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Tuesday 5 April 2016
Three Brockton Men Charged with Distributing FentanylRead the Press Release
BOSTON – Three men, two of whom were arrested this morning, were charged in U.S. District Court in Boston for trafficking fentanyl in the Brockton area. The third defendant was already in state custody. In addition, 36 grams of fentanyl and a firearm were recovered following the execution of a federal search warrant.
Luis DaCosta, 21, aka “Jesse” and “Slu;” Gilvan Monteiro, 25, aka “G;” and Edson Gomes, 19, aka “E” and “Evil,” were charged in a complaint with one count of conspiracy to possess fentanyl with intent to distribute. DaCosta and Gomes were arrested today. Monteiro was already in state custody on unrelated matters. DaCosta and Gomes were detained pending a detention hearing scheduled for April 15, 2016.
As alleged in the complaint, from December 2015 to March 2016, the defendants sold fentanyl on numerous occasions in the Brockton area, and several times the drug was seized by law enforcement from the defendants’ associates. In addition, on Feb. 11, 2016, law enforcement seized a loaded Smith and Wesson .40 caliber handgun from an associate of Gomes’s during a vehicle stop.
Documents filed in court today also allege that the defendants have violent histories and gang associations. Monteiro has a lengthy criminal record which includes narcotics and firearms offenses and assault and battery with a dangerous weapon. According to the affidavit, law enforcement seized fentanyl from Monteiro’s customers on numerous occasions. Gomes, who also has a violent criminal history, is alleged to have engaged in gang-related shootings and a car chase with police as recently as December 2015. According to the affidavit, DaCosta was recently released on bail after he allegedly shot a person in Rhode Island on March 19, 2016. DaCosta also allegedly sold fentanyl to a person that overdosed in February 2016.
Gomes was arrested without incident in Brockton. DaCosta was arrested at the Roadway Inn on Belmont Street, also in Brockton. During the execution of a federal search warrant at the Roadway Inn, officers recovered a firearm, approximately 36 grams of suspected fentanyl and related drug paraphernalia. A woman also present in the Roadway Inn was arrested on state firearms and drug charges.
This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states. A recent surge in overdose deaths has been attributed in part to the addition of Fentanyl to heroin. Fentanyl is a powerful synthetic opiate that is 50 to 100 times more potent than morphine and, when added to heroin, creates a toxic mixture substantially more potent, and more dangerous, than heroin alone.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $1 million. 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; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Plymouth County District Attorney Timothy Cruz; and Brockton Police Chief John Crowley, made the announcement today. The case was investigated by the Massachusetts State Police assigned to the Plymouth Country District Attorney’s Office, MSP CAT Team, MSP Gang Unit, the New England High Intensity Drug Trafficking Area (HIDTA), and Brockton Police Department. The case is being prosecuted by Assistant U.S. Attorney Glenn A. MacKinlay of Ortiz’s Organized Crime and Gang Unit.
The details contained in the complaints are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Stockton Man Charged with Sex Trafficking a MinorRead the Press Release
SACRAMENTO, Calif. — Ricky Lee Richardson Jr., 39, of Stockton, was arrested on Monday, April 4, 2016, charged with sex trafficking of a minor and possession of child pornography, United States Attorney Benjamin B. Wagner announced.
A two-count indictment, unsealed after his arrest, was returned by a federal grand jury in Sacramento on March 31, 2016. According to court documents, between November 2011 and March 2012, Richardson transported, harbored, and maintained a minor victim, knowing that the minor would be caused to engage in prostitution. Richardson also possessed images of child pornography.
This case is the product of an investigation by the Federal Bureau of Investigation with assistance from the Stockton Police Department. Assistant United States Attorney Brian A. Fogerty is prosecuting the case.
Richardson is scheduled to be arraigned today before United States Magistrate Judge Carolyn Delaney.
If convicted of sex trafficking of a minor, Richardson faces a minimum of 10 years in prison and a maximum statutory penalty of life in prison. The possession of child pornography charge carries a maximum statutory penalty of 10 years in prison. Both charges carry a maximum fine of $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Scranton Man Pleads Guilty to Federal Heroin Trafficking OffenseRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Scranton man pleaded guilty today to a federal heroin distribution conspiracy charge before Senior United States District Court Judge A. Richard Caputo in Wilkes-Barre.
According to United States Attorney Peter Smith, Camilo Andujar, aka “Melo,” age 24, was indicted by a grand jury in October 2015 and pleaded guilty pursuant to a plea agreement filed by the government.
The charges stemmed from an investigation in which police made a purchase of heroin from Andujar and then obtained a search warrant for a residence located on Electric Street in Scranton, where Andujar lived. Police seized approximately 91 grams of heroin, equivalent to more than 3,100 individual retail bags of heroin. Police also seized a coffee bean grinder filled with heroin, $5,950 in cash, heroin packaging materials and drug paraphernalia.
The investigation was conducted by the Scranton Police Department, Special Investigations Division, Lackawanna County District Attorney’s Office and the Drug Enforcement Administration (DEA). The case is being prosecuted by Assistant United States Attorney Robert J. O’Hara.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is up to forty years in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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San Gabriel Valley Man Sentenced to Federal Prison in Stolen Identity Tax Refund Scheme which Fraudulently Sought $2.6 MillionRead the Press Release
LOS ANGELES – A Hacienda Heights man already serving a 27-month prison term for fraudulently seeking tax refunds has been sentenced in a second case to an additional two years in federal prison for his role in another scheme that used stolen identities to seek more than $2.6 million in false tax returns from the Internal Revenue Service.
Adel Cotton, 63, was sentenced to 51 months in federal prison by United States District Court Judge Michael W. Fitzgerald, who ordered that 27 months be served concurrently with the prior case.
In addition to the prison term, Judge Fitzgerald ordered Adel Cotton to pay $725,294 in restitution to the IRS.
Adel Cotton pleaded guilty in January to one count of conspiracy to defraud the United States by obtaining the payment of false claims, namely tax refunds.
Adel Cotton’s son and co-defendant – Heber Cotton, 39, of Los Angeles – pleaded guilty in November to one count of conspiracy to defraud the United States. Heber Cotton is scheduled to be sentenced by Judge Fitzgerald on June 6, at which time he will face a statutory maximum sentence of 10 years in federal prison.
According to Adel Cotton’s plea agreement, beginning in December 2008 and continuing through March 2010, the Cottons caused at least 275 fraudulent income tax returns to be filed with the IRS. Those fraudulent returns sought income tax refunds totaling more than $2.6 million.
As part of the scheme, Adel Cotton obtained names and Social Security numbers of individuals without their knowledge and consent. Adel Cotton, with the help of others, prepared false Forms W-2 (IRS Wage and Tax Statements) in the names of the identity theft victims that reported false employment and income information, as well as false tax withholding amounts. Using the falsified information reported on the Forms W-2, Adel Cotton and others prepared fraudulent individual income tax returns claiming false tax refunds. The tax returns were filed without the knowledge or consent of the identity theft victims.
“This case is the latest involving stolen identity refund fraud, which victimizes both the United States and the individuals who have had their identities stolen,” said United States Attorney Eileen M. Decker. “Individual victims of this type of fraud typically have to devote significant time and resources recovering their tax refund and protecting their identities from future fraud.”
In his plea agreement, Adel Cotton admitted that he and his son directed the IRS to mail the fraudulent refunds to addresses they controlled. The defendants then worked with two unidentified co-conspirators to deposit the refund checks using bank accounts opened in the names of the identity theft victims.
In the prior case, Adel Cotton was one of 53 people convicted in relation to the “Old Quest” tax refund scheme that fraudulently sought more than $250 million in tax refunds (see: http://go.usa.gov/ceGNJ).
The investigation into Adel and Heber Cotton was conducted by IRS Criminal Investigation and the Federal Bureau of Investigation.
Retired Judge, Attorney and Psychologist Indicted in $600 Million Social Security Fraud SchemeRead the Press Release
Thousands of Kentucky Claimants Improperly Received Disability Benefits
A retired administrative law judge, a lawyer and a psychologist were charged in a federal indictment unsealed today for their roles in a scheme to fraudulently obtain more than $600 million in federal disability payments for thousands of claimants.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Howard S. Marshall of the FBI’s Louisville, Kentucky, Field Division; Special Agent in Charge Tracey D. Montaño of Internal Revenue Service Criminal Investigations (IRS-CI) Nashville, Tennessee, Field Office; and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.
David Black Daugherty, 81, of Myrtle Beach, South Carolina; Eric Christopher Conn, 55, and Alfred Bradley Adkins, 44, both of Pikeville, Kentucky, were charged in an 18-count indictment returned on April 1, 2016, in the U.S. District Court for the Eastern District of Kentucky. The indictment was unsealed upon Conn’s arrest and initial court appearance today before U.S. Magistrate Judge Robert E. Wier of the Eastern District of Kentucky. Conn was detained pending his detention hearing, which is scheduled for April 7, 2016.
The indictment charges all three defendants with one count of conspiracy to commit mail and wire fraud. In addition, Conn is charged with three counts of mail fraud, three counts of wire fraud, two counts of obstruction, two counts of false statements, one count of conspiracy to commit money laundering, four counts of money laundering, and one count of conspiracy to structure payments. Adkins is charged with one count of mail fraud, one count of wire fraud, and one count of false statements. Daugherty also is charged with two counts of mail fraud, two counts of wire fraud, and one count of conspiracy to commit money laundering.
“The defendants are charged with designing an intricate scheme, using their expertise and positions of authority, to fraudulently induce payment of $600 million in federal disability and healthcare benefits,” said Assistant Attorney General Caldwell. “While Social Security disability programs are designed to support the disabled, the defendants allegedly used it to enrich themselves. Today’s arrests demonstrate, however, that the Criminal Division will root out greed and corruption wherever they may be found.”
“The Social Security Administration Office of the Inspector General is committed to pursuing those who violate the public trust by conspiring to misrepresent disabling conditions to defraud not only Social Security, but all American taxpayers,” said Special Agent in Charge McGill. “We will continue to uphold the integrity of Social Security’s disability programs, which are a lifeline for so many Americans and their families. I would like to thank the Department of Justice’s Criminal Division, and in particular, the division’s Fraud Section, for their willingness to take on this case and their diligent efforts to ensure these individuals will be held accountable for their actions.”
“As I stated just a few days ago when announcing charges against Kentucky Deputy Attorney General Timothy Longmeyer, the Louisville FBI is committed to cleaning up Kentucky,” said Special Agent in Charge Marshall. “The allegations against these defendants is yet another example of Kentucky’s historical willingness to accept corruption as the status quo. Although cleaning up Kentucky is a long and difficult process, today’s announcement is another step toward ending public corruption and taking back the commonwealth from those who corrupt it.”
“IRS-Criminal Investigation is committed to unraveling complex fraud and money laundering schemes,” said Special Agent in Charge Montaño. “The allegations in this case describe a gross abuse of a system that was established to provide assistance to those truly in need. The defendants are alleged to have conspired to use their positions, to corrupt the system for their own personal gain, at the expense of the American taxpayers who fund the Social Security system. We are proud to work with our law enforcement partners to investigate and prosecute individuals who attempt to enrich themselves by fraudulent means.”
“This scheme allegedly enrolled ineligible people in Medicare and Medicaid,” said Special Agent in Charge Jackson. “We are working with our law enforcement partners to protect these government health care programs funded by our taxpayer dollars.”
The indictment alleges that from October 2004 to Feb. 13, 2012, Conn, Daugherty and Adkins conspired to defraud the government by, among other things, submitting false and fraudulent medical documentation to the SSA in order to have the SSA pay claimants’ retroactive disability benefits, continue to pay claimants’ disability benefits in the future, award Medicare and Medicaid benefits to claimants and pay Conn’s attorney fees. According to the indictment, the conspirators intended that the SSA disburse more than $600 million in disability benefits in more than 2,000 cases to claimants in Kentucky and elsewhere, irrespective of the claimants’ actual entitlement to benefits. Conn, Adkins and Daugherty allegedly received more than $5 million during the nearly eight-year scheme.
According to the indictment, Conn is an attorney whose firm in Floyd County has focused for the past 20 years primarily on representing individuals seeking Social Security disability benefits; Adkins is a clinical psychologist who performed medical evaluations for Conn from 2004 through 2011; and Daugherty is a former SSA administrative law judge who began working with the SSA in 1990 and was assigned to the Office of Disability and Adjudication Review hearing office in Huntington, West Virginia, which maintained a satellite office in Prestonsburg, Kentucky, and handled the claims of Kentucky claimants who requested hearings. Daugherty, who retired in July 2011, was responsible for deciding whether claimants were disabled and entitled to benefits.
As part of the scheme, Conn allegedly filed disability applications with the Prestonsburg Field Office, irrespective of the claimants’ residence in an effort to ultimately bring the cases before the Huntington Hearing Office, where Daugherty either self-assigned or directed others to assign those cases to himself. Daugherty allegedly solicited Conn to submit falsified medical evidence so that Daugherty could issue fully favorable decisions. Adkins and others performed pretextual physical and mental evaluations on claimants, the indictment alleges. They routinely prepared and signed evaluation reports indicating that claimants had limitations considered disabling by the SSA, irrespective of claimants’ actual physical or mental conditions, according to the indictment.
According to the indictment, once the law enforcement investigation began, Conn allegedly threatened to retaliate against another person’s livelihood when that person provided truthful information to a law enforcement officer about the scheme. Conn also allegedly destroyed and directed others to destroy evidence, including federal reports, a computer tower and other electronic hardware and media located at his law firm.
An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The SSA-OIG, the FBI, IRS-CI and HHS-OIG investigated the case. Trial Attorney Dustin M. Davis and Special Trial Attorney Trey Alford of the Criminal Division’s Fraud Section and Trial Attorney Kristen M. Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section are prosecuting the case.
Polk County Man Charged in Mortgage Fraud SchemeRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Stevie McDonald (41, Winter Haven) with multiple counts of bank fraud and a conspiracy to commit bank fraud. If convicted on all counts, he faces a maximum penalty of 30 years in federal prison for each count. The indictment also notifies the defendant that the United States is seeking a money judgment in the amount of $509,221, the approximate loss amount that the financial institutions sustained in this case.
According to the indictment, McDonald participated in a conspiracy to defraud federally insured financial institutions in connection with multiple residential mortgage loans made by JP Morgan Chase Bank and Washington Mutual Bank. Along with others, McDonald was involved in the submission of false and fraudulent information to the lenders, which induced the lenders to make the mortgage loans. Subsequently, the recipients of these loans defaulted on those mortgages and the banks sustained losses of approximately $509,221.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Jay L. Hoffer.
Paden City, WV man sentenced for unlawful possession of firearmsRead the Press Release
WHEELING, WEST VIRGINIA – Kevin Ray Morgan, 40, of Paden City, West Virginia, was sentenced today to 27 months in prison for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.
Morgan, who has a previous felony conviction in Tyler County, was discovered in unlawful possession of two firearms in October 2015 in Tyler County. Morgan was convicted of “Failure to Appear” in the Circuit Court of Tyler County. He pled guilty in February 2016 to one count of “Felon in Possession of a Firearm.”
Assistant U.S. Attorney David Perri prosecuted the case on behalf of the government. The Tyler County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge John Preston Bailey presided.
Owner of Detroit Home Health Care Agency Sentenced to 57 Months in Prison for His Role in $3.4 Million Health Care Fraud SchemeRead the Press Release
The owner and operator of a Detroit-area home health care agency was sentenced to 57 months in prison today for his participation in a $3.4 million health care fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Region made the announcement.
Mohammad Rafiq, 49, of West Bloomfield, Michigan, was sentenced by U.S. District Judge George Caram Steeh of the Eastern District of Michigan, who also ordered Rafiq to pay $3,471,906.02 in restitution and to forfeit the same amount.
According to his plea agreement, Rafiq was the owner and operator of Perfect Home Health Care (Perfect), a home health care agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries in the greater Detroit metropolitan area. According to admissions made as part of his plea agreement, Rafiq paid physicians and recruiters to refer Medicare beneficiaries to Perfect and sign medical documents falsely certifying that they required home health care. Rafiq also directed patient recruiters and Perfect employees to pay cash kickbacks to Medicare beneficiaries in exchange for signing multiple blank physical therapy records, he admitted.
Between February 2009 and November 2013, Medicare paid Perfect approximately $3.4 million as a result of these false and fraudulent claims, Rafiq admitted.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan. This case is being prosecuted by Trial Attorney Elizabeth Young and Special Trial Attorney Katie R. Fink of the Fraud Section and Assistant U.S. Attorney Katherine Wagner of the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
New York man pleads guilty to unlawful cigarette smugglingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Abrahim Yahya Kassim, 28, of Richmond Hill, New York, pled guilty in federal court today to unlawful cigarette smuggling, United States Attorney William J. Ihlenfeld, II, announced.
Kassim participated in a cigarette smuggling operation designed to transport large quantities of cigarettes across state lines for redistribution and sale. The cigarettes were acquired in Virginia, where the tax rate for cigarettes is one of the lowest in the nation, and sold in New York, which has one of the nation’s highest tax rates. The cigarettes were possessed and transported in West Virginia.
Kassim pled guilty today to one count of “Conspiracy to Traffic in Contraband Cigarettes.” He faces up to five years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Michael Stein and Shawn Adkins prosecuted the case on behalf of the government. Homeland Security Investigations, the Frederick County, Virginia Sheriff’s Office, the Virginia Office of Attorney General, the Alcohol and Tobacco Tax and Trade Bureau, the West Virginia State Police, the New York Department of Taxation and Finance, the Federal Bureau of Investigation, and the Internal Revenue Service - Criminal Investigation led the inquiry.
U.S. Magistrate Judge Robert W. Trumble presided.
New York Man Sentenced to Prison for Rushing Airline CockpitRead the Press Release
ALEXANDRIA, Va. – David Patrick Diaz, 36, of Poughkeepsie, New York, was sentenced today to nine months in prison and three years of supervised release for interference with flight crew members and attendants. Diaz was also ordered to complete mental health and substance abuse treatment programs, and pay restitution to United Airlines in the amount of $22,151.77.
Diaz pleaded guilty on Jan. 15, 2016. According to court documents, Diaz admitted to shouting threatening statements as he charged the cockpit of a United Airlines flight shortly after it took off from Dulles International Airport in March 2015. After being tackled by a group of passengers, Diaz said the word, “Jihad,” and he also said that there was something in the belly of the plane. The passengers and flight attendants were able to restrain Diaz until the plane returned safely to Dulles.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Anthony J. Trenga. Assistant U.S. Attorneys Tyler McGaughey and Jonathan Fahey prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-324.
New York Man Pleads Guilty to Failure to Register as a Sex OffenderRead the Press Release
Contact: Halsey B. Frank
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Thomas P. Cortez, of College Point, New York and Portland, Maine, pleaded guilty today in U.S. District Court to failing to register as a sex offender.
According to court documents, Cortez was convicted in Maine in 1989 of unlawful sexual contact with a minor under 14 years old. As a result, Cortez is required to register as a sex offender for life. In 1996, Cortez was living in New York when it instituted a sex offender registry. Between about 1996 and about March of 2003, Cortez was registered in New York. In 2003, Cortez gave New York notice that he was moving back to Maine. Between 2006 and 2015, Cortez registered in Maine. After March 2015, Cortez moved to College Point, New York, where he lived with his father and stepmother. He did not inform Maine that he had moved to New York and he did not register in New York. In December of 2015, Cortez was arrested in New York and told arresting officers, among other things, that he had been living in New York for about eight months.
Cortez faces up to 10 years in jail and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by U.S. Marshals Service, the U.S. Postal Inspection Service, the Maine Department of Health and Human Services, the Maine and New York Sex Offender Registries, and the Portland Police Department.
New Orleans Man Charged with Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CLARK JAMES PELLEGRIN, JR., age 40, of New Orleans, has been charged in a one-count Bill of Information with wire fraud.
PELLEGRIN is charged with engaging in a multi-year scheme involving creditors on whose behalf he collected overdue debts from debtors. The scheme charges that PELLEGRIN negotiated with debtors even though he had no authority to negotiate and made collections from debtors on behalf of twenty-three different creditors in the approximate amount of $243,980, which funds he converted to his own use, instead of paying the creditors.
If convicted, PELLEGRIN faces a possible maximum sentence of twenty years imprisonment on the single count.
U.S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Postal Inspection Service. Assistant U.S. Attorney Patrice Harris Sullivan is in charge of the prosecution.
Nebraska Men Sentenced for Conspiracy to Commit Mail FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that on April 4, 2016, Jeffery Negus, of Omaha, Nebraska, age 55, and Gregory Negus of Omaha, Nebraska, age 60, were sentenced for conspiracy to commit mail fraud. The Honorable Chief Judge Laurie Smith Camp sentenced both men to a 4 year term of probation. Both men were also ordered to make restitution in the amount of $708,743.21.
An investigation conducted by the United States Department of Labor determined that from 2007 through 2011, Jeffery Negus and Gregory Negus operated businesses in the District of Nebraska identified as Negus-Sons, Inc and Netal, Inc. These businesses entered into federally-funded prevailing wage construction contracts for work on several construction projects in the District of Nebraska. Negus-Sons, Inc and Netal, Inc. accepted payments of approximately $4.9 million dollars relating to the federally-funded construction projects for which prevailing wage fringe benefit contributions were to be paid to employee benefit plans.
The United States Department of Labor determined that Jeffery Negus and Gregory Negus fraudulently diverted, for their own use and the use of Negus-Sons, Inc and Netal, Inc., fringe benefit contributions relating to the federally-funded prevailing wage construction contracts in the approximate amount of $708,741.56, which payments were supposed to go to employee benefit plans. As part of the scheme, Jeffery Negus and Gregory Negus used the United States mail to submit hundreds of certified reports to governmental agencies, which falsely represented that the fringe benefit contributions were being made to the employee benefit plans.
This case was investigated by the United States Department of Labor.
National Crime Victims’ Rights Week Event Set for April 10 in CharlottesvilleRead the Press Release
CHARLOTTESVILLE, VIRGINIA – The Jefferson Area Victim Assistance Coalition will host a Community Day on Sunday, April 10 from 1 to 4 p.m. at the Ntelos Wireless Pavilion on the downtown mall in Charlottesville to commemorate National Crime Victims’ Rights Week (April 10-16).
“Protecting the rights and dignity of the victims of crimes is as important a part of the administration of justice as any other aspect of an investigation or prosecution,” United States Attorney John P. Fishwick Jr. said today. “The United States Attorney’s Office strives to work in cooperation with all of our local, state and federal law enforcement and service provider partners to ensure the victims of crimes are treated with respect, dignity and have their rights protected at all times.”
The Community Day, which is free and open to the public, has been planned as a family friendly, interactive event with demonstrations and information available from dozens of local agencies. There will be plenty for kids to see and do, including police motorcycles, fire trucks, police cars, and demonstrations by local K9 Officers and therapy dogs. Many of the local agencies will have plenty of giveaways for the kids.
In addition, there will information available for parents, including DNA and fingerprinting kits available, anti-bullying information, tips on home safeguarding, self-defense and how to avoid falling victim to a scam.
The Jefferson Area Victim Assistance Coalition consists of members form the Albemarle Co. Victim/Witness Program, Charlottesville Victim/Witness Program, Fluvanna County Victim/Witness Program, Greene County Victim/Witness Program, Homeland Security Victim/Witness Program, Louisa County Victim/Witness Program, Sexual Assault Resource Agency, University of Virginia Victim/Witness Program and the United States Attorney’s Office Victim/Witness Program.
Local Agencies participating in Sunday’s event include: the Jefferson Area Victim Assistance Coalition, Charlottesville Fire Department, Charlottesville Police Department, Fluvanna County Sheriff’s Office, Charlottesville Sheriff, Offender Aid and Restoration, Shelter for Help in Emergency, Sexual Assault Resource Agency, The Women’s Agency, The Women’s Initiative, Louisa Sheriff’s Office, United States Attorney’s Office for the Western District of Virginia, Homeland Security Investigations, Foothills Child Advocacy Center, Help Save the Next Girl, CVLAS/SAAF, Albemarle County Police Department, Albemarle County DSS, UVA Police Department and the Charlottesville Albemarle Rescue Squad.
Napa Physician Agrees to Pay $400,000 to Settle Allegations That He Submitted False Claims to the Medicare ProgramRead the Press Release
SAN FRANCISCO – Ali S. Vaziri, a gastroenterologist who had a private gastroenterologist practice in Napa, California, has agreed to pay the United States $400,000 to settle allegations that he submitted false claims for reimbursement to the Medicare program in violation of the False Claims Act, announced United States Attorney Brian J. Stretch; David J. Johnson, Special Agent in Charge, Federal Bureau of Investigation; Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf; and Special Agent in Charge Steve Ryan, Office of Inspector General for the U.S. Department of Health and Human Services.
From 2007 to 2011, Dr. Vaziri allegedly billed Medicare for patient office visits that reflected more time and services than he actually spent with patients. In addition, Dr. Vaziri allegedly billed Medicare for patient office visits that were required to be billed together with routine colonoscopies as one charge.
This case is the result of an investigation by the U.S. Attorney’s Office, the Federal Bureau of Investigation, Office of Inspector General for the U.S. Department of Health and Human Services, and the Internal Revenue Service, Criminal Investigations.
Assistant U.S. Attorney Gioconda R. Molinari handled the matter on behalf of the U.S. Attorney’s Office for the Northern District of California, with assistance of Paralegal Tiffani Chiu.
Morgantown woman pleads guilty to role in Detroit to WV heroin trafficking operationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Debra Bolden, 46, of Morgantown, West Virginia, pled guilty to heroin trafficking in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Bolden participated in a drug trafficking network designed to transport heroin across state lines from Detroit, Michigan to Morgantown, West Virginia for redistribution and sale throughout the region. The heroin trafficking scheme was interrupted in February 2016 when a federal grand jury returned indictments against Bolden and thirteen other individuals. Specifically, Bolden sold heroin in August 2015 in Monongalia County, West Virginia.Bolden pled guilty to “Distribution of Heroin.” She faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Mon Metro Drug and Violent Crime Task Force investigated.U.S. Magistrate Judge Michael John Aloi presided.
Montana Husband and Wife Indicted for Tax FraudRead the Press Release
A federal grand jury sitting in Billings, Montana, returned an indictment on Feb. 17, which was unsealed today, charging a Saint Ignatius, Montana, couple with one count of conspiracy to defraud the United States and three counts of tax evasion, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael W. Cotter of the District of Montana.
According to the allegations in the indictment, Margaret DeYoung aka Peggy Ann DeYoung and John Robert DeYoung failed to file federal income tax returns with the Internal Revenue Service (IRS) for the years 2009 through 2011. During these years, Margaret DeYoung received rental income as a part-owner of two mobile home parks in California. It is alleged that the DeYoungs conspired together to conceal assets and income from the IRS through the use of nominee entities that they created. The DeYoungs opened bank accounts in the names of these entities using fabricated Employer Identification Numbers to hide the rental income from the IRS and to pay personal expenses.
If convicted, the DeYoungs face a statutory maximum sentence of five years in prison for the conspiracy charge and five years in prison for each count of tax evasion, along with a $250,000 fine on each count.
An indictment merely alleges that crimes have been committed and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Cotter thanked special agents of IRS-Criminal Investigation, who investigated the case and Assistant U.S. Attorney Chad Spraker of the District of Montana and Trial Attorney Rebecca J. Sable 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.
Mission Hills Woman Pleads Guilty to Impeding the IRS by Lying about Cayman Islands BusinessesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Mission Hills, Kan., woman pleaded guilty in federal court today to impeding the work of the IRS by lying under oath about her Cayman Islands businesses.
Verna Cheryl Womack, 65, of Mission Hills, pleaded guilty before U.S. District Judge Gary A. Fenner to the charge contained in a Dec. 12, 2013, federal indictment.
By pleading guilty today, Womack admitted that she testified falsely while under oath with the corrupt intent to impede the due administration of the Internal Revenue Code.
In 2009, Womack was served with a subpoena to testify at a deposition in a civil enforcement action brought by the U.S. Department of Justice. This civil enforcement action sought to permanently enjoin Allen R. Davison from providing tax advice. Davison had previously served as Womack’s tax advisor, and later, as her business employee.
Womack complied with the subpoena and testified under oath at a deposition on May 19, 2009. Womack admitted today that she answered questions falsely and with the corrupt intent to impede the due administration of the Internal Revenue Code.
During the deposition, the Dept. of Justice attorney asked Womack if she knew when a company called JoJoDi Insurance Company of Cayman was started. Instead of answering truthfully, Womack responded to the question by falsely stating that she did not know when JoJoDi was started. In fact, she knew that she had personally caused it to be started in 1997.
During the deposition, the Dept. of Justice attorney also asked Womack who owned Lucy Limited, another Cayman Islands business. Womack was the settlor and 1/3 beneficiary of the trust that owned Lucy Limited. Instead of answering truthfully, however, Womack falsely stated that Lucy Limited was owned by a group of investors. In fact, she knew that there were no such investors. Womack knew that she had caused the creation of both Lucy Limited and the trust that owned Lucy Limited.
Among its assets, according to the indictment, Lucy Limited owned (as nominee for Womack) a wine collection that was stored in the basement of Womack’s Mission Hills residence. Womack used a credit card issued by the Bank of Butterfield (in Grand Cayman) in the name of Lucy Limited to purchase at least part of the wine for her collection, the indictment says. On March 15, 2008, Womack sold approximately half of the wine stored in her basement at an auction house in New York for $1.6 million.
Federal prosecutors will argue at Womack’s sentencing hearing that Womack’s criminal conduct resulted in a significant tax loss, which is relevant for determining an appropriate sentence. However, the court will determine whether the tax loss is relevant to sentencing in this case, and if it is, whether Womack’s conduct resulted in a criminal tax loss, and if so, in what amount, and the impact that any tax loss may have on determining the sentence.
Under the terms of today’s plea agreement, Womack will be sentenced to up to two years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys Brian P. Casey and Daniel M. Nelson. It was investigated by IRS-Criminal Investigation and the FBI.
Men Arraigned on Charges of Failing to Pay over Hospital Payroll TaxesRead the Press Release
Texarkana, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that James R. Cheek, age 67, formerly of Douglasville, Georgia, and Herschel J. Breig, Sr., age 68, formerly of Nixa, Missouri, appeared today before United States Magistrate Judge Barry A. Bryant for arraignment on nine (9) counts of Failure to Pay Over Employment Tax in violation of 26 U.S.C. § 7202. The Indictment alleges that as principals of Hope Medical Park Hospital, both Cheek and Breig were responsible to collect, truthfully account for, and pay over the hospital’s payroll taxes to the Internal Revenue Service throughout the calendar years 2009, 2010, 2011, and 2012, failed to pay approximately $6,000,000 in payroll taxes as was required.
The charges in an indictment are only allegations. A person is presumed innocent unless or until he or she is proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Internal Revenue Service Criminal Investigative Division and the Federal Bureau of Investigation (FBI). Assistant United States Attorney Jonathan D. Ross is prosecuting the case for the United States.
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Martinsburg man pleads guilty to cocaine traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Ronald Lee Jackson, Jr., 29, of Martinsburg, pled guilty to cocaine trafficking in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Jackson sold cocaine in Berkeley County, West Virginia. He pled guilty to one count of “Distribution of Cocaine Base.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Special Assistant U.S. Attorney Stephanie Taylor, also of the Berkeley County Prosecuting Attorney’s Office, prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.U.S. Magistrate Judge Robert W. Trumble presided.
Mark Douglas “Doug” Helton Sentenced to 151 Months in Prison for Child Pornography OffensesRead the Press Release
KNOXVILLE, Tenn.- On April 5, 2016, Mark Douglas “Doug” Helton, 62, of Maryville, Tenn., was sentenced by the Honorable Thomas A. Varlan, Chief U.S. District Judge, to serve 151 months in prison as a result of his conviction for distribution of child pornography.
Following his release from prison, Helton will be supervised by the U.S. Probation Office for 10 years and will be required to register with the sex offender registry in any state in which he resides, works, or attends school.
Helton pleaded guilty in October 2015 to federal charges stemming from an undercover investigation into distribution of child pornography via peer-to-peer file sharing software on the Internet. After undercover investigators downloaded child pornography from Helton’s computer, a federal search warrant was executed at his residence and a forensic examination of his computer revealed that he had collected thousands of images and videos of child pornography. A large assortment of the depictions of child abuse collected by the defendant was available for download by others from Helton’s computer through the use of peer-to-peer software.
Nancy Stallard Harr, Acting U.S. Attorney, emphasized the importance of pursuing child pornography offenders stating, “This sentence should send a message that the United States will aggressively investigate and prosecute those who choose to participate in the continued victimization of children, some of our most vulnerable members of society, through the circulation of child pornography on the Internet.”
This investigation was conducted locally by Knoxville Police Department’s Internet Crimes Against Children Task Force. Assistant U.S. Attorney Matthew Morris represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Malden heroin dealer pleads guilty to Federal drug crimeRead the Press Release
CHARLESTON, W.Va. – A Malden man pleaded guilty today to a federal heroin crime, announced Acting United States Attorney Carol Casto. James Christian Young, 41, entered his guilty plea to distribution of heroin.
Young admitted that on October 19, 2015, he sold heroin to a confidential informant working with law enforcement. The drug deal took place at Young’s residence on Georges Creek Drive in Malden in Kanawha County. Young faces up to 20 years in federal prison and a $1 million fine when he is sentenced on June 23, 2016.
The Metropolitan Drug Enforcement Network Team and the Kanawha County Sheriff’s Office conducted the investigation. Assistant United States Attorney John J. Frail is handling the prosecution. The plea hearing was held before United States District Judge Thomas E. Johnston.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Lubbock Man Sentenced to 27 Months in Federal Prison for Sending Obscene Material to Texas DPS Special Agent Posing Online as a 13-Year-Old FemaleRead the Press Release
LUBBOCK, Texas — A 30-year-old Lubbock, Texas, man, Justin Boyet Johnson, was sentenced on Friday by U.S. District Judge Sam R. Cummings to 27 months in federal prison, following his guilty plea in January to an indictment charging one count of attempted transfer of obscene material to a minor, announced U.S. Attorney John Parker of the Northern District of Texas.
Johnson must surrender to the Bureau of Prisons on May 6, 2016.
According to documents filed in his case, on May 15, 2015, Johnson engaged in a series of communications, via texting and emailing, with a person he believed to be a 13-year-old girl who represented that she lived in Lubbock. This “girl,” who was actually a special agent with the Texas Department of Public Safety, acting in an undercover capacity, had posted an online advertisement stating she was bored and looking for something to do. Johnson expressed his sexual interest in the girl and emailed her a sexually explicit photograph of himself.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The case was investigated by the Texas Department of Public Safety and the Federal Bureau of Investigation. Assistant U.S. Attorney Steven M. Sucsy was in charge of the prosecution.
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Korean Company Fined $750,000 and to Make $200,000 Community Service Payment for Illegal Discharge of Waste WaterRead the Press Release
HONOLULU -- United States District Court Judge Leslie E. Kobayashi today accepted the guilty plea of Doorae Shipping Co., LTD, a South Korean maritime operations company, and sentenced the company to pay a fine of $750,000, a community service payment of $200,000, and a term of two years of probation for the failure to maintain an accurate oil record book, in violation of the Act to Prevent Pollution from Ships, and making false statements to the U.S. Coast Guard concerning the discharge of oil contaminated bilge water.
According to the Information to which Doorae pled guilty, the operation of a marine vessel, such as the B. Sky, an oil tanker ship flagged out of Vanuatu and operated by Doorae, generates large quantities of waste oil and oil-contaminated waste water. International and U.S. law requires that these vessels use pollution prevention equipment to preclude the discharge of these materials. Should any overboard discharges occur, they must be recorded in an oil record book, a log that is inspected by the U.S. Coast Guard.
Information produced to the court established that instead of running bilge water through an oil water separator, the Chief Engineer of the B. Sky discharged over 500 gallons of oily machinery space bilge water directly into the ocean. The Court approved the payment of the $200,000 community service payment, per an agreement between the government and Doorae to be donated to the National Fish and Wildlife Service Foundation to fund projects that preserve and enhance coral reefs and reef ecosystems in Hawaii.
In addition, the Court also took the guilty plea of the Chief Engineer of the B. Sky, JEUNG MUN, to one charge of causing the maintenance of a faulty oil record book in violation of the Act to Prevent Pollution from Ships. The Court scheduled MUN’s sentencing for July 27, 2016.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said "All maritime companies, including those that provide refueling services on the open seas, must respect the laws and the obligations of their trade, which exist to prevent the spoiling of oceans and marine habitat. This office will continue to aggressively investigate and prosecute those who violate our nation’s laws enacted to protect our oceans and environment.
"The Coast Guard has a long-standing commitment to protecting our nation's maritime environment," said Captain Shannon Gilreath, Coast Guard Captain of the Port of for Honolulu. "This case is a great example of inter-agency teamwork to hold accountable vessel operators that choose to pollute the waters around the Hawaiian Islands."
"The oceans and marine wildlife must be protected from marine companies that look to cut corners by dumping untreated waste," said Jay M. Green, Special Agent in Charge of the Environmental Protection Agency’s (EPA) criminal enforcement program in Hawaii. "The defendants in this case falsified their log books in an attempt to conceal their crimes, but thanks to the thoroughness of Coast Guard and EPA investigators and the persistence of the United States Attorney’s Office, the defendants got caught. Today’s guilty pleas demonstrate that the American people will not tolerate the flagrant violation of U.S. laws."
The case was investigated by U.S. Coast Guard Sector Honolulu, the U.S. Coast Guard Investigative Service and the EPA. The case was prosecuted by Assistant U.S. Attorney Ken Sorenson.
KC Postal Carrier, California Man Charged with Conspiracy to Distribute PCP Through the MailRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., postal carrier and a California man have been charged in federal court for their roles in a conspiracy to distribute multi-kilogram quantities of PCP through the mail.
Michael Garrett, 56, of Victorville, Calif., and Carol Barfield, 64, were charged in a criminal complaint filed under seal in the U.S. District Court in Kansas City, Mo., on March 29, 2016. That complaint was unsealed and made public today upon the arrests and initial court appearances of Garrett and Barfield.
The federal criminal complaint alleges that Garrett and Barfield participated in a conspiracy to distribute PCP from Nov. 2, 2015, to March 4, 2016. Garrett allegedly mailed bottles of PCP from California to addresses on Barfield’s Kansas City, Mo., postal route, so that she could identify those parcels and mark them as delivered, while actually keeping them to distribute to others.
According to an affidavit filed in support of the complaint, federal agents learned that Garrett was mailing parcels containing gallons of PCP to separate addresses on the same postal carrier’s route; the carrier was later identified as Barfield. Agents identified five suspicious transactions from the Victorville post office, mailing a total of 15 parcels addressed to separate addresses on the same carrier route from Nov. 2 to Dec. 16, 2015. Each of the parcels weighed in excess of 10 pounds. Barfield allegedly scanned all of the suspicious mailings as “delivered” on her route.
Agents also identified 61 telephone calls between Barfield and Garrett during the same time frame, the affidavit says.
On March 1, 2016, surveillance video identified Garrett mailing four parcels at the Victorville post office. The four parcels were mailed to separate addresses on Barfield’s postal route, the affidavit says, but were addressed to individuals who did not reside at those addresses. On March 4, 2016, federal agents set up surveillance on Barfield’s postal route. Barfield loaded the parcels into her postal vehicle. She scanned the first parcel as delivered, the affidavit says, but she did not actually deliver the parcel.
According to the affidavit, agents believe that Barfield then realized she was being followed by law enforcement, so she delivered one of the parcels as addressed and scanned the other parcels as undeliverable. Prior to returning to the station, the affidavit says, she rescanned the first parcel (which she had originally scanned as “delivered”) as “undeliverable.” When she returned to the station, the affidavit says, Barfield told her supervisor that she saw people following her on the route.
Agents opened the suspicious parcels, which each contained two 64-ounce plastic Welch’s Grape Juice bottles of PCP. The total weight of the liquid from the eight bottles was approximately 13.4 kilograms.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Justin G. Davids. It was investigated by the U.S. Postal Inspection Service and the Drug Enforcement Administration.
Justice Department Hosts Interagency Community Initiative in Dallas to Combat Religious DiscriminationRead the Press Release
DALLAS — The Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Northern District of Texas, in partnership with other federal agencies, hosted a community roundtable in Dallas last week that focused on religiously-motivated hate violence and hate crimes, protecting places of worship, and ways the federal government can improve its efforts in these critically important areas, announced U.S. Attorney John Parker of the Northern District of Texas.
“The diversity and tolerance of the north Texas area can be seen reflected in our many and varied faith-based communities,” said U.S. Attorney Parker. “The one thing we cannot, must not, tolerate, however, is hate directed at someone solely because they are different. It is particularly repugnant to our core values as Americans to victimize a person or group because of their faith. In fact, it is our shared duty to ensure that everyone, not just those who think like us, is free to worship as they choose and do so in peace.”
Approximately 35 representatives from Dallas - Fort Worth area faith-based community and civil rights organizations as well as several government agencies attended the roundtable that was facilitated by U.S. Attorney Parker. Enthusiastic dialogue during the roundtable will guide stakeholders in identifying next steps, as well as short and long-term goals.
A guest at the roundtable, U.S. Attorney Barry Grissom of the District of Kansas, spoke about the April 2014 shooting deaths of three people outside Jewish facilities in Overland Park, Kansas, and the resulting aftermath. Grissom also spoke about the statement he made to Kansans after a series of crimes in the U.S. against Muslims and mosques followed the Paris and San Bernardino, California, terrorist attacks, asking them to not let fear drive them to hateful and divisive acts toward Muslims.
This roundtable is the second in a series of roundtables being held throughout the U.S. as part of the Department’s new interagency community engagement initiative designed to promote religious freedom, challenge religious discrimination and enhance enforcement of religion-based hate crimes. This new initiative supplements the Department’s long-standing criminal and civil enforcement efforts to prevent religious discrimination and religion-motivated hate crimes.
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Johnstown Man Charged with Violating Federal Drug LawsRead the Press Release
JOHNSTOWN, Pa. – On April 5, 2016, a resident of Johnstown, Pa., was indicted by a federal grand jury in Johnstown on charges of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
The four-count indictment named Vantroy Godboat, 44.
According to the indictment presented to the court, on Jan. 27, Feb. 2, and Feb. 4, 2016, Godboat distributed less than 100 grams of heroin on each of those dates, and on Feb. 5, 2016, Godboat possessed with the intent to distribute less than 100 grams of heroin.
The law provides for a maximum sentence of 80 years in prison and a fine of $4,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, and the Cambria County Drug Task Force, conducted the investigation that led to the prosecution of Godboat.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Husband and Wife Sentenced to Federal Prison for Selling Methamphetamine on the Ak-Chin Indian CommunityRead the Press Release
PHOENIX – Yesterday, Stephanie Amanda Aviles, 31, and Juan Verduzco-Caro, 37, of Maricopa, Ariz., were sentenced by U.S. District Judge Susan R. Bolton to 96 months’ and 72 months’ imprisonment, respectively. Aviles and Verduzco-Caro had previously pleaded guilty to possession with the intent to distribute a mixture or substance containing methamphetamine.
Between August 4, 2014 and April 28, 2015, Aviles and Verduzco-Caro sold methamphetamine to undercover officers on and near the Ak-Chin Indian Community. Neither defendant is a member of the Ak-Chin Tribe.
The investigation in this case was conducted by the Bureau of Indian Affairs, the Ak-Chin Police Department, and the Drug Enforcement Administration. The prosecution was handled by Christina J. Reid-Moore, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-15-0604-PHX-SRB
RELEASE NUMBER: 2016-029 Aviles_Verduzco-Caro
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Hunting Privileges Revoked for Duck Hunter Who Used Forged StampRead the Press Release
Robert W. Fabick, of St. Louis, Missouri, pled guilty last week in federal court to misdemeanor charges for creating and using a fraudulent stamp in order to circumvent the lottery draw process at the Duck Creek Waterfowl Draw on the Mingo National Wildlife Refuge in Stoddard County. Fabick appeared before United States Magistrate Judge Abbie Crites-Leoni at the Rush H. Limbaugh, Sr. U.S. Courthouse in Cape Girardeau, Missouri, for his plea on March 31, 2016.
Conservation officials previously implemented a lottery draw process for waterfowl hunting at Duck Creek in order to accommodate heavy demand during peak times of the waterfowl hunting season. The process requires prospective hunters to arrive early in the morning to register for the lottery. If a hunter’s name is picked during the draw, conservation officials use an official stamp to mark their hunting pass and they are granted the privilege of hunting waterfowl on the grounds for the day.
On the morning of December 16, 2014, conservation officials investigated a complaint that Fabick had fired a shot several minutes before legal shooting hours were scheduled to begin. When confronted by officials, Fabick turned over a stamped hunting pass. During the course of the investigation, officials discovered that Fabick had not registered for the lottery draw that morning. Fabick later admitted that he used a fraudulent stamp to mark his hunting pass. Fabick told officials that he arranged to have the fraudulent stamp manufactured so that he could bypass the lottery draw process for waterfowl hunting. Fabick explained that he became frustrated in the past when his name was not picked during the draw and he wanted to guarantee that he could hunt on the property.
As part of a plea agreement with federal prosecutors, Fabick is subject to a complete revocation of all hunting privileges on both public and private lands for a period of three (3) years. Fabick was also ordered to pay a fine of $5,000 for using the fraudulent stamp and a fine of $100 for attempting to take migratory birds before lawful shooting hours.
This case was investigated by the U.S. Fish and Wildlife Service and the Missouri Department of Conservation.
Hartford Man Sentenced to More Than 6 Years in Federal Prison for Trafficking HeroinRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that YOANNI SUAREZ, also known as “Cuba,” 39, of Hartford, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 78 months of imprisonment, followed by four years of supervised release, for trafficking heroin.
According to court documents and statements made in court, in August 2015, the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force received information that SUAREZ was selling large quantities of raw heroin in Hartford. SUAREZ was arrested on September 17, 2015, after investigators coordinated a controlled purchase of heroin from SUAREZ. SUAREZ possessed 278 grams of heroin at the time of his arrest. A subsequent search of his Stafford Street residence revealed an additional 986 grams of heroin.
The quantity of heroin possessed by SUAREZ would create approximately 50,000 individual bags when broken down for street sale. SUAREZ admitted to law enforcement that he obtained heroin at a price of approximately $60,000 per kilogram, which he received from his supplier on credit.
SUAREZ has been detained since his arrest. On January 7, 2016, he pleaded guilty to one count of possession with intent to distribute 100 grams or more of heroin.
The FBI’s Northern Connecticut Violent Crimes Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction.
This case was prosecuted by Assistant U.S. Attorneys Michael J. Gustafson and Gabriel J. Vidoni.
Hardy County, WV man pleads guilty to cocaine traffickingRead the Press Release
ELKINS, WEST VIRGINIA – Roberto Montalvo Laureano, 33, of Moorefield, West Virginia, pled guilty to cocaine trafficking in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Laureano sold cocaine in Hardy County, West Virginia. He pled guilty to one count of “Cocaine Distribution.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen Warner prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, and the Potomac Highlands Drug and Violent Crime Task Force investigated.U.S. Magistrate Judge Michael John Aloi presided.
Grant County, WV man pleads guilty to painkiller traffickingRead the Press Release
ELKINS, WEST VIRGINIA – Samuel Lee Winebrenner, 29, of Petersburg, West Virginia, pled guilty to selling morphine in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Winebrenner sold morphine near Petersburg City Park, a playground in Grant County, West Virginia. He pled guilty to one count of “Distribution of Morphine within 1,000 feet of a Protected Location.” He faces between one and forty years in prison and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen Warner prosecuted the case on behalf of the government. The Potomac Highlands Drug and Violent Crime Task Force investigated.U.S. Magistrate Judge Michael John Aloi presided.
Gila River Indian Community Member Sentenced for MurderRead the Press Release
PHOENIX, Ariz. – Last week, Royce Allen Young, 38, of Laveen, Ariz., a member of the Gila River Indian Community, was sentenced by U.S. District Judge G. Murray Snow to 15 years in federal prison. Young had previously pleaded guilty to second degree murder.
On Aug. 10, 2012, Daniel Ballesteros, 24, who was also a member of the Gila River Indian Community was found lying dead in an intersection on the Gila River Indian Community. Ballesteros had died after sustaining three gunshot wounds. A spent shotgun shell and a kitchen knife were found at the scene, though the victim had not been stabbed. Young was located in Phoenix about an hour after the victim was found. He had a shotgun in his car. At sentencing, Judge Snow ordered that the 15 years run consecutive to a state sentence of imprisonment that Young is currently serving for another matter.
The investigation in this case was conducted by the Gila River Police Department and the Federal Bureau of Investigation. The prosecution was handled by Gayle L. Helart and Bill C. Solomon, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: 2:14-cr-1539-GMS-1
RELEASE NUMBER: 2016-030_Young
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Four indicted for conspiring to possess with intent to distribute 20 pounds of marijuana and nearly 20 pounds of MDMARead the Press Release
Four people were indicted in federal court on charges of conspiring to possess with intent to distribute at least 20 pounds of marijuana and nearly 20 pounds of MDMA, law enforcement officials said.
Indicted are: Rinald Turhani, 37, of Macomb, Mich.; Denisa Alicka, 26, of Rocky River; Jonida Alicka, 28, of Rocky River, and Leka Konini, 46, of Canton, Mich.
The indictments follow a joint investigation of multiple sales of MDMA and marijuana by the Alicka sisters from their residences and vehicles between September 2014 and March 2016. Investigators determined the Alickas obtained MDMA and marijuana through Turhani and Konini. Jonida Alicka also obtained MDMA from her boyfriend who resides in Canada, according to court documents.
Denisa Alicka travelled to Michigan on several occasions to pick up the narcotics and transport them back to Ohio. Jonida Alicka, a reserve police officer with the Linndale Police Department, traveled to New York to pick up MDMA and transport it back to Ohio. Denisa and Jonida Alicka distributed the narcotics throughout the Northern District of Ohio, according to court documents.
This case is being prosecuted by Assistant U.S. Attorneys Robert F. Corts, Marissa Darden and Antoinette T. Bacon following an investigation by the FBI, Cleveland Division of Police, Ohio HIDTA, Parma Police Department, Rocky River Police Department and US Border Patrol.
If convicted, the defendant’s sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violation.
An indictment 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 Tax Preparer, Elected Public Official Sentenced for Tax FraudRead the Press Release
PROVIDENCE, R.I. – Leon F. Tejada, 51, of Providence, former owner of El Centro Multiservices, a tax preparation service in Providence, and a former member of the Providence City Council and Rhode Island General Assembly, was sentenced today to 12 months and one day in federal prison for devising and executing two tax fraud schemes to steal tax refunds monies from 76 taxpayers whose tax returns he prepared and filed, and from the IRS.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Tejada to serve three years supervised release upon completion of his prison term, during which time he is ordered to perform 1,000 hours of community service. Tejada pleaded guilty on December 18, 2015, to one count of tax fraud and four counts of wire fraud.
Tejada’s sentence is announced by United States Attorney Peter F. Neronha and Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation.
At the time of his guilty plea, Tejada admitted to the court that during tax years 2009 through 2012, without the knowledge of his clients, he devised a scheme to create and falsify clients’ dependents, exemptions, tax credits, deductions, and expenses in order to increase the amount of tax refund due to some of the clients. An investigation by IRS Criminal Investigation and the United States Attorney’s Office determined that this scheme resulted in a loss to the United States of $54,440.
Additionally, Tejada admitted to the court that he devised a scheme to divert a portion of tax refunds some of his clients’ received into his own bank account for his own personal use. An investigation by IRS Criminal Investigation and the U.S. Attorney’s Office determined that Tejada diverted $24,987 in tax refund monies skimmed from the tax refunds of at least 76 individuals.
At sentencing, U.S. District Court Chief Judge William E. Smith ordered Tejada to pay full restitution to the 76 individuals whose tax refund monies he stole and to the IRS, totaling $78,548.
Tejada has been ordered to self-surrender to begin serving his prison sentence by May 2, 2016.
In a separate matter, a federal grand jury last week returned a 70-count indictment alleging that Belkis M. Guzman, 47, of Cranston, a former tax preparer employed at El Centro Multiservices, participated in schemes to prepare false tax returns claiming deductions taxpayers were not entitled to and to filing fraudulent tax returns using personal identifying information of others without authorization. It is alleged that the latter scheme resulted in tax refunds totaling more than $686,000, which were deposited into Guzman’s personal bank account.
The indictment, which charges Guzman with thirty-three counts of preparing false income tax returns, eight counts of wire fraud, four counts of aggravated identity theft, twenty-three counts of forgery, and one count of theft of government funds. Guzman pleaded not guilty at her arraignment on April 4, 2016.
An indictment is merely an allegation 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.
The cases are being prosecuted by Assistant U.S. Attorney Richard W. Rose.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Former St. Charles District Attorney Harry Morel Charged with Obstruction of JusticeRead the Press Release
U.S. Attorney Kenneth A. Polite announced today the unsealing of a Bill of Information charging HARRY J. MOREL, JR., with obstruction of justice in violation of Title 18, United States Code, Section 1512(d)(1).
The Bill of Information charges MOREL with intentionally harassing an Individual A and thereby hindering, delaying, preventing, and dissuading Individual A from attending and testifying in a federal grand jury proceeding investigating possible wrongdoing by MOREL, in his capacity as St. Charles Parish District Attorney and Assistant District Attorney.
If convicted, MOREL faces a maximum term of imprisonment of three years, a fine of $250,000 and one year of supervised release following any term of imprisonment.
U.S. Attorney Kenneth Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite noted that the investigation has not implicated any other former or current employees of the St. Charles Parish District Attorney's Office.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation, particularly Special Agent Michael Zummer, and the St. Charles Parish Sheriff’s Office in investigating this matter. Assistant U.S. Attorney James Baehr is in charge of the prosecution.
Former Senior Executives of Global Financial Services Company Charged in Scheme to Defraud Clients through Secret Trading CommissionsRead the Press Release
BOSTON – Two former high-ranking executives of a Boston-based financial services company, which is one of the world’s largest asset managers and custody banks, have been charged with engaging in a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Ross McLellan, 44, of Hingham, Mass. and Edward Pennings, 45, who is believed to be living abroad, were charged in a five-count indictment with conspiring to commit securities fraud and wire fraud, as well as two counts each of securities fraud and wire fraud. McLellan, a former executive vice president of the bank who served as president of its U.S. broker-dealer unit, was arrested this morning in Hingham and will appear in U.S. District Court in Boston later today.
U.S. Attorney Carmen M. Ortiz of the District of Massachusetts, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Harold M. Shaw of the Boston Field Office of the Federal Bureau of Investigation made the announcement.
“The secret conversations and backroom plotting laid bare in today’s charges paint a vivid picture of a brazen fraud,” said U.S. Attorney Ortiz. “The defendants never thought anyone would hear those conversations – conversations in which they plotted to overcharge their clients by millions of dollars, and to hide their tracks. With each trade, they chipped away at the savings of thousands of retirees whose pensions they were charged with safeguarding. Bankers who abuse their clients’ trust in this way must be held accountable. And we will work hard to ensure that they are.”
“The defendants are charged with reaping millions of dollars of illicit profits by abusing their clients' trust and secretly setting their own inflated compensation,” said Assistant Attorney General Caldwell. "The charges announced today reflect our continued commitment to hold individuals accountable for toying with the integrity of our financial system.”
"As alleged, Ross McLellan and Edward Pennings cheated and lied to investors so that the bank could line its pockets. Actions like theirs undermine investor confidence. This case demonstrates the FBI's commitment to unraveling elaborate and complex schemes, motivated by sheer greed, that ultimately undermine our financial markets," said Special Agent in Charge Shaw.
The Indictment alleges that, between February 2010 and September 2011, McLellan and Pennings, together with others, conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. McLellan and Pennings then allegedly took steps to hide the commissions from the clients and others within the bank, including by directing that the commissions not be broken out in post-trade reports.
For example, the Indictment alleges, among other things, that:
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In a telephone call in March 2010, Pennings instructed an unidentified co-conspirator in the transition management unit not to talk about the plans to charge hidden commissions on one transaction “with anyone . . . because it’s not going to help our story.Don’t even share it with the rest of the team, to be honest.”
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In June 2010, McLellan and the unidentified co-conspirator requested that the bank’s traders provide them with the reported daily high and low prices of securities the bank had traded for the client so that they could determine the amount of the commissions to be applied to each security without attracting the client’s attention by exceeding the bounds of reported prices.
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In March 2011, McLellan instructed a U.S. fixed income trader to charge a one basis point (0.01%) commission to each trade conducted for another client – notwithstanding that the written trading instructions for the transaction said to charge zero commissions – and subsequently instructed the trader to delete any reference to the commissions from the trading results he sent to the transition manager assigned to the project.
In June 2011, when one of the affected clients inquired about whether it had, in fact, been charged commissions in breach of its agreement with the bank, it is alleged that Pennings initially denied that any commissions had been charged. Later – at McLellan’s direction – Pennings acknowledged only that some commissions had been “inadvertently” charged on securities traded in the United States, but did not disclose that they had, in fact, been intentionally charged, in the United States and in Europe. McLellan and Pennings then allegedly sought to mislead the bank’s compliance staff into believing that the commissions had been charged in error and that the amount of the overcharges was limited to the commissions applied on U.S. securities.
The ongoing investigation is being conducted by the Federal Bureau of Investigation. The United States Attorney’s Office and the Fraud Section have also received valuable assistance from the Securities & Exchange Commission as well as from authorities in the United Kingdom, including the City of London Police. The Criminal Division’s Office of International Affairs also provided assistance. The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Ortiz’s Economic Crimes Unit and Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section.
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Former Oregon Resident Sentenced to Prison for Role in One Million Dollar Tax Fraud SchemeRead the Press Release
A former resident of Portland, Oregon was sentenced to 37 months in prison today for her role in a tax refund fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Tataneisha White, 43, admitted to conspiring with multiple individuals, including Jasmine Mason, Shawntina Ware and Brandon Leath, all of Portland, to file more than 227 false income tax returns claiming more than $1 million in fraudulent refunds. The false information on the tax returns included fictitious W-2 wages and inflated withholding amounts to generate tax refunds ranging from $1,000 to $12,000. White also admitted that she and her co-conspirators shared personal identifying information and employer information with each other to file the false returns. White directed the Internal Revenue Service (IRS) to divide the fraudulently obtained tax refunds between bank accounts and debit cards controlled by White and others, including friends and family members of White and her co-conspirators. In October 2015, White pleaded guilty to one count of conspiracy to file false claims, one count of filing a false claim and one count of theft of government funds.
In addition to the prison term, U.S. District Judge Robert E. Jones ordered White to serve three years of supervised release and pay restitution to the IRS in the amount of $626,750. Mason and Leath previously pleaded guilty to similar charges and were sentenced to 32 months and 24 months in prison, respectively. Ware also pleaded guilty and is scheduled to be sentenced on July 27.
Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Lori A. Hendrickson and Ryan R. Raybould of the Tax Division, who are prosecuting the case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the District of Oregon for their valuable assistance.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Former Oregon Resident Sentenced to Prison for Role in One Million Dollar Tax Fraud SchemeRead the Press Release
WASHINGTON – A former resident of Portland, Oregon was sentenced to 37 months in prison today for her role in a tax refund fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Tataneisha White, 43, admitted to conspiring with multiple individuals, including Jasmine Mason, Shawntina Ware and Brandon Leath, all of Portland, to file more than 227 false income tax returns claiming more than $1 million in fraudulent refunds. The false information on the tax returns included fictitious W-2 wages and inflated withholding amounts to generate tax refunds ranging from $1,000 to $12,000. White also admitted that she and her co-conspirators shared personal identifying information and employer information with each other to file the false returns. White directed the Internal Revenue Service (IRS) to divide the fraudulently obtained tax refunds between bank accounts and debit cards controlled by White and others, including friends and family members of White and her co-conspirators. In October 2015, White pleaded guilty to one count of conspiracy to file false claims, one count of filing a false claim and one count of theft of government funds.
In addition to the prison term, U.S. District Judge Robert E. Jones ordered White to serve three years of supervised release and pay restitution to the IRS in the amount of $626,750. Mason and Leath previously pleaded guilty to similar charges and were sentenced to 32 months and 24 months in prison, respectively. Ware also pleaded guilty and is scheduled to be sentenced on July 27.
Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Lori A. Hendrickson and Ryan R. Raybould of the Tax Division, who are prosecuting the case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the District of Oregon for their valuable assistance.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Former Milwaukee Police Detective Charged with Excessive Force in Violation of Victim's Civil RightsRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin has announced that the federal grand jury sitting in Milwaukee has indicted former Milwaukee Police Department Detective Rodolfo Gomez, Jr. (age: 49) for willfully depriving an in-custody subject of his civil right not to be subjected to excessive force, in violation of Title 18, United States Code, Section 242. If convicted, Mr. Gomez could be sentenced to a maximum possible term of imprisonment of ten years, a fine of not more than $250,000, and a term of supervised release not to exceed three years.
The charge is based on the allegation that, in an interview room in the Police Administration Building on August 14, 2013, Gomez repeatedly punched the victim in the face and head and kneed him in the torso, all while one of the victim’s hands was handcuffed to a wall in the interview room. Gomez stopped punching and kicking the victim when a police lieutenant who heard yelling entered the room. The indictment alleges that the force used was unreasonable and that the victim suffered bodily injury.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
This case was investigated by the FBI, building upon an earlier investigation done by the Milwaukee Police Department. The case is being prosecuted by United States Attorney Gregory J. Haanstad and Assistant United States Attorney Mel S. Johnson.
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Former IT Director and Wife Arrested for Embezzling More Than $1 Million from EmployerRead the Press Release
HOUSTON – A Frisco couple, formerly of Houston, have been taken into custody on a multi-count indictment alleging a $1 million mail and wire fraud conspiracy, announced U.S. Attorney Kenneth Magidson. Bradley Freitas, 36, was the former Director of Information Technology (IT) services for Orion Real Estate Services Inc.
Freitas and his wife - Loren Freitas, 32 - are set to make their initial appearance in Sherman in the Eastern District of Texas at 11:00 a.m. They are then expected to appear in Houston before U.S. Magistrate Judge Stephen Smith on April 7 at 10:00 a.m.
The indictment, filed Feb. 17, 2016, and unsealed upon their arrests today, charges the Freitas with one count of conspiracy to commit mail and wire fraud, 11 counts of mail fraud and 10 counts of wire fraud.
According to the allegations in the indictment, from approximately April 14, 2009, through Jan. 14, 2014, Bradley Freitas embezzled approximately $1,009,634.45 from Orion Real Estate Services Inc. with the help of his wife. Orion is a full-service, multi-family residential real estate management company serving a wide variety of investors, ranging from institutions, private partnerships, foreign investors, individual owners and government housing organizations. With more than 665 employees, Orion allegedly provides management for all types of multi-family properties and had a growing portfolio of more than 25,000 apartment homes under management throughout the nation.
Bradley Freitas was hired as the director of IT services for Orion on March 5, 2009.
Throughout his employment, Bradley Freitas allegedly created false explanations on internal Orion company justification documents to mask unauthorized purchases as legitimate IT-related items. The indictment alleges he miscoded Orion justification documents to mask unauthorized personal purchases for several years and made these unauthorized purchases with company credit cards issued to him for IT purchases only. He allegedly purchased merchandise from online retailers, such as Amazon, NewEgg and CDW, and mailed it to either to his office or home.
Several of the items Freitas purchased, including a dining room table and chairs, a Gucci purse and wallet, home entertainment systems, televisions, etc., were for his and wife’s own personal enrichment, according to the allegations. Other items - iPads, laptops, etc. - were fraudulently purchased with the company card and allegedly sold on EBay or to their own private customers in New York and elsewhere for the Freitas to earn a profit.
According to the indictment, Loren Freitas would direct her husband at times on what to purchase and then mail the various items to be sold to their customers via FedEx or UPS.
Each charge carries a possible 20 years in federal prison and a possible $250,000 maximum fine, upon conviction.
The FBI conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Former East Cleveland police sergeant sentenced to nine years in prisonRead the Press Release
A former East Cleveland police sergeant was sentenced to nine years in prison for her role in a conspiracy in which she kept thousands of dollars from alleged drug dealers, much of which was seized through illegal searches and fabricated reports, 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.
Torris Moore pleaded guilty late last year to one count each of conspiracy against rights, Hobbs Act conspiracy and false statements to law enforcement and two counts of theft concerning programs receiving federal funds.
Officers Antonio Malone and Eric Jones both previously pleaded guilty to one count of conspiracy against rights and one count of Hobbs Act conspiracy. They are scheduled to be sentenced Monday.
“This police supervisor betrayed her badge and her community,” Rendon said. “She profited from the drug trade that has devastated the city she swore to protect. She has earned every day of this prison sentence through her criminal behavior.”
“Torris Moore acted like a cunning criminal rather than an honorable public servant who swore to protect and serve,” Anthony said. “She will now serve time behind bars for her reprehensible, unlawful conduct.”
Moore, of South Euclid, was a sergeant at the East Cleveland Police Department, where he supervised the Street Crimes Unit. Malone, of Cleveland, and Jones, of Cleveland Heights, were detectives assigned to the Street Crimes Unit. The unit, including Moore, Malone and Jones, were familiar with several drug traffickers, according to court documents.
From 2012 through June 2014, the defendants conspired to unlawfully enter premises and exceed the scope of lawful entry, thereafter conducting unlawful searches and seizures, used their power to seize money and property for themselves under the guise of legitimate search warrants, and created and approved false reports, affidavits and other documents to conceal their illegal searches and seizures, according to court documents.
These illegal searches took place in East Cleveland but also outside city limits, in various locations throughout Greater Cleveland. The conspirators placed false and inaccurate information in police reports, which Moore reviewed, knew was incorrect, but she failed to correct the inaccuracies. This false information was used to obtain search warrants, according to court documents.
The conspirators seized money and property during these searches, and diverted some of the seized money and property for their own use. Malone provided false information to the Cuyahoga County Prosecutor’s Office about certain investigative techniques in order to conceal their illegal conduct, including attributing information to a confidential informant that did not exist, according to court documents.
For example, on Sept. 10, 2012, Jones presented an affidavit to an East Cleveland Municipal Judge, which the conspirators knew contained false and misleading statements. The judge, unaware of false information, issued a search warrant for a home on Sheldon Avenue. Moore, Malone, Jones and another officer then executed the search warrant and seized $20,000. On Sept. 11, Moore, Malone and Jones met at a park in East Cleveland and divided a portion of the $20,000, which each officer receiving between $2,000 and $3,000. Jones then authored a report reflecting that they had seized a total of $11,173, according to court documents.
On June 20, 2013, SCU officers, including Moore, searched a home on East 85th Street. Malone, without a search warrant, forced his way into a room that was secured by a padlock and seized approximately $100,000 in cash. Moore, Malone and Jones removed a portion of the cash before causing the remainder to be secured in the East Cleveland Police Department’s evidence room. Later that day, the three officers met at an East Cleveland park and divided the money, with each receiving about $10,000. Malone later wrote the search resulted in the recovery of $74,670, according to court documents.
On June 19, 2014, Malone encountered a parked car driven by a known drug trafficker, identified in the indictment only as M.M. Malone arrested M.M., who told the officer he had approximately $11,000 or $12,000 in the car’s glove box. Malone agreed to release M.M. but insisted on towing the car. Malone said: “I looked out for you. You gotta look out for me,” before instructing M.M. to get the cash from the glove box but to leave behind $3,000. Malone removed $3,000 from M.M.’s car but did not list the money when he completed the vehicle’s inventory form, according to court documents.
This case is being prosecuted by Assistant U.S. Attorney Edward F. Feran following an investigation by the Federal Bureau of Investigation – Cleveland Division, with assistance from the East Cleveland Police Department and Cuyahoga County Prosecutor’s Office.
Former Deere Employee Charged with Wire Fraud, Money LaunderingRead the Press Release
Rock Island, Ill. – A former employee of Deere and Company appeared in federal court today on charges of wire fraud and money laundering. Harvey Ulfers, 62, Cedar Falls, Iowa, appeared before U.S. District Judge Sara Darrow in Rock Island. Trial has been scheduled for June 6, 2016. Ulfers was allowed to remain on bond pending trial. The indictment was returned on Mar. 22, 2016, but remained sealed pending Ulfers’ court appearance.
The indictment alleges that from about 2004 to January 2013, Ulfers defrauded Deere & Company, headquartered in Moline, of at least $250,000. Using his position at Deere’s foundry facility in Waterloo, Iowa, Ulfers allegedly caused the creation and approval of fraudulent internal documents that allowed significantly undervalued scrap metal to leave the facility. Ulfers conspired with others to obtain the excess value of the scrap after it was sold at scrap yards, using a third party to launder the fraudulent proceeds and provide cash payments to Ulfers.
If convicted, the statutory maximum penalty for each count of wire fraud is 20 years in prison, and a fine of up to $250,000, and the statutory maximum penalty for each count of money laundering is 20 years in prison, and a fine of up to $500,000, or twice the value of property involved in the transactions, whichever is greater.
The case is being prosecuted by Assistant U.S. Attorneys Meredith DeCarlo and Donald Allegro. The charges are the result of investigation by the Internal Revenue Service Criminal Investigation Division and the Federal Bureau of Investigation. Deere & Company is cooperating in the investigation and referred the matter to law enforcement following internal investigations.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
Former Canadian Youth Soccer Coach Sentenced to 7 Years in Prison for Seeking Sex with Person He Believed was 12-Year-Old GirlRead the Press Release
A 47-year-old man from Surrey, British Columbia was sentenced today in U.S. District Court in Seattle to seven years in prison and ten years of supervised release for a federal sex crime, announced U.S. Attorney Annette L. Hayes. KULDIP “KELLY” SINGH MAHAL was arrested in February 2015 at a park in Burlington, Washington, where he was expecting to meet a 12-year-old girl whom he believed he had enticed into having sexual contact with him. MAHAL had in fact sent multiple sexually explicit messages and photos to an undercover agent with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). At the sentencing hearing, U.S. District Judge Robert S. Lasnik said, “We have so many child victims and if we can stop abuse of real children by doing these sting operations, then it is a good use of government resources.”
“Even with the knowledge that another man had been arrested in a similar internet enticement case, this defendant persisted in seeking sex with a 12-year-old child,” said U.S. Attorney Annette L. Hayes. “This case should send a clear message to those trolling the internet to victimize children: you will be caught and pay with your freedom for such crimes.”
According to records in the case, MAHAL responded to a posting on the internet in January 2015. MAHAL sent a picture of his arms and upper body, and expressed interest in a sexual relationship. MAHAL continued to communicate with the undercover agent even after the agent claimed she was 12-years-old. In fact MAHAL sent sexually explicit photos of himself and repeatedly requested the “girl” send sexually explicit photos of herself back to him. MAHAL engaged in lengthy sexualized chats via text message with the “girl.” MAHAL crossed the border from Canada into the U.S. at Blaine, Washington and was arrested at the park where he thought he was going to meet the “girl” and have sex.
MAHAL was employed as a facilities manager for a Vancouver, BC tech firm and was a volunteer coach for a U-16 soccer team in British Columbia.
“We entrust teachers and coaches to serve as role models for our children and safeguard their welfare,” said Bradford Bench, special agent in charge for HSI Seattle. “This sentence should serve as a stern warning to those who mistakenly believe cyberspace affords them anonymity and they can use the Internet to sexually exploit children with impunity. HSI will continue to work closely with our law enforcement partners to investigate these predators and ensure that they feel the full weight of the law.”
MAHAL will be required to register as a sex offender.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and is being prosecuted by Assistant United States Attorney Kate Vaughan.
Former Air Force Reservist Pleads Guilty to Distribution of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul, Jr. announced today that Steven Fine, 30, of Orchard Park, NY, pleaded guilty to distribution of child pornography before U.S. District Judge Richard J. Arcara. The charge carries a mandatory minimum sentence of five years in prison, a maximum of 20 years, and a $250,000 fine.Assistant U.S. Attorney Stephanie Lamarque, who is handling the case, stated that the investigation began when the defendant, a former United States Air Force Reservist, distributed videos containing child pornography to an undercover agent. On September 12, 2014, law enforcement officers executed a search warrant at the defendant’s mother’s house in West Seneca, NY and recovered electronics being used by Fine. A subsequent forensic examination determined that several of the electronics contained images and videos of child pornography, including a video that the defendant had produced of himself engaging in sexually explicit conduct with a minor under the age of 16.
The plea is the culmination of an investigation by the Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, and the Town of West Seneca Police Department under the direction of Chief Daniel Denz.
Sentencing is scheduled for July 15, 2016 before Judge Arcara.
Federal Court Holds Tennessee Tax Return Preparer in ContemptRead the Press Release
Court Finds That “The Tax Firm” is Successor to Previously
Enjoined Operation, “The Tax Factory,” Flouted Court’s Earlier OrderFinding that she “is not competent, or if competent, she is not willing to prepare returns that comply with the law,” a federal court yesterday held Stephanie Edmond in contempt of court for violating the court’s previous injunction orders. The U.S. District Court for the District of Tennessee also barred Edmond’s businesses, the Tax Factory and the Tax Firm, and her husband, Kevin Williams, from preparing tax returns and it ordered them to disgorge to the United States all fees they have earned since January 15.
On April 17, 2015, the court enjoined Edmond and the Tax Factory from preparing improper federal income tax returns. The court also ordered Edmond and her businesses to pay for an independent monitor who would be required to report to the United States on a monthly basis as to whether Edmond complied with the internal revenue laws. However, the court found that after the independent monitor sent Edmond and the Tax Factory a letter regarding their failure to provide bank statements and otherwise comply with the April 2015 injunction, Williams arranged, in exchange for a fee, to use the Electronic Filing Identification Number of another entity, the Tax Firm, to file returns. The court found that the Tax Firm was the successor of the Tax Factory and concluded that “[t]here is no evidence that the Tax Firm was created for any reason except to escape the review of the monitor and the injunctions issued by this Court. There is no evidence to show a legitimate separate entity. Instead, the evidence demonstrates that Tax Firm was created for the improper purpose of flouting the Court’s orders.” The court ordered a copy of the contempt order to be posted at the locations of the Tax Factory and the Tax Firm in Memphis.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
El Paso, Texas Man Pleads Guilty in New Mexico to Federal Drug Trafficking Charge Arising from Seizure of Almost Six Pounds of HeroinRead the Press Release
ALBUQUERQUE – Luis Alejandro Escapite Perez, 21, of El Paso, Texas, pleaded guilty today in federal court in Albuquerque, N.M., to a heroin trafficking charge under a plea agreement with the U.S. Attorney’s Office.
Perez was arrested on Oct. 13, 2015, on a criminal complaint charging him with possession of heroin with intent to distribute in Valencia County, N.M. According to the complaint, Perez was arrested after law enforcement officers discovered approximately 2.67 kilograms (5.9 pounds) of heroin concealed inside Perez’s vehicle during a traffic stop on Interstate 25 near Belen, N.M. Perez was subsequently indicted on the same charge on Dec. 17, 2015. The indictment included forfeiture allegations requiring Perez to forfeit a white 2011 Volkswagen Jetta to the United States.
During today’s proceedings, Perez pled guilty to the indictment. In entering the guilty plea, Perez admitted that on Oct. 13, 2015, he was in the process of transporting 2.67 kilograms of heroin to Albuquerque when he was stopped by law enforcement officers. Perez admitted that he previously delivered heroin from the area of El Paso and Juarez, Mexico to Albuquerque on April 28, 2015 and May 18, 2015. During each of these prior deliveries, Perez was paid to transport the heroin from the El Paso and Juarez, Mexico area to Albuquerque.
At sentencing, Perez faces a statutory minimum of ten years and a maximum of life in federal prison. Perez remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the New Mexico State Police. Assistant U.S. Attorney Shaheen P. Torgoley is prosecuting the case.
This case was prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Eight Members of Cherry Hill Group ‘UDH’ Plead Guilty to Racketeering Conspiracy on the Eve of TrialRead the Press Release
Baltimore, Maryland – Eight men have pleaded guilty to conspiracy to participate in a racketeering enterprise in connection with their gang activities as members of the UDH organization, which operates in the Cherry Hill section of Baltimore. The following defendants pleaded guilty on April 1 and April 4, 2016, just prior to trial:
Steven Jackson, a/k/a Cutty, age 25, of Baltimore;
Asim Benns, a/k/a Seem, age 33, of Baltimore;
Gregory Sykes-Bey, age 22, of Baltimore;
Elijah Sykes-Bey, a/k/a LaLa, age 21, of Baltimore;
James Scott, a/k/a Mook Day, age 24, of Essex, Maryland;
Michael Smith, a/k/a Lil Mikey, age 23, of Baltimore;
Donte Thornton, a/k/a Tay, age 30, of Baltimore; and
Alonzo Clea, a/k/a Zo, age 26, of Baltimore.The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Commissioner Kevin Davis of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn Mosby.
“Disputes between rival drug gangs lead to many shootings and murders in Baltimore City,” said U.S. Attorney Rod J. Rosenstein. “Thanks to a lengthy and intensive investigation, we are holding accountable the criminals who turned Cherry Hill into a war zone.”
According to their plea agreements, from at least 2007 to 2013, the UDH organization operated in the area of Cherry Hill known as “Up the Hill” or “Up da Hill.” UDH members and associates have been in a long-running dispute with members of an organization known as “Coppin Court” that is involved in criminal activity in the part of Cherry Hill known as “Down the Hill,” or “Down da Hill,” (DDH), and since at least January 2011, have been in a dispute with members of “Little Spelman,” another organization that is involved in criminal activity in the DDH section of Cherry Hill. UDH members and associates used violence and intimidation to protect themselves, the organization, and their control of the drug trade in part of Cherry Hill.
The defendants admitted that as members of UDH they were part of a racketeering enterprise and protected their power, territory and profits through the use of violence, threats of violence, intimidation, robbery, and narcotics trafficking.
In addition to selling drugs, UDH members have also committed murders, attempted murders, assaults, carjackings, and robberies. Beginning in 2004, UDH members committed six murders of rival gang members and/or drug dealers, and shot nine other individuals. In addition, the members of UDH committed street and bank robberies in order to fund their narcotics activities.
According to his plea agreement, in addition to being a member of UDH, Asim Benns was also a high ranking member of the Black Guerilla Family (BGF), overseeing the Up the Hill area of Cherry Hill. Benns admitted that he planned and/or participated in the murders of two rival gang members, and two other shootings. Benns ran a heroin shop in the UDH area, as well as distributing other drugs. In July and August of 2011, Benns and other UDH members robbed two banks, stealing a total of $11,100, which he and the other robbers used to buy drugs that they could sell. Thornton participated in one of the bank robberies.
All of the defendants admitted to their participation in the gang’s narcotics trafficking activities. In addition, co-defendant Steven Jackson admitted to the murder of a rival gang member and the shooting of another person. Gregory Sykes-Bey admitted to two shootings and the murder of a rival gang member, and Michael Smith admitted committing the murder of a rival gang member and to possessing a firearm used in that murder and two additional shootings. According to their plea agreements, Elijah Sykes-Bey participated in the murders of two rival gang members, and Donte Thornton participated in a shooting and a murder of a rival gang member.
The defendants and the government have agreed to recommend specific sentences as part of their plea agreements. If the Court accepts the plea agreements Benns be sentenced to between 20 and 25 years; Jackson and Smith will each be sentenced to 25 years; the Sykes-Bey brothers will each be sentenced to 24 years each; Clea will be sentenced to 10 years in prison; Thornton will be sentenced to 15 years in prison; and Scott will be sentenced to10 to 15 years in prison, respectively. U.S. District Judge George L. Russell, III has scheduled sentencing for Jackson and Clea on June 10, 2016; for Elijah Sykes-Bey on June 24, 2016; for Gregory Sykes-Bey on July 9, 2016; for Asim Benns, James Scott and Donte Thornton on July 15, 2016; and for Michael Smith on August 12, 2016.
A total of 35 Cherry Hill gang members have now pleaded guilty. For example, Little Spelman gang member Davon Martin, age 26, admitted to drug dealing and the murders of two UDH gang members and was sentenced to 35 years in prison. UDH member Dominic Evans, a/k/a “FlatLine,” age 25, admitted to drug dealing, two stabbings and to his participation in a murder, and was sentenced to 30 years in prison.
United States Attorney Rod J. Rosenstein praised the ATF, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Andrea L. Smith, Seema Mittal, and Patricia C. McLane, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Coventry Man Admits Role in Steroid Distribution ConspiracyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOHN KOCH, 49, of Coventry, pleaded guilty today before U.S. District Judge Robert N. Chatigny in Hartford to one count of conspiracy to distribute anabolic steroids.
According to court documents and statements made in court, a long-term investigation led by the Federal Bureau of Investigation, Drug Enforcement Administration and Homeland Security Investigations revealed that Steven Santucci, a former Newtown Police sergeant, and others were receiving shipments of steroid ingredients from China and manufacturing and distributing wholesale quantities of steroids. The investigation also revealed that certain members of the conspiracy were distributing prescription pills, including oxycodone, as well as cocaine.
In pleading guilty, KOCH admitted that he conspired with Santucci and others to distribute anabolic steroids.
During the course of the investigation, law enforcement officers seized hundreds of vials of steroids, approximately 600 grams of raw testosterone powder, approximately 350 grams of powder cocaine, and several firearms.
KOCH was arrested on June 4, 2015.
Judge Chatigny scheduled sentencing for July 1, 2016, at which time KOCH faces a maximum term of imprisonment of 10 years and a fine of up to $500,000. KOCH is released on a $100,000 bond.
On December 9, 2015, Santucci pleaded guilty steroid distribution and money laundering offenses. He awaits sentencing.
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations, with the assistance of the U.S. Marshals Service, U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Robert M. Spector.
Compliance Officer Admits Rigging Contractor Selection Process for Union City Community Development Agency ProjectsRead the Press Release
NEWARK, N.J. – A compliance officer with the Union City Community Development Agency (UCCDA) today admitted that he manipulated the contractor selection process for federally funded residential rehabilitation and sidewalk replacement projects, causing losses of $40,000 to $95,000, U.S. Attorney Paul J. Fishman announced.
Washington Borgono, 65, of North Bergen, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to Count Two of an indictment charging him with obtaining by fraud, converting and misapplying government funds provided by the UCCDA.
According to documents filed in this case and statements made in court:
Between April 2007 and February 2013, Borgono was a compliance officer at the UCCDA, a local government agency that received grant funds from the U.S. Department of Housing and Urban Development (HUD). Among the programs that the UCCDA operated through this HUD funding were a residential rehabilitation program and a sidewalk replacement program.
From 2007 through 2013, Borgono manipulated the contractor selection process for HUD-funded residential rehabilitation and sidewalk replacement projects through false and misleading bids. Borgono instructed certain contractors, such as Leovaldo Fundora, a contractor in Guttenberg, New Jersey, to obtain and submit higher, phony bids from other contractors in order to improperly award residential rehabilitation and sidewalk replacement projects to the contractors of Borgono’s choice. Borgono also instructed certain contractors, such as Joseph Lado, of Fort Lee, New Jersey, to bid under a certain specified amount on residential rehabilitation and sidewalk replacement projects, to ensure those contractors obtained those projects. At other times, Borgono instructed certain contractors to submit phony higher bids from their own companies, for residential rehabilitation and sidewalk replacement projects, to ensure that certain contractors were awarded the projects. In other instances, Borgono discarded the lowest bid for sidewalk replacement projects to ensure that Borgono’s contractors of choice would be awarded the sidewalk replacement projects. Fundora, Lado, UCCDA Inspector Johnny Garces and Stanley Parzych, a contractor in Jersey City, New Jersey, previously pleaded guilty to criminal charges for their roles in this scheme and await sentencing.
The charge of obtaining by fraud, converting and misapplying government funds carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Sentencing is scheduled for July 19, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Barbara R. Llanes and José R. Almonte of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Louis A. Zayas Esq., North Bergen