admitted that he was on supervised release for a prior conviction at the time he committed the two crimes charged in the felony information.
At sentencing, Gonzales faces a maximum of 20 years in federal prison followed by up to three years of supervised release. Gonzales remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Chaves County Metro Narcotics Task Force and the Roswell Police Department. Assistant U.S. Attorney Alfred J. Perez of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
The HIDTA Chaves County Metro Narcotics Task Force is comprised of investigators from the Roswell Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI and the Chaves County Sherriff’s Office. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Buffalo Man Pleads Guilty to Selling Drugs That Were Smuggled into the Attica Correctional FacilityRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul, Jr. announced today that Jerome Tallington, 28, of Buffalo, NY, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to narcotics conspiracy and possession with intent to distribute and distribution of heroin. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Meghan A. Tokash, who is handling the case, stated that the defendant sold heroin and marijuana to Elizabeth Camue Martinez. Between September 2013 and December 2013, Martinez then smuggled gram quantities of heroin and ounces of marijuana into the Attica Correctional Facility and provided it to her husband, Andres Martinez, who was at that time incarcerated in the facility, knowing that he would then distribute the heroin and marijuana to other inmates.
Elizabeth Camue Martinez and her husband Andres Martinez have also been convicted and are awaiting sentencing.
The plea is 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 New York State Police, under the direction of Major Steven Nigrelli, the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major Wayne C. Olson, the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard, the Wyoming Country District Attorney’s Office, under the direction of Donald O’Geen, and the New York State Department of Corrections and Community Supervision, under the direction of Commissioner Anthony Annucci.Sentencing is scheduled for July 22, 2016 at 9:00 a.m. before Judge Vilardo.
Buffalo Man Charged with August 2015 Robbery of Bellevue BankRead the Press Release
PITTSBURGH - A resident of Buffalo, New York, has been indicted by a federal grand jury in Pittsburgh on a charge of bank robbery, United States Attorney David J. Hickton announced today.
The one-count indictment named Casey Swain, 37, as the sole defendant.
According to the indictment presented to the court, on or about Aug. 7, 2015, Swain stole $4,970 from the First Niagara Bank located at 484 Lincoln Avenue, Bellevue, Pennsylvania.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Ryan K. Hart is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and Bellevue Police Department conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bossier City resident sentenced to 15 years in prison for receiving child pornographyRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Bossier City man was sentenced Monday to 180 months in prison for receiving child pornography.
Christopher J. Leger, 53, of Bossier City, La., was sentenced by U.S. District Judge S. Maurice Hicks Jr. on one count of receiving child pornography. He was also sentenced to 10 years of supervised release and must register as a sex offender. According to the November 18, 2015 guilty plea, federal agents executed a search warrant March 13, 2014 on Leger’s residence. Child pornography had previously been downloaded from a computer at the address. After examining media devices from the residence, agents found 76 images and two videos of child pornography.
“The internet is not a safe haven for those downloading and sharing images of abused children,” Finley stated. “These materials are illegal and perpetuate the extreme abuse of children. This prison sentence shows that abusers will be vigorously prosecuted.”
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood combines federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) also encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
Homeland Security Investigations and Louisiana Internet Crimes Against Children Task Force conducted the investigation. Assistant U.S. Attorney Earl M. Campbell prosecuted the case.
Blankenship sentenced to a year in Federal prisonRead the Press Release
CHARLESTON, W.Va. – Acting United States Attorney Carol Casto announced that former Massey Energy Chief Executive Officer Don Blankenship was sentenced today to a year in federal prison and ordered to pay a $250,000 fine. Blankenship was sentenced for conspiracy to willfully violate mine health and safety standards after a jury returned a guilty verdict on the federal crime.
“This sentence is a victory for workers and workplace safety. It lets companies and their executives know that you can’t take chances with the lives of coal miners and get away with it,” stated Acting United States Attorney Carol Casto. “Putting the former chief executive officer of a major corporation in prison sends a message that violating mine safety laws is a serious crime, and those who break those laws will be held accountable.”
Over the course of the trial, in which jury selection began on October 1, 2015, and the jury returned a guilty verdict on December 3, 2015, the jury heard evidence from 27 witnesses called by the United States. Many of these witnesses were coal miners who worked at the Upper Big Branch (UBB) mine prior to the 2010 explosion, and they testified in detail from their firsthand knowledge of the unsafe working conditions at UBB, violations of U.S. Mine Safety and Health Administration (MSHA) regulations, and organized efforts to obstruct and interfere with MSHA inspectors. The jury heard from Bill Ross, former Manager of Technical Services at Massey, who testified that he warned Blankenship about the company’s practice of rampant violations, and told the defendant prior to the UBB explosion that Massey’s standard tactic of ignoring or defrauding MSHA could not be sustained without the possibility of a serious accident that could have fatalities. The evidence also showed that Blankenship received daily updates on safety violations and helped perpetuate them.
“Putting profits over the safety of workers is reprehensible. The jury acknowledged that with the guilty verdict, and the sentence imposed today recognizes that disregarding safety laws has real consequences,” said Casto. “From the beginning, the objective of this investigation and this prosecution was to not only show that those who violate safety laws will be held responsible, but also to deter these violations in the future to make everyone’s workplace safer.”
“Today’s sentence marks the culmination of a comprehensive, joint investigation that took over five years to complete and resulted in five criminal convictions.” said Special Agent in Charge Scott S. Smith of the FBI’s Pittsburgh Field Office. “Along with dedicated prosecutors in the U.S. Attorney’s Office and investigators in United States Department of Labor’s Office of Inspector General, the FBI is committed to holding those who commit crimes by enabling safety violations and who place profits above the value of human life accountable.”
"Donald Blankenship's trial and conviction came after an explosion that killed 29 miners at the Upper Big Branch mine. His sentencing today reaffirms the responsibility of company executives to ensure they adhere to health and safety standards. The Department of Labor's Office of Inspector General will continue to work with the Mine Safety and Health Administration and our law enforcement partners to investigate criminal worker safety violations that pose a threat to American workers," said John Spratley, Special Agent in Charge of the Philadelphia Regional Office, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
The prosecution was the result of a comprehensive investigation that, including Blankenship, resulted in five criminal convictions. In addition to the convictions of individuals, the outcome of the investigation also included a resolution of over $200 million with Alpha Natural Resources after it acquired Massey. This agreement established a foundation dedicated to mine safety and health research, the first of its kind, and set aside nearly $50 million in funding for the foundation. That funding has provided the resources for some of the best and brightest minds in the country to pursue research that will make mines safer all over the world.
This matter was investigated by the Federal Bureau of Investigation and the United States Department of Labor’s Office of Inspector General. Assistant United States Attorneys Steven R. Ruby, Gregory McVey, and Gabriele Wohl, as well as former United States Attorney Booth Goodwin, handled the prosecution and tried the case before a federal jury.
The prosecution is part of a sustained effort by the United States Attorney’s Office for the Southern District of West Virginia to protect the health and safety of West Virginia workers by vigorously prosecuting workplace safety crimes and holding accountable those responsible for dangerous working conditions.
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Bergen County, New Jersey, Man Admits Embezzling Millions of Dollars from North Jersey BusinessRead the Press Release
TRENTON, N.J. – The former chief financial officer of a Bergen County business today admitted to embezzling millions of dollars from the company and to evading taxes, U.S. Attorney Paul J. Fishman announced.
Gomidas Garabed Hartounian, 52, of Franklin Lakes, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to a superseding information charging him with one count of wire fraud and one count of tax evasion.
According to documents filed in this case and statements made in court:
From April 2007 through April 2014, Hartounian was the CFO for “Company A,” a for-profit company with its principal place of business in Englewood, New Jersey. Hartounian is also the sole owner of MGB LLC, a company registered to his residence. Hartounian fraudulently designated MGB as a vendor in Company A’s accounting system without disclosing that he controlled MGB. He directed Company A employees to issue checks to MGB for freight services that MGB supposedly provided Company A. When asked for the MGB invoices, he claimed that he was maintaining them in his office.
Because Hartounian didn’t have sole signatory power, he forged the signatures of the chief executive officer or the chief operating officer before depositing the checks into bank accounts that he controlled. Hartounian also had checks issued directly from Company A bank accounts to pay for his personal expenses, including real estate taxes to the Borough of Franklin Lakes for $6,562 in August 2011.
Hartounian also admitted that he filed a false federal tax return, Form 1040, for the calendar year 2012 in which he knowingly did not report $1.29 million in income that he received as the sole owner of MGB. Instead, Hartounian falsely understated his income for 2012 as $133,290.
The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss resulting from the crime. The tax evasion count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss resulting from the crime. Sentencing is scheduled for Aug. 16, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Shana W. Chen of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Alan Silber Esq., Roseland, New Jersey
Baltimore Serial Robber Sentenced to Six Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced Robert William Sykes, Jr., age 27, of Baltimore, Maryland, today to six years in prison followed by three years of supervised release for two armed commercial robberies. At today’s sentencing hearing Judge Garbis found that Sykes also committed at least one, and up to eight, additional armed robberies.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Baltimore Police Commissioner Kevin Davis; and Baltimore City State’s Attorney Marilyn Mosby.
According to the information presented at today’s sentencing hearing, Sykes admitted that on November 30, 2014, he robbed a discount store located in the 5100 block of Liberty Heights Avenue in Baltimore. Sykes, wearing a red and white hoodie jacket, entered the store and demanded money from the cashier, threatening to shoot if the teller did not comply with his demands. The cashier gave Sykes approximately $97, and Sykes fled through the front doors. A customer who was in the store followed Sykes and took a picture of him as he got into the driver’s side door of a Cadillac. That car was subsequently determined to be registered to Sykes.
Sykes also admitted that on December 2, 2014, he robbed an auto parts store located in the 2000 block of Maryland Avenue in Baltimore. Sykes entered the store holding a handgun in his left hand. He demanded that the two employees who were standing at the cash registers give him money. When the employees told him that they were unable to open the registers without a key, Sykes fled the store. Several hours later, two Baltimore City Police officers on patrol in the Western District recognized Sykes’ Cadillac as being the car used to flee the November 30th robbery. Police stopped the car and detained Sykes, who was the driver and sole occupant. During the course of the investigation, which included an interview with Sykes and the execution of a search warrant on his car, police learned that Sykes is left handed, and they recovered a red and white hoodie jacket, matching the jacket worn in several robberies, and a black BB gun, believed to have been used to facilitate the robberies.
During the sentencing hearing, the government presented evidence of Sykes’ participation in five other robberies. For example, according to the government’s evidence, on October 20, 2014, and November 1, 2014, Sykes robbed a convenience store located in the 700 block of Washington Boulevard in Baltimore, each time wearing the red and white hoodie jacket. In each robbery Sykes displayed the gun to the store employees and ordered the employees to give him the money in the cash registers. After the employees gave Sykes the money from their registers, Sykes ordered the employees to lay on the floor. Sykes then left the store.
The government also presented evidence that on November 3, 2014, Sykes also robbed a convenience store, in the 3600 block of Potee Street. Also on November 3rd Sykes attempted to rob a convenience store in the 200 block of West Coldspring Avenue and on November 5, 2014, attempted to rob a discount store in the 5300 block of York Road.
After hearing the government’s evidence, Judge Garbis ruled that Sykes committed at least one and up to eight robberies in addition to the two robberies to which he pleaded guilty.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Special Assistant United States Attorney Piper F. McKeithen, a cross-designated Baltimore Assistant State’s Attorney assigned to Exile cases, who prosecuted the case.
Atlantic County, New Jersey, Tax Preparer Sentenced to Two Years in Prison for Tax FraudRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, tax preparer was sentenced today to 24 months in prison for including fraudulent credits and deductions on federal tax returns for his clients in an effort to gain repeat business, U.S. Attorney Paul J. Fishman announced.
Tinh Van Vo, 50, of Egg Harbor Township, New Jersey, was previously convicted of 10 counts of aiding and assisting in the preparation of false federal income tax returns following a two-week trial before U.S. District Judge Robert B. Kugler, who imposed the sentence today in Camden federal court.
According to documents filed in this case and the evidence at trial:
Vo prepared and filed fraudulent U.S. Individual Income Tax Returns through his business, TVO Services in Atlantic City, New Jersey. The returns attached schedules for fictitious educational credits, charitable contributions, and job expenses the taxpayers were not entitled to take – all to generate fraudulently inflated refunds.
In addition to the prison term, Judge Kugler sentenced Vo to one year of supervised release. During that time, Vo is prohibited from employment that allows him to prepare or assist in the preparation of tax returns. Vo must also pay a $15,000 fine.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the Criminal Division in Camden, New Jersey.
Defense counsel: William J. Hughes Jr. Esq., Atlantic City, New Jersey
Alien Pleads Guilty to Unlawfully Possessing FirearmsRead the Press Release
TULSA, Okla.—Mauricio Arevalo-Magana, 25, pleaded guilty in federal court to the charge of Alien Unlawfully in the United States in Possession of Firearms, announced Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma. United States District Court Chief Judge Gregory K. Frizzell will sentence Arevalo-Magana on July 12, 2016.
In the summer of 2015, Arevalo-Magana, an alien illegally in the United States, exchanged drugs for firearms in Tulsa. Those firearms, which included semi-automatic rifles, had been stolen during a burglary of a home in Ponca City by another individual. Agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrested that individual and were able to recover approximately 43 stolen firearms. ATF agents then became aware of the Arevalo-Magana’s unlawful exchange.
At the time, ATF only knew Arevalo-Magana by his alias, “Wicho.” With the assistance of the Tulsa Police Department, ATF agents were able to discover Arevalo-Magana’s true name and apprehend him. Arevalo-Magana faces a statutory maximum sentence of 10 years in prison and a $250,000 fine.
This case was investigated by ATF. Assistant United States Attorney Neal C. Hong prosecuted the case.
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Tuesday 5 April 2016
Wheeling woman pleads guilty to cocaine traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Jessica Carrie Estep, 30, of Wheeling, pled guilty to cocaine trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
In late 2015, Estep conspired with other individuals to possess and sell cocaine in Ohio County, West Virginia. She pled guilty today to one count of “Conspiracy to Distribute Cocaine Base.” She faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Randy Bernard prosecuted the case on behalf of the government. The Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.U.S. Magistrate Judge James E. Seibert presided.
Virginia man pleads guilty to unlawful possession of firearmsRead the Press Release
MARTINSBURG, WEST VIRGINIA – Evan Megeath, 33, of Strasburg, Virginia, pled guilty in federal court today to unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.Megeath, who has multiple previous felony convictions in state court in Virginia, was discovered in unlawful possession of a .22 caliber rifle in July 2015 in Jefferson County, West Virginia. Megeath was previously convicted of “Breaking and Entering,” “Grand Larceny,” “False Pretenses,” “Bad Check,” and “Possession of a Schedule II Controlled Substance” in the Circuit Court of Warren County, Virginia.
Megeath pled guilty today to one count of “Felon in Possession of a Firearm.” He faces up to 10 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Paul Camilletti and Anna Krasinski prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.U.S. Magistrate Judge Robert W. Trumble presided.
U.S. Attorney’s office co-sponsors Indianapolis job and resource fairRead the Press Release
Indianapolis – United States Attorney Josh J. Minkler today announced a community-wide job and resource fair for formerly incarcerated individuals hosted by the U.S. Attorney’s Office for the Southern District of Indiana and Indiana University McKinney School of Law. The event will occur this Friday, April 8, 2016.
“Reintegrating individuals into our community from federal and state prisons is a responsibility I am passionate about,” said Minkler. “For me, this is a public safety issue. Gainfully employed re-entrants are much less likely to commit crimes. I hope our community shares my commitment to assist these individuals in becoming contributing citizens.”
What: JOB FAIR
When: April 8, 2016, 11:00am-3:00pm
Where: Julia Carson Center, 300 East Fall Creek Parkway, North Drive
As part of the U.S. Attorney’s Office Smart on Crime Initiative, Minkler’s office is collaborating with Indiana University McKinney School of Law and the City of Indianapolis to host this community-wide event. Some of the employers participating in the job fair include Eskenazi Health, Mays Chemical Company, Goodwill, Barber Construction, All Building Trades, Associated Builders and Contractors, Golden Corral, Labor Union – Local #20, Professional Building Maintenance, Sheet Metal Workers #20, Chipotle, Jiffy Lube and other construction and union organization, all of which desire to fill a range of positions. The goal of the job fair is to help re-entrants meet with many local employers from a wide range of industries.
Members of the McKinney Law School community will be managing the resource fair with assistance from the Indiana Christian Legal Clinic and the Marion County Prosecutor’s Office. The job and resource fair will provide information regarding child support matters and criminal record expungement. In addition, the event will provide free assistance with resume writing, interview skills and mock job interviews. Moreover, Indiana Department of Workforce Development, PACE/OAR and Keys to Work will offer assistance with application etiquette, dress for success, and job readiness.
Re-entrants face many barriers upon release from incarceration. The purpose of the community-wide job and resource fair is to provide them with the opportunity to connect with useful re-entry and community agencies that will help provide referrals and resources to enhance their employment opportunities.
U.S. Attorney Minkler thanks all of our partners and the community for their continued support of this initiative.
U.S. Attorney Announces Return to Mongolia of Looted Dinosaur FossilsRead the Press Release
This afternoon, Robert L. Capers, United States Attorney for the Eastern District of New York, will host a repatriation ceremony at which the United States will return to Mongolia the fossilized remains of six species of dinosaur. The fossils were unlawfully removed from Mongolia and seized by U.S. Immigration and Customs Enforcement (ICE) agents in New York and Utah.
The largest of these fossils, an Alioramus skull, was forfeited to the United States as a result of a civil forfeiture action handled by the U.S. Attorney’s Office. The other fossils being returned at today’s ceremony were administratively forfeited by ICE and U.S. Customs and Border Protection (CBP). HSI Executive Associate Director of Homeland Security Investigations (HSI) Peter T. Edge and Mongolia’s Ambassador to the United States Altangerel Bulgaa will sign the ceremonial certificates transferring ownership of the fossils from the United States to Mongolia. Mongolian paleontologist Dr. Bolortsetseg Minjin, and Director of the Institute for the Study of Mongolian Dinosaurs, will participate in the ceremony as a representative of the Mongolian Ministry of Education, Culture and Sciences.
“Mongolia is home to the world’s largest reserve of dinosaur fossils with many discoveries waiting to be made,” stated U.S. Attorney Capers. “We are proud of our role in restoring this rich paleontological heritage to the Mongolian people and taking these cultural treasures from the hands of looters and smugglers. We stand beside the people of Mongolia by disrupting the international trade in smuggled fossils and returning them to their home where they will be studied and treasured.”
“Today’s ceremony is an excellent demonstration of the cooperation between HSI, our colleagues at the Department of Justice, and our foreign counterparts with the Government of Mongolia,” stated HSI Executive Associate Director Edge. “A successful repatriation requires extensive cooperation among all parties involved, which is rewarded by the knowledge that we’ve returned what rightfully belongs to the people of Mongolia.”
“CBP is extremely proud to have played an important role in returning these valuable national treasures to the people of Mongolia,” said Robert E. Perez, Director of CBP’s New York Field Operations. “CBP’s cooperation with HSI and the United States Attorney’s Office for Eastern District of New York demonstrates the continuing resolve of law enforcement in the United States to address illegal trafficking in stolen artifacts.”
“Three years ago, we celebrated our first repatriation ceremony of the skeleton of a Tarbosaur-Bataar. The T-Bataar case was a unique one in many aspects. Most importantly, it has laid foundation of further strong and fruitful cooperation between our two governments in the fight against illegal trade of cultural heritages including fossils. Thanks to this fruitful cooperation, 23 dinosaur fossils were repatriated to Mongolia during the last three years and now we are witnessing a repatriation of seven fossils including an Alioramus skull,” stated Ambassador Altangerel. “I take this opportunity, on behalf of the Government and people of Mongolia, to express our profound gratitude for the hard work and dedication of American law enforcement agencies. I have no doubt that these efforts will further strengthen of our bilateral ties, opening new opportunities and giving new impetus to our future cooperation.”
The Mongolian dinosaur fossils being returned at today’s repatriation ceremony include:
- Alioramus skull
- Bactrosaurus skeleton
- Protoceratops baby skeleton pieces
- Troodontid egg bed
- Psittacosaurus skeleton and skull
- Hadrosaurus skeleton pieces
The Alioramus was a dinosaur that lived in the late Cretaceous period, approximately 65 to 70 million years ago. It is related to the Tyrannosaurus and Tarbosaurus. The Alioramus skull was seized by CBP after being shipped from France with false declarations which suggested that it was an inexpensive replica, not a genuine fossil. When the shipper petitioned for the Alioramus skull’s release, it conceded that it was a genuine Mongolian fossil but submitted forged Mongolian export documents. Mongolian patrimony laws prohibit the export and foreign ownership of dinosaur fossils.
According to Dr. Bolortsetseg Minjin, the Alioramus is an extremely rare dinosaur; only two specimens have been reported in the scientific literature, and both are from Mongolia. The Alioramus fossil being returned today is the most complete skull discovered to date. Its relative completeness, color and overall state of preservation are typical of the Nemegt Formation, which is only exposed in the Gobi Desert of Mongolia. In 2014, Mongolia nominated the Nemegt Formation and other fossil sites in the Gobi Desert for inclusion in the World Heritage List, citing the sites’ distinction as the largest dinosaur fossil reservoir in the world.
The government’s civil forfeiture action against the Alioramus skull was handled by Assistant United States Attorney Karin Orenstein.
E.D.N.Y. Docket No. 14-CV-5198 (BMC)
Two Former Senior Executives of Global Financial Services Company Charged in Scheme to Defraud Clients through Secret Trading Commissions on Billions of Dollars in Securities TradesRead the Press Release
Two former high-ranking executives of a Boston-based financial services company that is one of the world’s largest asset managers and custody banks were charged in an indictment that was unsealed today with a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division made the announcement.
Ross McLellan, 44, of Hingham, Massachusetts, and Edward Pennings, 45, were charged in a five-count indictment with conspiring to commit securities fraud and wire fraud, as well as two counts each of securities fraud and wire fraud. McLellan, a former executive vice president of the bank who served as president of its U.S. broker-dealer unit, was arrested this morning in Hingham and will appear in U.S. District Court in Boston later today.
“The defendants are charged with reaping millions of dollars of illicit profits by abusing their clients’ trust and secretly setting their own inflated compensation,” said Assistant Attorney General Caldwell. “The charges announced today reflect our continued commitment to hold individuals accountable for toying with the integrity of our financial system.”
“The secret conversations and backroom plotting laid bare in today’s charges paint a vivid picture of a brazen fraud,” said U.S. Attorney Ortiz. “The defendants never thought anyone would hear those conversations – conversations in which they plotted to overcharge their clients by millions of dollars, and to hide their tracks. With each trade, they chipped away at the savings of thousands of retirees whose pensions they were charged with safeguarding. Bankers who abuse their clients’ trust in this way must be held accountable. And we will work hard to ensure that they are.”
“As alleged, Ross McLellan and Edward Pennings cheated and lied to investors so that the bank could line its pockets,” said Special Agent in Charge Shaw. “Actions like theirs undermine investor confidence. This case demonstrates the FBI's commitment to unraveling elaborate and complex schemes, motivated by sheer greed, that ultimately undermine our financial markets.”
The indictment alleges that, between February 2010 and September 2011, McLellan and Pennings, together with others, conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions, the indictment alleges. McLellan and Pennings then allegedly took steps to hide the commissions from the clients and others within the bank, including compliance staff.
The government’s ongoing investigation is being conducted by the FBI’s Boston Division. The case is being prosecuted by Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorney and Deputy Chief of Economic Crimes Stephen E. Frank of the District of Massachusetts. The Fraud Section and the U.S. Attorney’s Office of the District of Massachusetts have also received valuable assistance from the U.S. Securities and Exchange Commission as well as from authorities in the United Kingdom, including the City of London Police. The Criminal Division’s Office of International Affairs also provided assistance.
Two Durable Medical Equipment Company Owners Charged in Similar Health Care Fraud SchemesRead the Press Release
McALLEN, Texas ‐ Federal charges have been filed against two individuals in separate cases for defrauding Texas Medicaid and/or Medicare in two separate schemes to defraud through false billings, announced U.S. Attorney Kenneth Magidson.
Manuel Gomez, Jr., 34, of Katy, owned two Rio Grande Valley area durable medical equipment (DME) companies, while Elva Santos, 36, of McAllen, owned Hope & Miracle DME in Mission.
A sealed indictment against Gomez was returned March 29, 2015, and unsealed today upon his arrest. He is expected to make an initial appearance in Houston before U.S. Magistrate Judge Stephen Smith at 10.00 a.m. tomorrow. Santos was charged in an unsealed information and is set for her appearance April 8, 2016, at 10:30 a.m. before U.S. Magistrate Judge Peter Ormsby.
Both are charged separately in difference cases but in similar schemes to defraud and sent false and fraudulent claims regarding DME, specifically incontinence supplies and diabetic supplies.
In his case, Gomez and/or his co-conspirators sent such claims totaling approximately $2,347,841.71 to Texas Medicaid, on which Texas Medicaid allegedly paid out $2,088,473.67, according to the indictment. Santos allegedly submitted false and fraudulent claims for $713,759.73 on which Texas Medicaid paid out $581,743.39. To conceal their schemes, both forged and/or caused others to forge the signatures of physicians on the required DME prescription forms also known as Title XIX forms.
Gomez owned Illusion Medical Equipment and Illusion Medical Equipment II LLC and is charged with one count of conspiracy to commit health care fraud, six counts of health care fraud and one count of aggravated identity theft.
The indictment alleges that Gomez conducted his scheme from Dec. 1, 2007, to Nov. 30, 2011. Gomez and his co-conspirators were allegedly responsible for the submission of false and fraudulent billings and the misuse of the identifying information of Texas Medicaid recipients. Gomez also allegedly paid illegal kickbacks in exchange for patient information, including patient Texas Medicaid numbers. He and/or his co-conspirators would then use the fraudulently obtained Texas Medicaid numbers to submit claims to Texas Medicaid in order to receive reimbursements.
In the separate, yet similar case against Santos, from Jan. 20, 2011, to May 10, 2013, she allegedly submitted the false and fraudulent claims. In one instance alleged in the information, Santos submitted or caused others to submit false or fraudulent claims with Medicare for a patient who was deceased on dates that Santos claimed to have provided diabetic supplies to the patient. The delivery tickets maintained by Hope & Miracle DME contained forged signatures of the deceased beneficiary after the date of her death.
Health care fraud carries a maximum punishment of 10 years in federal prison without parole and a $250,000 fine upon conviction. If convicted of the identity theft, Gomez also faces a mandatory 24 months which must be served consecutively to any other prison term imposed. The Texas Attorney General’s Medicaid Fraud Control Unit and the U.S. Department of Health and Human Services‐Office of Inspector General conducted the investigation. Assistant U.S. Attorney Michael Day is prosecuting the cases.
An indictment or information are accusations of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Twice Convicted Alien Smuggler Heads to PrisonRead the Press Release
LAREDO, Texas – A naturalized U.S. citizen from Cuba who had been residing in Louisville, Kentucky, has been ordered to federal prison following his convictions in two separate cases involving the smuggling of illegal aliens, announced U.S. Attorney Kenneth Magidson.
Yudelvis Alberto Jimenez-Elvirez, 29, entered a guilty plea Oct. 7, 2015, to smuggling illegal aliens and was released on bond. That same evening, he was arrested again on similar charges. He went to trial in that case and was convicted Dec. 16, 2015, after only 15 minutes of deliberation.
Today, U.S. District Judge Marina Garcia Marmolejo, who presided over the trial, handed Jimenez-Elvirez a total 97-month sentence to run concurrently on both cases.
Also sentenced today was Ricardo Gallo, 31, a U.S. permanent resident alien also from Cuba, who had pleaded guilty in the conspiracy involving the October 2015 smuggling attempt. He will serve 41 months in prison and must pay a $5000 fine.
At trial, Border Patrol agents testified about a semi-tractor and trailer being followed by a Chevrolet Tahoe that arrived at the Freer Border Patrol immigration checkpoint on the night of Oct. 7, 2015. Both vehicles displayed Florida license plates. Immediately after the 18-wheeler driver – Gallo - had been cleared to proceed, law enforcement learned that trailer had been detained on June 30, 2015, and used in an unsuccessful attempt to smuggle 17 Mexican and Guatemalan nationals illegally in the United States.
Agents pursued the 18-wheeler, but were unable to make contact with its driver because Jimenez, driving the Tahoe, blocked the agents’ official vehicle. Both vehicles were traveling at 80-85 miles per hour. Agents were eventually able to stop both vehicles and discovered 27 aliens sitting atop cargo of crushed aluminum cans in the trailer.
Five of the 27 aliens testified at trial, reporting that they or family members had made financial arrangements with smugglers in Mexico to smuggle them into country and to deliver them to various destinations within the United States. They testified about swimming or wading the Rio Grande River and entering Laredo illegally without inspection, later being taken to a warehouse in Laredo to wait for the trailer that would smuggle them further.
Jimenez and Gallo will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges were the result of an investigation conducted by Border Patrol and Homeland Security investigations. Assistant U.S. Attorney (AUSA) Jose Homero Ramirez prosecuted the cases. AUSA Shawn Coker handled the sentencing hearing today.
Traveling minister convicted on all counts for his role in a $4.8 million tax refund scamRead the Press Release
A jury convicted a traveling minister from Arkansas on all 14 counts for his role in a $4.8 million tax refund scam, said Carole S. Rendon, Acting U.S. Attorney for the Northern District of Ohio, and Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Allen D. Miles, 58, of Little Rock, Arkansas, is scheduled to be sentenced June 13. He was convicted of one count of conspiracy to commit wire fraud, 10 counts of wire fraud and three counts of aggravated identity theft.
Miles, acting with Zinara Highsmith, engaged in a false tax refund scheme in which approximately 2,750 false income tax returns were filed, claiming false income tax refunds of approximately $4.8 million.
Miles obtained personal identification information from congregants and others by telling them that he could help them obtain money from an alleged government stimulus fund program. Miles did not tell congregants that income tax returns were going to be filed on their behalf. After he obtained the information, Miles forwarded it to Highsmith, and then Highsmith and others created the false income tax returns that generated refunds based on certain credits for which the taxpayers did not qualify, like the American Opportunity Credit, Making Work Pay Credit, and Earned Income Credit, according to trial testimony and court documents.
For each refund, Miles collected a $125 commission and Highsmith received $275; the taxpayers received the balance. Miles received approximately $300,000 for his efforts in the refund scam, which operated between March and July 2011, according to trial testiony and court records.
"This defendant traveled the country defrauding people and the goverment," Rendon said. "He took advantage of their religious faith and their faith in the government to enrich himself."
"Misusing his position of trust as a minister, Mr. Miles perpetuated an elaborate scheme driven by insatiable greed and a blatant disregard for the tremendous damage inflicted on innocent victims. The jurors have spoken and Mr. Miles is being held accountable for his criminal actions," Enstrom said. "Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law. IRS Criminal Investigation, along with the United States Attorney's Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes."
Highsmith has pleaded guilty to her role in the conspiracy and is scheduled to be sentenced later this year.
This case is being prosecuted by Assistant U.S. Attorneys Michael L. Collyer and Carmen Henderson, following an investigation by the Internal Revenue Service – Criminal Investigations.