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23 May 2016
Rapid City Man Charged with Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Johnny Lunderman, age 53, was indicted on May 17, 2016. He appeared before U.S Magistrate Judge Mark A. Moreno on May 19, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, a mandatory minimum of 5 years up to life of supervised release, and a $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
On August 31, 2009, Lunderman was sentenced to 40 months in federal custody for Sexual Abuse of a Minor. As a result of his conviction, he is required to register as a sex offender. It is alleged that between April 6, 2016, and April 20, 2016, Lunderman, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under Federal Law, failed to properly register as a sex offender in Pennington County and elsewhere.
The charge is merely an accusation and Lunderman is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Kirk W. Albertson is prosecuting the case.
Lunderman was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Pharr Resident Sentenced in Firearms CaseRead the Press Release
McALLEN, Texas – A 31-year-old Mexican citizen residing in Pharr has been ordered to federal prison following his convictions of possession of a firearm with an obliterated serial number and conspiring to export defense articles to Mexico without authorization, announced U.S. Attorney Kenneth Magidson. Jose Abraham Benavides-Cira pleaded guilty July 31, 2015.
Today, U.S. District Judge Randy Crane sentenced Benavides-Cira to 135 months in federal prison. Not a U.S. citizen, he is expected to face deportation proceedings following his release from prison.
From Dec. 10, 2014, through the March 17, 2015, indictment and even continuing to his arrest two days later, Benavides-Cira was involved in a conspiracy to illegally export 5.56 caliber rifles to Mexico along with his brother - Jose Luis Benavides-Cira, 33, of Edinburg, Oliver Bouzas-Delie, 32, of McAllen, and Ricardo Humberto Varela, 32, of Pharr.
During that time, Bouzas-Delie introduced an undercover agent acting as a weapons smuggler to the Benavides-Cira brothers who had negotiated and completed the purchase of a rifle. The agent continued negotiating directly with the brothers, resulting in the purchase of two more 5.56 caliber rifles that Valera had supplied. The serial numbers on those rifles had been obliterated.
Jose Abraham Benavides-Cira and his brother engaged in yet another sale at the time of their arrest on March 19, 2015.
Jose Luis Benavides-Cira and Varela were each previously sentenced to 46 months in prison, while Bouzas-Delie served a sentence of eight months based on his involvement with the sale of one rifle to an undercover agent.
The charges were the result of an investigation by Homeland Security Investigations and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Joseph Leonard prosecuted the case.
New Jersey Man Sentenced to 36 Months in Federal Prison for Heroin DealingRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that, on May 23, 2016, Jonathan Nisbett, 24, of Newark, New Jersey was sentenced to 36 months in federal prison after his guilty plea to charges that he distributed heroin. Chief U.S. District Court Judge Christina Reiss also ordered that Nisbett serve three years of supervised release following his prison term.
According to court records, in 2015, Nisbett regularly traveled from the New Jersey area to Chittenden County, Vermont with heroin to sell. Nisbett and his associates would distribute the heroin and bring the proceeds back to New Jersey. After conducting a series of controlled purchases from him, on August 11, 2015 agents from the Northern Vermont Drug Task Force and the Vermont State Police arrested Nisbett after he exited a train from New York City in Essex Junction, Vermont. From Nisbett’s luggage, agents seized approximately 2,250 individual use bags of heroin.
For his crime, Nisbett faced a statutory maximum term of 20 years in prison. The United States Sentencing Guidelines, which are advisory, recommended that Nisbett receive a prison term between 37 and 46 months. The United States and the defense agreed that a 36-month sentence was appropriate.
In accepting the parties’ agreed-upon sentence, Judge Reiss considered the severity of the offense and the negative impact of heroin on the Vermont community.
United States Attorney Eric Miller commended the efforts of Vermont State Police, the VDTF, the Vergennes Police Department, the South Burlington Police Department, and the Burlington Police Department for their coordinated efforts in this investigation. United States Attorney Miller noted that this case is part of the U.S. Attorney’s Office’s Vermont Heroin Initiative, which is a coordinated effort by the U.S. Attorney’s Office and federal, state, and local law enforcement agencies to combat heroin distribution in Vermont. United States Attorney Miller applauded the efforts of the agencies involved in the Heroin Initiative.
The prosecution is being handled by Assistant U.S. Attorney Timothy C. Doherty, Jr. Nisbett is represented by David McColgin of the Federal Public Defender’s Office.
Neopit Man Sentenced for Assault on Federal Officer and BurglaryRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced today that Merwin J. Wynos, Jr., (age: 28) of Neopit, Wisconsin, was sentenced to three years in federal prison by Chief United States District Judge William C. Griesbach. The sentence also included three years of supervised release and restitution for damaged or destroyed property of a convenience store.
Wynos previously entered a guilty plea for his assault on a Menominee Tribal Police officer, in violation of Title 18, United States Code Section 111(a)(1) and 111(b), which followed the burglary of a convenience store in Keshena, Wisconsin, in violation of Title 18, United States Code Section 1153(a) and (b) and Wisconsin Statute Section 943.10(2).
According to the plea agreement and other documents filed with the court, Wynos, participated in the theft of items from the convenience store and then nearly struck an officer from the Menominee Tribal Police Department when that officer responded to the burglar alarm. Wynos led tribal police and officers with the Menominee County Sheriff’s Office on a high speed chase that ended in Shawano County when Wynos crashed the car he was driving.
In pronouncing the sentence, Chief Judge Griesbach noted the extremely serious nature of the offense which included nearly striking the officer with the car, as well as the lengthy criminal history of Mr. Wynos.
The case was investigated by the Menominee Tribal Police Department, Menominee County Sheriff’s Office, and Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney William J. Roach.
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NFL Hall of Famer, Practicing California Attorney Pleads Guilty to Filing a False Tax ReturnRead the Press Release
A San Diego, California, workers’ compensation attorney pleaded guilty today in the Western District of Missouri to one count of filing a false tax return, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Tammy Dickinson of the Western District of Missouri announced.
According to court documents, Ron Mix, 78, entered into an arrangement where he received professional athlete referrals from a non-attorney so Mix and his law firm, the Law Offices of Ron Mix, could file workers’ compensation claims in California on the former athletes’ behalf. After receiving these referrals, Mix agreed to make donations to Project Contact Africa (PCA), as directed by the non-attorney. Mix admitted that between 2010 and 2013, he made approximately $155,000 in donations to PCA and that these payments represented illegal referral payments that he falsely claimed on his personal income tax return as charitable deductions.
U.S. District Court Judge Greg Kays for the Western District of Missouri has not yet scheduled Mix’s sentencing. Mix faces a statutory maximum sentence of three years in prison and a maximum fine of $250,000.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Dickinson commended special agents of Internal Revenue Service-Criminal Investigation and Homeland Security Investigations, who investigated the case and Assistant U.S. Attorneys Patrick Daly and Curt Bohling of the Western District of Missouri and Trial Attorney Ryan Raybould of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Muskegon Woman Sentenced to 24 Months in Federal Prison for PerjuryRead the Press Release
GRAND RAPIDS, MICHIGAN – Tunisia Phillips-Lark, also known as "Kesha" and "Nish Nish," of Muskegon, Michigan was sentenced to 24 months in federal prison for perjury, U.S. Attorney Patrick Miles announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell imposed a three-year term of supervised release that will commence once Phillips-Lark is released from imprisonment.
Phillips-Lark pled guilty to one count of perjury on February 4, 2016. She admitted at the plea hearing that she knowingly lied when she testified in August of 2015 before a federal grand jury sitting in Grand Rapids, Michigan. She admitted that she had done so in an effort to prevent Larry Diggs, the target of the grand jury’s investigation, from getting into trouble. Diggs has since pleaded guilty to possessing "crack" cocaine with the intent to distribute, using and carrying a firearm during and in relation to a drug trafficking crime, and witness tampering.
In its sentencing memorandum, the U.S. Attorney’s Office wrote "[p]roviding false testimony and tampering with witnesses strikes at the heart of the judicial system and is affront to the Court and the community." The U.S. Attorney’s Office emphasized that Phillip-Lark’s "conduct was not merely the result of a momentary lapse in judgment. On the contrary, this is her second conviction for lying to law enforcement." Specifically, Phillips-Lark had previously been convicted for "falsely and deliberately claim[ing] that she had seen a police officer murder her brother in cold blood. The truth, of course, was quite the opposite." In light of Phillip-Lark’s conduct and history, the U.S. Attorney’s Office wrote that "[t]he need for deterrence – both specific and general – is acute in this case."
The charges in this case are the result of a joint investigation by the Muskegon Township Police Department and the Muskegon Violent Crime Task Force, which includes the Federal Bureau of Investigation (FBI), the Michigan State Police (MSP), and the Muskegon City Police Department. The U.S. Attorney's Office, the Muskegon County Prosecutor's Office, and federal, state, and local law enforcement are working closely together to combat violent crime and witness tampering in the Muskegon area.
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Mexican Nationals Arrested in New Mexico on Federal Methamphetamine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Two Mexican nationals are facing federal drug trafficking charges arising out of a seizure of 65-pounds of methamphetamine, announced U.S. Attorney Damon P. Martinez, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, and New Mexico State Police (NMSP) Chief Pete N. Kassetas.
Mario Osorio-Espinoza, 33, and Victor Hugo Lagarica-Salazar, 53, both of whom are illegally in the United States and reside in Lynwood, Calif. made their initial appearances today in federal court on methamphetamine trafficking charges. The two men remain in custody pending preliminary hearings and detention hearings scheduled for tomorrow.
Osorio-Espinoza and Lagarica-Salazar were arrested on May 19, 2016, after NMSP officers discovered approximately 29.54 gross kilograms (65.12 pounds) of methamphetamine hidden in their vehicle during a routine traffic stop in Bernalillo County, N.M.
If convicted of the charges in the criminal complaint, Osorio-Espinoza and Lagarica-Salazar each face a statutory mandatory minimum of ten years and a maximum of life in federal prison. Charges in criminal complaints are merely accusations, and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
Assistant U.S. Attorney Presiliano Torrez is prosecuting the case, which was investigated by the Albuquerque office of HSI and the NMSP.
Media Advisory: Mighty Times: The Children’s MarchRead the Press Release
CEDAR RAPIDS, IA – The United States Attorney’s Office for the Northern District of Iowa joins community leaders in a special day celebrating Law Day 2016. The theme, “Mighty Times: The Children’s March,” will highlight how youth can be catalysts for positive social change. The connection between historical events involving young people in Birmingham, Alabama in 1963 and current day issues will be examined in a series of breakout sessions. A Proclamation proclaiming May 25th as Law Day in the city will be signed by Cedar Rapids Mayor, Ron Corbett.
The keynote address will be given by the Iowa-Nebraska NAACP President Betty C. Andrews. Area high school students have been invited and will participate in program activities designed to encourage them to be a positive change agent in their community. Follow this event at: #CRLawDay2016.
Event Details
When: Wednesday, May 25, 2016.
Where: Event begins at the Cedar Rapids Public Library, 450 5th Ave SE, Iowa, with a keynote address, viewing of a video, then followed by a symbolic march to the Veterans Memorial Building where the program will continue with breakout sessions there and in City Hall.
Time: 9:00 am. – 2:00 p.m.
Manhattan Energy Investor Indicted in Tax Fraud Schemes Involving Evasion of over $45 Million of Income and Sales TaxesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Shantelle P. Kitchen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that MORRIS E. ZUKERMAN, a Manhattan businessman who owns companies involved in energy investments, was charged today in a three-count Indictment with engaging in multi-year tax fraud schemes pursuant to which he evaded over $45 million in income and other taxes. ZUKERMAN was presented earlier today in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein.
U.S. Attorney Preet Bharara said: “As alleged in the indictment, Morris Zukerman cheated on virtually all of his various tax obligations: he evaded tens of millions of dollars of corporate income taxes arising out of $130 million sale of an oil company; he prepared personal tax returns for himself and family members that claimed millions of false deductions; he evaded employment taxes based on personal employees; and he evaded New York sales and use taxes. To top it off, when the IRS auditors examined his returns, Zukerman allegedly schemed to defraud and obstruct the IRS auditors who were examining his false tax returns.”
IRS-CI Special Agent in Charge Shantelle P. Kitchen said: “There is simply no excuse for a financially successful individual, clearly with the resources to meet his tax obligations, to defraud the tax system and ultimately cheat hard working, law abiding taxpayers who strive to do what is right. As protectors of our nation’s tax system, IRS Criminal Investigation is committed to ensuring that everyone pays their fair share. We will use our financial investigative expertise to dissect and unravel complex tax fraud schemes, especially those specifically designed to obstruct the Internal Revenue Service from carrying out its mission to serve American taxpayers.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Honest taxpayers should be offended by the actions of Mr. Zukerman who devised a scheme to avoid paying his fair share of taxes. As citizens we have a legal obligation to pay taxes and when this doesn’t happen, law enforcement will be there to ensure these scofflaws are brought to justice.”
According to the Indictment[1] unsealed today in Manhattan federal court and other court filings related to this matter:
ZUKERMAN, the principal of M.E. Zukerman & Co. (“MEZCO”), an investment firm located in Manhattan, schemed to evade taxes based on income received from the January 2008 sale of a petroleum products company (the “Oil Company”) he co-owned (through a MEZCO subsidiary) with a public company. ZUKERMAN schemed to evade the reporting of the sale – which resulted in the receipt by the MEZCO subsidiary of $130 million in gross sales proceeds – by falsely telling his accountants in mid-2008 that he had transferred ownership of the MEZCO subsidiary to a family trust in early 2007. In support of the story he gave to the accountants, ZUKERMAN created backdated documents such as promissory notes and a board resolution purporting to show the transfer of the subsidiary to his family trust in 2007. The false documents allowed ZUKERMAN to remove the MEZCO subsidiary from the consolidated tax reporting being handled by the accountants for MEZCO and thereby evade the reporting to the IRS of the sale of the Oil Company, as well as the payment of over $35 million in corporate income taxes.
Following the sale of the Oil Company, ZUKERMAN transferred the proceeds of the sale from the MEZCO subsidiary to his family trust and various corporations he controlled, including a company called Zukerman Investments. Between 2008 and 2013, ZUKERMAN directed that over $50 million of the funds transferred to Zukerman Investments be used to purchase paintings by European artists from the 15th through the 19th centuries (the “Old Master paintings”), which ZUKERMAN used to decorate his Upper East Side apartment and the apartments of two family members – Family Member-1 and Family Member-2.
In connection with the purchase of the Old Master paintings, ZUKERMAN schemed to defraud New York State of over $4.5 million of sales and use taxes by directing that the paintings, which were frequently purchased from galleries located blocks from ZUKERMAN’s Manhattan residence, be shipped by the galleries to ZUKERMAN’s corporate addresses located in Delaware and New Jersey, and transported immediately thereafter (sometimes within minutes), by ZUKERMAN and others, back to ZUKERMAN’s residence in New York – all without the payment to New York State of sales or use taxes. ZUKERMAN further schemed to defraud New York State of sales and use taxes by using his corporate address in New Jersey to be falsely listed on a sales invoice for a $645,000 pair of diamond earrings he purchased in Europe from a jeweler who turned over possession of the earrings to a member of ZUKERMAN’s family in Manhattan but charged no sales tax, based on the out-of-state address provided by ZUKERMAN.
ZUKERMAN also schemed to evade personal income taxes and to obstruct the IRS by (i) causing various tax return preparers to prepare U.S. Individual Income Tax Returns, Forms 1040, for ZUKERMAN and his wife, and for Family Member-1, Family Member-2, and Family Member-3, that claimed, in the aggregate, millions of dollars of false and fraudulent deductions and expenses, such as phony charitable contributions and investment interest expenses; (ii) diverting, for personal use, corporate assets from MEZCO and other corporate entities ZUKERMAN controlled by directing that hundreds of thousands of dollars of fees be paid between 2007 and 2013 to Family Member-1, Family Member-2, and Family Member-3, for which the family members performed little or no work; (iii) directing that corporate funds be used to pay compensation to, and health care insurance for, a household employee of ZUKERMAN, whom ZUKERMAN also caused to be falsely identified as a MEZCO employee to ZUKERMAN’s corporate health care provider when, in truth and fact, the household employee worked exclusively out of ZUKERMAN’s homes in New York City and in Maine as a domestic employee; (iv) falsely under-reporting employment taxes through the payment of hundreds of thousands of dollars of cash and other wages to ZUKERMAN’s domestic employees; and (v) providing false information to the IRS during audits in an attempt to fraudulently convince IRS auditors and other IRS employees that the fraudulent claims made on his previously filed tax returns were accurate when, in truth, they were not.
The False Charitable Contribution Deductions for the 2009 & 2011 Tax Years
ZUKERMAN’s fraudulent charitable contribution deductions – totaling $1 million – arose out of a real estate transaction in 2009 and 2010, pursuant to which ZUKERMAN purchased approximately 240 acres of property on Black Island, a small island located off the coast of Maine, close to ZUKERMAN’s home on a nearby island. ZUKERMAN was enlisted to purchase the Black Island property by a Maine-based land conservation entity (“the Conservation Entity”) that was seeking to orchestrate the purchase, for conservation purposes. After considering making a charitable contribution to the Conservation Entity intended to be used to purchase the property, ZUKERMAN decided instead to purchase the land as the outright owner for the benefit of himself and his family for $1 million through a newly formed limited liability company he solely owned. ZUKERMAN, however, falsely told his tax return preparer that the $1 million he paid for the property should be declared on his personal income tax returns as a charitable contribution to the Conservation Entity during the 2008 and 2010 tax years. ZUKERMAN subsequently signed the false 2008 and 2010 tax returns and caused them to be filed with the IRS.
The False Investment Interest Expense Deductions Relating to the Corporate Loans
ZUKERMAN orchestrated the creation of hundreds of thousands of dollars of fraudulent “investment interest expense” deductions on his own tax returns and those of three family members. ZUKERMAN accomplished this by falsely telling his tax preparers that payments made from the personal bank accounts of ZUKERMAN and his family members to a California bank were made to legitimately satisfy loan interest payments owed by one of his California companies. In fact, although the interest payments were initially made from the bank accounts of ZUKERMAN and those of his family members (whose accounts ZUKERMAN controlled), ZUKERMAN secretly took funds from the bank account of the California corporation that owed the interest payments and reimbursed himself and his family members. In addition, because the corporation that owed the interest payments had claimed the interest indebtedness as an expense on its corporate tax returns, ZUKERMAN’s claiming of the same expenses on his own tax returns and those of his family members constituted fraudulent double deductions.
The Audit Fraud
In seeking to obstruct and defraud the IRS during an audit of one of ZUKERMAN’s companies, ZUKERMAN utilized two attorneys from a law firm in Washington, D.C., to convey a false factual narrative to an IRS Appeals officer, who was undertaking a review of ZUKERMAN’s challenge to an adverse determination made by an IRS auditor during the corporate audit. Pursuant to a “crime-fraud” ruling by the United States District Court for the Southern District of New York, and affirmed by the Second Circuit Court of Appeals, ZUKERMAN’s companies were required to disclose to the grand jury all of the communications between ZUKERMAN and the two attorneys that led to the submission to the IRS of the false factual narrative.
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ZUKERMAN, 71, of New York, New York, is charged with: one count of tax evasion, which carries a maximum sentence of five years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of obstructing the IRS, which carries a maximum sentence of three years in prison. The three charges each also carry a maximum fine of $250,000, or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentences for the defendant will be determined by the judge.
ZUCKERMAN was released on a $2,500,000 secured bond. The case was assigned to United States District Judge Analisa Torres, and a conference is set for June 8, 2016, before Judge Torres.
Mr. Bharara praised the outstanding investigative work of the IRS and the U.S. Postal Inspection Service.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Stanley J. Okula and Edward Imperatore are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Lower Brule Man Sentenced for Criminal ContemptRead the Press Release
United States Attorney Randolph J. Seiler announced that a Lower Brule, South Dakota, man charged with Criminal Contempt pled guilty to and was sentenced on May 12, 2016, by U.S. Magistrate Judge Mark A. Moreno.
Vance TaSunke Witko, age 34, was sentenced to time served, equal to 21 days in custody, and $10 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on February 17, 2016, when TaSunke Witko failed to appear at the Federal Courthouse to testify at a hearing.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Services and the Lower Brule Police Department. The case was prosecuted by Assistant U.S. Attorney Kirk W. Albertson.
Leader in Conspiracy to Distribute over $6.6 Million in Contraband Cigarettes Sentenced to PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Elmar Rakhamimov, a/k/a “Eric Rakhamimov,” age 43, of Owings Mills, Maryland, to 18 months in prison followed by three years of supervised release for conspiring to possess and distribute over $6.6 million in contraband cigarettes; and for trafficking and distributing oxycodone. Judge Motz imposed the sentence on May 20, 2016, and entered an order requiring Rakhamimov to pay restitution of $400,000.
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; Chief James W. Johnson of the Baltimore County Police Department; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to his guilty plea, Elmar Rakhamimov was the leader and organizer of the contraband cigarettes scheme. Contraband cigarettes are cigarettes on which the applicable state taxes have not been paid. Elmar Rakhamimov coordinated with Ilgar Rakhamimov (no relation) and Artur Zakharyan to collect the money to purchase the contraband cigarettes, and to arrange for the storage and transportation of the contraband cigarettes to Brooklyn, New York. The Rakhamimovs and Zakharyan purchased contraband cigarettes on 18 occasions between December of 2011 and November of 2013 from an undercover FBI agent operating in the Baltimore County, Maryland area.
According to court documents and trial testimony, Artur Zakharyan recruited his son, Nikolay Zakharyan, to participate in the scheme. Nikolay Zakharyan assisted in the unloading, accounting, bagging, moving and loading of the master cases of contraband cigarettes. Other members of the conspiracy included Zarakh Yelizarov, Salim Yusufov, Adam Azerman, Shamil Novakhov, and Ruslan Ykiew.
The first transaction occurred on December 11, 2011, when Elmar Rakhamimov and Ilgar Rakhamimov purchased 20 master cases of contraband cigarettes in exchange for $18,000 in cash. After the first transaction, the contraband cigarettes were delivered to and stored at Elmar Rakhamimov’s home. Prior to each transaction, Elmar Rakhamimov, Ilgar Rakhamimov, and Artur Zakharyan discussed the transaction on the phone, and frequently met at Elmar Rakhamimov’s home to discuss the purchase and compile and count the money for the transaction.
The cigarettes were sold in quantities of 10,000 cigarettes or more, and bore no evidence of the payment of applicable state sales taxes. At the time of the indictment, the cigarette tax in Maryland was $2.00 per package of cigarettes ($20 per carton of cigarettes) and the cigarette tax in New York was $4.35 per package of cigarettes ($43.50 per carton of cigarettes). The total tax evaded over the course of the conspiracy was more than $2.5 million.
Following many of the deliveries, the conspirators met at Elmar Rakhamimov’s residence to discuss moving the cigarettes to Brooklyn, New York where the cigarettes were sold at a profit to individuals in New York, who further distributed the contraband cigarettes. The cigarettes were often transported from Maryland to New York by Adam Azerman, who delivered them to Shamil Novakhov, a relative of Ilgar Rakhamimov. Ilgar Rakhamimov brought Novakhov into the conspiracy, and was the primary contact with Novakov throughout the conspiracy. Novakhov’s nephew, Ruslan Ykiew, also would travel from New York to Maryland to obtain contraband cigarettes and transport them to his uncle in New York. Ykiew initially stored the cigarettes in a restaurant he owned. At Novakhov’s request, in 2012 Ykiew rented a warehouse for the storage of the contraband cigarettes. The conspirators paid $30 for each carton of contraband cigarettes, and sold them to buyers in New York for approximately $41 - $45 per carton.
Elmar Rakhamimov and his cousin, Zarakh Yelizarov, laundered the proceeds of the contraband cigarette sales through an international money laundering operation that wired funds from banks located in Latvia, Cyprus, Estonia, and New York, to a bank in Maryland, disguising the money as legitimate business payments for medical equipment or supplies. From December 27, 2012 through September 5, 2013, Yelizarov and Rakhamimov wired a total of $649,500 through 12 transactions.
Elmar Rakhamimov also distributed Oxycodone, prescription drugs, counterfeit prescription drugs and other drugs as partial payment for contraband cigarettes and in exchange for cash. He conducted 15 drug transactions for which he received $356,123.00 in cash. Additionally, on October 28, 2013, Rakhamimov sold 340 pills of Oxycodone and 1,000 pills of counterfeit Cialis to an individual who paid him $38,980 in cash. This cash amount represented payment of $30,980 for such drugs and for drugs provided in an earlier drug transaction, and an $8,000 money laundering fee relating to contraband cigarette transactions.
Finally, the government presented evidence to the court that Elmar Rakhamimov was involved in the fencing of stolen jewelry from a violent robbery orchestrated by his nephew, Stanislav “Steven” Yelizarov. After kidnapping a store employee, whose movements they had been monitoring, Yelizarov and his co-conspirators brandished firearms and forced the victim to provide the alarm codes for the jewelry store. Yelizarov and a co-conspirator stole jewelry worth approximately $500,000 from the store. The next day, Elmar Rakhamimov told a confidential informant (CI) that he had a million dollars of “hot” jewelry to sell, and set up a meeting for January 18 at Rakhamimov’s home. The CI met Rakhamimov and Yelizarov, who were wearing gloves and had the stolen jewelry. The CI bought a selection of the stolen jewelry for $29,000.
Zarakh Yelizarov, age 53, of Pikesville, Maryland was sentenced to 18 months in prison and ordered to pay restitution of $2.5 million; Ilgar Rakhamimov, age 41, also of Pikesville, was sentenced to a year and a day in prison and ordered to pay a $10,000 fine; Shamil Novakhov, age 60, of Brooklyn, New York, was sentenced to a year and a day in prison and ordered to pay restitution of $400,000; and Adam Azerman, age 61, Pikesville, was sentenced to time served and ordered to pay restitution of $912,780. Nikolay Zakharyan, age 25, of Owings Mills, Maryland, was convicted by a federal jury after a five day trial and was sentenced to a year and a day in prison, and ordered to pay restitution of $9,659,880.
Artur Zakharyan, age 54, of Reisterstown, Maryland, to one year of home detention, as part of four years’ probation and ordered to pay restitution of $2,500,000 and to forfeit $50,000 believed to be proceeds of the offense, $11,947, and a five troy ounce gold bars and a gold coin seized during searches.
Elmar Rakhamimov’s brother, Salim Yusufov, age 43, of Reisterstown, Maryland, was sentenced to 12 months home confinement as part of four years’ probation, for conspiracy to traffic over $6.6 million in contraband cigarettes, health care fraud, and receipt and delivery of misbranded drugs. Yusufov was also ordered to forfeit $200,000. Ruslan Ykiew, age 40, of Brooklyn, New York, was sentenced to two years’ probation.
Stanislav “Steven” Yelizarov, age 26, of Pikesville, Maryland, was sentenced on April 13, 2016 to 30 years in prison on charges arising from the robbery of a jewelry store, including a carjacking and kidnapping.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, and Office of Inspector General of the Department of Health and Human Services – Office of Investigations for their work in the investigation and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office for its assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and John W. Sippel, Jr., who prosecuted the case.
Kansas City Man Sentenced to 17 Years in Violent Overland Park Bank RobberyRead the Press Release
KANSAS CITY, KAN. - A Kansas City man who threatened employees with a gun and dragged a woman by her hair during a bank robbery was sentenced Monday to 17 years in federal prison , Acting U.S. Attorney Tom Beall said.
Clifton B. Cloyd, 54, Kansas City, Mo., pleaded guilty to one count of bank robbery and one count of brandishing a firearm during the robbery. On Oct. 29, 2014, he and another man robbed the Bank of America at 9500 Mission in Overland Park, Kan. In his plea, Cloyd admitted:
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He and his accomplice held five bank employees and one customer at gunpoint.
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Cloyd, who was carrying a handgun, grabbed one of the bank employees and pulled her by the hair and scarf to the teller station. He struck her in the face with a handgun.
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Cloyd struck a customer so hard her glasses flew off and she was knocked to the floor.
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Cloyd struck a male bank employee with such force that his head started bleeding.
Co-defendant Steve A. Watts, 55, Kansas City, Mo., is awaiting sentencing.
Beall commended the Overland Park Police Department, the Prairie Village Police Department, the Leawood Police Department, the FBI and Assistant U.S. Attorney David Zabel for their work on the case.
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Inmate Charged with Plotting to Kill PresidentRead the Press Release
BOSTON – An inmate at Old Colony Correctional Center in Bridgewater, Mass. was charged today with threatening to kill the President of the United States.
Alex Hernandez, 31, of Worcester, was charged in U.S. District Court in Boston with two counts of threatening to kill and inflict bodily harm upon the President of the United States.
According to the complaint, in March 2015, agents learned that Hernandez told another inmate who was working as a cooperating witness in the investigation, that he was upset about the way his people were being treated, wanted to become a mujahedeen, had the ability to obtain weapons upon release from prison, and wanted to kill the President in a lone-wolf style attack. Hernandez also allegedly expressed an interest in obtaining false travel documents so he could flee the country after his attack.
Based on these allegations, agents decided to introduce Hernandez to an undercover agent posing as an embassy contact who could assist Hernandez with obtaining false travel documents. In November 2015, at the direction of federal agents, the cooperating witness provided Hernandez with a mailing address for his purported embassy contact. In actuality, the mailing address was that of an undercover law enforcement post office box. From that point on, Hernandez allegedly wrote two letters to the embassy contact. In the second letter, Hernandez stated, “I am writing to you now to ask that you come see me. I am a brother in faith, a martyr; and as a martyr I wish to fulfill Allah’s wishes and not to live among infidels. The mujahedeen movement is hard but pure. I need your help and I hope to meet you in person.”
According to the complaint, on Dec. 22 2015 and Feb. 12, 2016, the undercover agent posing as the embassy contact met with Hernandez at Old Colony Correctional Center. During the first meeting, Hernandez allegedly stated he wanted to attack, “the house with the big people there.” The agent inquired whether Hernandez meant the White House and Hernandez said he did. When asked for additional details about his plan, Hernandez explained, “there is always a head. He’s the one who’s always in charge. So if you attack the head, everything will go down a little bit.” Hernandez went on to say that he wanted to learn how to shoot “like a sniper,” and that he had a contact in Florida that had a firearm ready for him. He also stated that he was studying how to make explosives that could be placed around government buildings to “create chaos.” During the second meeting with the undercover agent, Hernandez allegedly discussed the motivation for his planned attacks – telling the agent that his brothers are “fighting to uphold the laws and structure of the caliphate in the Middle East” and that “this government . . . is painting it like they are the bad guys[.]” Hernandez also allegedly explained that he wanted to target the President because “he’s the one that gives the orders[.]”
Court documents also allege that over the course of the investigation, searches of Hernandez’s jail cell revealed several items of concern such as a document listing the former U.S. Presidents and containing the handwritten notation “kill” underneath all the U.S. Presidents that have been assassinated while in office, and images of the September 11, 2001 attacks, Osama Bin Laden, and members of the Islamic State of Iraq and the Levant (ISIL) holding assault weapons and the ISIL flag.
The charging statute provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service; and Thomas Turco, Commissioner of the Massachusetts Department of Correction, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Independence Man Sentenced for Stealing $247,000 from EmployerRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former financial comptroller of a North Kansas City, Mo., business was sentenced in federal court today for a wire fraud scheme in which he embezzled more than $247,000 from his employer over five years.
John S. Kruse, 48, of Independence, Mo., was sentenced by U.S. District Judge Dean Whipple to two years and three months in federal prison without parole. The court also ordered Kruse to pay $247,000 in restitution.
On Nov. 9, 2015, Kruse pleaded guilty to wire fraud. Kruse was employed as the financial comptroller of BCC Merchant Solutions, a North Kansas City firm that provides electronic payment systems, e-commerce systems, business capital and marketing services to other companies.
Kruse admitted that he engaged in a scheme to steal at least $247,508 from BCC Merchant Solutions from April 2010 until his resignation in July 2014. Kruse made at least 213 unauthorized wire transfers from his employer’s bank account into his personal bank account. Through his scheme, Kruse embezzled $5,776 in 2010; $36,989 in 2011; $71,868 in 2012; $76,225 in 2013; and $56,648 in 2014.
Kruse used the money to pay for extravagant trips for his family to Las Vegas, Nev., and to Disneyworld. He spent $50,934 at convenience stores and for gasoline; $41,197 on entertainment; $138,186 for groceries and general merchandise; $65,416 through PayPal; $49,105 for travel and leisure; $49,773 for miscellaneous; and $50,934 for cash.
As the financial comptroller, Kruse was in charge of paying out sales commissions and bank reconciliations, along with keeping records within QuickBooks. In the course of his job, Kruse was authorized to access BCC Merchant Solutions’ bank account. To hide his embezzlement, Kruse manipulated the QuickBooks records to falsely reflect that the money he transferred into his account was being used elsewhere. Kruse falsified who the deposits were made to, indicating they were payments made on sales commissions and bank reconciliations.
This case was prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the U.S. Secret Service and the North Kansas City, Mo., Police Department.
IRS Employee Found Guilty for Filing Multiple Fraudulent Tax ReturnsRead the Press Release
FRESNO, Calif. — After a four-day trial, a federal jury found Kimberly English, 53, of Fresno, guilty today of two counts of filing a fraudulent tax return by an employee of the United States and four counts of making an opportunity for a person to defraud the United States, Acting U.S. Attorney Phillip A. Talbert announced.
According to evidence presented at trial, English was an employee of the IRS in Fresno when she prepared and filed her own fraudulent tax returns for tax years 2011 and 2012. She also prepared and filed false and fraudulent tax returns for others, including her daughter and her daughter’s boyfriend, for the same tax years. The returns identified in court included fraudulent claims for false deductions and credits, such as the number of dependents and eligibility for the child tax credit. The false returns allowed English and other taxpayers to obtain undue tax refunds or improperly reduce their tax liabilities.
This case is the product of an investigation by the Treasury Inspector General for Tax Administration and the Tax Division of the Department of Justice. Assistant United States Attorneys Patrick R. Delahunty and Angela L. Scott are prosecuting the case.
English is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on August 15, 2016. English faces a sentence of up to five years in prison, a $10,000 fine, and mandatory dismissal from her job. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Houston Man Convicted of Producing and Distributing Animal Crush VideosRead the Press Release
HOUSTON – A 54-year-old man from Houston has been convicted of creating and distributing videos depicting the torture and killing of puppies, chickens and kittens, announced United States Attorney Kenneth Magidson. Brent Justice was found guilty of three counts of producing and one count of distributing what is referred to as “animal crush videos” following a one-day bench trial. U.S. District Judge Sim Lake presided. Co-defendant Ashley Nicole Richards, 25, originally from Waco, but residing in Houston, entered a guilty plea Sept. 8, 2015.
People For the Ethical Treatment of Animals (PETA) defines the “crush” fetish as a cruel and illegal genre of pornography in which women are videotaped or photographed mutilating small animals for the sexual gratification of viewers. In crush fetish materials, women are depicted, usually barefoot or in high heels, stepping on (or crushing), torturing and killing different species of animals, ranging from crawfish, crabs and insects to rodents, rabbits, kittens, puppies, cats, dogs and other mammals.
Under federal law, it is illegal to depict - via photograph, motion-picture film, video, digital recording or electronic image - actual conduct in which one or more living non-human mammals, birds, reptiles or amphibians is intentionally crushed, burned, drowned, suffocated, impaled or otherwise subjected to serious bodily injury, and is obscene.
These were believed to be the first individuals indicted on these offenses since the statute was amended in 2010.
Richards and Justice created and distributed videos that involve puppies, chickens and kittens being tortured and killed. The videos are titled “puppy1,” “puppy 2,” “whitechick1,” “whitechick2,” “whitechick3,” “blackluvsample,” “adammeetseve” and “adammeetseve2” and were created at varying times between February 2010 and August 2012. In the “puppy2” video, which is more than 13 minutes in length, Richards is seen torturing and killing a blue Pit Bull-mix puppy in a kitchen. The defenseless dog’s mouth is closed with duct tape and he struggles as Richards strikes the dog numerous times with a meat cleaver. In the video, Richards chops off one of the puppy’s paws, then hacks at his head and neck. Richards is later seen severing the dog’s head and urinating on its body. In another video, described in court, Richards steps on a cat’s eye with heel of her shoe.Previous court records also indicated that during the videos, Richards is often scantily clad and wearing a Mardi Gras-type mask. As she tortured the animals, she engaged in sexually charged dialogue meant to arouse the viewer.
The government contended that Justice was the cameraman in all of the videos in all the videos he was charged with producing. Richards testified during the bench trial today that Justice introduced her to “crush” and that he was the person behind the marketing and distribution of the videos.
Authorities were alerted to the videos following an inquiry from PETA.
Richards was originally arrested on state charges on Aug. 15, 2012. A federal grand jury returned an indictment Nov. 28, 2012, and she was transferred to federal custody. However, the crush video charges were later dismissed on what the court cited as constitutionality issues. The government appealed that decision to the 5th Circuit Court of Appeals in New Orleans which subsequently overturned the decision of the District Court. The defense then filed a petition for a writ of certiorari to the U.S. Supreme Court challenging the 5th Circuit’s ruling. The U.S. Supreme Court denied that petition and remanded the case back to the District Court for prosecution.
Today, Judge Lake found Justice guilty of the three counts of producing and one count of distribution of the animal crush videos which were obscene in nature and set sentencing for Aug. 18, 2016. At that time, Justice faces up to seven years in federal prison on each count of conviction as well as possible $250,000 fine.
Justice was also found guilty after a bench trial in state court stemming from similar conduct in February 2016 and sentenced to 50 years. Richards also pleaded guilty to three charges in state court stemming from the same conduct and was sentenced to 10 years in prison.
The Houston Police Department originally investigated the matter and worked in conjunction with the Houston Office of the FBI. Assistant U.S. Attorney Sherri L. Zack prosecuted the case, while trial attorney John Pellettieri of the Department of Justice’s Criminal Division handled the appeal.Goffstown Woman Sentenced to 27 Months in Prison for $1 Million Embezzlement SchemeRead the Press Release
CONCORD, N.H. – Suzan Harbinson, a 52-year-old resident of Goffstown, New Hampshire, and an owner of ATA Martial Arts of Southern New Hampshire, LLC, in Bedford, has been sentenced to 27 months in prison for stealing more than $1 million, announced United States Attorney Emily Gray Rice.
Harbinson worked as a part-time bookkeeper for Henry’s Collision Center in Manchester from January 2010 to January 2015. Part of her duties included preparing checks drawn on the company’s operating account for the company’s owner to sign. From December 2010 to January 2015, Harbinson forged the owner’s signature on 145 checks that totaled $1,005,754.83. In effort to conceal her embezzlement scheme, Harbinson falsely reported in the company’s check register that the forged checks were “voided” due to mistakes she made while preparing them. Harbinson also stole $2,245 from the company by forging the company owner’s signature on three checks that were issued to “Cash,” negotiating the checks, and using the money for her personal benefit.
The forged checks were deposited by Harbinson to the martial art school’s bank account. As the deposits were made, Harbinson caused checks drawn on the school’s account to be mailed to the school’s creditors and used the remainder of the stolen money for her personal benefit.
In addition to the period of imprisonment, Chief United States District Court Judge Joseph Laplante ordered Harbinson to make restitution payments totaling $1,007,999.83 to the victim.
The case was investigated by the Federal Bureau of Investigation. It was prosecuted by AUSA Robert M. Kinsella.
Four Army National Guardsmen Indicted in Two Fraud SchemesRead the Press Release
Greenbelt, Maryland – Three guardsmen from the District of Columbia Army National Guard were indicted on charges arising from a scheme to use Bitcoin to buy stolen credit and debit card numbers from foreign websites, re-encode cards issued in their names with those stolen numbers, and then fraudulently purchase items at Army and Air Force Exchange Service (AAFES) stores on military bases and elsewhere for use and resale (Shelton Stewart Indictment):
Derrick K. Shelton, II, age 28, of Washington, D.C.,
James C. Stewart, III, (J. Stewart) age 25, of District Heights, Maryland; and
Quentin T. Stewart, age 28, of Parkville, Maryland.
A fourth national guardsman, Vincent Anthony Grant, age 27, of Laurel, Maryland was also indicted in a separate case involving a similar fraud scheme (Grant Indictment). The indictments were returned on May 9, 2016 and unsealed last Friday, May 20, 2016 following the arrests of the defendants.
The indictments were 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 (DCIS); and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
Shelton, J. Stewart and Grant were specialists, and Q. Stewart was a former sergeant, all in the District of Columbia Army National Guard.
“Bitcoin” is a digital currency that operates through an online, decentralized ledger system. Bitcoin is not issued by any government, bank, or company, but rather is generated and controlled through computer software operating through a decentralized network. Bitcoin can be exchanged for other currencies, products, or services.
The Shelton Stewart Indictment alleges that from July 2014 to May 2015, Shelton, J. Stewart and Q. Stewart, along with co-conspirator Jamal Moody and others, used Bitcoin to purchase stolen credit and debit card numbers of individuals and businesses from foreign internet websites. They selected and purchased stolen credit and debit card numbers of individuals and businesses holding federal credit union accounts, and those with billing addresses in or near Maryland. They bought magnetic strip card-encoding devices and software to re-encode credit, debit and other cards with the stolen credit and debit card numbers.
According to the Shelton Stewart Indictment, the defendants used the cards they fraudulently re-encoded to buy merchandise, including gift cards, electronic items, and luxury goods, from AAFES stores on U.S. military bases, and other locations in Maryland and elsewhere. They used the merchandise themselves or resold the merchandise.
The Grant Indictment alleges that from July 2014 to April 2015, Grant, along with co-conspirator Moody and others, engaged in a scheme similar to the one described above.
Shelton, J. Stewart and Q. Stewart face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and wire fraud. Grant faces a maximum sentence of seven and half in prison for conspiring to commit access device fraud. All four defendants also face a mandatory minimum of two years in prison for aggravated identity theft, consecutive to any other sentence imposed. The defendants had their initial appearances last week and were released under pretrial supervision, except for Quentin Stewart who is scheduled to have a detention hearing tomorrow, May 24, 2016, at noon before U.S. Magistrate Judge Charles B. Day in U.S. District Court in Greenbelt.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
In a separate proceeding, Jamal Alexander Moody, age 28, of Oxon Hill, Maryland, and Waynesboro, Pennsylvania, who was also a specialist in the District of Columbia Army National Guard, pleaded guilty to conspiring to commit access device fraud and aggravated identity theft. Moody admitted that from July 2014 to April 2015, he purchased a magnetic-strip card-encoding device which he used to re-encode credit and debit cards issued in his name with more than 100 stolen credit and debit card numbers of other individuals that he purchased through Bitcoin transactions. Moody used the fraudulently re-encoded cards to purchase – often from AAFES stores - gift cards or electronic and luxury goods for resale. Moody is awaiting sentencing.
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 DCIS and FBI for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney Gustav William Eyler, of the U.S. Justice Department, Criminal Division - Fraud Section, and Assistant U.S. Attorney Thomas P. Windom, who are prosecuting the case.
Fort Totten, North Dakota, Man Sentenced to Federal Prison for Aggravated Sexual Abuse of a ChildRead the Press Release
FARGO - US Attorney Christopher C. Myers announced that on May 23, 2016, Jade Shilo OldRock, 42, of Fort Totten, ND, was sentenced before US District Judge Ralph R. Erickson after a federal jury found him guilty on July 17, 2015, of Sexual Abuse of a Child and Commission of a Federal Sex Offense by a Registered Sex Offender. OldRock was sentenced to a total of 40 years on the two counts, plus 10 years of supervised release. OldRock was also ordered to pay a $200 special assessment to the Crime Victims’ Fund.
In or about May 2014, OldRock was temporarily residing at the residence of the victim, who had not yet attained the age of 12, when he and the victim’s father came home from a night of drinking. The victim testified at trial that she woke up when OldRock began performing a sexual act on her while she was asleep.
OldRock has a previous conviction for Sexual Abuse of a Minor in 1998. Because he committed this offense while he was a registered sex offender, a consecutive 10 years was imposed along with the underlying 30-year minimum mandatory sentence for the sexual abuse of a child under the age of 12.
This case was investigated by the Federal Bureau of Investigation (FBI) and the Bureau of Indian Affairs - Fort Totten Agency.
Assistant US Attorneys Janice Morley and Matt Greenley prosecuted this case.
Fort Thompson Man Charged with Assaulting a Federal OfficerRead the Press Release
United States Attorney Randolph J. Seiler announced that a Fort Thompson, South Dakota, man has been indicted by a federal grand jury for Assaulting, Resisting, and Impeding a Federal Officer.
Stuart Dion, age 32, was indicted on May 17, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 19, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about April 16, 2016, at Fort Thompson, Dion forcibly assaulted, resisted, opposed, impeded, intimidated, and interfered with an officer from the Bureau of Indian Affairs, while said officer was engaged in the performance of his official duties.
The charge is merely an accusation and Dion is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Dion was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Former VP Sentenced for Embezzling from Houston Police Federal Credit UnionRead the Press Release
HOUSTON – A 66-year-old former ex-vice president of the Houston Police Federal Credit Union has been ordered to federal prison for embezzlement that occurred for approximately 18 years, announced U.S. Attorney Kenneth Magidson. Cheryl Vickers was charged in a criminal information that was filed Dec. 7, 2015. She pleaded guilty Jan. 20, 2016.
Today, U.S. District Judge Melinda Harmon ordered Vickers to serve 41 months in prison and to pay $1,247,785 in restitution to the Houston Police Federal Credit Union. Prior to today’s sentencing, Vickers made a lump sum payment of $949,148 into the registry of the court to be applied toward the restitution owed.
At the time of her plea, she admitted that between January 1997 and February 2015 she embezzled at least $1,247,785 from the Houston Police Federal Credit Union while employed there as vice-president of accounting.
The embezzlement was ultimately discovered following her retirement in February 2015. At that time, a credit union customer brought in a “stale” check to have it re-issued. A “stale” check is an old check that has been issued by the credit union but never cashed. When credit union records showed that Vickers had already reissued the stale check, the credit union conducted an audit of Vickers’ banking activity.
The audit revealed that from January 1997 until her retirement, Vickers had embezzled at least $1,247,785 by various means, including, but not limited to, re-issuing stale checks. The credit union maintained a ledger of its stale checks which showed that Vickers reissued stale checks to credit card companies to pay her personal credit card bills. This included a Feb. 4, 2015, reissued stale check in the amount of $7,800 to pay her Chase Bank credit card bill. Some of the reissued checks even had her credit card number hand-written on them.
Vickers admitted that while employed at the Houston Police Federal Credit Union, she took credit union money without authorization or permission.
She was permitted to remain on bond pending her surrender to federal prison.
The charges are the result of an investigation conducted by FBI with assistance from the Federal Deposit Insurance Corporation – Office of Inspector General. Assistant U.S. Attorney Belinda Beek is prosecuting the case.
Former USD Basketball Star Sentenced for Camp Pendleton TheftsRead the Press Release
Special Assistant U.S. Attorney Kathleen J. O’Hara (619) 546-7945
NEWS RELEASE SUMMARY – May 23, 2016
SAN DIEGO – Former University of San Diego women’s basketball star Dominique Conners, 26, was sentenced today by U.S. District Judge Michael M. Anello to 90 days house arrest and three years’ probation for thefts she committed at Camp Pendleton in order to fund her gambling addiction. Judge Anello also ordered Conners to pay $11,779 in restitution after she stole the wedding gifts of a newly married couple who were staying at a beach cottage at the Del Mar Beach Resort on Camp Pendleton.
Ms. Conners, a graduate of La Jolla Country Day School, went on to star for the University of San Diego Torreos. Conners, a WNBA draft prospect, also played professional basketball in the Czech Republic. According to court documents and other admissions, her thefts at Camp Pendleton began shortly after she returned to the United States from Europe. Records showed that Ms. Conners was gambling several thousand dollars a week and had access to Camp Pendleton because her father is a retired Marine. Ms. Conners had been ordered to attend counseling for gambling addiction after her arraignment in November 2015.
The victims in this case had just been married and had over $11,000 in cash gifts in their beach cottage. Shoe prints were found on the window sill and a forensic analysis of Ms. Conners’s shoes matched her to the crime scene. One victim stated, “I felt violated and the false sense of security (on a military installation) was overwhelming.” Another victim said, “She stole a large sum of money from us. Money that was to help start our new life together after we got married.”
The Marine Corps Criminal Investigations Division (CID) conducted the investigation. The victims were able to recover their lost property.
CID also linked Ms. Conners to several other vehicle thefts. In those cases, Ms. Conners stole cash and gift cards from unlocked vehicles at the beach, but left the wallets and other personal items behind. Ms. Conners was ordered to pay restitution for those thefts as well.
DEFENDANTS
Dominique Conners Age: 26 Oceanside, CA
SUMMARY OF CHARGES
18 U.S.C. § 661 – Theft within the Special Maritime or Territorial Jurisdiction
AGENCY
Criminal Investigative Division, United States Marine Corps
Former Employee of Albuquerque Halfway House Pleads Guilty to Sexually Abusing Female InmatesRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez and Special Agent in Charge Monte A. Cason of the Department of Justice Office of Inspector General, Dallas Field Office, announced that a former employee of a halfway house in Albuquerque, N.M., has pleaded guilty to sexually abusing six female inmates who were under his custodial authority.
Eric Trujillo, 35, of Albuquerque, entered his guilty plea in federal court this morning to a six-count felony information charging him with sexually abusing persons in official detention. Under the terms of the plea agreement, Trujillo will be sentenced within the range of four to 15 years in federal prison followed by a term of supervised release to be determined by the court. Trujillo also will be required to register as a sex offender.
Trujillo was arrested in Nov. 2015, on a seven-count indictment charging him with aggravated sexual abuse and sexual abuse of persons in official detention. The indictment charged Trujillo with sexually abusing four women who were living at a halfway house in Bernalillo County, N.M., that provided lodging and other services for federal inmates under a contract with the U.S. Bureau of Prisons. According to the indictment, Trujillo committed the crimes between June 2012 and March 2014, while he was employed as a resident monitor by the halfway house.
The indictment was superseded on March 23, 2016, to add two more sexual abuse charges. The new charges alleged that between May 2012 and Sept. 7, 2012, Trujillo sexually assaulted two more women who were residing at the halfway house.
During today’s proceedings, Trujillo pled guilty to six counts of sexual abuse of a person in official detention. In entering the guilty plea, Trujillo admitted that between May 2012 and March 2014, he engaged in sexual acts with six female inmates who were living at the halfway house pursuant to a contract with the U.S. Bureau of Prisons. Trujillo acknowledged that at the time, he was employed as a resident monitor and guard by the halfway house and that the victims were in official detention and under his custodial, supervisory and disciplinary authority.
Trujillo was remanded into custody after entering his guilty plea. He will remain detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Dallas Field Office of the Department of Justice Office of Inspector General with assistance from the Albuquerque Police Department, and is being prosecuted by Assistant U.S. Attorneys Novaline D. Wilson and Sarah J. Mease.
Former Detroit Public Schools Director of Grant Development Charged with FraudRead the Press Release
Criminal charges were filed today against Carolyn StarkeyDarden, a former Detroit Public Schools Director of Grant Development, alleging federal program fraud, announced U.S. Attorney Barbara L. McQuade.
Joining McQuade in the announcement were David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation.
The charging document, known as a criminal information, charges that between 2005 and 2012, Carolyn StarkeyDarden, 69, of Detroit, as president and/or agent of companies she established to provide supplemental educational services to eligible students in Michigan, obtained at least $1,275,000 from DPS through a scheme in which she submitted fraudulent invoices for payment to DPS for tutorial services that were never rendered to DPS students.
United States Attorney Barbara L. McQuade said, “We hope that our work to uncover fraud in public school systems will deter others from stealing funds intended to educate children.”
“Ms. StarkeyDarden cheated the students of Detroit Public Schools out of valuable resources by fraudulently billing for her company’s services,” said David P. Gelios, Special Agent in Charge, FBI Detroit Division. “In fact, Detroit students were cheated twice by this scheme. Students that needed tutoring never received it, and money that could have been spent on other resources was paid to Ms. StarkeyDarden as part of her fraud scheme.”
StarkeyDarden faces up to 10 years in prison and fines of up to $250,000 on the charge of Federal Program Theft.
This case was investigated by agents of the FBI. This case is being prosecuted by Assistant United States Attorney Dawn N. Ison.
The FBI Detroit Area Corruption Task Force (DACTF) is led by the FBI Detroit Field Office, and consists of Special Agents and law enforcement officers with the FBI Detroit; the Detroit Police Department; the Michigan State Police; the Michigan Attorney General’s Office; the Internal Revenue Service – Criminal Investigation Division; the U.S. Department of Housing and Urban Development–Office of Inspector General; the U.S. Environmental Protection Agency–Office of Inspector General; the U.S. Department of Transportation–Office of Inspector General; the U.S. Department of Homeland Security–Office of Inspector General; the U.S. Department of Education–Office of Inspector General; and the U.S. Department of Labor–Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
A Criminal Information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Deschutes County Sheriff's Office Captain Pleads Guilty to EmbezzlementRead the Press Release
EUGENE, Ore – Former Deschutes County Sheriff’s Office Captain Scott Raymond Beard, 46, of Bend, Oregon, pleaded guilty today to four felony offenses related to an embezzlement scheme where he stole $205,000 in taxpayer funds and laundered some of the tainted cash. The government alleges Beard laundered the cash to pay expenses on behalf of his co-defendant, Krista Jean Mudrick, 35, of Bend, Oregon. Mudrick is also a former employee of the Deschutes County Sheriff’s Office and is charged with making false statements to the FBI and IRS about Beard’s expenditures of the ill-gotten gains. Her case is pending, and she is presumed innocent.
Beard appeared in court today and, pursuant to a plea agreement, pleaded guilty to two counts of theft of funds from a federally funded program, and two counts of money laundering. A related count, passport fraud, was dismissed.
United States District Judge Michael McShane presided over Beard’s guilty plea and will sentence him on August 23, 2016. Beard faces up to twenty years in prison and will pay full restitution to Deschutes County.
This case was investigated by the FBI, IRS-Criminal Investigation, and the Deschutes County Sheriff’s Office. Assistant U.S. Attorney Christopher Cardani is prosecuting the case.
Former Deputy Sentenced in Multiple Fraud SchemesRead the Press Release
Contact Person: T. DeWayne Pearson (803) 929-3000
Columbia, SC - United States Attorney Bill Nettles stated that former Richland County Sheriff’s Deputy Maribel Crespo, age 40, of Columbia, South Carolina, was sentenced to 12 months and one day imprisonment for her role in multiple fraud schemes, including trafficking in counterfeit goods, impersonating a federal agent and tax fraud. According to information presented during her guilty plea, Crespo sold counterfeit luxury goods including fake Michael Kors handbags and Rolex watches over the internet. Additionally, Crespo posed as an officer of the Department of Homeland Security to defraud undocumented aliens by charging them thousands of dollars for counterfeit immigration paperwork. Crespo also entered a guilty plea for preparing fraudulent tax returns for other former Richland County Sheriff’s Deputies by adding false and fictitious information to the returns. Crespo would attach children’s information to the returns so that she could claim them as false dependents in an effort to artificially inflate the amount of the tax returns. The children used were typically citizen children of non-citizen Hispanics in the Columbia area. Crespo would forward a part the tax return to the parents of the dependent, some to herself and the remainder to the tax filer. Based on IRS calculations, Crespo caused over $100,000 in loss to the Treasury based on the fraudulent returns.
Internal Revenue Special Agent in Charge Thomas J. Holloman III said, “IRS, Criminal Investigation takes seriously any attempts to steal taxpayer money through false claims for refunds; and certainly when those false claims are made by someone sworn to uphold the law.” Special Agent in Charge of HSI Atlanta Nick S. Annan said “Criminal counterfeiters are economic parasites who harm legitimate businesses that pay taxes, create jobs and support our national economy. Anyone who thinks counterfeiting is a victimless crime should realize the proceeds of black-market sales are often funneled to support criminal organizations. Further, defrauding the government harms law-abiding citizens everywhere who pay their fair share and as such these cases will continue to be a major investigative priority for ICE Homeland Security Investigations.” The case was investigated by the Department of Homeland Security - Immigration and Customs Enforcement and the Internal Revenue Service and was prosecuted by Assistant United States Attorney T. DeWayne Pearson of the Columbia office.
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Former Anchorage Prosecutor Sentenced to over 13 Years in Prison for Massive Wire Fraud and Money Laundering SchemeRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a former Anchorage resident and former municipal prosecutor was sentenced to 160 months in prison for perpetrating a massive wire fraud and money laundering scheme encompassing $52 million. This is the largest wire fraud and money laundering conviction by amount ever prosecuted in Alaska.
Mark Avery, 57, who last resided in San Francisco, California, was sentenced today by U.S. District Judge Ralph R. Beistline. In addition to the prison term, Avery was also ordered to serve five years of supervised release, pay a $100,000 fine, and pay restitution to the May Smith Trust in the amount of $45,925,737.57. Avery was convicted on Feb. 29, 2016, following a two-week jury trial, of three counts of wire fraud, six counts of money laundering, one count of bank fraud, and one count of making false statements to a bank.
Avery was indicted by a federal grand jury in Anchorage in 2013. The indictment alleged that he defrauded the May Wong Smith and the May Smith Trust, of over $52 million dollars. Avery was, at the time, a trustee of the trust and used his influence to obtain access to $52 million of trust assets, all of which he expended in a period of six months. The jury’s verdict found that, in 2005 and 2006, Avery siphoned over $31 million of trust assets in a wire fraud scheme that defrauded the May Smith Trust.
Avery was re-charged after the Ninth Circuit Court of Appeals reversed Avery’s conviction on similar charges for honest services wire fraud in 2013 based on a Supreme Court decision that found the theory of honest services fraud under which Avery was previously convicted unconstitutional. The revised indictment filed against Avery charged that Avery engaged in a scheme to defraud the trust and May Wong Smith. Avery served as a trustee and lawyer to the May Smith Trust from early 2002, and received yearly compensation in the amount of $600,000 in trustee fees for his fiduciary role. Avery was also owner/operator of Avery and Associates, L.L.C., Security Aviation, Inc., and Regional Protective Services, L.L.C. Avery’s companies, many of which were created after receipt of trust funds, were engaged in air charter services, aeromedical evacuation, legal services, development of real property, and court imposed electronic monitoring.
During the trial, the jury heard that May Wong Smith was born in China in 1922 and, shortly after World War II, married Stanley Smith, a citizen of Australia. Stanley Smith amassed millions of dollars from post-war business investments and became a quiet benefactor of various charitable organizations. Stanley Smith died in 1968 and May Wong Smith never remarried.
In the early 1980s, May Wong Smith began to show signs of dementia and her mental condition began to deteriorate to the point where she was not capable of living without assisted care. The May Smith Trust was established on October 10, 1982, to provide for May Wong Smith’s support and maintenance during her life and certain charitable purposes after her death. Due to her mental condition, she had full time live-in care, who were hand-picked by Avery, from at least 1991 until her death in Nassau, Bahamas, on July 15, 2006. In spite of her compromised mental capacity, she remained a trustee until her death in July 2006.
The indictment alleged that Avery engaged in a scheme wherein he pledged assets of the May Smith Trust as collateral to secure a $52 million loan for himself. The jury’s verdicts found that Avery defrauded May Wong Smith and the May Smith Trust by using the $52 million loan funds for his personal use and to invest in various businesses without any indicia of normal business practices. The money was obtained and spent with no written business plan, no controls over how the money was to be spent, no repayment terms, no promissory note and none of the common safeguards of commercial investments. At trial the evidence showed that Avery exhausted the $52 million he obtained from the trust in six months using the funds for various purchases including two World War II era fighters, a P-51D Mustang, and an F4U-4 Corsair, other antique aircraft, real estate, a personal mortgage payoff, a 47' Carver Yacht, and a 37' heavy-duty patrol boat.
Avery was also convicted of bank fraud and making false statements to Wells Fargo Bank in October 2006 in connection with a $500,000 line of credit. Avery failed to list the $52 million dollar debt when applying for the loan, which, if listed, would have been material in Wells Fargo’s decision in evaluating the loan.
“Today’s sentencing brings to a close a lengthy investigation of one of the largest fraud cases perpetrated in Alaska,” said U.S. Attorney Loeffler. “Mr. Avery’s conduct involved a massive breach of fiduciary obligations and just convictions for someone who used his access to these huge funds to defy the wishes and bequests of the Smiths and spend their trust funds on personal debts, whims, wishes and pie in the sky ventures unsupported by any business planning. I commend the dedication of the IRS, FBI and prosecutors in this office who picked up this investigation and brought it forward to today’s result.”
“IRS Criminal Investigation is uniquely trained to follow the money in sophisticated and complex financial crimes such as the one perpetrated by Mark Avery. We will continue to partner with the FBI and DOJ in defense of those victimized by white collar crime,” stated Special Agent in Charge Teri Alexander.
Felon and Gang Member Sentenced to Federal Prison for Role in Meth DistributionRead the Press Release
A felon who conspired to distribute methamphetamine was sentenced March 29, 2016, to 15 years in federal prison.
Israel Grimaldo 26, from Sioux City, Iowa, received the prison term after a December 21, 2015, guilty plea to conspiracy to distribute methamphetamine. Grimaldo was previously convicted of a felony drug offense in Woodbury County, Iowa, on August 28, 2008.
Evidence presented at the guilty plea and sentencing hearings revealed that Grimaldo was involved in a conspiracy from about January 2013 through January 2014 that distributed at least 50 grams of pure methamphetamine. During and in relation to this conspiracy, defendant repeatedly obtained, possessed, and re-distributed methamphetamine. For example, he did so on both November 25, 2013 (distributing 7 grams of methamphetamine while armed with a firearm) and December 2, 2013 (distributing 3.5 grams of methamphetamine in a city park) among other times.
In furtherance of his illegal drug trafficking activities, defendant possessed firearms to intimidate his drug customers, guard himself, protect his illegal drugs and drug proceeds, and even rob individuals with whom he had drug disputes. For example, on November 25, 2013, defendant possessed a firearm in his waistband while involved in the 7 gram meth deal previously described, and on December 13, 2013 defendant participated in the robbery of a man (in the presence of a child) in connection with an illegal drug dispute. After the robbery, defendant and an accomplice fled from Iowa into Nebraska where they were later captured.
Grimaldo was sentenced in Sioux City by United States District Court Judge Leonard T. Strand. Grimaldo was sentenced to 180 months’ imprisonment. A special assessment of $100 was imposed. He must also serve an eight-year term of supervised release after the prison term. There is no parole in the federal system.
Grimaldo is being held in the United States Marshal’s custody until he can be transported to a federal prison.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 14-4068.
The case was investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration , Sioux City, Iowa Police Department, Homeland Security Investigations (HIS); Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
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Federal Grand Jury Indicts Members of New Orleans Heroin Trafficking OrganizationRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green of the Middle District of Louisiana announced today the unsealing of a federal grand jury indictment against five members of a heroin trafficking network operating in the St. Roch neighborhood of New Orleans. As detailed below, the indictment charges the defendants with serious drug trafficking offenses.
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Miguel L. Joseph, also known as “Pretty,” age 29, of New Orleans, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute heroin; distribution of heroin; unlawful use of a communications facility; and forfeiture.
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Edward Lawrence, also known as “Burger,” age 32, of New Orleans, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute heroin; distribution of heroin; unlawful use of a communications facility; and forfeiture.
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Vantrell Toomer, age 44, of Houston, Texas, and New Orleans, Louisiana, is charged with conspiracy to distribute and possess with the intent to distribute heroin; possession with intent to distribute heroin; and forfeiture.
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Michelle Marie Jefferson, age 31, of New Orleans, Louisiana, is charged with charged with conspiracy to distribute and possess with the intent to distribute heroin; unlawful use of a communications facility; and forfeiture.
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Danielle Denise Taylor, age 42, of New Orleans, Louisiana, is charged with charged with conspiracy to distribute and possess with the intent to distribute heroin; and forfeiture.
United States Attorney Green stated: “Our office, together with the FBI and our other federal, state, and local law enforcement partners, will aggressively pursue those who contribute to the heroin epidemic raging across our communities and country. I greatly appreciate the dedication of the agents and prosecutors working on this important matter.”
FBI New Orleans Division Special Agent-in-Charge Jeff Sallet stated: “The FBI and the people of New Orleans will not tolerate the scourge of gang activity including narcotics distribution and violence which accompanies this behavior. The New Orleans Gang Task Force is committed to bringing those involved in this illegal behavior to justice and dismantling criminal organizations we encounter during the course of our investigations.”
This matter is being investigated by the FBI New Orleans Division's Gang Task Force, with the assistance of the New Orleans Police Department, the St. Tammany Parish Sheriff's Office, the Jefferson Parish Sheriff's Office, and the Orleans Parish District Attorney's Office. This matter is being prosecuted by Assistant United States Attorneys Cam T. Le and Ryan Rezaei of the Middle District of Louisiana, who are serving as Special Attorneys to the United States Attorney General.
NOTE: An indictment is an accusation by the Grand Jury. The defendants are presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
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El Monte Flores Gang Member Sentenced to 210 months in Federal Prison on Multiple Racketeering ChargesRead the Press Release
LOS ANGELES – An El Monte man who pled guilty to four separate crimes related to gang activity has been sentenced to serve 210 months in federal prison.
Christian “Bossy” Lafargo, 30, was sentenced Thursday by United States District Judge John A. Kronstadt after pleading guilty to multiple charges, including Racketeer Influenced and Corrupt Organizations (“RICO”) Conspiracy, Violent Crime in Aid of Racketeering -– Attempted Murder, Violent Crime in Aid of Racketeering – Conspiracy to Commit Murder, and Discharging a Firearm During and in Relation to a Crime of Violence.
The case was based on Lafargo’s activities in the El Monte Flores (“EMF”) gang, one of the oldest street gangs in Los Angeles County. According to the government’s sentencing papers, EMF has hundreds of Mexican Mafia affiliated gang members, spanning several generations. The Mexican Mafia is a powerful and violent prison gang that controls drug distribution and other illegal activities within the California penal system and on the streets of Southern California by organizing Latino street gang members for the purpose of establishing a larger network for the Mexican Mafia’s illegal activities. If a street gang does not comply with the demands of the Mexican Mafia, the prison gang will order the assault or murder the offending gang’s members, whether they are in custody or on the streets.
According to the indictment, the EMF gang seeks to control parts of the San Gabriel Valley through violence and intimidation, while deriving profits from its drug-trafficking operations and the scheme of “taxing” persons within the community. The crimes of EMF include drug-trafficking, extortion, theft, robbery, assault, hate crimes against African-Americans, and murder.
Lafargo, a long-time EMF member, participated in drug distribution, extortion, and crimes of violence on behalf of the enterprise and the most aggravating aspect of defendant’s offense conduct was his violent activity on behalf of the gang. In 2009, Lafargo beat and kicked a victim in the head and assaulted this victim while Lafargo possessed marijuana for distribution along with a 9mm firearm. In 2010, Lafargo attempted to kill a co-defendant, Jose Salas, because Salas had instructed an unidentified co-conspirator to sell drugs in the same area where Lafargo was selling drugs on behalf of Mexican Mafia members.
Even during his periods of incarceration, LaFargo continued to participate in criminal activity on behalf of the gang and Mexican Mafia within the walls of the State Prison.
“Gang violence like that employed by the EMF gang terrorizes the community and often victimizes the innocent,” said United States Attorney Eileen M. Decker. “Lafargo was an integral part of that violence and was unwilling to stop committing crimes, even when in State Prison. The sentence imposed in this case will protect the El Monte community for over 17 years.”
Lafargo was the latest defendant sentenced by Judge Kronstadt in the case against the EMF gang:
• Rafael Lomeli, 38, of El Monte, was sentenced to 130 months in custody on May 5, 2016;
• Mark Salazar, 25, of El Monte, was sentenced to five years in prison on April 21, 2016;
• Enrique Lopez, 50, of El Monte, was sentenced to 65 months in custody on March 24, 2016;
• Marie Gutierrez, 56, of El Monte, was sentenced to 27 months in custody on February 4, 2016; and
• Hiram Ramirez, 48, of El Monte, was sentenced to 32 months in custody on December 17, 2015.
Jose Salas, 38, of El Monte, has pled guilty and admitted to attempting to murder Lafargo and another gang member after Lafargo failed in his attempt to murder Salas. Salas has agreed to a sentence of 15 years in prison and will be sentenced later this year. James Gutierrez, 53, of El Monte, a Mexican Mafia member who was a “shotcaller” of the gang has pled guilty to conspiring to violate the RICO Act, conspiring to distribute controlled substances, including methamphetamine and heroin, and conspiring to launder money. Gutierrez has also agreed to a sentence of 15 years in prison and will be sentenced later this year.
The investigation into the EMF gang was conducted by a task force that included the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; IRS Criminal Investigation; and the El Monte Police Department.
Eighth Circuit Court of Appeals Affirms Conviction for Being a Felon in Possession of a FirearmRead the Press Release
United States Attorney Randolph J. Seiler announces that the Eighth Circuit Court of Appeals has affirmed the district court in appeal no.15-1175, United States of America, appellee, v. Lance Majestic House, appellant.
House argued that the district court erred in denying his motion to suppress photographic identification evidence and that the identification tainted subsequent witness identifications of House as the suspect.
In July 2013, various witnesses saw a man pointing a handgun at another man in central Sioux Falls. The descriptions of the man with the handgun by different witnesses at each location were nearly identical. When confronted by police, House ran from the scene. Law enforcement showed a photo lineup that included House to the eyewitnesses, each of whom chose the photograph of House as matching the man they saw.
In January 2014, House was indicted by a grand jury for being a felon in possession of a firearm. At his jury trial, before the Honorable United States District Court Judge Karen E. Schreier, several witnesses made in-court identifications of House as the man they observed holding a firearm in July 2013. The jury returned a guilty verdict, and House was sentenced to 78 months of imprisonment, followed by three years of supervised release.
In today’s published opinion, the federal court of appeals affirmed the district court in all respects.
The case was investigated by the Sioux Falls Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Jennifer Mammenga prosecuted the case at trial and handled the appeal for the government.
Easton Man Pleads Guilty to Filing False Tax ReturnsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that on May 20, 2016, PAUL CARPENTER, 64, of Easton, waived his right to indictment and pleaded guilty to one count of filing a false tax return.
According to court documents and statements made in court, CARPENTER operated a chiropractic practice in Bridgeport. For the 2008 and 2009 tax years, CARPENTER intentionally mischaracterized personal expenses as deductible business expenses on his Schedule C relating to his chiropractic practice, including college tuition and numerous personal retail purchases. For the 2008 tax year, CARPENTER took false deductions totaling $308,084, resulting in a tax loss of $106,395, and for the 2009 tax year, he took false deductions totaling $183,283, resulting in a tax loss of $81,199
Judge Bolden scheduled sentencing for September 7, 2016, at which time CARPENTER faces a maximum term of imprisonment three years. CARPENTER has paid all back taxes, plus interest and penalties.
This matter has been investigated by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Eagle Butte Man Charged with Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Cletis Creek, age 54, was indicted on May 17, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 19, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between February 1, 2016, and May 17, 2016, Creek, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under State Law, failed to register and update his registration.
The charge is merely an accusation and Creek is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service and the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Creek was released on bond pending trial. A trial date has not been set.
Eagle Butte Man Charged with Aggravated Sexual Abuse of a ChildRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Abuse of a Child.
Lawrence Oakie, age 34, was indicted on April 13, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 16, 2016, and pled not guilty to the Indictment.
The penalty upon conviction is a mandatory minimum of 30 years up to life in custody and/or a $250,000 fine, no less than five years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
It is alleged that sometime between August 28, 2015, and August 31, 2015, Oakie knowingly engaged and attempted to engage in a sexual act with a child under the age of 12 at a home in Todd County, South Dakota.
The charge is merely an accusation and Oakie is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Kirk W. Albertson is prosecuting the case.
Oakie was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Eagle Butte Man Charged with AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Assault Resulting in Serious Bodily Injury and Assault by Strangulation and Suffocation.
Ronnie Antelope, Sr., a/k/a Ronald Noisy Hawk, Sr., was indicted on May 17, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on May 19, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about April 18, 2016, Antelope unlawfully assaulted his spouse, intimate partner and dating partner, and strangled her, resulting in serious bodily injury.
The charges are merely accusations and Antelope is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Antelope was released to a third party pending trial. A trial date has not been set.
Cape Girardeau Man Charged with Interstate Domestic Violence for 2011 Murder of his WifeRead the Press Release
Cape Girardeau, MO - The United States Attorney's Office announced today the unsealing of an indictment charging James Clay Waller II with Interstate Domestic Violence in violation of Title 18, United States Code, Section 2261(a)(1). The offense of Interstate Domestic Violence was enacted by Congress in 1994 as part of the Violence Against Women Act. A violation of the Act includes a possible prison sentence up to life imprisonment.
The indictment alleges that in June of 2011, Waller traveled back and forth between Illinois and Missouri with the intent to kill his wife, Jacque Sue Waller, and did in fact murder her. The indictment also seeks forfeiture of any proceeds that might be derived from a manuscript intended to be published as a book that details the facts of the murder.
In 2012 Waller was charged under state law with the murder of his wife, despite the fact that her body had never been recovered. That prosecution was resolved with Waller pleading guilty in exchange for a twenty-year sentence and leading authorities to the unmarked grave in Illinois where he had hidden and buried his wife’s body. During the guilty plea, Waller was specifically advised by the Court that any resolution of the state charges was not necessarily binding on federal authorities.
United States Attorney Richard Callahan commended the Cape Girardeau County Prosecuting Attorney’s Office for its handling of the state prosecution. He noted that although it is highly unusual for his office to follow a state prosecution with a federal prosecution of basically the same criminal conduct, "the facts and circumstances of this case begged for such a prosecution."
This murder has been investigated by a host of law enforcement agencies, including the Federal Bureau of Investigation, the Cape Girardeau County Major Case Squad, the Jackson City Police Department, the Cape Girardeau City Police Department, the Missouri State Highway Patrol and the Cape Girardeau County Sheriff’s Department.
The federal prosecution of the case will be handled by Assistant United States Attorney Larry H. Ferrell.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Canadian-Iranian Citizen Sentenced to Three Years in Prison for Conspiring to Violate Iran SanctionsRead the Press Release
Ali Reza Parsa, 45, a Canadian-Iranian dual citizen and resident of Canada, was sentenced to three years in prison for his participation in a conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR).
The sentence was announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York.
“Over the course of six years, Parsa repeatedly violated export control laws and aided Iranian entities in procuring high-tech electronic components that have both commercial and military uses,” said Assistant Attorney General Carlin. “With this sentence, he will be held accountable for circumventing important U.S. laws designed to protect our national security interests. One of our top national security priorities remains safeguarding our national assets from those who may wish to do us harm.”
“As he admitted in court, Ali Reza Parsa conspired to purchase high-tech electronic components – some used in the production of rockets and missiles – from American companies for eventual delivery to Iran through Canada,” said U.S. Attorney Bharara. “He has now been sentenced to three years in prison for his violation of federal law.”
Parsa was arrested in October 2014 following an investigation by the FBI and U.S. Department of Commerce’s Bureau of Industry and Security (BIS). He pleaded guilty on Jan. 20, 2016, before U.S. District Judge Ronnie Abrams of the Southern District of New York, who also imposed Friday’s sentence.
According to the indictment filed against Parsa and other court documents publicly filed in this case and statements made in court proceedings, including at Friday’s sentencing hearing:
Between approximately 2009 and 2015, Parsa conspired to obtain high-tech electronic components from American companies for transshipment to Iran and other countries for clients of Parsa’s procurement company in Iran, Tavan Payesh Mad, in violation of U.S. economic sanctions. To accomplish this, Parsa used his Canadian company, Metal PM, to place orders with U.S. suppliers and typically had the parts shipped to him in Canada or to a freight forwarder located in the United Arab Emirates, and then shipped from these locations to Iran or to the location of his Iranian company’s client. Parsa provided the U.S. companies with false destination and end-user information about the components in order to conceal the illegality of these transactions.
Parsa’s criminal scheme targeted numerous American technology companies. The components that Parsa attempted to procure included cryogenic accelerometers, which are sensitive components that measure acceleration at very low temperatures. Cryogenic accelerators have both commercial and military uses, including in applications related to ballistic missile propellants and in aerospace components such as liquid-fuel rocket engines.
In addition, following his arrest and while incarcerated, Parsa continued to violate the IEEPA and the ITSR by conducting business for Metal PM and Tavan Payesh Mad, including by ordering parts from German and Brazilian companies for Iranian customers. Parsa subsequently directed a relative to delete email evidence of his ongoing business transactions while in jail and emphasized the need for secrecy in their dealings.
Neither Parsa nor any other individual or entity involved in transactions that gave rise to his conviction applied for or obtained a license from the U.S. Department of the Treasury’s Office of Foreign Assets Control for the transactions.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the outstanding investigative work of the FBI and BIS.
This case was prosecuted by Assistant U.S. Attorneys Michael D. Lockard and Anna Skotko of the Southern District of New York, with assistance provided by Trial Attorney Mariclaire Rourke of the National Security Division’s Counterintelligence and Export Control Section.
Canadian-Iranian Citizen Sentenced in Manhattan Federal Court to Three Years in Prison for Conspiring to Violate Iran SanctionsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and John P. Carlin, Assistant Attorney General for National Security, announced that ALI REZA PARSA, a Canadian-Iranian dual citizen and resident of Canada, was sentenced on Friday, May 20, 2016, to three years in prison for his participation in a conspiracy to violate the International Emergency Economic Powers Act (“IEEPA”) and the Iranian Transactions and Sanctions Regulations (“ITSR”). PARSA was arrested in October 2014 following an investigation by the Federal Bureau of Investigation (“FBI”) and United States Department of Commerce, Bureau of Industry and Security (“BIS”). PARSA pled guilty on January 20, 2016, before U.S. District Judge Ronnie Abrams, who imposed Friday’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “As he admitted in court, Ali Reza Parsa conspired to purchase high-tech electronic components – some used in the production of rockets and missiles – from American companies for eventual delivery to Iran through Canada. He has now been sentenced to three years in prison for his violation of federal law.”
Assistant Attorney General John P. Carlin said: “Over the course of six years, Parsa repeatedly violated export control laws and aided Iranian entities in procuring high-tech electronic components that have both commercial and military uses. With this sentence, he will be held accountable for circumventing important U.S. laws designed to protect our national security interests. One of our top national security priorities remains safeguarding our national assets from those who may wish to do us harm.”
According to the Indictment filed against PARSA and other court documents publicly filed in this case and statements made in court proceedings, including Friday’s sentencing:
Between approximately 2009 and 2015, PARSA conspired to obtain high-tech electronic components from American companies for transshipment to Iran and other countries for clients of PARSA’s procurement company in Iran, Tavan Payesh Mad, in violation of U.S. economic sanctions. To accomplish this, PARSA used his Canadian company, Metal PM, to place orders with U.S. suppliers and typically had the parts shipped to him in Canada or to a freight forwarder located in the United Arab Emirates, and then transshipped from these locations to Iran or to the location of his Iranian company’s client. PARSA provided the U.S. companies with false destination and end-user information about the components in order to conceal the illegality of these transactions.
PARSA’s criminal scheme targeted numerous American technology companies. The components that PARSA attempted to procure included cryogenic accelerometers, which are sensitive components that measure acceleration at very low temperatures. Cryogenic accelerators have both commercial and military uses, including in applications related to ballistic missile propellants and in aerospace components such as liquid-fuel rocket engines.
In addition, following his arrest and while incarcerated at the Metropolitan Detention Center, PARSA continued to violate the IEEPA and the ITSR by conducting business for Metal PM and Tavan Payesh Mad, including by ordering parts from German and Brazilian companies for Iranian customers. PARSA subsequently directed a relative to delete email evidence of his ongoing business transactions while in jail, emphasizing the need for secrecy in their dealings.
Neither PARSA nor any other individual or entity involved in transactions that gave rise to his conviction applied for or obtained a license from the U.S. Department of the Treasury’s Office of Foreign Assets Control for the transactions.
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In addition to the 36-month prison term, PARSA, 45, was ordered to pay a $100 special assessment.
Mr. Bharara praised the outstanding investigative work of the FBI and BIS. He also thanked the U.S. Department of Justice’s National Security Division’s Counterintelligence and Export Control Section.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael D. Lockard and Anna Skotko are in charge of the prosecution.
Bremerton, Washington Man Pleads Guilty to Production of Child PornographyRead the Press Release
Spokane– Today, Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Larry Gutierrez, age 50, of Bremerton, Washington, pled guilty to the criminal charge of production of child pornography. United States District Judge Salvador Mendoza, Jr. accepted Gutierrez’s guilty plea and scheduled a sentencing hearing for August 23, 2016, at 11:15 a.m. in Spokane, Washington.
According to information disclosed during the court proceedings, on September 23, 2014 the mother of a 9 year-old girl in Spokane, Washington reported that she (the mother) found child pornography on her child’s phone. The child was interviewed and she stated that she met a man on the communication application Kik Messenger. The child sent the man nude images of herself, per his request. Subsequent search warrants revealed the man was Gutierrez.
During their investigation, law enforcement agents discovered a communication chat between Gutierrez and the child. In the chat the child tells Gutierrez that she is in 4th grade and also tells him when she will turn ten years old. During the chat, Gutierrez sends the child several images of a younger athletic male, claiming the photos were of him, which they were not. Gutierrez made specific requests that the child send him pornographic videos showing her genitalia. A few days later, Gutierrez chatted that if the child did not send him more images, he would post her images along with her Kik Messenger name so other adult men could contact her.
Search warrants executed on Gutierrez’s electronic devices revealed similar images of a great number of other children. Gutierrez had some children hold a sign indicating their age as shown in those images. One child is seen holding a sign indicating her tender age and then another sign which reads, “Stop blackmailing me.” Gutierrez threatened several children by claiming that he would post their photos if they did not send what he was asking for.
“Sextortion” is a serious crime that occurs when someone threatens to distribute your private and sensitive material if you don’t provide them images of a sexual nature, sexual favors, or money. The perpetrator may also threaten to harm your friends or relatives by using information they have obtained from your electronic devices unless you comply with their demands. Sextortion can have devastating effects on young victims from all walks of life, and it is easy to become a victim.
Online perpetrators might gain a person’s trust by pretending to be someone they are not. They lurk in chat rooms and record young people who post or live-stream sexually explicit images and videos of themselves, or they may hack into a person’s electronic devices using malware to gain access to files and control the person’s web camera and microphone without she/he knowing it.
Here are some things individuals can do to avoid becoming a sextortion victim:
• Never send compromising images of yourself to anyone, no matter who they are—or who they say they are.
• Do not open attachments from people you do not know.
• Turn off your electronic devices and web cameras when you are not using them.
Michael C. Ormsby stated: “If you are receiving sextortion threats, you are not alone. It is likely the perpetrator is an adult pretending to be a teenager, and you are just one of the many victims being targeted by the same person. Young people should not be afraid to talk to an adult and/or to call the FBI. If you believe you’re a victim of sextortion, or know someone else who is, call your local FBI office or toll-free at 1-800-CALL-FBI.”
Additional information about sextortion can be found online at:
FBI: https://www.fbi.gov/news/stories/2015/july/sextortion/video/what-is-sextortion
DOJ: https://www.justice.gov/psc/videos
https://www.justice.gov/psc/video/sextortion-public-service-announcement-60-seconds
https://www.justice.gov/psc/national-strategy-child-exploitation-prevention-and-interdiction
Bowling Green man charged with conspiracy and wire fraudRead the Press Release
A criminal information was filed charging John E. Moon, 69, of Bowling Green, with conspiracy and wire fraud, said Carole S. Rendon, Acting U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI's Cleveland Office.
Moon owned AlphaCare Services Inc. (ACS) and served as treasurer of the Construction Contractors Employer Group LLC (CCEG). CCEG was made up of general contractors from Northwest Ohio and served its members by collecting, processing and paying their employment expenses, such as payroll and worker’s compensation premiums, according to the information.
Moon embezzled money CCEG from 2002 through 2016. In one example, Moon made a wire transfer of $15,624 from a CCEG account to an ACS account. Then Moon and others wrote checks from the ACS account for their own personal benefit, according to the information.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Federal Bureau of Investigation in Sandusky. The case is being handled by Assistant United States Attorney Gene Crawford.
An information is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Area Tax Preparer Pleads Guilty to Tax ChargesRead the Press Release
St. Louis, MO – Ricker Brooks pled guilty to charges involving his preparation of false tax returns by overstating business expenses of a client for the tax years 2009 and 2010. Brooks owns Brooks Accounting Service, providing accounting and tax preparation services. Zondra Jones owns Alliance In-Home Care Services, which provides home health care services to individuals.
According to court documents, after Jones reviewed the tax returns that Brooks prepared for her, she thought that the contract labor expense for her business was overstated. Although there was discussion between the two of them regarding the overstatement, Jones and Brooks agreed to file the tax returns with the overstatement. After the IRS began to investigate the returns, Brooks prepared false 1099 forms and check schedules which falsely represented payments made by Alliance In-Home Care Services to contract employees. Jones provided these false documents to the IRS.
"Today, Mr. Brooks admitted that he blatantly ignored the tax laws by preparing false tax returns," said Karl Stiften, Special Agent in Charge of IRS Criminal Investigation. "Dishonest return preparers use a variety of methods to cheat the government, including falsifying information on the tax returns to generate larger refunds for their clients."
Brooks, St. Louis County, Missouri, pled guilty to one felony count of conspiracy to defraud the United States and two felony counts of aiding and assisting in the preparation of a false income tax return. He appeared today before United States District Judge Ronnie L. White. Sentencing has been set for August 23, 2016.
Zondra Jones, Florissant, Missouri, pled guilty last November to related charges and is awaiting sentencing on May 26, 2016.
Conspiracy carries a maximum penalty of five years in prison and or fines up to $250,000; aiding in the preparation of a false income tax return carries a maximum penalty of three years prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by IRS Criminal Investigation. Assistant United States Attorney Steven Muchnick is handling the case for the U.S. Attorney's Office.
Architect of Offshore Fraud Haven Pleads Guilty to $250 Million Money Laundering SchemeRead the Press Release
BROOKLYN, NY – Earlier today, Robert Bandfield, a U.S. citizen and resident of Belize, pleaded guilty to money laundering conspiracy for facilitating the stock manipulation of more than 40 U.S. publicly-traded companies and then laundering more than $250 million in profits through unidentifiable debit cards and attorney escrow accounts. Pursuant to his plea agreement with the government, Bandfield has agreed to forfeit, among other things, $1 million and all his rights and interests in three corporate entities -- IPC Management Services LLC, IPC Corporate Services Inc., and IPC Corporate Services LLC (collectively, IPC Corp.) -- that he founded and controlled in Belize. When sentenced, Bandfield faces up to 20 years in prison.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations, New York (HSI).
In announcing the guilty plea, Mr. Capers extended his grateful appreciation to the agencies that led the government’s investigation and thanked the Securities and Exchange Commission (SEC), the Department of Justice’s Office of International Affairs (OIA), the Department of State’s Diplomatic Security Service (DSS), and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG) for their cooperation and assistance in the case
According to the court filings and facts presented at the plea hearing, between January 2009 and September 2014, Bandfield and his co-conspirators engaged in three interrelated schemes: (1) to induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (2) to circumvent the payment of capital gains taxes and the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (3) to launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through debit cards and attorney escrow accounts. Through these schemes, Bandfield helped his corrupt clients -- who included more than 100 U.S. citizens and residents -- launder more than $250 million in fraudulent proceeds.
To facilitate these interrelated schemes, Bandfield and his co-conspirators created shell companies in Belize and the West Indies for the corrupt clients and placed nominees at the helm of these companies. This structure was designed to conceal the clients’ ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enable the corrupt investors to engage in trading under the nominee’s names through brokerage firms also set up in Belize. For example, this structure enabled Bandfield’s clients to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK. Bandfield’s clients concealed their ownership of “all the free trading” or unrestricted shares of CYNK through shell companies incorporated by IPC Corp. Prior to May 15, 2014, there had been no trading in CYNK stock for 24 trading days. Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.
Bandfield’s scheme also enabled the U.S. corrupt clients evade reporting requirements to the IRS by concealing the proceeds generated by the manipulated stock transactions through the shell companies and their nominees. For example, in response to a request received by a U.S. corrupt client from a U.S. transfer agent who had to determine whether the proceeds from manipulative stock trading transaction were taxable under U.S. law, Bandfield forwarded an IRS Form signed by co-defendant Andrew Godfrey as the nominee for the shell company which had been set up at the request of the client. At one point during the government’s investigation, Bandfield boasted to an undercover law enforcement agent that he had specifically designed this “slick” corporate structure to counter President Barack Obama’s new laws, a reference to FATCA.
An example of how the defendants’ scheme enabled U.S. corrupt clients to launder the proceeds from their fraudulent trading in U.S. public companies was the production of unidentifiable debit cards for the clients allowing them to freely transfer their proceeds back into the United States.
Today’s guilty plea took place before United States District Judge I. Leo Glasser.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn Kasulis, Winston Paes, and Michael Keilty are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of assets.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The Defendant: ROBERT BANDFIELD
Age: 71
Belize City, BelizeEDNY Docket No. 14-CR-476 (ILG)
Albuquerque Man Pleads Guilty to Discharging Firearm During Robbery of Commercial BusinessRead the Press Release
ALBUQUERQUE – Raiff Harland Hayes, 25, of Albuquerque, N.M., pleaded guilty in federal court this morning to discharging a firearm during the robbery of a commercial business. Under the terms of his plea agreement, Hayes will be sentenced to ten years in federal prison followed by a term of supervised release to be determined by the court.
Hayes was arrested on Aug. 18, 2015, on a criminal complaint charging him with violating the Hobbs Act and federal firearms laws. According to the complaint, Hayes robbed ABQ Interlock, a business located at 2444 Menaul Blvd. NE in Albuquerque, on the afternoon of July 27, 2015. According to surveillance video, Hayes pointed a firearm at two employees, fired a shot into the ceiling, placed a bag on the counter, and demanded that the employees put cash into his bag. On July 28, 2015, one of the employees identified Hayes as the robber from a photo array. Thereafter Hayes was arrested on state charges that were later dismissed in favor of federal prosecution.
Hayes was indicted on Sept. 10, 2015, and charged with violating the Hobbs Act and discharging a firearm during a crime of violence on July 27, 2015, in Bernalillo County, N.M.
During today’s proceedings, Hayes pled guilty to Count 2 of the indictment and admitted discharging a firearm during the armed robbery of a business engaged in interstate commerce. Hayes remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives in Albuquerque and the Albuquerque Police Department with assistance from the 2nd Judicial District Attorney’s Office. Assistant U.S. Attorney Norman Cairns is prosecuting the case under a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rate, on a per capita basis, is one of the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, N.M., under this initiative.
20 May 2016
Washington, Pa., Woman Charged with Trafficking Heroin Resulting in Serious Bodily InjuryRead the Press Release
PITTSBURGH – Quiote Guarino, of Washington, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of trafficking in heroin and fentanyl, which resulted in serious bodily injury, United States Attorney David J. Hickton announced today.
The one-count indictment, returned on May 17 and unsealed today, charged Guarino, 24, with possession with intent to distribute and distributing heroin and fentanyl, which resulted in serious bodily injury to at least one person, in February 2016.
The law provides for a maximum total sentence of not less than twenty years, and up to life in prison, a fine of up to $1,000,000, 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 Katherine A. King is prosecuting this case on behalf of the government.
Special Agents and Task Force Officers from the Drug Enforcement Administration, the Washington County Drug Task Force, the Pennsylvania Office of the Attorney General, the Pennsylvania State Police, the Washington County District Attorney’s Office, and numerous local police departments including the Canonsburg Police Department, the Donora Police Department, the Monessen Police Department, and the Charleroi Police Department, as well as the Washington County Sheriff’s Department, the Washington County Adult Probation Office, the Washington County Coroner’s Office, and the Allegheny County Medical Examiner’s Office, 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.
Warren County Man Sentenced to Prison for Possessing Child PornographyRead the Press Release
ERIE, Pa. - A resident of Youngsville, Pennsylvania, has been sentenced in federal court to 35 months in jail on his conviction of violating federal laws relating to the sexual exploitation of children, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Tyler Mitchell Engle, 24, of Youngsville, Pennsylvania.
According to information presented to the court, Engle possessed computer images depicting minors engaging in sexually explicit conduct.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Pennsylvania State Police for the investigation leading to the successful prosecution of Engle.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Waldorf Man Sentenced to 13 Years in Prison for Stealing Guns from a Federally Licensed Firearms Dealer and Setting the Store on FireRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore Chuang sentenced Edward White, age 46, of Waldorf, Maryland, today to 13 years in prison, followed by five years of supervised release, for theft of firearms and use of fire during the commission of a felony, in connection with the robbery and arson of a federally licensed firearms dealer.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Frank Riehl of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Charles County Sheriff Troy Berry.
“ATF worked hand-in-hand with the Charles County Sheriff's Office as well as federal prosecutors to build a strong case against Mr. White in an effort to hold him responsible for the theft of firearms and arson of Fred's Sporting Goods,” said ATF Acting Special Agent in Charge Frank Riehl. “The hard work of ATF's DNA chemists and the Charles County Forensic Science Unit provided unquestionable scientific evidence as to White's participation in this crime.”
According to his plea agreement, in February 2014, White planned to burglarize Fred’s Sports and Furniture, a federally licensed firearms dealer in Waldorf, Maryland. In preparation for the burglary White took photographs outside and inside the store, including the fence, gate, the padlock used to secure the gate, guns, and display cases containing the guns. White also accessed the roof of the store by climbing the HVAC system at the rear of the building, and took photos of the roof and the HVAC system. White’s DNA was recovered from a beam next to the HVAC system. White shared the photos with at least one co-conspirator.
On October 13, 2014, co-conspirators robbed Fred’s Sports and set it on fire. Specifically, co-conspirators cut the chain and padlock previously photographed by White, using bolt cutters provided by White. At least one co-conspirator climbed onto the roof of the building and cut a hole in the roof at the same location photographed by White. A co-conspirator entered the store and gathered more than 70 handguns from display cases throughout the store. After more than an hour, the co-conspirators poured an accelerant on the floor throughout the interior of the store, exited through the hole in the roof and ignited the accelerant. The fire destroyed Fred’s Sports and rendered the building uninhabitable.
Law enforcement officers recovered White’s cell phone near the rear of the store. The phone contained the photos of Fred’s Sports taken by White.
On November 6, 2014, law enforcement executed a search warrant at White’s home and recovered a .380 handgun stolen from Fred’s Sports and five .40 caliber rounds of ammunition. White’s DNA was found on the firearm. White, who was not under arrest at the time, agreed to go with law enforcement officers to the Charles County Sheriff’s Office, where he requested to use the rest room. While in the toilet stall, White placed a black cloth object in the trash can next to the toilet. Law enforcement subsequently searched the trash can and discovered a black cloth belly band holster containing a .40 caliber semi-automatic handgun, loaded with a magazine and 10 rounds of ammunition. This firearm was also stolen from Fred’s Sports on October 13, 2014. The next day, law enforcement searched White’s car and recovered the bolt cutters used during the robbery.
In addition to the two stolen guns recovered from White, several of the firearms stolen from Fred’s Sports were recovered in Washington, D.C., including: two guns used in separate shootings - one in which the victim was found next to the gun; one gun used in a robbery; one gun used in a carjacking; one gun recovered from a brothel; and two guns used in separate domestic altercations.
United States Attorney Rod J. Rosenstein commended the ATF and Charles County Sheriff’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Daniel C. Gardner, who prosecuted the case.
Village of Westfield Employee Pleads Guilty to Illegally Dumping Sewage into Chautauqua CreekRead 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 Andrew Thompson, 34, of Westfield, NY, pleaded guilty to violation of the Clean Water Act before U.S. Magistrate Judge Jeremiah J. McCarthy. The charge carries a maximum penalty of one year in prison, and a fine up to $25,000 per day of violation.
Assistant U.S. Attorney, Aaron J. Mango, who is handling the case, stated that the defendant was the Chief Operator of the Waste Water Treatment Plant for the Village of Westfield, N.Y. On June 12, 2014, a malfunction occurred at the West Side Pump Station located in the Village. The pump station was unable to pump the untreated sewage flowing through the station, which resulted in untreated sewage being discharged into Chautauqua Creek. Based on an alarm that was triggered due to the sewage overflow, Thompson was aware of the discharge of sewage into the creek.
The following day on June 13, 2014, as workers were attempting to fix the pump station, the defendant directed them to discharge the untreated sewage pumped out of the pump station into Chautauqua Creek. Thompson did not have a permit issued under the Clean Water Act for the discharge of untreated sewage, a pollutant, into the creek and acted negligently in allowing the untreated sewage to be discharged in such a manner.
The plea is the result of an investigation by agents of the Environmental Protection Agency, under the direction of Vernesa Jones-Allen, Special Agent-In-Charge and the New York State Department of Environmental Conservation under the direction of Captain Frank Lauricella.Sentencing is scheduled for August 16, 2016, before U.S. Magistrate Judge Jeremiah J. McCarthy.
Village of Westfield Employee Pleads Guilty to Illegally Dumping Sewage into Chautauqua CreekRead 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 Andrew Thompson, 34, of Westfield, NY, pleaded guilty to violation of the Clean Water Act before U.S. Magistrate Judge Jeremiah J. McCarthy. The charge carries a maximum penalty of one year in prison, and a fine up to $25,000 per day of violation.
Assistant U.S. Attorney, Aaron J. Mango, who is handling the case, stated that the defendant was the Chief Operator of the Waste Water Treatment Plant for the Village of Westfield, N.Y. On June 12, 2014, a malfunction occurred at the West Side Pump Station located in the Village. The pump station was unable to pump the untreated sewage flowing through the station, which resulted in untreated sewage being discharged into Chautauqua Creek. Based on an alarm that was triggered due to the sewage overflow, Thompson was aware of the discharge of sewage into the creek.
The following day on June 13, 2014, as workers were attempting to fix the pump station, the defendant directed them to discharge the untreated sewage pumped out of the pump station into Chautauqua Creek. Thompson did not have a permit issued under the Clean Water Act for the discharge of untreated sewage, a pollutant, into the creek and acted negligently in allowing the untreated sewage to be discharged in such a manner.
The plea is the result of an investigation by agents of the Environmental Protection Agency, under the direction of Vernesa Jones-Allen, Special Agent-In-Charge and the New York State Department of Environmental Conservation under the direction of Captain Frank Lauricella.Sentencing is scheduled for August 16, 2016, before U.S. Magistrate Judge Jeremiah J. McCarthy.
Veterans Treatment Court Established for Louisville Area Veterans Charged with Federal CrimesRead the Press Release
LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr., in conjunction with U.S. District Court Judge David J. Hale, U.S. District Court Magistrate Judge Colin H. Lindsay, Chief U.S. Probation Officer Kathryn B. Jarvis, Chief of Staff Robley Rex VA Medical Center Dr. Mary Lee Rothchild, and Chief Federal Defender Scott Wendelsdorf, today announced the newly established Veterans Treatment Court (VTC) Program for the Western District of Kentucky.
“Our nation is indebted to our veterans for their service and sacrifice," stated U.S. Attorney Kuhn. "Many return from combat with serious mental health and substance abuse issues that often go untreated. We have learned that these challenges sometimes lead to criminal behavior,” stated U.S. Attorney John Kuhn. “We expect this program will curb recidivism in our veteran community and promote sober and crime-free lives that our veterans deserve.”
"Our agency is committed to helping connect those on our case loads with the opportunities, skills, and resources for change. To that end, the Veteran Treatment Court allows us to more intentionally target and tailor our efforts to better serve justice involved veterans. Developing this program also helped us identify new veteran specific community resources which will allow us to better serve all veterans, not just those who are eligible for the treatment court," stated Kathryn Jarvis, Chief U.S. Probation Officer.
“The Robley Rex VAMC and Veterans Justice program is proud and honored to be a partner with the Western District Federal court, the U.S Attorney’s Office and the U.S. Probation and Parole office in the implementation of the Western District Federal Veterans treatment court. The Veterans treatment court is a model for assisting our Veteran population who have found themselves legally involved due to their often times untreated co-occurring mental health and substance abuse treatment issues or their difficulties with adjusting to civilian life. This partnership will include matching the legally involved Veteran with a mentor as well as identifying and addressing their housing, employment and pro-social needs, in order to empower their continued service to our community post military as they work within this partnership to resolve their criminal offense,” stated Sonny Hatfield, U.S. Department of Veterans Affairs.
The VTC allows qualified veterans charged with certain non-violent federal crimes to enroll in an intensive court-managed treatment program as an alternative to prison. This program was made possible through a collaborative agreement between the U.S. District Court, the U.S. Attorney's Office, the U.S. Probation Office, and the U.S. Department of Veterans Affairs. The mission of the VTC is to promote community safety and reduce recidivism by helping justice-involved veterans obtain needed mental health and addiction treatment. Voluntary participants will be monitored and held accountable by the Court-managed program to insure participants attain treatment and rehabilitation.
Veterans who have not been convicted of or charged with violent or sexual offenses may enter the VTC Program in one of three ways: as defendants facing federal misdemeanor charges; as defendants facing federal felony charges; or as felons facing revocation of supervised release after having served any sentence of incarceration.
Veterans Treatment Court requires enrollees to engage in intensive multi-stage professional counseling and treatment for issues involving substance abuse, mental health, disability, finances, and other difficulties, including those related to their military service. They must also abide by strict conditions, follow rigorous treatment plans, and attend scheduled hearings before a judge.
Most participants will be required to participate in the program for 18 months. Upon successfully completion of the voluntary program, veterans can expect the U.S. Attorney’s Office to reduce the charges to a lesser offense, refer the Veteran-Participant to Pretrial Diversion, or dismiss the charges entirely. Most importantly, Veteran-Participants will receive treatment that may help them regain hope for a sober and crime-free life.
The VTC program is only possible due to the availability of rehabilitative programs offered by the VA. Because the VTC program's essential treatment and counseling services are furnished by the VA Medical Center, veterans must be eligible to receive VA benefits in order to participate.
According to a report by the Bureau of Justice Statistics, the number of military veterans in jails and prisons continues to drop since 1978, when 24 percent of prisoners were veterans. Currently veterans make up 8 percent of the inmate population in local jails, state facilities and federal prison. The increasing number of Veterans’ Courts is partly credited for the lower incarceration rate. However, a Department of Veterans Affairs study determined that from 1999 through 2010, between 18 and 22 veterans commit suicide each day in the United States.
A Memorandum of Understanding (MOU) was signed today by officials from each participating agency during a ceremony held in the Gene Snyder United States Courthouse. The MOU establishes the rights and responsibilities of each stakeholder involved in the VTC program and outlines the expectations for the program's veteran-participants.
U.S. Attorney’s Office Hosts Mock Trial Academy for Fifth Graders from Gabe Allen Elementary School in West DallasRead the Press Release
DALLAS — The U.S. Attorney’s Office for the Northern District of Texas’s Mock Trial Academy, conducted as part of the District’s ongoing Crime Prevention and Community Outreach component of the Justice Department’s Smart on Crime initiative, concluded this week with fifth grade students from Gabe Allen Elementary School in West Dallas participating in a mock trial held in a federal courtroom in Dallas.
“Establishing a positive relationship with today’s youth is vital to the prevention of crime and violence in our communities,” said U.S. Attorney John Parker of the Northern District of Texas. “Through this Mock Trial Academy, these students directly interacted with professionals in law and law enforcement, gaining not only an insider’s perspective of our legal system, but an opportunity to explore career opportunities in law enforcement and criminal justice.”
Approximately 30 fifth-graders met with representatives from the U.S. Attorney’s Office throughout the academy to learn about our criminal justice system. The students were guided through the trial process and had an opportunity to further develop their listening, problem solving, and communication skills.
All of the participants in this week’s mock trial were students who played the roles of judge, court security officers, lawyers, witnesses and jurors in the case of U.S. v. Mary Witch, in which defendant Witch was accused of kidnapping Hansel and Gretel. The court was brought to order by the young judge and young bailiffs ensured courtroom procedures were followed. After hearing the evidence presented, the group of 12 young jurors, who had not heard about the case prior to trial, had the opportunity to deliberate, decide on a verdict, and present that verdict to the court.
Following the mock trial, a graduation ceremony, where the students were presented certificates and junior U.S. Attorney badges, and a reception were held in the U.S. Attorney’s Office.
Smart on Crime, a DOJ initiative announced in 2013, acknowledges that while aggressive enforcement of federal criminal statutes remains necessary, we cannot arrest and incarcerate our way to becoming a safer nation. To be effective, federal efforts must also focus on other components of criminal justice, like crime prevention and reentry. In fact, during last month’s Smart on Crime’s National Reentry Week in north Texas, the District sponsored and coordinated several events to raise awareness of the importance of reentry work.
More information about Smart on Crime may be found here. Information regarding Reentry efforts in the Northern District of Texas may be found here and resources regarding the Department’s Reentry efforts may be found here.
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