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Tuesday 5 April 2016
City of Chicago Building Inspector Charged with Demanding Bribe from Property Owner in Exchange for Allowing Renovations Without a PermitRead the Press Release
CHICAGO — A building inspector for the City of Chicago was arrested today for allegedly demanding a $300 bribe from a property owner in exchange for allowing renovation work without a permit.
ROBERTO URIBE, 55, of Chicago, is charged with attempted extortion for soliciting the bribe from an owner of a two-story building in Chicago, according to a criminal complaint and affidavit filed in U.S. District Court. Unbeknownst to Uribe, the building owner was cooperating with federal authorities and had surreptitiously recorded the bribery demand.
In a recorded conversation on Nov. 9, 2015, Uribe allegedly boasted of his ability to shut down the renovation work unless the owner paid him $300. “What’s going to happen is, if we put a stop on it, it’s going to stop you for six months, seven months,” Uribe told the building owner, according to the complaint. “So now, what’s happening now is you’re gonna give me some appreciation, and you’re gonna hurry up and get this done. And that appreciation is gonna be $300. Now how quickly can you get me my money to keep my mouth shut?”
Federal authorities arrested Uribe this morning. He was released on a personal appearance bond after an initial hearing this afternoon before U.S. Magistrate Judge Sheila Finnegan in Chicago. A status hearing is scheduled for April 26, 2016, at 1:15 p.m.
The attempted extortion charge is punishable by up to 20 years in prison and a $250,000 fine.
The arrest was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph M. Ferguson, Inspector General for the City of Chicago.
Uribe is employed as a Building/Construction Inspector for the City of Chicago Department of Buildings, which enforces the permitting and inspection requirements of the Chicago Building Code. According to the complaint, Uribe initially approached workers performing renovations at the building and asked if they had a permit to work on the front window façade. The workers put Uribe in touch with the building owner, who met with Uribe and learned of the bribery solicitation.
Uribe allegedly told the owner that paying a bribe to avoid a permit would save money and benefit both of them. “This here will stop you for six months and it’ll cost you starting at $3,500 for an architect and plans,” Uribe told the owner in a recorded conversation, according to the complaint. “I’m looking out for you, we’re looking out for each other.”
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Sarah Streicker.
Complaint
Christian County Jail Inmate Pleads Guilty to Tax Fraud Conspiracy Behind BarsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an inmate in the Christian County Jail in Ozark, Mo., pleaded guilty in federal court today to his role in a conspiracy to file fraudulent federal income tax returns while he was incarcerated and awaiting sentencing on another federal conviction.
John Dennis Sedersten, 40, who was an inmate in the Christian County Jail at the time of the offense, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a federal information that charges him with leading a conspiracy to defraud the government.
Sedersten committed this offense, his fifth federal conviction, while incarcerated as he awaited sentencing on an earlier federal conviction for escaping from custody. Sedersten had walked away from a halfway house in Springfield, Mo., on Aug. 9, 2014. For that offense, he was sentenced on Thursday, March 31, 2016, to five years in federal prison without parole.
Sedersten was at the halfway house as part of his sentence for aggravated identity theft, to which he pleaded guilty in 2013. He was scheduled to be released about five months later, on Dec. 3, 2014. Sedersten also has prior federal convictions related to a counterfeit check-cashing scheme to which he pleaded guilty in 2010. Sedersten also has a 2002 federal felony conviction for counterfeit checks in the District of Nebraska.
By pleading guilty today, Sedersten admitted that, while he was incarcerated, he conspired with others to prepare and submit false federal income tax returns in order to receive refunds to which the conspirators were not entitled. Sedersten’s co-conspirators, who are not identified in court documents, were not inmates of the jail.
Sedersten admitted that he provided his co-conspirators with specific instructions regarding how to complete and file the false federal income tax returns, listing wages not received, federal income tax withholdings that had not been withheld, and false business expenses. Sedersten also provided his co-conspirators with an Employer Identification Number (EIN) under which they could report the false wages and withholdings. Most of the conspirators claimed to have received wages from JDS Enterprises, which is registered to Sedersten.
All false claims but one were halted by the IRS, and the one refund issued was recovered. Today’s plea agreement lists nine false claims filed by eight individuals. The government believes the total amount of the false claims submitted during the course of this conspiracy was $373,372.
Under federal statutes, Sedersten is subject to a sentence of up to 10 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation, the Springfield, Mo., Police Department and the U.S. Marshals Service.
Checora Sentenced to 60 Months in Federal Prison for Voluntary Manslaughter ConvictionRead the Press Release
SALT LAKE CITY – Grant Hubert Checora, age 23, of Ft. Duchesne, who pleaded guilty to voluntary manslaughter while within Indian Country in January, will serve 60 months in federal prison. Checora will be on supervised release for 36 months once he finishes his prison sentence. U.S. District Judge Dale Kimball imposed the sentence Monday afternoon in U.S. District Court in Salt Lake City.
As a part of a plea agreement reached in the case, Checora admitted that he killed an individual identified as E.C. on June 11, 2014. The victim, an enrolled member of the Ute Indian Tribe, was killed on the Uintah and Ouray Reservation. Checora admitted that he acted recklessly with extreme disregard for human life by killing E.C., while in a sudden quarrel. Checora is also an enrolled member of the Ute Indian Tribe.
The charges stem from a June 11, 2014, incident in the Little Chicago Community of Fort Duchesne. Bureau of Indian Affairs officers responded to a shooting about 2 a.m. A confrontation between two groups preceded the shooting. The case was investigated by the BIA and the FBI.
Checora was initially indicted on murder in the second degree, two counts of discharge of a firearm in furtherance of a crime of violence and attempt to commit murder while in Indian Country. A felony information charging voluntary manslaughter was filed in connection with the plea agreement reached with federal prosecutors. The charges in the indictment were dismissed at the sentencing hearing Monday.
Kimball recommended that Checora receive vocational rehabilitation and participate in the Tribal Reentry Court when he finishes his federal sentence.
Cape Cod Drug Traffickers Arrested and ChargedRead the Press Release
BOSTON – Thirteen individuals have been charged with federal drug trafficking and firearms charges following an investigation led by the Bureau of Alcohol, Tobacco, Firearms & Explosives. Three face state first-degree murder charges following a State Police and Barnstable Police investigation led by District Attorney Michael O’Keefe.
Thirteen Cape Cod residents affiliated with the Nauti street gang and drug trafficking organization were charged with federal drug and firearm violations. One individual was charged in a separate, related complaint with possession of a firearm by a felon. In addition, the Cape and Islands District Attorney’s Office charged three individuals with the murder of Christine Santos Ferreira.
In October 2015, law enforcement initiated an effort to address the rising opiate epidemic in Massachusetts and on Cape Cod in particular. Barnstable and Bristol counties each have an overdose death rate of 16-20 per 100,000 people, which is the highest in Massachusetts and exceeds the national average. As alleged in the federal criminal complaint, Denzel Chisholm and Christopher Wilkins, along with the other charged defendants, are responsible for a significant quantity of the heroin that has been distributed on Cape Cod. The investigation led to the state murder charges against Denzel Chisholm, Shannelle Chisholm and Tyrone Gomes.
According to state and federal criminal complaints, Ferreira was found shot and stabbed numerous times in the east bound rest area between Exits 6 and 7 on Route 6 in Barnstable on Sept. 19, 2015. Investigators believe that Chisholm orchestrated the murder of Ferreira in retaliation for her testimony against a fellow member of the Nauti street gang in 2011.
According to the federal criminal complaint, Chisholm and Wilkins pooled money and purchased heroin from a common source, which they then distributed to their customers who included Oliver Hamilton, Brooke Cotell, Shaun Miller, Tyrone Gomes, Stephanie Davis, Anthony Hall, and Benjamin Roderick, for further distribution.
According to the affidavit, in February 2016, Wilkins and Chisholm began distributing heroin tinted “blue” due to the “cut” put in the heroin, which was later seized from multiple sources on Cape Cod, indicating its widespread distribution. The complaint describes the lengths that Chisholm and Wilkins went to in order to shield themselves from law enforcement detection. Chisholm allegedly employed a girlfriend, Eelyese Mateo, to deliver heroin and store it at her Hyannis home. Chisholm and Wilkins also stored and sold heroin from a stash house operated by Bethanne Hutchings. On March 12, 2016, Chisholm left Hutchings a sample of heroin at her home for her to try. That night, Hutchings overdosed, was found unresponsive by local authorities, and was administered Narcan which ultimately saved her life.
In addition to heroin trafficking, it is further alleged that Wilkins, Chisholm and their co-conspirators possessed and used firearms. In March 2016, investigators intercepted telephone calls in which Benjamin Roderick, a heroin customer of Wilkins, offered to trade a .38 caliber firearm to Wilkins for 10 grams of heroin. Wilkins agreed to the deal, but just before they were to meet, law enforcement officers stopped Roderick’s vehicle and recovered the firearm. In a related complaint, Matthew Monroe was charged with possession of a firearm by a felon after he sold an Uzi semi-automatic rifle to a cooperating witness in a Hyannis hotel room.
The following defendants were charged in a federal criminal complaint with:
Conspiracy to distribute and possess with intent to distribute heroin:
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Denzel Chisholm, aka “Den” and “Din,” 26, of Barnstable;
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Christopher Wilkins, aka “Degree” and “Half Circle,” 29, of Hyannis;
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Tyrone Gomes, 31, of Hyannis;
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Eelyese Mateo, aka “El Chapo,” 20, of Hyannis;
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Bethanne Hutchings, 50, of Hyannis;
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Oliver Hamilton, 26, of Hyannis;
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Stephanie Davis, 21, of Harwich; and
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Anthony Hall, aka “Nova,” 31, of Sandwich.
Possession of heroin with the intent to distribute:
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Brooke Cotell, 22, of Hyannis;
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Shaun Miller, aka “Shizz” and “Shizz Miller,” 31, of Hyannis; and
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Jason Mello, 27, of Barnstable.
Conspiracy to possess a firearm in furtherance of a drug trafficking offense:
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Benjamin Roderick, aka “B Dot,” 26, of Hyannis; and
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Christopher Wilkins.
The following defendant was charged in a related federal criminal complaint with:
Possession of a firearm by a felon:
1. Matthew Monroe, 25, of Barnstable.
The defendants will appear in U.S. District Court in Boston. Gomes and Chisholm will appear in federal court after first being arranged and charged with related murder charges in Massachusetts state court. Gomes was previously in custody.
The charge of conspiracy to distribute and possess with intent to distribute heroin and possession with the intent to distribute heroin provides a sentence of no greater than 20 years in prison, up to a lifetime of supervised release and a fine of $1,000,000. The charge of conspiracy to possess a firearm in furtherance of a drug trafficking offense provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The Cape and Islands District Attorney’s Office charged the following defendants in a criminal complaint with:
First degree murder:
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Denzel Chisholm;
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Shannelle Chisholm, 26, of Mashpee; and
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Tyrone Gomes
United States Attorney Carmen M. Ortiz; Cape and Islands District Attorney Michael O’Keefe; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, 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; Barnstable County Sheriff James M. Cummings; Bristol County Sheriff Thomas Hodgson; Barnstable Police Chief Paul MacDonald; Yarmouth Police Chief Frank Frederickson; and U.S. Marshal John Gibbon for the District of Massachusetts made the announcement today. The federal cases are being prosecuted by Assistant U.S. Attorney Eric Rosen of Ortiz’s Narcotics and Money Laundering Unit. The state cases are being prosecuted by the Cape & Islands District Attorney’s Office.The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
For information on the state charges, please contact First Assistant District Attorney Michael A. Trudeau, First Assistant District Attorney Brian S. Glenny or Assistant District Attorney Tara L. Miltimore at the Cape & Islands District Attorney’s Office.
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California Woman Pleads Guilty to Wire Fraud and Aggravated Identity TheftRead the Press Release
BOISE - Jassmine Pettaway, 27, of Inglewood, California, pleaded guilty today to wire fraud and aggravated identity theft, U.S. Attorney Wendy J. Olson announced. Pettaway was indicted by a federal grand jury in Boise on October 14, 2015.
According to the court proceedings, Pettaway admitted that she agreed to travel to Idaho for the purpose of making fraudulent purchases. Pettaway admitted that she and her co-defendant made at least eight fraudulent purchases from at least four different retail stores, in the amount of at least $20,225.86. Two of those purchases were made at the Nike Factory Store in Meridian for $8,087.95 and $10,116.59. Law enforcement recovered a fake Michigan driver’s license, at least 19 counterfeit credit cards, and at least 45 gift cards.
Wire fraud is punishable by up to 20 years in prison, a maximum fine of $250,000.00, and up to three years of supervised release. Aggravated identity theft is punishable by a mandatory minimum term of imprisonment of two years, a term of supervised release of not more than one year, and a fine up to $250,000.
Sentencing is set for June 15, 2016, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise.
The case was investigated by the Meridian Police Department, the Boise Police Department, and the U.S. Secret Service (USSS).
California CPA Sentenced to 57 Months in Prison for Defrauding New Jersey Religious Center, California Non-Profit Out of More Than $4 MillionRead the Press Release
NEWARK, N.J. – A California CPA was sentenced today to 57 months in prison for abusing his positions at a worship center in New Jersey and a non-profit in California to steal more than $4 million, U.S. Attorney Paul J. Fishman announced.
Donald Gridiron, 51, of Pomona, California, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of wire fraud and one count of filing a false tax return. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
A religious facility located in Rahway, New Jersey, hired Gridiron based, in part, on his connections with individuals in the religious community as well as his standing within that community. The religious facility agreed to pay Gridiron a monthly salary and reimburse him for reasonable expenses related to his work. In addition, Gridiron was the treasurer for a non-profit entity registered in California.
Gridiron used his employment with the worship center and his status with the non-profit to illegally syphon money without their consent or authorization. In total, Gridiron transferred more than $4 million to accounts he controlled. Gridiron then used the funds for his own use, including mortgage payments, luxury car payments and gambling expenses. Gridiron also failed to report this income on his tax returns, including $950,000 he stole during the 2011 tax year.
In addition to the prison term, Judge McNulty sentenced Gridiron to three years of supervised release and ordered him to pay restitution of approximately $5.16 million ($4,815,964 to the worship center, including $200,000 to insurers who have paid the worship center; and $348,450 to the foundation.)
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and law enforcement officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Candace Hom Esq., Newark, New Jersey
CEO of Venture Capital Firm Pleads Guilty to Fraud ChargeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that JOSEPH McANDREW, 74, of Pawcatuck, pleaded guilty today before U.S. District Judge Victor A. Bolden in Bridgeport to one count of wire fraud stemming from his misuse of client funds.
According to court documents and statements made in court, McANDREW was the Chief Executive Officer and Managing Partner of Wall Street Venture Capital Ltd. (“WSVC”), which offered lending and brokerage services to prospective clients who were seeking to raise money for business ventures. McANDREW required each client who retained WSVC’s services to pay upfront fees of approximately $30,000, which he falsely represented would be used solely for expenses incurred in raising money on the clients’ behalf. In truth, McANDREW used the upfront fees he received from WSVC’s clients for personal expenditures, including to purchase stocks and pay personal credit card charges.
In total, McANDREW stole $317,628 from clients of WSVC who believed their money would be used to secure financing on their behalf. None of these clients ever received financing through WSVC.
Wire fraud carries a maximum term of imprisonment of 20 years. A sentencing date has not been scheduled.
McANDREW is released on a $25,000 bond.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Avi M. Perry and Christopher W. Schmeisser.
Bank Employee Pleads Guilty to $213,000 TheftRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., woman pleaded guilty in federal court today to embezzling more than $213,000 from Bank of America.
Elisha Nicole Araiza, 35, of Kansas City, pleaded guilty before U.S. District Judge Dean Whipple to embezzlement by a bank employee.
Araiza was employed by Bank of America on May 17, 2004, and worked as a financial analyst in the Special Assets Group on the Small Business Accounts Team. Her duties included contacting small business borrowers to arrange payments on past due loans, and in that regard she had authority to negotiate settlements, create payment plans, and forgive portions of the debts owed.
Araiza admitted that she had been experiencing overdrafts in her personal bank account for about a year when, in July 2011, she deposited a bank customer’s money order into her own account. Thereafter, the diversion of client checks to Araiza’s personal accounts continued until March 19, 2015, at which point the embezzlement was detected by Bank of America.
Bank of America found 121 diverted loan payment checks totaling $213,090 deposited into Araiza’s personal account.
Under federal statutes, Araiza is subject to a sentence of up to 30 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the U.S. Secret Service.
Attorney General Loretta E. Lynch Statement on Planned Departure of Acting Associate Attorney General Stuart F. DeleryRead the Press Release
Attorney General Loretta E. Lynch released the following statement Tuesday on the departure, effective April 14, of Acting Associate Attorney General Stuart F. Delery:
“For over seven years – since the very first day of the Obama Administration – Stuart Delery has been an indispensable source of wisdom, leadership and inspiration at the Department of Justice, working relentlessly to make the ideals of equal opportunity and equal justice a reality for all. He has proven himself a superlative lawyer and a dynamic force for progress, both within the department and far beyond it. Stuart was involved in many of the department’s most consequential cases and programs, and he invariably brought both skill and passion to a wide range of critical issues.
“Across all of his efforts – from launching the department’s Servicemembers and Veterans Initiative, to implementing the Supreme Court’s landmark ruling in United States v. Windsor, to leading unprecedented actions to address financial fraud and consumer safety – Stuart has been dedicated, above all, to making a meaningful difference in the lives of Americans who need our help and deserve our attention. We can all take pride in the many ways he has helped to make this country more fair, more equal and more just. I am grateful for his distinguished record of service, and I wish him the very best in the next steps of his already illustrious career.”
Anchorage Man sentenced to 126 months in prison for armed robbery crimeRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that an Anchorage man has been sentenced by U.S. District Judge Ralph R. Beistline to serve 126 months in prison for his role in robbing a local business with a stolen assault rifle.
Miguel J. Batista, 28, previously pled guilty to interference with commerce by robbery and to brandishing and carrying a firearm during a crime of violence. As part of his guilty plea, Batista admitted that he twice stole assault rifles from the Eagle River Walmart, ultimately stealing nine total rifles. He then used one of those assault rifles to rob Party Time Liquor Store in Anchorage.
According to Special Assistant U.S. Attorney Erin Bennett, who prosecuted the case, Batista pointed the assault rifle at several people inside the store and made a cashier give him the money from the registers. After leaving the store, he went around to the back of the building and pointed the gun at another employee. He made the employee hand over his cell phone and car keys and then drove away in the employee’s car.
During the sentencing hearing, the government noted that Batista had a great impact on this community by unleashing a number of assault rifles, stealing from businesses, and terrifying six individuals by pointing his assault rifle at them.
Judge Beistline stated that Batista had made his own problems the problems of this community. He also noted the terrible impact that Batista had on the life of the cashier by robbing her at gunpoint. In pronouncing the sentence, Judge Beistline focused on the seriousness of the offenses but also spoke of the need for people like Batista – an admitted drug user – to get treatment for their addiction.
U.S. Attorney Loeffler commended the work of the Bureau of Alcohol, Tobacco, and Firearms (ATF) and the Anchorage Police Department (APD), who investigated the case. Since 2007, the Municipality of Anchorage has partnered with the U.S. Attorney’s Office to address drug and violent crime issues within the city. Ms. Bennett is a municipal prosecutor assigned to prosecute drug and violent crime cases in federal court.
21 Defendants Charged with Fraudulently Enabling Hundreds of Foreign Nationals to Remain in the United States Through Fake ‘Pay to Stay’ New Jersey CollegeRead the Press Release
“College” Created as Part of Homeland Security Investigations Sting Operation
Twenty-one brokers, recruiters and employers from across the United States who allegedly conspired with more than 1,000 foreign nationals to fraudulently maintain student visas and obtain foreign worker visas through a “pay to stay” New Jersey college were arrested this morning by federal agents, U.S. Attorney Paul J. Fishman for the District of New Jersey announced.
The defendants (see chart below) were arrested in New Jersey and Washington by special agents with U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) and charged in 14 complaints with conspiracy to commit visa fraud, conspiracy to harbor aliens for profit and other offenses. All the defendants, with the exception of Yanjun Lin aka Aimee Lin, 25, of Flushing, New York, will appear today before U.S. Magistrate Judge Steven C. Mannion of the District of New Jersey in Newark, New Jersey, federal court. Lin will appear before U.S. Magistrate Judge Karen L. Strombom in the Western District of Washington federal court.
“‘Pay to Stay’ schemes not only damage our perception of legitimate student and foreign worker visa programs, they also pose a very real threat to national security,” U.S. Attorney Fishman said. “Today’s arrests, which were made possible by the great undercover work of our law enforcement partners, stopped 21 brokers, recruiters and employers across multiple states who recklessly exploited our immigration system for financial gain.”
“While the United States fully supports international education, we will vigorously investigate those who seek to exploit the U.S. immigration system,” said Director Sarah R. Saldaña for ICE. “As a result of this operation, HSI special agents have successfully identified and closed a gap in the student visa system and have arrested 21 individuals alleged to be amongst the system’s most egregious violators.”
“Individuals engaged in schemes that would undermine the remarkable educational opportunities afforded to international students represent an affront to those who play by the rules,” said Special Agent in Charge Terence S. Opiola for ICE Homeland Security Investigations. “These unscrupulous individuals undermine the integrity of the immigration system. Our special agents are committed to addressing, identifying fraud in order to better protect the system as a whole.”
According to the complaints unsealed today and statements made in court:
The defendants, many of whom operated recruiting companies for purported international students, were arrested for their involvement in an alleged scheme to enroll foreign nationals as students in the University of Northern New Jersey, a purported for-profit college located in Cranford, New Jersey (UNNJ). Unbeknownst to the defendants and the foreign nationals they conspired with, however, the UNNJ was created in September 2013 by HSI federal agents.
Through the UNNJ, undercover HSI agents investigated criminal activities associated with the Student and Exchange Visitor Program (SEVP), including, but not limited to, student visa fraud and the harboring of aliens for profit. The UNNJ was not staffed with instructors or educators, had no curriculum and conducted no actual classes or education activities. The UNNJ operated solely as a storefront location with small offices staffed by federal agents posing as school administrators.
UNNJ represented itself as a school that, among other things, was authorized to issue a document known as a “Certificate of Eligibility for Nonimmigrant (F-1) Student Status - for Academic and Language Students,” commonly referred to as a Form I-20. This document, which certifies that a foreign national has been accepted to a school and would be a full-time student, typically enables legitimate foreign students to obtain an F-1 student visa. The F-1 student visa allows a foreign student to enter and/or remain in the United States while the student makes normal progress toward the completion of a full course of study in an SEVP accredited institution.
During the investigation, HSI special agents identified hundreds of foreign nationals, primarily from China and India, who previously entered the U.S. on F-1 non-immigrant student visas to attend other SEVP- accredited schools. Through various recruiting companies and business entities located in New Jersey, California, Illinois, New York and Virginia, the defendants then enabled approximately 1,076 of these foreign individuals – all of whom were willing participants in the scheme – to fraudulently maintain their nonimmigrant status in the U.S. on the false pretense that they continued to participate in full courses of study at the UNNJ.
Acting as recruiters, the defendants solicited the involvement of UNNJ administrators to participate in the scheme. During the course of their dealings with undercover agents, the defendants fully acknowledged that none of their foreign national clients would attend any actual courses, earn actual credits, or make academic progress toward an actual degree in a particular field of study. Rather, the defendants facilitated the enrollment of their foreign national clients in UNNJ to fraudulently maintain student visa status, in exchange for kickbacks, or “commissions.” The defendants also facilitated the creation of hundreds of false student records, including transcripts, attendance records and diplomas, which were purchased by their foreign national conspirators for the purpose of deceiving immigration authorities.
In other instances, the defendants used UNNJ to fraudulently obtain work authorization and work visas for hundreds of their clients. By obtaining this authorization, a number of defendants were able to outsource their foreign national clients as full-time employees with numerous U.S.-based corporations, also in exchange for commission fees. Other defendants devised phony IT projects that were purportedly to occur at the school. These defendants then created and caused to be created false contracts, employment verification letters, transcripts and other documents. The defendants then paid the undercover agents thousands of dollars to put the school’s letterhead on the sham documents, to sign the documents as school administrators and to otherwise go along with the scheme.
All of these bogus documents created the illusion that prospective foreign workers would be working at the school in some IT capacity or project. The defendants then used these fictitious documents fraudulently to obtain labor certifications issued by the U.S. Secretary of Labor and then ultimately to petition the U.S. government to obtain H1-B visas for non-immigrants. These fictitious documents were then submitted to the U.S. Customs and Immigration Services (USCIS). In the vast majority of circumstances, the foreign worker visas were not issued because USCIS was advised of the ongoing undercover operation.
In addition, starting today, HSI Newark is coordinating with the ICE Counterterrorism and Criminal Exploitation Unit (CTCEU) and the SEVP to terminate the nonimmigrant student status for the foreign nationals associated with UNNJ, and if applicable, administratively arrest and place them into removal proceedings.
The chart below outlines the charges for each defendant. The charges of conspiracy to commit visa fraud and making a false statement each carry a maximum potential penalty of five years in prison and a $250,000 fine. The charges of conspiracy to harbor aliens for profit and H1-B Visa fraud each carry a maximum penalty of 10 years in prison and $250,000 fine.
The charges and allegations contained in the complaints are merely accusations and the defendants are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement, under the leadership of Director Saldaña; HSI Newark, under the leadership of Special Agent in Charge Opiola; U.S. Immigration and Customs Enforcement, Counterterrorism and Criminal Exploitation Unit, under the leadership of Unit Chief Robert Soria; U.S. Citizenship and Immigration Services, Fraud Detection and National Security Section, under the leadership of Associate Director Matthew Emrich; the Student and Exchange Visitor Program, under the leadership of Deputy Assistant Director Louis M. Farrell; U.S. Citizenship and Immigration Services, Vermont Service Center, Security Fraud Division, under the leadership of Associate Center Director Bradley J. Brouillette; U.S. Department of State, Bureau of Consular Affairs, Office of Fraud Prevention Programs, under the leadership of Director Josh Glazeroff; and the FBI, Joint Terrorism Task Force, under the leadership of Timothy Gallagher in Newark, for their contributions to the investigation.
He also thanked the Accrediting Commission of Career Schools and Colleges (ACCSC), under the leadership of Executive Director Michale S. McComis, and the New Jersey Office of Higher Education, under the leadership of Secretary of Higher Education Rochelle R. Hendricks, for their assistance. In addition, U.S. Attorney Fishman thanked the New Jersey Motor Vehicle Commission and the New York State Department of Motor Vehicles, as well as the U.S. Attorney’s Offices for the Central District of California, Eastern District of New York, Eastern District of Virginia, Southern District of New York, Central District of Illinois, Peoria Division, and the Northern District of Georgia for their help.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit and Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Defendant Name
Age
Residence
Charges
Jun Shen aka Jeanette Shen
32
Levittown, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jiaming Wang aka Celine Wang,
34
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Philip Junlin Li
33
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Zitong Wen aka Kate Wen
27
Rowland Heights, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Chaun Kit Yuen aka Alvin Yuen
24
Rowland Heights, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Ting Zue aka Tiffany Xue
28
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Yanjun Lin aka Aimee Lin
25
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Zheng Zhang aka Vicky Zhang
26
New York, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Xue Yong Liu aka Jack Liu
29
New York, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Minglu Li aka Vivian Lee
36
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jason Li aka Jason Liu aka Fen Lee
43
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Tajesh Kodali
44
Edison, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jyoti Patel
34
Franklin Park, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Shahjadi M. Parvin aka Sarah Patel
54
Hackensack, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Narendra Singh Plaha
44
Hillsborough, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Sanjeev Sukhija
35
North Brunswick, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Harpreet Sachdeva
26
Somerset, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Avinash Shankar
35
Bloomington, Illinois
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Karthik Nimmala
32
Smyrna, Georgia
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Govardhan Dyavarashetty aka Vardhan Shetty
35
Avenel, New Jersey
– H1-B Visa fraud
– False statements
– Conspiracy to harbor aliens for profit
Syed Qasim Abbas aka Qasim Reza aka Nayyer
41
Brooklyn, New York
– H1-B Visa fraud
– False statements
– Conspiracy to harbor aliens for profit
21 Defendants Charged with Fraudulently Enabling Hundreds of Foreign Nationals to Remain in the United States Through Fake ‘Pay to Stay’ New Jersey CollegeRead the Press Release
“College” created as part of Homeland Security Investigations sting operation
NEWARK, N.J. - Twenty-one brokers, recruiters, and employers from across the United States who allegedly conspired with more than 1,000 foreign nationals to fraudulently maintain student visas and obtain foreign worker visas through a “pay to stay” New Jersey college were arrested this morning by federal agents, New Jersey U.S. Attorney Paul J. Fishman announced.
The defendants (see chart below) were arrested in New Jersey and Washington by special agents with U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) and charged in 14 complaints with conspiracy to commit visa fraud, conspiracy to harbor aliens for profit, and other offenses. All the defendants, with the exception of Yanjun Lin, will appear today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Lin will appear before U.S. Magistrate Judge Karen L. Strombom in the Western District of Washington federal court.
“‘Pay to Stay’ schemes not only damage our perception of legitimate student and foreign worker visa programs, they also pose a very real threat to national security,” U.S. Attorney Fishman said. “Today’s arrests, which were made possible by the great undercover work of our law enforcement partners, stopped 21 brokers, recruiters and employers across multiple states who recklessly exploited our immigration system for financial gain.”
“While the United States fully supports international education, we will vigorously investigate those who seek to exploit the U.S. immigration system,” said ICE Director Sarah R. Saldaña. “As a result of this operation, HSI special agents have successfully identified and shut down multiple operations which have abused the student visa program.”
“Individuals engaged in schemes that would undermine the remarkable educational opportunities afforded to international students represent an affront to those who play by the rules. These unscrupulous individuals undermine the integrity of the immigration system,” said ICE Homeland Security Investigations Special Agent in Charge Terence S. Opiola. “Our special agents are committed to addressing, identifying fraud in order to better protect the system as a whole.”
According to the complaints unsealed today and statements made in court:
The defendants, many of whom operated recruiting companies for purported international students, were arrested for their involvement in an alleged scheme to enroll foreign nationals as students in the University of Northern New Jersey, a purported for-profit college located in Cranford, New Jersey (UNNJ). Unbeknownst to the defendants and the foreign nationals they conspired with, however, the UNNJ was created in September 2013 by HSI federal agents.
Through the UNNJ, undercover HSI agents investigated criminal activities associated with the Student and Exchange Visitor Program (SEVP), including, but not limited to, student visa fraud and the harboring of aliens for profit. The UNNJ was not staffed with instructors or educators, had no curriculum, and conducted no actual classes or education activities. The UNNJ operated solely as a storefront location with small offices staffed by federal agents posing as school administrators.
UNNJ represented itself as a school that, among other things, was authorized to issue a document known as a “Certificate of Eligibility for Nonimmigrant (F-1) Student Status - for Academic and Language Students,” commonly referred to as a Form I-20. This document, which certifies that a foreign national has been accepted to a school and would be a full-time student, typically enables legitimate foreign students to obtain an F-1 student visa. The F-1 student visa allows a foreign student to enter and/or remain in the United States while the student makes normal progress toward the completion of a full course of study in an SEVP accredited institution.
During the investigation, HSI special agents identified hundreds of foreign nationals, primarily from China and India, who previously entered the U.S. on F-1 non-immigrant student visas to attend other SEVP- accredited schools. Through various recruiting companies and business entities located in New Jersey, California, Illinois, New York, and Virginia, the defendants then enabled approximately 1,076 of these foreign individuals – all of whom were willing participants in the scheme – to fraudulently maintain their nonimmigrant status in the U.S. on the false pretense that they continued to participate in full courses of study at the UNNJ.
Acting as recruiters, the defendants solicited the involvement of UNNJ administrators to participate in the scheme. During the course of their dealings with undercover agents, the defendants fully acknowledged that none of their foreign national clients would attend any actual courses, earn actual credits, or make academic progress toward an actual degree in a particular field of study. Rather, the defendants facilitated the enrollment of their foreign national clients in UNNJ to fraudulently maintain student visa status, in exchange for kickbacks, or “commissions.” The defendants also facilitated the creation of hundreds of false student records, including transcripts, attendance records, and diplomas, which were purchased by their foreign national conspirators for the purpose of deceiving immigration authorities.
In other instances, the defendants used UNNJ to fraudulently obtain work authorization and work visas for hundreds of their clients. By obtaining this authorization, a number of defendants were able to outsource their foreign national clients as full-time employees with numerous U.S.-based corporations, also in exchange for commission fees. Other defendants devised phony IT projects that were purportedly to occur at the school. These defendants then created and caused to be created false contracts, employment verification letters, transcripts, and other documents. The defendants then paid the undercover agents thousands of dollars to put the school’s letterhead on the sham documents, to sign the documents as school administrators, and to otherwise go along with the scheme.
All of these bogus documents created the illusion that prospective foreign workers would be working at the school in some IT capacity or project. The defendants then used these fictitious documents fraudulently to obtain labor certifications issued by the U.S. Secretary of Labor and then ultimately to petition the U.S. government to obtain H1-B visas for non-immigrants. These fictitious documents were then submitted to the U.S. Customs and Immigration Services (USCIS). In the vast majority of circumstances, the foreign worker visas were not issued because USCIS was advised of the ongoing undercover operation.
In addition, starting today, HSI Newark is coordinating with the ICE Counterterrorism and Criminal Exploitation Unit (CTCEU) and the SEVP to terminate the nonimmigrant student status for the foreign nationals associated with UNNJ, and if applicable, administratively arrest and place them into removal proceedings.
The chart below outlines the charges for each defendant. The charges of conspiracy to commit visa fraud and making a false statement each carry a maximum potential penalty of five years in prison and a $250,000 fine. The charges of conspiracy to harbor aliens for profit and H1-B Visa fraud each carry a maximum penalty of 10 years in prison and $250,000 fine.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement, under the leadership of Director Sarah R. Saldaña; HSI Newark, under the leadership of Special Agent in Charge Terence S. Opiola; U.S. Immigration and Customs Enforcement, Counterterrorism and Criminal Exploitation Unit, under the leadership of Unit Chief Robert Soria; U.S. Citizenship and Immigration Services, Fraud Detection and National Security Section, under the leadership of Associate Director Matthew Emrich; the Student and Exchange Visitor Program, under the leadership of Deputy Assistant Director Louis M. Farrell; U.S. Citizenship and Immigration Services, Vermont Service Center, Security Fraud Division, under the leadership of Associate Center Director Bradley J. Brouillette; U.S. Department of State, Bureau of Consular Affairs, Office of Fraud Prevention Programs, under the leadership of Director Josh Glazeroff; and the FBI, Joint Terrorism Task Force, under the leadership of Timothy Gallagher in Newark, for their contributions to the investigation.
He also thanked the Accrediting Commission of Career Schools and Colleges (ACCSC), under the leadership of Executive Director Michale S. McComis, and the N.J. Office of Higher Education, under the leadership of Secretary of Higher Education Rochelle R. Hendricks, for their assistance. In addition, U.S. Attorney Fishman thanked the N.J. Motor Vehicle Commission and the New York State Department of Motor Vehicles, as well as the U.S. Attorney’s Offices for the Central District of California, Eastern District of New York, Eastern District of Virginia, Southern District of New York, Central District of Illinois, Peoria Division, and the Northern District of Georgia for their help.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Defendant Name
Age
Residence
Charges
Jun Shen, a/k/a “Jeanette Shen”
32
Levittown, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jiaming Wang, a/k/a “Celine Wang,”
34
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Philip Junlin Li
33
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Zitong Wen, a/k/a “Kate Wen”
27
Rowland Heights, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Chaun Kit Yuen, a/k/a “Alvin Yuen”
24
Rowland Heights, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Ting Zue, a/k/a “Tiffany Xue”
28
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Yanjun Lin, a/k/a “Aimee Lin”
25
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Zheng Zhang a/k/a “Vicky Zhang”
26
New York, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Xue Yong Liu a/k/a “Jack Liu”
29
New York, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Minglu Li, a/k/a “Vivian Lee”
36
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jason Li, a/k/a “Jason Liu,” “Fen Lee”
43
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Tajesh Kodali
44
Edison, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jyoti Patel
34
Franklin Park, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Shahjadi M. Parvin, a/k/a “Sarah Patel”
54
Hackensack, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Narendra Singh Plaha
44
Hillsborough, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Sanjeev Sukhija
35
North Brunswick, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Harpreet Sachdeva
26
Somerset, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Avinash Shankar
35
Bloomington, Illinois
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Karthik Nimmala
32
Smyrna, Georgia
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Govardhan Dyavarashetty, a/k/a “Vardhan Shetty”
35
Avenel, New Jersey
– H1-B Visa fraud
– False statements
– Conspiracy to harbor aliens for profit
Syed Qasim Abbas a/k/a “Qasim Reza,” and “Nayyer”
41
Brooklyn, New York
– H1-B Visa fraud
– False statements
– Conspiracy to harbor aliens for profit
Monday 4 April 2016
Wellesley Executive Sentenced to Prison for Million-Dollar EmbezzlementRead the Press Release
BOSTON – The former controller of a Cambridge-based technology company was sentenced in U.S. District Court today for embezzling $1 million from the company.
Andy Kim, 44, of Wellesley, was sentenced by U.S. District Court Judge F. Dennis Saylor, IV to 18 months in prison and year of supervised release. In December 2015, Kim pleaded guilty to two counts of wire fraud.
Kim worked at the company from 2004 until he was fired in July 2015 after the discovery of the theft. Kim stole $500,000 from the company on two separate occasions, once in July 2014 and again in June 2015. On both occasions, Kim had access to the company’s checking account. He disguised the transactions as transfers of capital to the company’s owner, fabricated records that purported to document legitimate capital transfers, and then planted those records in the company’s files.
On both occasions, Kim wired the money to a bank account belonging to a Massachusetts real-estate investment company. After the July 2014 transfer, the real estate company forwarded the funds to Kim’s personal bank account. In the second fraudulent transfer, Kim arranged for the money to be wired to the real estate company, and then invested the funds on his behalf.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. This case was prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
Webb City Man Sentenced for Stolen FireworksRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Webb City, Mo., man was sentenced in federal court today for stealing commercial fireworks.
Stephen Grimmett, 51, of Webb City, was sentenced by U.S. District Judge Beth Phillips to five years in federal prison without parole. The court also ordered Grimmett to pay $498 in restitution.
On April 17, 2015, Grimmett pleaded guilty to stealing explosives and to being a felon in possession of explosives. Grimmett stole more than 250 pounds of explosive materials – commercial grade fireworks – from Liberty Pyrotechnics, LLC, in June 2014.
Grimmett admitted that he and co-defendant Christopher Ransom, 41, of Alba, Mo., used a power drill to remove the screws from the sheet metal paneling to gain access to the building where Libery Pyrotechnics stored fireworks. Grimmett and Ransom loaded the fireworks into Ransom’s mini-van and drove to a gas station at Range Line Road and Zora in Joplin, Mo., where they split up the fireworks and parted ways.
According to court documents, Grimmett attempted to sell these items to others who would lack the proper training, skill, or facilities, to safely store and utilize these very dangerous items.
Grimmett has prior felony convictions for possession of a controlled substance and possession of a chemical with intent to manufacture a controlled substance. These felony convictions make it illegal for him to possess any explosive materials.
Ransom has also pleaded guilty and was sentenced on Sept. 9, 2015, to time served.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Newton County, Mo., Sheriff’s Department.
United States to Auction James “Whitey” Bulger PossessionsRead the Press Release
BOSTON – The U.S. Marshals Service will auction items belonging to James “Whitey” Bulger and Catherine Greig on June 24-26th at the Boston Convention and Exhibition Center. U.S. Marshal John Gibbons and U.S. Attorney Carmen Ortiz made the announcement today.
“The U.S. Marshals Service will execute the order signed by Judge Casper. Our goal is to maximize the proceeds of the auction to compensate the victims of Bulger’s brutal crimes,” said Marshal Gibbons.
“We are pleased that we will soon be auctioning a significant portion of Bulger's and Greig's personal possessions, which will mark another milestone in the course of their successful prosecutions,” said U.S. Attorney Carmen M. Ortiz. “Although the proceeds we obtain will never be enough to make up for the harm the victims and their families have suffered, it is our hope that this process and the restitution we will be able to distribute as a result of the auction will give some relief to the victims and families in this case."
Pursuant to a court order signed today by U.S. District Court Judge Denise J. Casper, the U.S. Marshals Service will be conducting a sale of the forfeited items of James Bulger and Catherine Greig.
The U.S. Marshals entered into an agreement with the Boston Convention and Exhibition Center to host the auction, which will include items seized from the couple’s Santa Monica apartment, and other possessions in the government’s custody. The auction will be open to the public and the items will be available simultaneously through an online auction. A list of auction items will be made available at a later date.
Marshal Gibbons, U.S. Attorney Ortiz and the U.S. Marshals Service Asset Forfeiture Division made the announcement today.
U.S. Customs and Border Protection Officers Arrest Atlanta Man Attempting to Smuggle Marijuana to the Virgin IslandsRead the Press Release
St. Thomas, USVI – Bert Donadelle, Jr., 25, made his initial appearance today before U.S. Magistrate Judge Ruth Miller after being charged in a complaint with possession with intent to distribute marijuana, United States Attorney Ronald W. Sharpe announced. Donadelle was released on an unsecured $10,000 bond and to the third-party custody of his mother pending further proceedings.
According to the complaint, on Sunday, April 3, 2016, at the Cyril E. King Airport, St. Thomas, Virgin Islands, a U.S. Customs and Border Protection (CBP) K-9 detected narcotics in a checked bag belonging to Donadelle, who had arrived on a Delta Airlines flight from Atlanta. CBP officers examined the contents of the bag, resealed it, and placed it on the carousel for retrieval. Donadelle retrieved the bag, and a second checked bag bearing his name, from the baggage claim area. CBP officers seized and field tested a total of approximately eight kilograms of marijuana from Donadelle’s bags.
Under federal law if convicted of possession with intent to distribute marijuana, Bailey faces a maximum of five years in prison and a $250,000 fine. This case is being investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). It is being prosecuted by Assistant United States Attorney Kim L. Chisholm.
United States Attorney Sharpe reminds the public that a Complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
Two Charleston men plead guilty to Federal drug trafficking crimesRead the Press Release
CHARLESTON, W.Va. – Two Charleston drug dealers entered guilty pleas today in federal court, announced Acting United States Attorney Carol Casto. Dushawn D. Williams, 39, pleaded guilty to distribution of crack. In a separate prosecution, Alan Alexander Clark, 33, pleaded guilty to distribution of heroin.
Williams admitted that on July 24, 2015, he sold approximately an ounce of crack to a confidential informant working with law enforcement in exchange for $1,600. The drug deal occurred in the parking lot of the Dollar General store in Cross Lanes. Williams faces up to 20 years in federal prison and a $1 million fine when he is sentenced on July 13, 2016.
In a separate drug prosecution, Clark admitted that on July 29, 2015, he sold approximately half a gram of heroin to a confidential informant. The drug deal took place at the Rite Aid Pharmacy at 406 Washington Street, West, in Charleston. Clark faces up to 20 years in federal prison and a $1 million fine when he is sentenced on July 5, 2016.
The investigations of Williams and Clark were conducted by the Metropolitan Drug Enforcement Network Team. Assistant United States Attorney John J. Frail is in charge of the prosecution of Williams. The Williams plea hearing was held before United States District Judge Thomas E. Johnston. Assistant United States Attorney Clint Carte is handling the prosecution of Clark. The Clark plea hearing was held before United States District Judge John T. Copenhaver, Jr.
These cases were prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat illegal drugs in our communities, including the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and other drugs in communities across the Southern District.
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Tucson Tax Preparer Sentenced to 21 Months in Prison for Submitting 90 Returns Seeking over $651,000 in False CreditsRead the Press Release
TUCSON, Ariz. – Today, Jose Jesus Gonzalez, 48, of Tucson, Ariz., was sentenced by U.S. District Judge James A. Soto to 21 months of imprisonment. Gonzalez previously had pleaded guilty to willfully filing a false individual income tax return. He was ordered to pay over $255,000 in restitution and separately was ordered to pay a $17,488 fine.
Gonzalez doing business as Gonzalez Insurance and Tax Services, operated offices in Tucson from 2004 through 2009 and in Phoenix from 2009 through 2010. During the 2008 tax year, Gonzalez e-filed 90 income tax returns seeking a total of $651,500 in false claims for the First Time Home Buyer Credit. The Internal Revenue Service disallowed a portion of the claims but paid $620,000 in false claims to taxpayers which the IRS is attempting to recover.
The investigation in this case was conducted by the Internal Revenue Service - Criminal Investigation. The prosecution was handled by Sandra M. Hansen, Assistant U.S. Attorney, District of Arizona, Tucson.
CASE NUMBER: CR-13-00575
RELEASE NUMBER: 2016-028_Gonzalez
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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.
Tolerance and Acceptance in the Heartland: An Examination of History’s LessonsRead the Press Release
CEDAR RAPIDS, IA – Today the United States Attorney’s Office traveled back in history to examine a time when Iowans demonstrated unfettered tolerance and acceptance by inviting refugees fleeing Nazi-occupied Europe during World War II to find a safe haven on the prairies. The program was held at the Federal Courthouse and was offered to encourage a reawakening of that tolerance and acceptance in order to overcome the disruption to our society that can be caused by our holding on to prejudices and fears.
United States Attorney Kevin W. Techau invited the Director of the non-profit organization TRACES Center for History and Culture, Dr. Michael Luick-Thrams, to share his research into refugees fleeing war-torn Europe who found safety in the American heartland and to mark its relevance to events in the world today.
Techau noted that, “The lessons history teaches us concerning the tolerance and acceptance practiced nearly 70 years ago is equally relevant today. Intolerance directed toward those who practice different religions and have a different skin color or sexual orientation is contrary to our strong and long-held cultural heritage of welcoming immigrants and of actively recognizing equality among people.”
An Iowa native, author and historian, Dr. Luick-Thrams spends part of each year in Dresden, Germany, overseeing another non-profit history and cultural center. He shared the story of the Scattergood Hostel located near West Branch, Iowa, during the war years (1939-1943). During this time Iowans welcomed 185 European refugees escaping Hitler’s reach. Luick-Thrams suggested that this glimpse into history offers redeeming stories of positive, inspiring acts of kindness and selflessness and should be viewed today with reflection.
Also speaking was a former Scattergood refugee, Guenter “George” Krauthamer, a retired Rutgers University Professor. He spoke via conference call about his family’s story of their flight from Nazi Germany in 1942.
Dr. Luick-Thrams offered his special insights on this extraordinary time in Iowa history and current events occurring in Europe. He also discussed the mass migration in the spring and summer of 2015 as refugees fleeing war, poverty and ecological disaster arrived in Europe seeking a safe haven from the myriad conflicts wracking the Middle East. Luick-Thrams watched as German neighbors, students, friends and relatives reacted to those uninvited newcomers. Today, he offered his personal perspective on how the refugee crisis will change Germany—and, indeed, Europe—forever.
Those attending the program came away with a greater appreciation of the proud cultural heritage we share as Iowans—the heritage of inclusiveness and tolerance. And, more importantly, a concrete example that the challenges the world faces today might be better served by examining history’s lessons.
Follow the office on Twitter @USAO_NDIA.
Three Plead Guilty in Portland Area Drug Conspiracy CaseRead the Press Release
Contact: Daniel J. Perry
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Scot Stolkner, 42, of Gray, Maine, Angela Green, 34, of South Portland, Maine, and Jonathan Day, 41, of Portland, pleaded guilty on April 1, 2016 in U.S. District Court to conspiring to distribute and possess with the intent to distribute controlled substances, including heroin, fentanyl, and alpha-pyrrolidinovalerophenone (a-PVP), commonly known as a “bath salt.”
According to court records, from about August through late December 2014, Stolkner obtained heroin from out-of-state sources and had others transport it to Maine and sell it to his customers. During the conspiracy, Green transported heroin and fentanyl for Stolkner and she, Day, and others sold it for Stolkner.
In about April 2015, Stolkner began obtaining a-PVP from a Chinese source. Stolkner placed online orders and wired money to the supplier. The supplier sent a-PVP to the addresses Stolkner provided. Once the a-PVP was in Maine, Green, Day, and others sold it for Stolkner.
The defendants face up to 20 years in prison, a $1,000,000 fine and between three years and life on supervised release. They will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by the U.S. Drug Enforcement Administration, with the assistance of the Maine Drug Enforcement Agency.
Stamford Man Pleads Guilty to Distributing CrackRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that WAYNE ALEXANDER, also known as “Uncle Easy,” 50, of Stamford, pleaded guilty today in Hartford federal court to one count of possession with intent to distribute and distribution of cocaine base (“crack cocaine”).
According to court documents and statements made in court, between February 2015 and April 2015, law enforcement conducted three controlled purchases of crack cocaine, totaling approximately 130 grams, from ALEXANDER.
ALEXANDER was arrested on a federal criminal complaint on May 11, 2015. He is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on May 30, 2016, at which time he faces a maximum term of imprisonment of 20 years.
This matter has been investigated by the Federal Bureau of Investigation’s Bridgeport Safe Streets Task Force Drug Enforcement Administration, Bridgeport Police Department and Stamford Police Department. The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
St. Thomas Resident Pleads Guilty to Transporting Minor for SexRead the Press Release
St. Thomas, USVI-Jennifer Bowen-Dodoo, 51, pleaded guilty on Friday, April 1, 2016, in District Court on St. Thomas to one count of transportation of a minor for sex, United States Attorney Ronald W. Sharpe announced today.
According to the plea agreement, Bowen-Dodoo admitted that she aided and abetted an adult male to transport her minor daughter for the purpose of sexual activity. District Court Judge Curtis V. Gomez remanded Bowen-Dodoo into the custody of the United States Marshals Service. Sentencing is scheduled for August 4, 2016. Bowen-Dodoo faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. She also faces a fine of up to $250,000.
"Sex trafficking is a deplorable crime, especially when it involves underage victims who are particularly vulnerable," said Ricardo Mayoral, Acting Special Agent in Charge of Homeland Security Investigations (HSI) San Juan and U.S. Virgin Islands. “Prostituting young girls is a growing threat worldwide, and we encourage anyone with information about this activity to call law enforcement. Your call could save a girl from sexual slavery.”
Suspected child exploitation or missing children cases may be reported to the National Center for Missing and Exploited Children via its toll-free 24–hour hotline at 202-514-5678 or Homeland Security Investigations at (340) 693-2250.
The case was investigated by HSI, the Virgin Islands Police Department, and the Virgin Islands Department of Human Services. It is being prosecuted by Assistant United States Attorney Everard E. Potter.
Springfield Sex Offender Sentenced to 15 Years for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a prior sex offender in Springfield, Mo., was sentenced in federal court today for receiving and distributing child pornography.
Gary Thomas Sheldon, 52, of Springfield, was sentenced by U.S. District Judge Beth Phillips to 15 years and eight months in federal prison without parole. The court also ordered Sheldon to serve the rest of his life on supervised release following incarceration.
On Nov. 9, 2015, Sheldon pleaded guilty to receiving and distributing child pornography over the Internet. Sheldon, a registered sex offender, was previously convicted in federal court of possessing child pornography in January 2001.
According to court documents, law enforcement officers received a cybertip from the National Center for Missing and Exploited Children, which had received the tip from an adult pornography Web site where Sheldon had uploaded an image of child pornography. Law enforcement officers executed a search warrant at Sheldon’s residence on July 15, 2015. Sheldon’s desktop computer and cell phone were seized, and investigators discovered images of child pornography on both devices.
Sheldon admitted to law enforcement officers that he downloaded at least 100 images of child pornography over the Internet. He also admitted that he had two e-mail addresses and a Facebook account he had not reported on his sex offender registry, although he was required to do so.
While this offense was occurring, according to court documents, Sheldon was on probation for failing to register as a sex offender.
This case was prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI, the Missouri State Highway Patrol and the Southwest Missouri Cybercrime Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Singapore Man Extradited to United States in Connection with Plot Involving Exports to Iran of U.S. Components Later Found in Bombs in IraqRead the Press Release
Defendant Extradited from Indonesia
Lim Yong Nam, aka Steven Lim, 42, a citizen of Singapore, has been extradited from Indonesia to stand trial in the District of Columbia on charges of taking part in a conspiracy that allegedly caused thousands of radio frequency modules to be illegally exported from the United States to Iran, at least 16 of which were later found in unexploded improvised explosive devices (IEDs) in Iraq.
The extradition was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Channing D. Phillips of the District of Columbia, Director Sarah Saldaña of the U.S. Immigration and Customs Enforcement (ICE), Executive Assistant Director Michael Steinbach of the FBI’s National Security Branch and Under Secretary Eric L. Hirschhorn of the Commerce.
Lim had been detained in Indonesia since October 2014 in connection with a U.S. request for extradition. He is to make his initial appearance at 1:30 p.m. EDT before Magistrate Judge Deborah A. Robinson of the District of Columbia. Lim was indicted on June 23, 2010, and faces one count of conspiracy to defraud the United States, one count of smuggling, one count of illegal export of goods from the United States to Iran, one count of making false statements to the United States government and one count of making false statements to law enforcement.
“The indictment alleges that Lim conspired to defraud the United States and defeat our export controls by sending U.S.-origin components to Iran instead of their stated final destination of Singapore,” said Assistant Attorney General Carlin. “Several of those components ultimately ended up in unexploded improvised devices in Iraq. This case, including the successful extradition of Lim, demonstrates our efforts to vigorously pursue and bring to justice those who threaten our national security.”
“Thanks to the efforts of law enforcement here and abroad, Lim Yong Nam will now appear in an American courtroom to face charges involving the illegal export of sensitive technology,” said U.S. Attorney Phillips. “As alleged in the indictment, the parts at issue here wound up in Iran and then on the battlefields in Iraq. The extradition of this defendant demonstrates our commitment to aggressively investigating and prosecuting those who violate our export controls and threaten our nation’s security.”
“Improvised explosive devices (IEDs) have injured or killed thousands of military service members overseas,” said Director Saldaña. “The U.S.-made products Lim is accused of illegally exporting were found in several of the devices used against America’s warfighters. After a long investigative process, Lim is back on U.S. soil to answer for his actions.”
“The illegal export of restricted U.S. technology is extremely harmful to our national security,” said Executive Assistant Director Steinbach. “In this case the technology had lethal applications and was used in improvised explosive devices in Iraq which endangered U.S. and coalition forces. This investigation was a coordinated effort by many agency partners and shows our determination to identify and bring to justice all those who steal sensitive technology.”
“The extradition of Lim Yong Nam highlights the significant cooperation of U.S. law enforcement agencies and our international partners to pursue and prosecute those who pose a threat to our national security, especially to U.S. service members overseas,” said Under Secretary Hirschhorn. “I commend the outstanding efforts of all of the agencies involved in the case.”
According to a superseding indictment that was returned against Lim and other defendants on Sept. 15, 2010, IEDs were the major source of American combat casualties in Iraq. The conspiracy alleged in the indictment involved radio frequency modules that have several commercial applications, including in wireless local area networks connecting printers and computers in office settings. These modules include encryption capabilities and have a range allowing them to transmit data wirelessly as far as 40 miles when configured with a high-gain antenna. These same modules also have potentially lethal applications. Notably, during 2008 and 2009, coalition forces in Iraq recovered numerous modules, all made by the same Minnesota firm, that had been utilized as part of the remote detonation system for IEDs.
The superseding indictment alleges that between June 2007 and February 2008, Lim and others caused 6,000 modules to be purchased and illegally exported from the Minnesota-based company through Singapore, and later to Iran, in five shipments, knowing that the export of U.S.-origin goods to Iran was a violation of U.S. law. In each transaction, Lim and others made misrepresentations and false statements to the Minnesota firm that Singapore was the final destination of the goods. Similarly, according to the superseding indictment, Lim and others caused false documents to be filed with the U.S. government, in which they claimed that Singapore was the ultimate destination of the modules. At the time of these activities, Lim and others were allegedly communicating with one another about U.S. laws prohibiting the export of U.S.-origin goods to Iran. However, in November 2009, Lim told U.S. authorities that he had never participated in illicit exports to Iran, the superseding indictment alleges.
The superseding indictment alleges that several of the 6,000 modules the defendants routed from Minnesota to Iran were later discovered by coalition forces in Iraq, where the modules were being used as part of IED remote detonation systems. In May 2008, December 2008, April 2009 and July 2010, coalition forces found at least 16 of these modules in unexploded IEDs recovered in Iraq, the indictment alleges.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
This investigation was jointly conducted by ICE Homeland Security Investigations (HSI) special agents in Boston and Los Angeles; FBI agents in Minneapolis; and Department of Commerce’s Bureau of Industry and Security agents in Chicago and Boston. Substantial assistance was provided by the U.S. Department of Defense, U.S. Customs and Border Protection, the State Department’s Directorate of Defense Trade Controls, the Treasury Department’s Office of Foreign Assets Control and the Justice Department’s Office of International Affairs, particularly the Justice Department Attaché in the Philippines, as well as the FBI and HSI Attachés in Jakarta and Singapore.
U.S. law enforcement authorities thanked the governments of Singapore and Indonesia for the substantial assistance that was provided in the investigation of this matter.
The prosecution is being handled by Assistant U.S. Attorney Ari Redbord of the District of Columbia and Trial Attorney Julie Edelstein of the National Security Division’s Counterintelligence and Export Control Section.
Lim et al Superseding Indictment
Singapore Man Extradited to United States in Connection with Plot Involving Exports to Iran of U.S. Components Later Found in Bombs in IraqRead the Press Release
WASHINGTON – Lim Yong Nam, aka Steven Lim, 42, a citizen of Singapore, has been extradited from Indonesia to stand trial in the District of Columbia on charges of taking part in a conspiracy that allegedly caused thousands of radio frequency modules to be illegally exported from the United States to Iran, at least 16 of which were later found in unexploded improvised explosive devices (IEDs) in Iraq.
The extradition was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Channing D. Phillips of the District of Columbia, Director Sarah Saldaña of U.S. Immigration and Customs Enforcement (ICE), Executive Assistant Director Michael Steinbach of the FBI’s National Security Branch, and Under Secretary of Commerce Eric L. Hirschhorn.
Lim had been detained in Indonesia since October 2014 in connection with a U.S. request for extradition. He is to make his initial appearance at 1:30 p.m. today in federal court in the District of Columbia, where he was indicted on June 23, 2010. Lim faces one count of conspiracy to defraud the United States, one count of smuggling, one count of illegal export of goods from the United States to Iran, one count of making false statements to the United States government and one count of making false statements to law enforcement.
“The indictment alleges that Lim conspired to defraud the United States and defeat our export controls by sending U.S.-origin components to Iran instead of their stated final destination of Singapore,” said Assistant Attorney General Carlin. “Several of those components ultimately ended up in unexploded improvised devices in Iraq. This case, including the successful extradition of Lim, demonstrates our efforts to vigorously pursue and bring to justice those who threaten our national security.”
“Thanks to the efforts of law enforcement here and abroad, Lim Yong Nam will now appear in an American courtroom to face charges involving the illegal export of sensitive technology,” said U.S. Attorney Phillips. “As alleged in the indictment, the parts at issue here wound up in Iran and then on the battlefields in Iraq. The extradition of this defendant demonstrates our commitment to aggressively investigating and prosecuting those who violate our export controls and threaten our nation’s security.”
“Improvised explosive devices (IEDs) have injured or killed thousands of military service members overseas. The U.S.-made products Mr. Lim is accused of illegally exporting were found in several of the devices used against America’s warfighters,” said ICE Director Saldaña. “After a long investigative process, Mr. Lim is back on U.S. soil to answer for his actions.”
“The illegal export of restricted U.S. technology is extremely harmful to our national security,” said Executive Assistant Director Steinbach of the FBI's National Security Branch. “In this case the technology had lethal applications and was used in improvised explosive devices in Iraq which endangered U.S. and coalition forces. This investigation was a coordinated effort by many agency partners and shows our determination to identify and bring to justice all those who steal sensitive technology.”
“The extradition of Lim Yong Nam highlights the significant cooperation of U.S. law enforcement agencies and our international partners to pursue and prosecute those who pose a threat to our national security, especially to U.S. service members overseas,” said Under Secretary Hirschhorn. “I commend the outstanding efforts of all of the agencies involved in the case.”
According to a superseding indictment that was returned against Lim and other defendants on Sept. 15, 2010, IEDs were the major source of American combat casualties in Iraq. The conspiracy alleged in the indictment involved radio frequency modules that have several commercial applications, including in wireless local area networks connecting printers and computers in office settings. These modules include encryption capabilities and have a range allowing them to transmit data wirelessly as far as 40 miles when configured with a high-gain antenna. These same modules also have potentially lethal applications. Notably, during 2008 and 2009, coalition forces in Iraq recovered numerous modules made by the Minnesota firm that had been utilized as part of the remote detonation system for IEDs.
The superseding indictment alleges that between June 2007 and February 2008, Lim and others caused 6,000 modules to be purchased and illegally exported from the Minnesota-based company through Singapore, and later to Iran, in five shipments, knowing that the export of U.S.-origin goods to Iran was a violation of U.S. law. In each transaction, Lim and others made misrepresentations and false statements to the Minnesota firm that Singapore was the final destination of the goods. Similarly, according to the superseding indictment, Lim and others caused false documents to be filed with the U.S. government, in which they claimed that Singapore was the ultimate destination of the modules. At the time of these activities, Lim and others were allegedly communicating with one another about U.S. laws prohibiting the export of U.S.-origin goods to Iran. However, in November 2009, Lim told U.S. authorities that he had never participated in illicit exports to Iran, the superseding indictment alleges.
The superseding indictment alleges that several of the 6,000 modules the defendants routed from Minnesota to Iran were later discovered by coalition forces in Iraq, where the modules were being used as part of IED remote detonation systems. In May 2008, December 2008, April 2009 and July 2010, coalition forces found at least 16 of these modules in unexploded IEDs recovered in Iraq, the indictment alleges.
An indictment is merely a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
This investigation was jointly conducted by ICE Homeland Security Investigations (HSI) special agents in Boston and Los Angeles; FBI agents in Minneapolis, and Department of Commerce, Bureau of Industry and Security agents in Chicago and Boston. Substantial assistance was provided by the U.S. Department of Defense, U.S. Customs and Border Protection, the State Department’s Directorate of Defense Trade Controls, the Treasury Department’s Office of Foreign Assets Control, and the Office of International Affairs in the Justice Department’s Criminal Division, particularly the Justice Department Attaché in the Philippines, as well as the FBI and HSI Attachés in Singapore.
U.S. law enforcement authorities thanked the governments of Singapore and Indonesia for the substantial assistance that was provided in the investigation of this matter.
The prosecution is being handled by Assistant U.S. Attorney Ari Redbord of the District of Columbia and Trial Attorney Julie Edelstein of the National Security Division’s Counterintelligence and Export Control Section.
SeaWorld Manager Accused of Embezzling $750,000Read the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – April 4, 2016
SAN DIEGO – Former SeaWorld San Diego manager Wilfred David Joseph Jobin-Reyes (known as “Sebastian Jobin”) was arraigned today in San Diego on wire fraud charges relating to an elaborate eight-year embezzlement scheme he orchestrated while working as a Show Producer at the marine mammal park.
Jobin-Reyes is charged with stealing more than $750,000 from SeaWorld by creating fake invoices from a fictitious company, then using his management position to approve their payment. He diverted the money to bank accounts he secretly controlled, and then withdrew cash or spent the proceeds on restaurants, plane tickets, hotels, and shopping.
As alleged in the complaint and other court documents unsealed today, Jobin-Reyes created a fake merchandise company, “SJ Merchandise,” which he registered with the Secretary of State but didn’t use to conduct any real business. He adopted the fictitious alias “John Caldwell” to communicate with SeaWorld, in order to conceal his ownership and control of the company. After uncovering the fraud, SeaWorld investigators discovered that Jobin-Reyes had used his work computer to create more than 100 fake invoices for goods that were never actually delivered to SeaWorld, including “wildlife animal bookmarks,” “sea creature rings,” “purple shiny ornaments,” and “poinsettia in pots.” Many of the invoices Jobin-Reyes created were for amounts just under the $10,000 threshold that resulted in limited review by his managers. SeaWorld unwittingly paid Jobin-Reyes more than $750,000 before discovering the fraud in early 2015.
“We are dedicated to protecting our local businesses and institutions from corruption inside and out,” said U.S. Attorney Laura E. Duffy. “We will root out and prosecute business insiders who abuse the trust of their employers and the community.”
U.S. Secret Service Special Agent in Charge David Murray said, “Today’s arraignment demonstrates that the U.S. Secret Service is dedicated to protecting our local communities and businesses against these types of fraudulent financial schemes, and will continue to collaborate with its law enforcement partners to target and arrest individuals who use U.S. financial institutions as part of their criminal activity.”
“IRS-Criminal Investigation is committed to working with our law enforcement partners to lend our financial expertise to trace the money, whatever the source, including embezzlement funds,” said IRS-CI Acting Special Agent in Charge Anthony J. Orlando. “We will protect American businesses and institutions from insiders who abuse positions of trust to commit this type of financial fraud.”
Jobin-Reyes was arrested in Dallas, Texas on March 12, 2016, and made his initial appearance there. On March 15, 2016, U.S. Magistrate Judge Paul D. Stickney of the Northern District of Texas found that Jobin-Reyes posed a serious risk of flight, and ordered him detained pending trial. He was brought to San Diego for his initial appearance in this district today. Jobin-Reyes’s next court appearance is for a detention hearing on Thursday, April 7 at 10:00 a.m. before U.S. Magistrate Judge Bernard G. Skomal.
DEFENDANT:
Wilfred David Joseph Jobin-Reyes Age: 47 San Diego, CA
CHARGES
Wire Fraud, in violation of 18 U.S.C. § 1343
Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
United States Secret Service
Internal Revenue Service Criminal Investigation
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Rindge Man Sentenced for Tax Evasion in Connection with Fraudulent Investment OperationRead the Press Release
CONCORD, N.H. – Aaron E. Olson, 41, of Rindge, New Hampshire, was sentenced to 60 months in prison for tax evasion in United States District Court for the District of New Hampshire, announced United States Attorney Emily Gray Rice.
From 2007 through 2010, Olson was the sole proprietor of an investment business known as AEO Associates (AEO). In December of 2010, Olson formed KMO Associates LLC (KMO), an investment business that was registered in Massachusetts. Olson ran both operations from an office in Jaffrey, New Hampshire. Olson used AEO and later KMO to obtain approximately $27.8 million from individuals and organizations ostensibly to invest on their behalf. Olson was not licensed as an investment broker in New Hampshire or in any other jurisdiction and he did not register AEO and KMO with the State of New Hampshire as investment businesses.
Olson used approximately $2.6 million of the investors’ money for his personal benefit and used some of the investors’ money to make fraudulent “earnings” payments to other investors. To conceal this conduct, Olson sent investors fictitious earnings statements that falsely showed significant earnings in their accounts.
Olson also filed false and fraudulent joint individual tax returns with the IRS in which he attempted to evade or defeat taxes he owed based on his income from the fraudulent investment operation. Among other things, Olson failed to report the gross receipts and expenses associated with the operation of AEO and KMO and he failed to issue Forms 1099 with the Internal Revenue Service summarizing investors’ annual gains and losses. In total, Olson fraudulently understated the income taxes he owed for the four years by more than $664,000.
Olson pleaded guilty to four counts of attempted tax evasion on March 9, 2015. As part of a Plea Agreement, he agreed to pay restitution to the defrauded investors in lieu of paying the taxes he owes to the United States. A restitution hearing is scheduled on May 26, 2016.
This case is being investigated by the office of Criminal Investigations for the Internal Revenue Service in conjunction with the New Hampshire Bureau of Securities Regulation and is being prosecuted by Assistant United States Attorney Mark S. Zuckerman.
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Project Safe Childhood - Plainfield Man Pleads Guilty to Child Pornography PossessionRead the Press Release
CONCORD, NEW HAMPSHIRE: John Martin Favor, 49, of Plainfield, New Hampshire, pled guilty in the United States District Court for the District of New Hampshire to possessing child pornography, announced United States Attorney Emily Gray Rice.
An investigation conducted by the New Hampshire Internet Crimes Against Children (NH ICAC), the Hinsdale, New Hampshire Police Department, and Homeland Security Investigations Manchester revealed that an individual was uploading images of child pornography to an online bulletin board from the defendant’s Plainfield, New Hampshire residence. A federal search warrant was issued and executed in September 2015. Law enforcement ultimately discovered hundreds of videos and images of child pornography on Favor’s personal computer.
Favor is scheduled for sentencing in July 2016. The charges to which he pleaded guilty carry a statutory maximum sentence of 10 years in prison. The court will determine Favor’s actual sentence after it has had an opportunity to review a presentence investigation report prepared by the United States Probation and Pretrial Services Office.
The investigation in this case was a collaborative effort between federal, state, and local authorities, which included Homeland Security Investigations Manchester, the New Hampshire Internet Crimes Against Children Task Force, the Police Departments of Hinsdale, Hampton, Plainfield, Rochester, and Portsmouth, New Hampshire, as well as the New Hampshire State Police.
The case is being prosecuted by Assistant United States Attorney Nick Abramson.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led, in each district, by the United States Attorney’s Office, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Pittsburgh Man Indicted on Charges Relating to the Killing of a Federal WitnessRead the Press Release
PITTSBURGH – A federal grand jury today returned a second superseding indictment charging Price Montgomery with witness tampering crimes relating to the killing of federal witness Tina Crawford and the attempt to kill another witness on August 22, 2014.
The charges were announced by United States Attorney for the Western District of Pennsylvania David J. Hickton, Special Agent in Charge Sam Rabadi of the Bureau of Alcohol Tobacco, Firearms and Explosives, Assistant Special Agent in Charge David Battiste of the Drug Enforcement Administration; Assistant Special Agent in Charge Ed Wirth of the Internal Revenue Service-Criminal Investigation, Pennsylvania Attorney General Kathleen Kane and Pittsburgh Police Chief Cameron McLay.
“With staunch determination we have endeavored to identify and charge the person responsible for the murder of Tina Crawford that August afternoon just minutes before she was scheduled to be interviewed at our office,” stated U.S. Attorney Hickton. “Today’s indictment demonstrates our unwavering commitment to seek justice for Tina and her family and shows we will use every tool available to pursue criminals who seek to intimidate and inflict harm on witnesses.”
“We will use every resource we have at our disposable to target those criminals who threaten or commit acts of violence against witnesses. Retaliation against witnesses will not be tolerated,” said ATF Special Agent in Charge Rabadi. “Witnesses are integral to the investigative process, the judicial process, and to justice. ATF will work with our Federal, State and local law enforcement partners to investigate, charge and prosecute those who retaliate against witnesses to the fullest extent of the law.”
“The joint investigation targeting Price Montgomery and his co-defendants involved a significant amount of heroin and firearms,” said Gary Tuggle, the Special Agent in Charge of the Drug Enforcement Administration’s Philadelphia Field Division. “Montgomery’s alleged involvement in the murder of Tina Crawford and the shooting of another witness are horrific crimes, especially when they involve a witness. We will remain vigilant in pursuing cases against individuals that seek to tamper with witnesses.”
IRS-CI Asst. Special Agent in Charge Wirth added, “Today’s indictment demonstrates IRS-Criminal Investigation’s commitment to the pursuit of justice wherever the trail might lead us. We will work with our law enforcement partners to conduct a thorough investigation that incorporates all aspects of an individual’s illegal activity and hold him accountable for his actions.”
The 10-count second superseding indictment named Montgomery, 35, (currently incarcerated); James Perrin, 37, (currently incarcerated); Charles Cook, 49, of Pittsburgh, PA; and Andre Avent, 38, of Homestead, PA, as the defendants.
According to the second superseding indictment, from April 2013, and continuing to June 2014, in the Western District of Pennsylvania and elsewhere, Montgomery and Perrin conspired to distribute one kilogram or more of heroin. The indictment also charges that on June 8, 2014, Montgomery and Perrin, who both have prior felony convictions, possessed 16 firearms in furtherance of that drug trafficking crime. Federal law prohibits a convicted felon from possessing firearms. Montgomery, Cook and Avent are charged with conspiring to commit money laundering. The second superseding indictment returned today further charges Montgomery with tampering with a witness by killing a person (victim: Tina Crawford), use of a firearm resulting in death (victim: Tina Crawford), tampering with a witness by attempting to kill that witness (victim: Patsy Crawford) and use of a firearm in relation to attempting to kill a witness (victim: Patsy Crawford).
The indictment also contains forfeiture allegations seeking cash, vehicles and jewelry involved in the commission of these offenses and constituting proceeds of these offenses.
The law provides for a mandatory minimum sentence of life in prison for Montgomery. The law provides for a maximum total sentence of not less than 10 years and up to life in prison, a fine of $10,000,000 or both for Perrin. Cook and Avent face a maximum total sentence of not more than 20 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Gregory J. Nescott and Shaun E. Sweeney are prosecuting this case on behalf of the government.
The Western Pennsylvania offices of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation, the U.S. Marshals Service, along with the Pennsylvania Office of the Attorney General and the Pittsburgh Bureau of Police, conducted the investigation leading to the charges in this case.
A second superseding indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Penn Hills Man Pleads Guilty in Cross-Country Cocaine Trafficking SchemeRead the Press Release
PITTSBURGH - A Penn Hills resident pleaded guilty in federal court to a charge of conspiracy to possess with intent to distribute and distribute 500 grams or more of cocaine, United States Attorney David J. Hickton announced today.
Gregory Price, 39, pleaded guilty to one count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. During that timeframe, Gregory Price was intercepted over the wire conspiring with others to possess with intent to distribute and distribute cocaine, which was shipped from California to the Western District of Pennsylvania through the United States Postal Service or commercial carrier.
Judge Hornak scheduled sentencing for Aug. 10, 2016. The law provides for a minimum sentence of five years in prison, a maximum sentence of 40 years in prison, a fine of not more than $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant’s detention.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Gregory Price.
Owners of Virginia Beach Cake Shop Plead Guilty to Money Laundering, Drug and Tax ChargesRead the Press Release
NORFOLK, Va. – Vernon Michael Norvell, 43, and his wife, Cheron Johnson, 31, of Portsmouth, both pleaded guilty today to various drug, tax, and money laundering crimes. Norvell pleaded guilty to conspiring to distribute of cocaine and conspiracy to commit money laundering. Johnson pleaded guilty to money laundering and making a false statement in a tax filing.
According to court documents, Norvell was a kilogram level cocaine dealer that regularly conducted transactions at his home in the Crystal Lake neighborhood of Portsmouth, at his cake business, “G’s Cake Shop – Cake For All Occasions” in Virginia Beach, and at a Food Lion parking lot off Airline Boulevard, in Portsmouth. One confidential source regularly purchased ounce quantities of cocaine for $1,350 to $1,500 over the course of several years. Another source purchased in excess of five kilograms, often paying $46,000 per kilogram. At times, Norvell was accepting between $60,000 and $70,000 a week for cocaine. On five occasions from October 2014 to July 2015, the DEA, in partnership with the Chesapeake and Portsmouth Police Department, conducted controlled purchases of cocaine and crack from Norvell.
According to court documents, Norvell and Johnson used the proceeds of his cocaine distribution to purchase a home in the Crystal Lake neighborhood of Portsmouth, several automobiles, expensive clothing and other material items. The real estate purchase was one way the couple concealed the cocaine proceeds. While the home appraised for $315,000, they purchased it for $160,000, yet they made over $80,000 in payments before and after the closing, $14,000 of which was in cash.
In addition to the drug and money laundering crimes and according to court documents, from 2012 to 2014, Norvell and Johnson reported a combined adjusted gross income of $157,916, yet during that same period they deposited $926,854, including $338,860 in cash, into nearly a dozen bank accounts, including one off shore account located in Curaҫao. From January 2011 through August 2015 the couple deposited $468,500 in cash into their accounts.
Both Norvell and Johnson will be sentenced on June 22. Norvell faces a mandatory minimum sentence of 10 years in prison and a maximum of life in prison, while Johnson faces a maximum sentence of 20 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; Karl C. Colder, Special Agent in Charge of Drug Enforcement Administration (DEA) Washington Field Division; and Thomas Jankowski, Special Agent in Charge, Washington D.C. Field Office, IRS-Criminal Investigation, made the announcement after the pleas were accepted by U.S. Magistrate Judge Douglas E. Miller. The case is being prosecuted by Special Assistant U.S. Attorney John F. Butler and Assistant U.S. Attorneys Andrew C. Bosse and Joseph E. DePadilla.
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 Nos. 2:16-cr-48 (Johnson) and 2:16-cr-49 (Norvell).
Operator of Ohio Anti-Aging Skincare Company Indicted for Obstructing Internal Revenue Service and Filing False Income Tax ReturnsRead the Press Release
A federal grand jury returned an indictment on March 22, which was unsealed today, charging the operator of an anti-aging skincare company in Dayton, Ohio, with one count of corruptly endeavoring to impair and impede the Internal Revenue Service (IRS), two counts of aiding and assisting in the preparation of false income tax returns and five counts of filing false income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to the indictment, James L. Wright of Germantown, Ohio, controlled the financial and business operations of B&P Company Inc., a fourth-generation family business that has manufactured and sold skincare products, including a wrinkle reduction product called Frownies, since approximately 1889. It is alleged that beginning in 1997, Wright used a series of entities that he established and controlled to divert money from B&P Company to his personal use and the use of his family members. Wright caused the preparation and filing with the IRS of false tax returns for B&P Company for the years 2008 and 2009 that claimed deductions for payments that Wright made or caused to be made from the company for his mother’s apartment rent and utilities and the apartment rent of one of his daughters. Wright is also alleged to have filed false tax returns for another entity, The Remnant Inc., on which he claimed deductions for personal expenses – including expenses related to his personal residence, rent for an apartment for one of his daughters and automobile expenses. The indictment further charges him with filing false personal income tax returns for the years 2008, 2009 and 2010 on which he underreported his income.
Among the entities that Wright used to obstruct the IRS was Fore Fathers Foundation, a private foundation that Wright established in 2003. Wright is alleged to have used Fore Fathers Foundation, which was funded with donations from B&P Company and another entity that Wright controlled, to pay his children’s private high school and college tuition. Wright filed income tax returns in the name of the foundation for the years 2008 and 2009 that failed to disclose that the foundation made payments for his children’s educational expenses. Wright is also alleged to have submitted documents to the educational institutions on which he concealed his involvement with Fore Fathers Foundation.
Wright was arrested on March 30. If convicted, Wright faces a statutory maximum sentence of three years in prison and a $250,000 fine on each count of the indictment.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Melissa S. Siskind and Thomas F. Koelbl of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
National Crime Victims' Rights WeekRead the Press Release
flyer.pdf
Lincoln County pill dealer pleads guilty to Federal crimesRead the Press Release
CHARLESTON, W.Va. – A Lincoln County drug dealer pleaded guilty today to federal crimes associated with selling pain pills, announced Acting United States Attorney Carol Casto. Timothy Scott Hallam, 34, entered a guilty plea to conspiracy to distribute oxycodone and conspiracy to launder the proceeds of his drug dealing.
Hallam admitted that from May 2012 through May 2014, he obtained oxycodone pills from Lester Taylor, who resided in Florida, for distribution in Lincoln County. After Hallam sold the pills in West Virginia, he and the other co-conspirators deposited the proceeds into Taylor’s bank accounts at various banks in Barboursville and Huntington. Once the money was deposited in West Virginia, Taylor and others would withdraw the money in Florida. Hallam admitted to depositing over $40,000 in drug proceeds as part of the conspiracy.
Taylor was previously sentenced in November 2015 to 10 years in federal prison. Hallam faces up to 40 years in federal prison when he is sentenced on July 6, 2016.
This case was investigated by the West Virginia State Police, the Internal Revenue Service’s Criminal Investigation division, the Metropolitan Drug Enforcement Network Team, and the Drug Enforcement Agency. Assistant United States Attorney Monica D. Coleman is handling the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
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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Lincoln County Man Pleads Guilty to Trafficking Synthetic DrugsRead the Press Release
St. Louis, MO - Richard Gross, Winfield, Missouri, pled guilty to multiple counts involving the trafficking of synthetic drugs. He entered his plea before United States District Judge John A. Ross.
According to court documents, Richard Gross and co-defendant Paul Berra manufactured synthetic cannabinoids known on the street as "K 2" and "Incense" and synthetic cathinones known on the street as "Bath Salts." These products were sold to stores in a number of states. However, their largest customer was Gross' mother, co-defendant Pam Tabatt, who was the largest retailer of synthetic drugs in Missouri. She sold the synthetic drugs through South 94 Bait and Tackle in St. Charles County and Smoke Sensations, Nights of Rave in St. Louis County.
Gross pled guilty to one felony count each of conspiracy to distribute and possess with the intent to distribute controlled substance analogues intended for human consumption, conspiracy to fraudulently receive and distribute misbranded products in interstate commerce, conspiracy to import controlled substance analogues into the United States and conspiracy to receive, sell and facilitate transportation of smuggled goods. Sentencing has been set for July 12, 2016.
Pamela Tabatt, St. Peters, Missouri, pled guilty to related charges in March. She is scheduled for sentencing June 21, 2016. Paul Berra, Jr., Warrenton, Missouri, entered his plea in January and is schedule for sentencing May 2, 2016.
These charges carry a penalty range of 5 to 20 years in prison for each count and/or fines ranging from $250,000 to $1,000,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges. Additionally, as part of his conviction, he will be required to forfeit assets and property totaling more than $500,000.
This case was investigated by US Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Internal Revenue Service Criminal Investigation, Drug Enforcement Administration, the Postal Inspection Service and the Federal Bureau of Investigation. Additional assistance was received from the St. Louis County Police Department, St. Charles County Sheriff’s Department, Missouri Lake Area Narcotics Enforcement Group, Metropolitan Enforcement Group for Southern Illinois, Southern Illinois Drug Task Force, the Illinois Attorney General’s Office, as well as the prosecuting attorney's offices in St. Louis County, Missouri; St. Charles County, Missouri; Madison County, Illinois; and St. Clair County, Missouri. Assistant United States Attorneys James Delworth and Erin Granger are handling the cases for the U.S. Attorney's Office.
Liberal Sex Offender Sentenced to 20 Years for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a prior sex offender in Liberal, Mo., was sentenced in federal court today for receiving and distributing child pornography over the Internet.
Timothy Curless, 55, of Liberal, was sentenced by U.S. District Judge Beth Phillips to 20 years in federal prison without parole. The court also sentenced Curless to a lifetime of supervised release following incarceration. Curless has prior state convictions in Kansas for aggravated indecent liberties with a child and aggravated incest.
On Sept. 30, 2015, Curless pleaded guilty to receiving and distributing child pornography over the Internet between Nov. 4, 2012 and April 19, 2013.
According to court documents, a law enforcement officer was conducting an undercover investigation into the distribution of child pornography by suspect(s) using file-sharing software. On two separate occasions the officer downloaded images of child pornography from Curless’s computer. Among those images were children who have not reached puberty and a child as young as three years of age. When officers executed a search warrant they learned that Curless had been using his neighbor’s wi-fi network in order to access the Internet.
This case was prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Southwest Missouri Cyber Crime Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Last week: Secretary General Stock in D.C. for Final Nuclear Security SummitRead the Press Release
On March 31st and April 1st, the White House and U.S. Department of State hosted the fourth and final Nuclear Security Summit in Washington, D.C. The purpose of the summit, attended by 53 nations and 3 non-governmental organizations, was to strengthen international commitments to the security of nuclear materials. It also provided world leaders the opportunity to discuss new initiatives for combating nuclear terrorism through improved communication, new training, and the sharing of best practices. Secretary General Jürgen Stock was the head of the delegation for INTERPOL, along with Director Geoffrey Shank, representing the U.S. National Central Bureau (USNCB).
The day before the summit, the Secretary General and USNCB leadership met with staff from the Commerce, Justice, Science, and Related Agencies Subcommittee, as well as staff from the House Homeland Security Committee later that day. Dr. Stock provided a strategic overview of his vision for INTERPOL going into 2020, emphasizing connectivity between the organization’s databases and those of its members in Europe, improving the use of biometrics, and securing borders against foreign terrorist fighter (FTF) travel. Dr. Stock also noted that though INTERPOL continues to excel in integrating security infrastructure, the rise of cybercrime poses ever greater challenges to law enforcement, and more must be done to ensure partners are communicating their intentions and addressing local administrative problems. To do so, Dr. Stock stressed, requires not only the support of a nation’s NCB, but the uncensored support of its respective government.
Kansas City, Kan., Man Sentenced to 12 Years in Drug Trafficking ConspiracyRead the Press Release
KANSAS CITY, KAN. – A Kansas City, Kan., man was sentenced Monday to 12 years in federal prison for his part in a drug trafficking organization that is alleged to have distributed large amounts of methamphetamine, U.S. Attorney Barry Grissom said.
Joshua Thomas Alvarez, 26, Kansas City, Kan., pleaded guilty to one count of conspiracy to distribute methamphetamine. In his plea, he admitted that in July 2012 the FBI identified a major drug trafficking ring operating in Kansas City, Kan. During the investigation, agents made 15 controlled purchases of methamphetamine from members of the organization. Five search warrants were executed at locations where methamphetamine and firearms were stored. Alvarez was identified as one of the conspirators who purchased methamphetamine from the leader of the organization and resold it.
Co-defendants include:
Vicencio Olea-Monarez, 38, Kansas City, Kan., who is awaiting trial.
Gabriel Agustin Lopez, 30, who is set for sentencing June 27.
Rosalio Chinchilla, 45, Kansas City, Kan., who is set for sentencing June 15.
Jose Luis Silva-Cardona, 26, Kansas City, Mo., who is set for sentencing June 13.
Lee Thomas Faulkner, 41, Topeka, Kan., who is set for sentencing July 5.
Omar Francisco Orduno-Ramirez, 37, who is awaiting trial.
Hector Javier Valdez, 36, who is awaiting trial.
Juan Carlos Alvarez, 28, who is set for sentencing June 15.
Herbert Lee Saysoff, 54, who is awaiting trial.
Grissom commended the FBI and Assistant U.S. Attorney David Zabel for their work on the case.
Justice Department Sues ValueAct for Violating Premerger Notification RequirementsRead the Press Release
ValueAct Invested Over $2.5 Billion in Halliburton and Baker Hughes, Failed to Notify Antitrust Authorities, Wrongly Claiming No Intent to Influence Companies’ Business Decisions
The Department of Justice today filed a civil antitrust lawsuit in the U.S. District Court for the Northern District of California against certain ValueAct Capital entities for violating the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). The Antitrust Division’s lawsuit seeks civil penalties and an injunction against further HSR Act violations.
On Nov. 17, 2014, Baker Hughes and Halliburton – two of the three largest providers of oilfield products and services in the world – announced their plan to merge in a deal valued at $35 billion. Thereafter, ValueAct, an activist investment firm, purchased over $2.5 billion of Halliburton and Baker Hughes voting shares without complying with the HSR Act’s notification requirements. According to the complaint, ValueAct purchased these shares with the intent to influence the companies’ business decisions as the merger unfolded and therefore could not rely on the limited “investment-only” exemption to HSR notification requirements. The complaint details how ValueAct used its access to senior executives of both Halliburton and Baker Hughes to formulate merger and other business strategies with the companies.
“ValueAct’s substantial stock purchases made it one of the largest shareholders of two competitors in the midst of our antitrust review of the companies’ proposed merger, and ValueAct used its position to influence decision-making at both companies,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “ValueAct was not entitled to avoid HSR requirements by claiming to be a passive investor. Given the seriousness of the violation and ValueAct’s prior HSR violations, we will be seeking significant civil penalties and an injunction against further violations.”
The HSR Act imposes notification and waiting period requirements for transactions meeting certain size thresholds so that such transactions can undergo premerger antitrust review by the department and the Federal Trade Commission. The HSR Act has a narrow exemption for acquisitions of less than 10 percent of a company’s outstanding voting securities if that acquisition is made “solely for the purposes of investment” with no intention of participating in the company’s business decisions.
Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the department. The maximum civil penalty for an HSR violation is $16,000 per day.
ValueAct is an investment firm headquartered in San Francisco that advertises a strategy of “active, constructive involvement” in the management of the companies in which it invests. According to ValueAct’s website, ValueAct’s business model focuses on “acquiring significant ownership stakes in a limited number of companies,” and “[t]he goal in each investment is to work constructively with management and/or the company’s board to implement a strategy or strategies that maximize returns for all shareholders.” ValueAct manages over $16 billion on behalf of investors.
Jacqueline Stanfill Sentenced to Nine Years in Federal Prison for Fraud and Money LaunderingRead the Press Release
KNOXVILLE, Tenn. – On April 4, 2016, Jacqueline J. Stanfill, 58, of Knoxville, Tenn., was sentenced by the Honorable Leon Jordan, Senior U.S. District Judge, to serve 108 months in federal prison for wire fraud, mail fraud and money laundering. In January 2016, Stanfill pleaded guilty to these charges that were included in a July 2015 indictment.
In addition to her prison sentence, Stanfill was ordered to pay over $8 million in restitution to the victims of her crimes.
Stanfill was the owner and operator of Stanfill Wealth Management in Knoxville. In her plea agreement on file with the U.S. District Court Clerk, she admitted to claiming to invest her clients’ money with legitimate investment companies. However, Stanfill converted these funds to her own personal use. In order to maintain the confidence of her clients, she created phony documents that had the appearance of account statements and correspondence from Charles Schwab and Co., Inc. She further attempted to maintain the confidence of her clients by making payments either under the guise of returning invested funds and accumulated earnings, and/or by sending funds to the Internal Revenue Service to maintain the illusion that the client’s fictitious investments were tax-deferred.
This investigation was conducted by the Federal Bureau of Investigation and Internal Revenue Service. Assistant U.S. Attorneys Frank Dale and Jennifer Kolman represent the United States.
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Huntington man pleads guilty to Federal heroin chargeRead the Press Release
HUNTINGTON, W.Va. – A Huntington man who participated in a heroin distribution conspiracy in 2012 and 2013 pleaded guilty today in federal court, announced Acting United States Attorney Carol Casto. Edwin G. Simpson, 45, entered a guilty plea to maintaining a residence for the purpose of distributing and using heroin.
Between November 2012 and March 2013, Simpson was the tenant of an apartment at 1231 10th Avenue in Huntington. During that period, Simpson allowed others to store heroin at his apartment after it was transported from Detroit. Simpson also allowed others to distribute heroin from his apartment to various customers.
On March 8, 2013, agents with the Huntington FBI Drug Task Force executed a search warrant at Simpson’s apartment. During the search, agents seized heroin, a .32 caliber revolver, ammunition, and other items associated with the sale of heroin.
Multiple defendants have been convicted of drug offenses as a result of this investigation. Those sentenced to federal prison include Kenneth E. Baxter, who was sentenced to seven years and three months; Coty S. Richardson, who was sentenced to five years and ten months; Sean L. Gist, who was sentenced to five years and three months; Ramone L. Wells, who was sentenced to four years; Pricilla Lee Dylan, who was sentenced to two years and nine months; and Dustin S. Barton, who was sentenced to a year and a day. Paul A. Roberts, Jr., was sentenced to five years of probation for assisting the group in securing a residence to conduct drug deals. Warren G. Howard was also sentenced to five years of probation for distributing heroin.
The Huntington FBI Drug Task Force conducted the investigation. Assistant United States Attorney Joseph F. Adams is responsible for the prosecution. The plea hearing was held before Chief United States District Judge Robert C. Chambers.
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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Former United States Tax Court Judge and Husband Indicted for Conspiracy to Commit Tax Evasion and Obstruction of an IRS AuditRead the Press Release
Diane Kroupa Filed Fraudulent Tax Returns While a Sitting U.S. Tax Court Judge
Kroupa and Her Husband Conspired to Evade More Than $400,000 in Federal Taxes
U.S. Attorney Andrew M. Luger for the District of Minnesota today announced a federal indictment charging Diane L. Kroupa, 60, and her husband, Robert E. Fackler, 62, with conspiring with each other to evade assessment of taxes. Each defendant is charged with conspiracy, tax evasion, making and subscribing false tax returns and obstruction of an Internal Revenue Service (IRS) audit. The defendants are expected to appear later this week in U.S. District Court in Minneapolis, Minnesota.
“The allegations in this indictment are deeply disturbing,” said U.S. Attorney Andrew Luger. “The tax laws of this country apply to everyone, and those of us appointed to federal positions must hold ourselves to an even higher standard.”
“As a former tax court judge, Kroupa dealt regularly with individuals who cheated on their taxes, which makes these allegations particularly troubling,” said Chief Richard Weber of the IRS-Criminal Investigation. “Reporting personal expenses as business expenses on your tax returns is not tolerated, regardless of your job or position. We expect all taxpayers to follow the law –whether you are a business owner, individual, or government official – we all must play by the same rules and pay our fair share.”
According to the indictment and documents filed in court, between 2004 and 2012, Kroupa and Fackler conspired to evade their tax obligations. Kroupa was appointed to the U.S. Tax Court on June 13, 2003, for a term of 15 years, but she retired on June 16, 2014. During the same period, Fackler was a self-employed lobbyist and political consultant who owned and operated a business known as Grassroots Consulting. From 2004 to 2013, Kroupa and Fackler owned a home in Minnesota. From 2007 to 2013, they also leased a second residence in Maryland.
According to the indictment and documents filed in court, as part of the conspiracy to defraud the United States, Kroupa and Fackler fraudulently claimed personal expenses as Grassroots Consulting business deductions. They fraudulently claimed the following personal expenses as deductible business expenses: rent and utilities for the Maryland home; utilities, upkeep and renovation expenses of the Minnesota home; pilates classes; spa and massage fees; jewelry and personal clothing; wine club fees; Chinese language tutoring; music lessons; personal computers; and expenses for vacations to Alaska, Australia, the Bahamas, China, England, Greece, Hawaii, Mexico and Thailand.
According to the indictment and documents filed in court, Kroupa and Fackler made a series of other false claims on their tax returns, including failing to report approximately $44,520 that Kroupa received from a 2010 land sale in South Dakota. The defendants falsely claimed financial insolvency to avoid paying tax on $33,031 on cancellation of indebtedness income.
According to the indictment and documents filed in court, in 2006, Kroupa and Fackler concealed documents from their tax preparer and an IRS Tax Compliance Officer during an audit. During a second audit in 2012, Kroupa and Fackler caused misleading documents to be delivered to an IRS employee in order to convince the IRS employee that certain personal expenses were actually business expenses of Grassroots Consulting.
According to the indictment and documents filed in court, between 2004 and 2010, Kroupa and Fackler purposely understated their taxable income by approximately $1 million and purposely understated the amount of tax they owed by at least $400,000.
This case is the result of an investigation conducted by the IRS-Crimination Investigation and the United States Postal Inspection Service.
Assistant U.S. Attorneys Benjamin Langner and Timothy Rank are prosecuting the case.
Former United States Tax Court Judge and Husband Indicted for Conspiracy to Commit Tax Evasion and Obstruction of an IRS AuditRead the Press Release
United States Attorney Andrew M. Luger today announced a federal indictment charging DIANE L. KROUPA, 60, and her husband, ROBERT E. FACKLER, 62, with conspiring with each other to evade assessment of taxes.[1] Each defendant is charged with conspiracy, tax evasion, making and subscribing false tax returns and obstruction of an IRS audit. The defendants are expected to appear later this week in U.S. District Court in Minneapolis, Minn.
“The allegations in this indictment are deeply disturbing,” said United States Attorney Andrew Luger. “The tax laws of this country apply to everyone, and those of us appointed to federal positions must hold ourselves to an even higher standard.”
“As a former tax court judge, Kroupa dealt regularly with individuals who cheated on their taxes, which makes these allegations particularly troubling,” said Richard Weber, Chief, IRS - Criminal Investigation. “Reporting personal expenses as business expenses on your tax returns is not tolerated, regardless of your job or position. We expect all taxpayers to follow the law –whether you are a business owner, individual, or government official – we all must play by the same rules and pay our fair share.”
According to the indictment and documents filed in court, between 2004 and 2012, KROUPA and FACKLER conspired to evade their tax obligations. KROUPA was appointed to the United States Tax Court on June 13, 2003 for a term of 15 years, but she retired on June 16, 2014. During the same period, FACKLER was a self-employed lobbyist and political consultant who owned and operated a business known as Grassroots Consulting. From 2004 to 2013, KROUPA and FACKLER owned a home in Minnesota. From 2007 to 2013, they also leased a second residence in Maryland.
According to the indictment and documents filed in court, as part of the conspiracy to defraud the United States, KROUPA and FACKLER fraudulently claimed personal expenses as Grassroots Consulting business deductions. They fraudulently claimed the following personal expenses as deductible business expenses: rent and utilities for the Maryland home; utilities, upkeep and renovation expenses of the Minnesota home; pilates classes; spa and massage fees; jewelry and personal clothing; wine club fees; Chinese language tutoring; music lessons; personal computers; and expenses for vacations to Alaska, Australia, The Bahamas, China, England, Greece, Hawaii, Mexico and Thailand.
According to the indictment and documents filed in court, KROUPA and FACKLER made a series of other false claims on their tax returns, including failing to report approximately $44,520 that KROUPA received from a 2010 land sale in South Dakota. The defendants falsely claimed financial insolvency to avoid paying tax on $33,031 on cancellation of indebtedness income.
According to the indictment and documents filed in court, in 2006, KROUPA and FACKLER concealed documents from their tax preparer and an IRS Tax Compliance Officer during an audit. During a second audit in 2012, KROUPA and FACKLER caused misleading documents to be delivered to an IRS employee in order to convince the IRS employee that certain personal expenses were actually business expenses of Grassroots Consulting.
According to the indictment and documents filed in court, between 2004 and 2010, KROUPA and FACKLER purposely understated their taxable income by approximately $1,000,000 and purposely understated the amount of tax they owed by at least $400,000.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS and the United States Postal Inspection Service.
Assistant U.S. Attorneys Benjamin Langner and Timothy Rank are prosecuting the case.
Defendant Information:
DIANE L. KROUPA, 60
Minnetonka, Minn.Charges:
- Conspiracy to defraud the United States, 1 count
- Tax evasion, 2 counts
- Making and subscribing, 2 counts
- Obstruction of an IRS audit, 1 count
ROBERT E. FACKLER, 62
Minnetonka, Minn.
Charges:
- Conspiracy to defraud the United States, 1 count
- Tax evasion, 2 counts
- Making and subscribing, 2 counts
- Obstruction of an IRS audit, 1 count
Former Operative of Boston “Boiler Room” Sentenced to Prison for Fraud and Conspiracy ChargesRead the Press Release
BOSTON – A former Boston resident was sentenced today in U.S. District Court in connection with his participation in a fraudulent “boiler room” operation that misled investors and caused over $4 million in losses.
Jonathan Fraiman, 36, was sentenced by U.S. District Court Judge F. Dennis Saylor, IV to six years in prison, three years of supervised release, and ordered to pay restitution of $3,800,466. Following an 11-day trial in December 2015, Fraiman was convicted of mail fraud and conspiracy to commit mail and wire fraud
In December 2007, Fraiman joined Envit Capital LLC (Envit), a company which, with its various related entities, purported to invest in and manage a hedge fund and private equity funds. Envit originally operated in Boston, and later opened an office in Boca Raton, Fla. Upon joining Envit, and through August 2009, Fraiman conspired with Envit’s CEO and Chairman, co-defendant Edward Laborio, to solicit investments, by, among other things, making fraudulent misrepresentations about the historical rate of return of certain Envit entities and falsely promising certain investors quarterly fixed dividends on their investments. As part of the scheme, Fraiman purported to act as some investors’ investment adviser, a position he exploited to convince his clients to invest monies, including retirement assets and trust monies, in Envit through bogus promises of guaranteed dividends and false assurances regarding the financial health of the company. As part of the conspiracy, Fraiman and Laborio periodically rolled out new Envit “offerings,” which invariably were based on deceptive representations about the company, to both existing and new investors in order to raise more funds for Envit, from which they both personally profited. Investors lost over $4 million through their investment in Envit and its related entities.
Laborio, who was also charged in the indictment, was a fugitive and was found deceased in Barcelona, Spain in summer 2015.
In imposing sentence, Judge Saylor noted the “coldhearted” nature of the crimes of which Fraiman was convicted, particularly given that some of the victims were elderly individuals who had lost retirement savings in the scheme.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The U.S. Attorney’s Office also acknowledges the valuable assistance provided by the U.S. Securities and Exchange Commission, Boston Regional Office. The case was prosecuted by Assistant U.S. Attorneys Vassili Thomadakis and Eric P. Christofferson of Ortiz’s Criminal Division.
Former Insurance Agency Owner Pleads Guilty to Defrauding Clients Out of More Than $500,000Read the Press Release
TULSA, Okla.–A former insurance agent and owner of Grand Lake Investments and Insurance in Grove, Oklahoma, pleaded guilty today to implementing a fraudulent scheme that caused his clients to lose $505,126.43, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma, Special Agent in Charge R. Damon Rowe of the Internal Revenue Service-Criminal Investigation and Oklahoma Insurance Commissioner John D. Doak.
“The defendant perpetrated a scheme to defraud his clients who entrusted him with their annuities,” said U.S. Attorney Williams. “My office and our law enforcement partners are committed to an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. We are committed to ensuring that justice is provided for the victims.”
“Taking away an individual’s peace of mind by manipulating his or her retirement nest egg is unconscionable,” stated SAC Rowe. “Retirees obviously count on every penny of hard-earned money being there when it is needed, and they should not be subjected to the greed of trusted insurance agents who line their own pockets with dollars manipulated away from clients who have literally placed a portion of their future in the hands of thieves. It is deceitful, it is shameful, and it is just plain wrong. That is exactly why IRS Criminal Investigation is very proud and willing to team up with agencies like the Oklahoma Insurance Department who share our goal of putting people like Mr. Hibbing out of business, and punishing them for their financial misdeeds.”
“Fraud is something I will not tolerate,” said Oklahoma Insurance Commissioner Doak. “It is imperative that consumers be able to trust their insurance agent or broker. I want to thank the U.S. Attorney for the Northern District of Oklahoma, the IRS and the Arkansas Insurance Department for their assistance in this case. It was truly a team effort.”
Gary Edward Hibbing, 52, of Chino, California, and formerly of Grove, Oklahoma, pleaded guilty before U.S. District Court Chief Judge Gregory K. Frizzell to two counts of wire fraud and two counts of unlawful monetary transactions. Hibbing was indicted on August 12, 2015. Sentencing is scheduled on July 12, 2016.
According to admissions made in court, Hibbing defrauded his victims through a scheme called “twisting.” Twisting is an insurance industry term that refers to the fraudulent practice by an insurance agent of convincing a client to surrender an existing annuity in exchange for a new one. Because there is usually a penalty for early termination of an annuity, the client often loses money while the agent makes money on a new commission.
Hibbing admitted that he lied to clients to convince them to surrender their existing annuities and immediately purchase new ones. He intentionally failed to disclose early termination penalties. He also provided false information to insurance companies to facilitate his twisting scheme.
At the time of sentencing, Hibbing faces imprisonment terms up to 20 years on the wire fraud counts and up to 10 years on the unlawful monetary transaction counts. The defendant also faces entry of a criminal forfeiture money judgment in the amount of $505,126.43 representing proceeds obtained as a result of his wire fraud scheme.
The case was investigated by the Internal Revenue Service-Criminal Investigation and the Oklahoma Insurance Department’s Anti-Fraud Unit. The case is being prosecuted by Assistant U.S. Attorneys Kevin C. Leitch, Clemon D. Ashley, and Catherine Depew.
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Former Cheyenne, Wyoming Resident Christopher Sean Koegl Sentenced for False Statement and Fraud to Obtain Federal Employees' CompensationRead the Press Release
Cheyenne – U.S. Attorney Christopher A. Crofts announced today that forty-five year old Colonial Heights, Virginia, resident Christopher Sean Koegl was sentenced on March 28, 2016, by United States District Court Judge Alan Johnson to serve thirty-six (36) months of probation and to pay approximately $31,090 in restitution to the United States government for making false and fraudulent statements to obtain federal workers’ compensation benefits. In addition to this sentence, Koegl will no longer receive federal workers’ compensation benefits as a result of this felony conviction.
Koegl is a former resident of Cheyenne, Wyoming, and a former U.S. Postal Service employee who injured his knee on the job and began receiving federal workers’ compensation benefits in 2010. These benefits were paid by the U.S. Department of Labor. As a federal workers’ compensation beneficiary, Koegl was required to immediately report if he returned to work or obtained new employment. Koegl was also required to immediately return any benefit payment which he received for a period in which he worked.
In September 2014, Wyoming Division of Criminal Investigation agents served a search warrant on Koegl’s Cheyenne residence and seized evidence of drug distribution. When interviewed by agents, Koegl admitted selling heroin in Cheyenne beginning around July 2013. Following the interview, Koegl was arrested and charged with possession of heroin with intent to deliver in violation of Wyoming state law. Koegl pleaded guilty and was sentenced by the state court to 5 years’ probation.
As charged in the indictment, on April 15, 2014, Koegl submitted a false form to the Department of Labor which reported that he was not self-employed or involved in any business activities between January 2013 and April 2014. This statement was false because Koegl was selling heroin in Cheyenne between July 2013 and April 2014.
"The Office of Inspector General is committed to working with our law enforcement partners to ensure that those who defraud Department of Labor programs, in this case the Federal Employees' Compensation Act program, are held accountable," stated Steven Grell, Acting Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
The U.S. Postal Service Office of Inspector General’s Executive Special Agent in Charge Joanne Yarbrough said, "The American public trusts that U.S. Postal Service employees will obey the law. When an employee of the Postal Service violates that trust, the U.S. Postal Service Office of Inspector General (USPS OIG) thoroughly investigates those matters. It should be noted the overwhelming majority of Postal Service employees are honest, hardworking, and trustworthy individuals who would never consider engaging in any criminal behavior. The behavior described in this sentencing is not tolerated within the Postal Service. Workers' compensation benefits are for those who are truly injured and this sentencing sends a clear message that workers' compensation fraud is a federal crime, which carries serious consequences. The USPS OIG, along with our law enforcement partners and the U.S. Attorney's Office, remain committed to safeguarding the integrity of the Worker's Compensation program and ensuring the accountability and integrity of U.S. Postal Service employees."
Former Carlsbad Resident Jailed for Sale of Unapproved “Energy Wave” Medical DevicesRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – April 4, 2016
SAN DIEGO – Former Carlsbad resident David Perez was sentenced in federal court today to 30 months in custody for selling unapproved “Energy Wave” medical devices over the internet and mailing them to customers throughout the United States.
According to admissions in his plea agreement, Perez marketed the “Energy Wave” device using the website www.myenergywave.com. The Energy Wave device consists of a micro-current frequency generator with a digital readout, two stainless steel cylinders, two personal application plates with connectors and lead wire for the cylinders and plates. Users were provided with an operating manual and a list of Auto Codes that set forth over 450 digital settings for the device, directed to treat specific conditions from abdominal pain, AIDS and diabetes to stroke, ulcer and worms. The Auto Codes and Manuel advised users to connect the cylinders or plates to the machine, and touch them to the body for a recommended run time to treat each condition.
David Perez admitted selling each device for approximately $1,200-$1,500, and receiving gross proceeds of approximately $271,000. He also acknowledged that he intended to defraud and mislead the Food and Drug Administration by attempting to evade the agency’s oversight of medical claims made regarding the Energy Wave device by maintaining a separate website (rifecodes.com) to which he referred customers who needed to obtain the auto codes that allegedly were used to treat the various medical conditions. Perez admitted that he knew or should have known a number of his customers were vulnerable because they had purchased the device in an attempt to cure cancer, and that they were marketing the device without the proper FDA approvals.
“It’s unconscionable to sell useless medical devices to critically ill people who are hoping for a miracle,” said U.S. Attorney Laura Duffy. “This sentence reflects the serious nature of this crime, and our commitment to protecting those who are most vulnerable to being preyed upon by heartless predators.”
“This investigation uncovered a serious public health threat and should serve as a warning to those who put consumers at risk for their own financial gain,” said Dave Shaw, special agent in charge for HSI San Diego. “HSI agents will continue to work with our law enforcement partners, both here and abroad, to investigate medical-related fraud over the Internet, especially when it involves an online marketing scam, such as this case in which unregulated medical devices were sold under false pretense.”
“The U.S. Postal Inspection Service will continue to work with our partners in law enforcement to ensure that the U.S. Postal Service isn't used as a conduit for those criminals who seek to perpetrate medical quackery upon the American consumer,” said Robert Wemyss, Inspector in Charge of the U.S. Postal Inspection Service - Los Angeles Division. “This type of crime takes advantage of the most vulnerable segment of the population to include the elderly and terminally ill. The protection of our citizens remains the cornerstone of our mission.”
“Consumers rely on the FDA to ensure that the medical products they use, including medical devices, actually treat the diseases or conditions they claim to. When criminals sell misbranded devices not cleared by the FDA, they put users’ health at risk,” said Lisa L. Malinowski, Special Agent in Charge, FDA Office of Criminal Investigations’ Los Angeles Field Office. “We will continue to devote our resources to removing such threats to the public’s health from the U.S. marketplace.”
DEFENDANT Criminal Case No. 15cr0360-BEN
David Perez Age: 60 Medford, Oregon
SUMMARY OF CHARGES
Conspiracy– Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Immigration and Customs Enforcement’s Homeland Security Investigations
Postal Inspection Service
Food and Drug Administration, Office of Criminal Investigations
Former Baggage Handlers at LAX Arrested on Federal Drug Charges for Allegedly Using Credentials to Bring Cocaine Past SecurityRead the Press Release
LOS ANGELES – Two former baggage handlers who worked at Los Angeles International Airport were arrested today by law enforcement authorities investigating the use of employee credentials to breach airport security.
Adrian Ponce, 27, and Alberto Preciado Gutierrez, 26, both of South Gate, were arrested this morning without incident by law enforcement officers with the Drug Enforcement Administration, the Federal Bureau of Investigation, the Los Angeles World Airports Police Department, and the Los Angeles Police Department. Both defendants are scheduled to make their initial appearances this afternoon at 2:00.
The two defendants are charged in a federal criminal complaint with conspiracy to possess with intent to distribute and to distribute cocaine. Both men are expected to make their initial court appearances this afternoon in United States District Court in Los Angeles.
According to an affidavit by a detective with the Los Angeles Airport Police, who is working with an anti-narcotics trafficking task force at LAX, Ponce and Preciado “were engaged in a nationwide conspiracy to possess with intent to distribute and to distribute cocaine.” As part of this conspiracy, Ponce and Preciado facilitated the ability of third-party couriers to use commercial airlines to smuggle kilogram “samples” of cocaine from Los Angeles to drug customers on the East Coast. At the time of the conspiracy, Preciado was a supervisory baggage handler employed by Swissport International at LAX.
“These defendants are charged with abusing their privileged access on behalf of drug dealers,” said United States Attorney Eileen M. Decker. “This case is yet another example of employees associated with airports assisting drug traffickers.”
Less than two weeks ago, authorities arrested a JetBlue flight attendant who allegedly attempted to bring nearly 70 pounds of cocaine through security at LAX (see: http://go.usa.gov/cM6aW). Marsha Gay Reynolds, who was arrested in New York, has arrived in Los Angeles, and is expected to make her initial appearance in United States District Court this afternoon at 2:00.
As part of the investigation into the former baggage handlers, law enforcement seized a kilogram of cocaine in Preciado’s possession on December 16, 2015. According to the affidavit, the seizure was made in a restroom in Terminal 3 at LAX, where Preciado was delivering the cocaine to a courier, a man identified as “J.C.,” who was holding a boarding pass to travel on a JetBlue flight to New York only an hour later. After this incident, Preciado was terminated by Swissport.
The following day, law enforcement interviewed Ponce, who had been taken into custody while waiting for Preciado in a vehicle outside Terminal 3. According to the affidavit, Ponce gave a written statement in which he admitted that “on multiple occasions,” he and Preciado had used Preciado’s supervisory status as an LAX employee to smuggle drugs to out-of-state drug customers by using third-party couriers, such as J.C., who had booked flights from LAX to the East Coast, and were willing to take the drugs on a commercial flight in exchange for payment.
In another statement given to law enforcement officials in January, Ponce allegedly admitted working with a large-scale drug supplier, and he explained how couriers with travel documents would pass through normal airport security, and would be provided with kilogram quantities of cocaine by Preciado, who had used his employee credentials to bypass security screening. According to the affidavit, Ponce told law enforcement that if East Coast customers liked the cocaine “sample,” then large shipments – more than 100 kilograms – would be delivered by driving the drugs across the country, and Ponce allegedly admitted actually driving trucks laden with drugs, also in exchange for payment.
Ponce previously worked at LAX for a baggage handling service that was recently acquired by Swissport.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If they are convicted of the narcotics trafficking offense, Ponce and Preciado would face a mandatory minimum sentence of 10 years in federal prison, and a statutory maximum sentence of life.
This investigation was conducted by the DEA Los Angeles International Airport Narcotics Task Force, an inter-agency task force based at LAX. In addition to the Drug Enforcement Administration, the Task Force is made up of representatives from the Federal Bureau of Investigation, the Los Angeles World Airports Police Department, the Los Angeles Police Department, and the Los Angeles County Sheriff’s Department. The Task Force also works closely with the United States Customs and Border Protection and the Transportation Security Administration.
The DEA Los Angeles International Airport Narcotics Task Force is providing a coordinated law enforcement effort to target airport/airline internal criminal enterprises that use the aviation system to transport large amounts of illicit drugs throughout the United States, and throughout the world.
Swissport International cooperated in the investigation.
Federal Jury Convicts Three Mexican Nationals in Plan to Smuggle over $150,000,000 Worth of CocaineRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Lucio Molina Marroquin (38, Mexico), Robison Perez Montez (39, Mexico), and Javier Noyola Ruiz (40, Mexico) guilty of conspiring to possess five kilograms or more of cocaine with the intent distribute it while onboard a vessel subject to the jurisdiction of the United States. Each faces a mandatory minimum penalty of ten years, up to life, in federal prison. A sentencing hearing has been set for July 1, 2016.
According to evidence presented at trial, on July 6, 2015, a self-propelled semi-submersible (SPSS) vessel piloted by four Colombian nationals departed Colombia with more than 6,000 kilograms of cocaine. The vessel then traveled over 1,000 miles before arriving at its final destination, a point 200 nautical miles south of Puerto Escondido, Mexico. The vessel waited there for Mexican vessels to arrive to offload the drugs at sea.
Marroquin, Montez, and Ruiz were members of an advance team sent to verify the SPSS vessel’s arrival, check for law enforcement presence in the area, and then contact the organizers in Mexico so additional boats could be sent to rendezvous with the SPSS vessel and offload the cocaine. On July 18, 2015, before the offload could occur, the SPSS vessel was detected by a United States maritime patrol aircraft and interdicted by a boarding team from United States Coast Guard Cutter STRATTON.
This case was investigated by the Panama Express South Strike Force, a standing Organized Crime Drug Enforcement Task Force (OCDETF), comprised of agents and analysts from the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Drug Enforcement Administration, the United States Coast Guard Investigative Service, the Naval Criminal Investigative Service, and U.S. Southern Command's Joint Interagency Task Force South. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. This case is being prosecuted by Special Assistant United States Attorney James Zoll and Assistant United States Attorney Christopher F. Murray.
Federal Indictments Result in Charges Against 16 in Gregg CountyRead the Press Release
TYLER, Texas - U.S. Attorney John M. Bales announced today that 16 individuals have been charged in a federal firearms and drug trafficking conspiracy in the Eastern District of Texas.
According to the three indictments, which were returned by a federal grand jury on Mar. 16, 2016, the 16 defendants are alleged to be involved in a conspiracy by either members or associates of the Aryan Brotherhood and criminal street gangs to violate federal firearms and narcotics laws in the Gregg County, Texas area. Those named in the indictments from Longview include:
Haley Still, 29;
Courtney Crim-Gross, 39;
James Todd Harrington, Jr., 34;
David Wayne Williams, 30;
Chad David Dunaway, 23;
Brandon Scott Cheatum, 34;
Brandon Michael Allen, 31;
Jason Ray Ragan, 26;
Erick Lamar Addison, 37;
James Lamar Fountain, 34;
Charles Tarez Rollins, 41;
Alvin Lee Thompson, 42;
Kenneth Ray Addison, 41; and
Gena Elizabeth Rowley, 36.Also indicted was Timothy Paul Morales, 23, of Galveston, Texas.
The defendants are charged with conspiring to distribute methamphetamine and cocaine from at least January 2014. Many of the defendants are also charged with firearms violations such as being felons in possession of a firearm and possession of a firearm during a drug trafficking crime. If convicted, they face penalties of from five years to Life in federal prison.
This operation used confidential informants, search warrants, traffic stops, and other investigative tools to seize over 15 firearms and 650 grams of methamphetamine.
This 10-month, multi-agency investigation was led by the Tyler Texas Bureau of Alcohol, Tobacco, Firearms and Explosives Field Office and Tyler Texas Federal Bureau of Investigation Field Office with assistance provided by the Gregg County CODE Unit, Longview Police Department, Gregg County Sherriff’s Office, and the Tyler Texas Drug Enforcement Administration Field Office. This case is being prosecuted by Assistant U.S. Attorney Jim Middleton.