Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Monday 4 April 2016
District Court Enters Injunction Against Michigan Cheese Manufacturer and Its Owners to Prevent Distribution of Adulterated CheeseRead the Press Release
The U.S. District Court for the Eastern District of Michigan entered an injunction against S. Serra Cheese Company (Serra Cheese), of Clinton Township, Michigan, and its co-owners, Stefano Serra and Fina Serra, to prevent the distribution of adulterated cheese, the Department of Justice announced today.
The department filed a complaint on Aug. 8, 2014, in the U.S. District Court for the Eastern District of Michigan, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, S. Serra Cheese Company prepares, processes and distributes several varieties of pasteurized, ready-to-eat cheeses, such as ricotta, provolone, mozzarella and primo sale. The complaint alleged that the company’s Italian cheeses are manufactured in insanitary conditions and that the company’s procedures are inadequate to ensure the safety of its products.
The injunction announced today followed an Oct. 20, 2015, decision by the district court that Serra Cheese violated the Food, Drug and Cosmetic Act by distributing adulterated, ready-to-eat cheese products. The company sells these products to customers in Michigan, Illinois, New York and Pennsylvania.
“The Department of Justice is committed to preventing the unlawful distribution of adulterated food and enforcing laws designed to protect consumer health and safety,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “The Department of Justice will continue to work with the FDA to enforce laws designed to protect the American people from adulterated food.”
The district court’s Oct. 20, 2015, decision concluded that inspections by the FDA in 2013 showed that Serra Cheese repeatedly introduced adulterated cheese into interstate commerce and caused the cheese to become adulterated while held for sale after shipment in interstate commerce. The inspections, which occurred in January and November 2013, resulted in the collection of samples that showed that Listeria innocua was present in numerous locations throughout Serra Cheese’s facility. Analysis of other samples showed significant levels of non-pathogenic E. coli in the finished cheese products, indicating exposure of the products, directly or indirectly, to feces.
Furthermore, according to the district court’s Oct. 20, 2015, decision, Serra Cheese’s own testing, conducted in March 2015, revealed the presence of Listeria spp. at multiple locations in the company’s facility, including on its production floor.
The injunction requires Serra Cheese to take specific steps to remedy the violations found by the court. The defendants are required to submit a written plan to test the cheese in its existing inventory to detect the presence of certain microorganisms. In addition, defendants are required to conduct ongoing testing of certain finished cheese products pursuant to a plan approved by FDA. If, as part of the ongoing testing of finished cheese products, any such product tests positive for L. mono or pathogenic E. coli, defendants must immediately cease production and distribution and notify FDA that production and distribution have ceased.
In addition, under the injunction, the defendants must submit to the FDA a sanitation program that establishes adequate methods, facility and controls for receiving, preparing, processing, packing, holding, and distributing articles of food to minimize the risk of introduction of pathogenic Listeria or any other poisonous or deleterious substances, or contamination with filth, to ensure that defendants’ foods are not adulterated under the Act. For example, the plan must include thoroughly cleaning, sanitizing, renovating and rendering the facility and all equipment suitable for use in receiving, preparing, processing, packing, holding and distributing articles of food to prevent such articles from becoming adulterated and instituting standard sanitation operating procedures to ensure that the facility and equipment are continuously maintained in a sanitary condition.
The government is represented by Trial Attorney David A. Frank of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Peter Caplan of the Eastern District of Michigan, with the assistance of Associate Chief Counsel Yen Hoang of the U.S. Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
Dallas Man is Sentenced to Serve a Total of 25 Years in Federal Prison on Drug and Firearm ConvictionsRead the Press Release
DALLAS — A Dallas man who was convicted at trial last year on all counts of a superseding indictment charging drug trafficking and firearm offenses was sentenced on Thursday to a lengthy federal prison term, announced U.S. Attorney John Parker of the Northern District of Texas and U.S. Attorney John M. Bales of the Eastern District of Texas.
Thomas Earl Wright, 34, was sentenced by U.S. District Judge Jane J. Boyle to serve a total of 300 months in federal prison. He was convicted, following a five-day trial in September 2015, on one count of possession with intent to distribute five kilograms or more of cocaine, one count of possession with intent to distribute marijuana, one count of possessing a firearm in furtherance of a drug trafficking crime and one count of being a felon in possession of a firearm.
According to documents filed in the case and evidence presented at trial, officers with the Dallas Police Department responded to a welfare complaint about children coming and going from a narcotics stash house on Packard Street in Dallas. When officers arrived at the residence, they encountered Wright, with bundles of cash stuffed in his pockets, leaving the residence through its back door. When Wright’s co-defendant, Eric Tyrone Harris, opened the front door to the residence when officers knocked, officers noted a strong odor of marijuana emitting from the residence. A juvenile was at the front door with Harris, and officers removed the child from the residence and released him to a parent.
Law enforcement secured a search warrant and found multiple kilograms of cocaine located in a suitcase in a utility room, more than 100 pounds of marijuana in a bedroom closet and approximately $30,000 in cash — $3,000 in Wright’s pockets and $27,000 in cash beneath a mattress. In addition, they located three firearms in the residence.
Harris pleaded guilty in April 2015 to one count of possession with intent to distribute cocaine and was sentenced last month by Judge Boyle to 100 months in federal prison.
The Dallas Police Department, U.S. Secret Service, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives and the Plano Police Department investigated. Assistant U.S. Attorney Errin Martin of the Northern District of Texas and Assistant U.S. Attorney Heather Rattan of the Eastern District of Texas prosecuted the case.
# # #
Colombian Arms Trafficker Sentenced to 13 Years in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JHON JAIRO CRUZ TREJOS, a/k/a “Mellizo,” a citizen of Colombia, was sentenced today to 13 years in prison for conspiring to import cocaine into the United States and a related weapons offense. CRUZ TREJOS’s conviction on these charges resulted from his efforts to broker weapons deals on behalf of Colombian paramilitary groups, including exchanging cocaine for surface-to-air missiles and machine guns, and attempting to obtain highly enriched uranium to be used in an attack on a United States Embassy. CRUZ TREJOS pled guilty to cocaine importation and weapons charges in November 2015 before U.S. District Judge Naomi Reice Buchwald, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Jhon Jairo Cruz Trejos conspired to broker multimillion-dollar cocaine deals on behalf of Colombian terrorist organizations. Cruz Trejos negotiated those deals to fund the purchase of machine guns and surface-to-air missiles, and he tried to obtain uranium for a ‘dirty bomb’ to be used against a U.S. embassy. For his serious crimes, Cruz Trejos has been sentenced to 13 years in prison.”
According to the allegations contained in the superseding Indictment to which CRUZ TREJOS pled guilty, other documents filed in Manhattan federal court, and statements made during court proceedings:
Beginning in 2010, CRUZ TREJOS and others attempted to broker a weapons deal involving two Colombian paramilitary groups, which are also U.S.-designated foreign terrorist organizations: the Fuerzas Armadas Revolucionarias de Colombia (“FARC”) and the Ejército de Liberación Nacional (“ELN”). CRUZ TREJOS expressed interest in purchasing highly enriched uranium, missiles, machine guns, grenades, and explosives on behalf of the FARC and the ELN. During meetings in February and March 2010, for example, CRUZ TREJOS and another individual explained that the FARC wanted to use uranium to manufacture a “dirty bomb” targeting the United States Embassy in Bogotá, Colombia. CRUZ TREJOS also stated that FARC personnel planned to use the weapons in attacks on military bases and naval ships in an effort to disrupt drug interdiction efforts by the governments of Colombia and the United States.
During a recorded meeting in Barbados in December 2010, CRUZ TREJOS and others discussed a multimillion-dollar transaction involving the uranium, as well as 480 missiles, remote-detonated explosives, grenades, and Kalashnikov rifles for use in paramilitary “incursions.” In late 2011, Franklin Ramos Sanchez, who also was a charged defendant in this case, later told a confidential source (the “CS”), who was acting at the direction of the Federal Bureau of Investigation (“FBI”), that the FARC leadership was evaluating the terms of the deal and considering other options. In April 2013, Sanchez told the CS that the FARC had postponed its plan to attack the U.S. Embassy in Bogota.
In September 2012, Sanchez escorted the CS to a remote part of Colombia and introduced him to an ELN commander. The ELN commander expressed interest in exchanging cocaine for weapons, and explained that CRUZ TREJOS would represent him in the transaction going forward. In April 2013, CRUZ TREJOS discussed transporting cocaine to the United States, with the expectation that the proceeds would be used to pay for the weapons. Between June 2013 and February 2014, CRUZ TREJOS and Sanchez negotiated terms on a deal that was to involve financing the purchase of at least 60 AK-101 machine guns, 30 Dragunov rifles, 10 PKM machine guns, and several Igla surface-to-air missiles through the importation and distribution of cocaine in the United States. In furtherance of the deal, on November 22, 2013, CRUZ TREJOS provided 17 kilograms of cocaine and the equivalent of approximately $43,000 to another confidential source acting at the direction of the FBI in Barranquilla, Colombia.
On February 13, 2014, CRUZ TREJOS and Sanchez were arrested at a mall in Cartagena, Colombia. In a post-arrest statement, CRUZ TREJOS admitted that he had previously provided cocaine to an associate with the expectation that the proceeds would be used to purchase AK-101s, Dragunovs, and Igla missiles, and that he further planned to sell the weapons to either the FARC or the ELN.
CRUZ TREJOS and Sanchez were subsequently extradited to the United States. CRUZ TREJOS arrived in the Southern District of New York on or about April 30, 2015.
* * *
On November 5, 2015, CRUZ TREJOS pled guilty to all three Counts of the superseding Indictment: (1) conspiring to import five or more kilograms of cocaine into the United States; (2) distributing five or more kilograms of cocaine, knowing and intending that the narcotics would be imported into the United States; and (3) conspiring to use and carry machine guns during and in furtherance of a drug-trafficking crime.
In addition to his prison term, CRUZ TREJOS, 44, was sentenced to five years of supervised release, and ordered to pay a $300 special assessment.
Mr. Bharara praised the outstanding investigative work of the FBI’s New York Field Office and Weapons of Mass Destruction Directorate. Mr. Bharara also thanked the U.S. Department of Justice’s Office of International Affairs, and the Colombian National Police.
The prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III and Edward Y. Kim are in charge of the prosecution.
Chelmsford Man Charged with Attempting to Destroy Power Lines in Tyngsborough with Incendiary DeviceRead the Press Release
BOSTON – A previously-convicted Chelmsford man was charged today in U.S. District Court in Boston in connection with attempting to destroy high-voltage power lines with an incendiary device.
Danny M. Kelly, 61, was charged in a complaint with attempting to maliciously destroy and damage property used in interstate and foreign commerce and in an activity affecting interstate and foreign commerce by means of fire. Kelly was detained following an appearance before U.S. District Court Magistrate Judge Page Kelley today.
According to the complaint, on March 30, 2016, a brush fire broke out near Locust Avenue in Tyngsborough, Mass., in the vicinity of high-voltage power lines that bring power to the greater Boston area from Canada. After fire crews extinguished the fire, emergency and National Grid officials observed several suspicious objects dangling from the power lines. The objects were rendered safe by law enforcement officials and determined to be homemade incendiary devices containing materials which together make thermite, a substance that can cut through metal objects, such as power lines. At least one of the devices had been activated and fell to the ground and ignited the brush fire.
According to the complaint, federal agents also found a typed note on one of the high-voltage grid poles. The unsigned note took credit for cutting the lines, threatened future attacks, and threatened to disseminate on terrorist and anarchist websites the instructions on how to make the thermite devices.
As alleged in the complaint, federal law enforcement agents quickly recognized several similarities between this attack on the power infrastructure and an extortionate scheme in 2004-2005 in which Kelly had cut approximately 18 cable and telephone lines. The FBI also learned of recent shipments to Kelly’s residence of chemicals from which thermite can be made. During the search of Kelly’s residence, the FBI found an additional thermite device as well as additional chemicals and other materials related to the crime.
Kelly was convicted in federal court for the 2004-2005 crime, and has a long history of grievances with the court system, the immigration system, and the Town of Chelmsford.
The charge provides for a mandatory minimum sentence of five years and no greater than 20 years in prison, five years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Richard McKeon, Superintendent of the Massachusetts State Police; Chief James Spinney of the Chelmsford Police Department; and Chief Richard Howe of the Tyngsborough Police Department, made the announcement today. The Bureau of Alcohol, Tobacco, Firearms and Explosives, National Guard Civil Support Team, Massachusetts Department of Fire Services, National Grid and Tyngsborough Fire Department are also assisting in the investigation. The case is being prosecuted by Assistant U.S. Attorney Aloke Chakravarty of Ortiz’s National Security Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Cheektowaga Woman Pleads Guilty to Access Device Fraud and Aggravated Identity TheftRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Danielle Hamilton, 27, of Cheektowaga, NY, pleaded guilty to conspiring to commit access device fraud and aggravated identity theft before U.S. District Judge Lawrence J. Vilardo. The access device fraud charge carries a maximum penalty of five years and a $250,000 fine. Aggravated identity theft carries a mandatory penalty of two years which must be served consecutive to any penalty imposed on the access device fraud charge.Assistant U.S. Attorneys MaryEllen Kresse and Elizabeth R. Moellering, who are handling the case, stated that from October 2013 to January 2014, the defendant and others traveled to Walmart stores and other retail establishments in Western New York and Pennsylvania where they used unauthorized credit cards. The credit cards were obtained without the true account holder’s knowledge or authority. Hamilton and others purchased $500 store gift cards and other merchandise totaling in excess of $300,000.
The plea is the culmination of an investigation on the part of the United States Postal Inspection Service under the direction of Boston Division Inspector in Charge Shelly A. Binkowski, and the United States Secret Service under the direction of Special Agent in Charge C. Todd Laster.
Sentencing is scheduled for June 13, 2016 at 9:00 a.m. before Judge Vilardo.
Catherine McKinney Imprisoned for Large Law Firm EmbezzlementRead the Press Release
The United States Attorney for the District of Vermont announced that Catherine McKinney, 62, of Hartland, was sentenced today in United States District Court in Rutland to 36 months of imprisonment following her guilty plea to a charge of mail fraud. U.S. District Judge Geoffrey Crawford ordered that McKinney serve a one-year term of supervised release following her release from prison and pay restitution of about $903,000. At the conclusion of the hearing, McKinney was remanded to the custody of the U.S. Marshal to begin serving her sentence.
According to court records, on June 17, 2015, a federal grand jury in Rutland returned a three-count indictment charging McKinney with mail and wire fraud and interstate transportation of stolen money. The indictment alleges that, beginning no later than 2008 and continuing until early 2015, McKinney embezzled at least $690,000 from her employer, Myers Associates PLLC, a law firm in Lebanon which represents clients in both Vermont and New Hampshire. According to the indictment, McKinney wrote law firm checks to herself and to her creditors on which she forged the signature of her attorney employer. She deposited more than $90,000 in forged checks into her Vermont bank account. McKinney allegedly also caused electronic transfers of firm funds to pay her obligations, including large credit card bills. McKinney pled guilty to the mail fraud charge last December. Further investigation after the indictment established that the total loss suffered by Myers Associates was actually $962,000. McKinney recently liquidated the 401(k) retirement plan that had been set up by Myers Associates and turned over the net proceeds, about $64,000, as partial payment toward her restitution obligation.
This case was investigated by the United States Secret Service.
McKinney is represented by Assistant Federal Public Defender Elizabeth Quinn. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Blaine Man Sentenced to 15 Years for Transporting Child PornographyRead the Press Release
Contact: Chris Ruge
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Robert Kinney, Jr., 41, of Blaine, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 15 years in prison and 15 years of supervised release for transporting child pornography. The defendant was also ordered to pay $6,000 in restitution. He pled guilty on September 2, 2015.
According to court records, on about August 20 and 21, 2014, Kinney emailed at least nine videos and 15 images of child pornography as he traded with others over the internet. The defendant’s trade in child pornography supported, and was supported by, his personal collection of images and videos depicting the sexual exploitation of young children.
In announcing the sentence, Judge Woodcock described the defendant’s conduct as “chilling to any parent, grandparent, or anyone who cares about children.”
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Maine State Police.
Attorney General Loretta E. Lynch Statement on Judicial Approval of Historic Settlement with BP over the Deepwater Horizon Oil SpillRead the Press Release
Following the order today by U.S. District Judge Carl J. Barbier to enter the consent decree settling United States of America v. BP Exploration & Production Inc., et al., Attorney General Loretta E. Lynch released the following statement:
“The approval of this agreement will open a final, hopeful chapter in the six-year story of the Deepwater Horizon tragedy,” said Attorney General Loretta Lynch. “Today’s action holds BP accountable with the largest environmental penalty of all time while launching one of the most extensive environmental restoration efforts ever undertaken. I want to thank everyone who made this outcome possible, including my predecessor, Attorney General Eric Holder, and the federal agencies and states that developed the comprehensive restoration plan. The Department of Justice will continue to stand with the people of the Gulf as they seek to rebuild and protect the marine life, coastal systems, and beautiful beaches that have made the region a treasured natural resource.”
Anderson Man Sentenced for Bank RobberyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Anderson, Mo., man was sentenced in federal court today for robbing the Arvest Bank in Anderson.
Perry D. Abercrombie, 59, of Anderson, was sentenced by U.S. District Judge Beth Phillips to two years and nine months in federal prison without parole. The court also ordered Abercrombie to pay $699 in restitution.
On Aug. 3, 2015, Abercrombie pleaded guilty to robbing Arvest Bank, 607 N. Highway 71, Anderson, on May 18, 2015.
According to court documents, Abercrombie passed a handwritten note to a bank teller, indicating that he was robbing the bank and had a weapon. The teller retrieved $2,210 from her drawer and placed the money on the counter. Abercrombie took the money and the note and put them in his pocket, then left the bank.
A Missouri Highway Patrol trooper notified deputies from the McDonald County Sheriff’s Department that he had seen a pickup in the vicinity of the bank earlier that day. The trooper thought the pickup was suspicious and requested registration information for the vehicle to ensure there were no alerts for the driver or the vehicle. Deputies identified Abercrombie as the vehicle’s owner and retrieved his information, including a photograph. They showed Abercrombie’s driver’s license photo to bank employees, who said he resembled the man who had robbed the bank.
After identifying Abercrombie as a suspect in the bank robbery, a deputy drove to Abercrombie’s residence. After a short time, Abercrombie arrived at the residence. He was questioned by law enforcement officers and eventually admitted that he robbed the bank. He showed officers a cash box in his bedroom where he had put the money stolen from the bank.
Abercrombie also admitted that he had been watching several local financial institutions to determine which bank had the most lax security. He indicated he took these additional steps to ensure he successfully robbed the Arvest Bank, as well as carry out future bank robberies. Investigators were able to confirm Abercrombie’s information about “casing” additional banks after obtaining bank surveillance videos showing Abercrombie in his vehicle in the parking lot of those businesses.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the McDonald County, Mo., Sheriff’s Department and the FBI.
Anchorage Plastic Surgeon sentenced to prison for wire fraud and tax evasionRead the Press Release
Anchorage, Alaska – U.S. Attorney for the District of Alaska, Karen L. Loeffler, and Acting Assistant Attorney General of the Justice Department’s Tax Division, Caroline D. Ciraolo announced today that an Anchorage plastic surgeon was sentenced to 48 months in prison for wire fraud and tax evasion.
Dr. Michael D. Brandner, 67, of Anchorage, Alaska, was convicted by a federal jury in November 2015 of four counts of wire fraud and three counts of tax evasion. The charges arose from a scheme to conceal over $5 million of assets in secret bank accounts in Panama and Costa Rica from the Internal Revenue Service (IRS) and Dr. Brandner’s wife. According to the indictment and evidence introduced at trial, shortly after his wife filed for divorce in late 2007, Dr. Brandner collected millions of dollars in marital assets and secretly drove from Tacoma, Washington, to Costa Rica in Central America. In Costa Rica, he opened two bank accounts into which he deposited over $350,000 in cash and hid a thousand ounces of gold in a safe deposit box. He then traveled to Panama where he opened an account under the name of a sham corporation and deposited $4.6 million into the account in 2008.
Dr. Brandner concealed both the existence of the bank accounts and the interest income he earned on those accounts from the court in the divorce proceedings and from the IRS. Dr. Brandner owed the IRS $500,000 in additional taxes for the 2008 through the 2010 tax years. In 2011, Dr. Brandner repatriated over $4.6 million once the divorce was final only to have the funds seized by U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) special agents. He then lied to federal agents about his control of the funds.
In addition to the prison term, U.S. District Judge Sharon L. Gleason ordered Dr. Brandner to serve two years of supervised release and pay $25,922.95 toward the costs of prosecution. The judge will also consider the government’s request for restitution for Dr. Brandner’s ex-wife.
“Tax evasion and financial crimes undermine the system of laws that govern this country and demean the vast majority of citizens that pay their taxes and deal honestly and openly with the rules governing a whole array of judicial procedures,” said U.S. Attorney Loeffler. “I appreciate the hard work of the investigators and prosecutors who put the case together and presented it to the jury resulting in these verdicts.”
“Tax evasion knows no geographic bounds,” said Acting Assistant Attorney General Ciraolo. “This case demonstrates that there is no longer any country where it is safe for a defendant like Dr. Brandner to hide money from the government. The Department of Justice, along with its law enforcement partners, will continue to aggressively pursue individuals who conceal assets and income abroad in an effort to evade our nation’s tax laws.”
"Unchecked greed causes financial ruin to those left in its wake and creates an uneven playing field for those who would circumvent the law. Our mission at IRS-CI is to be that check to the fraudulently greedy," stated Special Agent in Charge Teri Alexander of IRS-Criminal Investigation. "Michael Brandner effectively stole from the US treasury and attempted to hide assets and money from the courts in an attempt to skirt the tax laws. We are grateful that the Department of Justice partnered with us to bring Brandner to justice and protect the integrity of our nation's tax system."
U.S. Attorney Loeffler and Acting Assistant Attorney General Ciraolo commend the special agents of IRS-Criminal Investigation and HSI, who investigated the case, as well as prosecutors, Assistant U.S. Attorney Bryan Schroder, and Trial Attorney Ignacio Perez de la Cruz of the Tax Division.
Alleged Drug Trafficker Extradited from Mexico to Eastern District of CaliforniaRead the Press Release
SACRAMENTO, Calif. — On Friday, April 1, 2016, Alvaro Rios-Madrid, 57, of Guamuchil, Sinaloa, Mexico, was formally extradited to the United States by Mexico to face federal narcotics charges, United States Attorney Benjamin B. Wagner announced.
On December 13, 2012, a federal grand jury in Sacramento indicted Rios-Madrid on one count of conspiring to distribute cocaine and two counts of using phones to facilitate the distribution of narcotics.
According to court documents, the government alleges that Rios-Madrid regularly exported large quantities of cocaine from Mexico to the United States and used a U.S.-based distribution cell to move his cocaine through a nationwide network of couriers to several states including Utah, Minnesota, Indiana, Ohio, Massachusetts, and California. Rios-Madrid is alleged to have regularly smuggled multi-kilogram quantities of cocaine into the United States through various ports of entry, including Nogales, Arizona, and San Ysidro, California. The cash proceeds from the sale of Rios-Madrid’s cocaine totaled, on average, between $500,000 and $1.3 million every month. Operatives in the United States arranged for those proceeds to be sent to Rios-Madrid in Mexico. As a result of a long-term investigation, the DEA and other state and federal agencies seized large quantities of cocaine and over $1 million in cash.
This case is the product of an investigation by the U.S. Drug Enforcement Administration; the United States Marshals Service; the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the Department of Homeland Security, U.S. Customs and Border Patrol; the Sacramento County Sheriff’s Department; the Central Valley HIDTA; the Sacramento Police Department; the California Department of Justice (Cal MMET); the San Joaquin County Metropolitan Narcotics Task Force; the Elk Grove Police Department; the San Joaquin County Sheriff’s Department; the Stockton Police Department; the Los Angeles County Sheriff’s Department; the Galt Police Department; the California Highway Patrol; the Nevada State Highway Patrol; the Minnesota Highway Patrol; the Kansas State Highway Patrol; the Massachusetts State Highway Patrol; and the Iowa State Highway Patrol. The U.S. Department of Justice’s Office of International Affairs provided assistance with the extradition. Assistant United States Attorneys Michael M. Beckwith and Paul A. Hemesath are prosecuting the case.
If convicted of the conspiracy, Rios-Madrid faces a maximum statutory penalty of 10 years to life in prison, a $10 million fine, and five years to life of supervised release. If convicted of using a cellphone to facilitate a drug trafficking offense, Rios-Madrid faces a maximum statutory penalty of four years in prison and a $250,000 fine for each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Albuquerque Men Ordered Detained Pending Trial on Federal Bank Robbery ChargesRead the Press Release
ALBUQUERQUE – This morning a U.S. Magistrate Judge sitting in Albuquerque, N.M., found probably cause to support a criminal complaint charging Greg Miera, 50, Martin Huerta, 43, Christian Herrera, 20, Isaiah Gallegos, 20, and Christopher Gallegos, 31, all of Albuquerque, with bank robbery. The Magistrate Judge ordered Miera, Huerta and Christopher Gallegos detained pending trial, and released Herrera and Isaiah Gallegos to a half-way house under pretrial supervision and other conditions of release.
Miera, Huerta, Herrera, Isaiah Gallegos and Christopher Gallegos were arrested on March 30, 2016, by the FBI and Albuquerque Police Department after a source identified the men as the individuals involved in robbing the US Bank located at 5620 Wyoming Blvd. NE in Albuquerque, on March 30, 2016. The complaint alleged that APD officers conducted surveillance as a vehicle with four men pulled up to the US Bank on the afternoon of March 30, 2016. Three of the men remained outside in the vehicle while the fourth entered the US Bank, threatened to shoot the bank employees, and demanded that two bank tellers place cash into a plastic bag.
APD officers continued to conduct surveillance as the fourth man reentered the vehicle and the vehicle was driven to a residence in the North Valley of Albuquerque where the officers later allegedly observed Miera throw a plastic bag containing cash over a fence into a vacant lot. Thereafter, the FBI executed a search warrant at the residence and also retrieved the plastic bag with cash that allegedly was discarded by Miera.
If convicted of the crimes charged in the criminal complaint, Miera, Huerta, Herrera, Isaiah Gallegos and Christopher Gallegos each face a maximum of 20 years in federal prison. Charges in criminal complaints are merely accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department. Assistant U.S. Attorney Paul Mysliwiec is prosecuting the case.
Alaska Plastic Surgeon Sentenced to Prison for Wire Fraud and Tax EvasionRead the Press Release
Defendant Concealed Bank Accounts in Panama and Costa Rica from the IRS
An Anchorage, Alaska, plastic surgeon was sentenced to 48 months in prison on Friday for wire fraud and tax evasion, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Karen L. Loeffler of the District of Alaska.
“Tax evasion knows no geographic bounds,” said Acting Assistant Attorney General Ciraolo. “This case demonstrates that there is no longer any country where it is safe for a defendant like Dr. Brandner to hide money from the government. The Department of Justice, along with its law enforcement partners, will continue to aggressively pursue individuals who conceal assets and income abroad in an effort to evade their responsibilities under our nation’s tax laws.”
Dr. Michael D. Brandner, 67, was convicted by a federal jury in November 2015 of four counts of wire fraud and three counts of tax evasion. The charges arose from a scheme to conceal over $5 million of assets in secret bank accounts in Panama and Costa Rica from the Internal Revenue Service (IRS) and Dr. Brandner’s wife. According to the indictment and evidence introduced at trial, shortly after his wife filed for divorce in late 2007, Dr. Brandner collected millions of dollars in marital assets and secretly drove from Tacoma, Washington, to Costa Rica in Central America. In Costa Rica, he opened two bank accounts into which he deposited over $350,000 in cash and hid a thousand ounces of gold in a safe deposit box. He then traveled to Panama where he opened an account under the name of a sham corporation and deposited $4.6 million into the account in 2008.
Dr. Brandner concealed both the existence of the bank accounts and the interest income he earned on those accounts from the court in the divorce proceedings and from the IRS. Dr. Brandner owed the IRS $500,000 in additional taxes for the 2008 through the 2010 tax years. In 2011, Dr. Brandner repatriated over $4.6 million once the divorce was final only to have the funds seized by U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) special agents. He then lied to federal agents about his control of the funds.
In addition to the prison term, U.S. District Judge Sharon Gleason in Anchorage ordered Dr. Brandner to serve two years of supervised release, and pay $25,922.95 toward the costs of prosecution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Loeffler thanked special agents of IRS-Criminal Investigation and HSI, who investigated the case and Trial Attorney Ignacio Perez de la Cruz of the Tax Division and Assistant U.S. Attorney Bryan Schroder of the District of Alaska, who jointly prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Abington Man Sentenced for Stealing Social Security BenefitsRead the Press Release
BOSTON – An Abington man was sentenced today in U.S. District Court in Boston for stealing $65,311 in Social Security benefits.
Mark Gardner, 57, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to three years of probation, including six months of home confinement, and was ordered to pay $65,311 in restitution to the Social Security Administration and a fine of $6,000. In November 2015, Gardner pleaded guilty to stealing public money.
Gardner’s mother died in 2009, but her monthly Social Security benefits continued to be directly deposited into a bank account held jointly in her name and Gardner’s name. Although Gardner was not entitled to this money, he routinely withdrew the Social Security money for his own use. In total, from 2009 to 2014, Gardner took $65,311 in Social Security funds to which he was not entitled.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office, in partnership with the Social Security Administration, to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died. In the past year, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money.
Last month, Lucy Girard, of Townsend, Mass., pleaded guilty to stealing $208,068 from Social Security; Brian Sandiford, of Jamaica Plain, was sentenced for stealing $70,811 from Social Security; and Shirley Warner, of Haydenville, Mass., pleaded guilty to stealing $45,491 from Social Security. Next week, Richard Alan Hersey, of Winthrop, will be sentenced for stealing $444,287 in Social Security and federal pension benefits.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division, made the announcement today. The Gardner case was prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Friday 1 April 2016
Wounded Knee Man Indicted on Sexual Abuse and Contact ChargesRead the Press Release
United States Attorney Randolph J. Seiler announced that a Wounded Knee, South Dakota, man has been indicted by a federal grand jury for Sexual Abuse and Abusive Sexual Contact.
Kelly Tyrell Bell, a/k/a Kelly Thunder Horse, age 26, was indicted on March 22, 2016. Bell appeared before U.S. Magistrate Judge Daneta Wollmann on March 25, 2016, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is life in custody and/or a $250,000 fine, a lifetime of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Bell engaging in a sexual act with an incapacitated person on January 22, 2016, at Kyle.
The charges are merely accusations and Bell is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Office of Justice Services, and the Federal Bureau of Investigation. Assistant U.S. Attorney Eric Kelderman is prosecuting the case.
Bell was released on bond pending trial. A trial date has been set for May 31, 2016.
Winner Man Sentenced for Aggravated IncestRead the Press Release
United States Attorney Randolph J. Seiler announced that a Winner, South Dakota, man convicted of Aggravated Incest was sentenced on March 28, 2016 by U.S. District Judge Roberto A. Lange.
Clinton Pierce, age 40, was sentenced to 54 months in custody, followed by 3 years of supervised release, a $5,000 fine, and a $100 special assessment to the Federal Crime Victims Fund.
Pierce was indicted for Aggravated Incest by a federal grand jury on July 14, 2015. He pled guilty on January 7, 2016.
Between September l, 2013, and June 23, 2015, Pierce and the victim were checking cattle together and driving around the family ranch in Todd County, South Dakota. While in the vehicle, Pierce sexually assaulted the victim, and the sexual touching happened for several minutes. The victim was under 18 years of age at the time.
This case was investigated by the Division of Criminal Investigation and Federal Bureau of Investigation. Assistant U.S. Attorney Carrie G. Sanderson prosecuted the case.
Pierce was immediately turned over to the custody of the U.S. Marshals Service.
Two Sentenced in Aggravated Identity Theft and Wire Fraud SchemeRead the Press Release
HOUSTON – Two Houston residents have been ordered to federal prison following their convictions of wire fraud and aggravated identity theft, announced U.S. Attorney Kenneth Magidson. Chloe McClendon, 27, and Domonique Thomas, 25, pleaded guilty Oct. 9, 2015.
Today, U.S. District Judge David Hittner upwardly departed from the U.S. sentencing guidelines in ordering Thomas to prison. He received 72 months for wire fraud as well as a mandatory 24 months for the aggravated identity theft which must be served consecutively for a total of 96 month in federal prison. Judge Hittner ordered McClendon to serve a total of 65 months – 41 months for the wire fraud and a consecutive 24 months on the identity theft. Both defendants were also ordered to serve three years of supervised release and must pay restitution in the amount of $267,253.43. In handing down the sentences, Judge Hittner read excerpts from statements of some of the 1,526 identified victims in the case.
The defendants were able to engage in this scheme through the theft of personal identifying information (PII) of individuals from the Department of State Passport Agency where McClendon had worked. They used the stolen and unlawfully obtained PII of true persons to create counterfeit identification documents. The defendants then recruited other individuals to assume the stolen identities and use the counterfeit documents to obtain commercial lines of credit and purchase iPhones, iPads and other electronics merchandise.
Previously released on bond, McClendon was taken into custody following the sentencing today where she will remain pending transfer to a U.S. Bureau of Prisons facility. Thomas has been and will remain in custody.
A third co-defendant - Alicia Myles, 31 - who had also pleaded guilty, will be sentenced June 1, 2016. She remains in custody.
The investigation leading up to the arrest was conducted by the Department of State, Diplomatic Security Service, Houston Field Office and Criminal Fraud Investigations Division and the Houston Police Department. Assistant U.S. Attorneys Ted Imperato and Alamdar Hamdani are prosecuting this case.
Two Members of International Child Exploitation Conspiracy SentencedRead the Press Release
Two members of an international child exploitation conspiracy were sentenced today for their participation in two websites that were operated for the purpose of coercing and enticing minors as young as eight years old to engage in sexually explicit conduct on web camera.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Section Chief Calvin Shivers of the FBI’s Violent Crimes Against Children Section (VCACS) made the announcement.
Stephen R. Funk, 35, of Milwaukee, and James E. Hancock, 45, of Boston, Georgia, were sentenced to 252 and 90 months in prison, respectively, by U.S. District Judge T.S. Ellis III of the Eastern District of Virginia. Both Funk and Hancock will be required to register as sex offenders. In December 2015, Funk and Hancock each pleaded guilty to one count of conspiracy to distribute and receive child pornography. The investigation, Operation Subterfuge, identified more than 300 minor victims in the United States and an estimated 1,600 minor victims were lured to the websites.
In connection with their guilty pleas, the defendants admitted that they and other members of the conspiracy created false profiles on social networking sites, such as YouTube, posing as young teenagers to lure children to the websites they controlled. Once on the conspirators’ websites, the conspirators showed the children pre-recorded videos of prior minor victims, often engaging in sexually explicit conduct, to make the new victims think that they were chatting with another minor. Using these videos, the conspirators coerced and enticed children to engage in sexually explicit activity on their own web cameras, which the website automatically recorded. Conspirators earned points based on their contribution to the success of website objectives, which allowed them access to the sexually exploitative videos of children. Law enforcement agencies have disabled both websites.
Trial Attorney Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Tracy Doherty-McCormick of the Eastern District of Virginia prosecuted the case. CEOS Trial Attorney Ravi Sinha assisted with the prosecution.
VCACS special agents led the investigation with the assistance of the FBI’s Operation Rescue Me and the FBI’s Digital Analysis and Research Center. The South Africa Police Service, Family Violence, Child Protection and Sexual Offenses, Gauteng; Dutch Police Service Agency, KLPD; Royal Canadian Mounted Police, National Child Exploitation Coordination Centre; and the Australian Federal Police, Child Protection Operations, Sydney were active partners in the investigation. The U.S. Attorneys’ Offices of the Eastern District of Wisconsin and the Middle District of Georgia contributed to the investigation and the prosecution.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Tennessee Woman Sentenced to Prison for Tax Fraud SchemeRead the Press Release
NORFOLK, Va. – Marsha King, 38, of Lakeland, Tennessee, was sentenced today to 100 months in prison for theft of government money and aggravated identity theft.
On July 30, 2015, after a week-long jury trial, King was found guilty of two counts of theft of government property and 12 counts of identity theft. According to court documents and evidence presented at trial, King resided with her sister in Memphis, Tennessee. King’s sister was employed as a school teacher in Memphis and actively engaged in various extra-curricular programs. At various times, King’s sister would print out rosters of her students and bring them home. On these rosters were various means of identification of the students in King’s sister’s class. Unbeknownst to King’s sister, the names and means of identification of these students were used by Marsha King to file false and fraudulent federal income tax returns and fraudulently receive income tax refunds.
The income tax returns were filed electronically from Memphis, and according to IRS records, a number of the false and fraudulent income tax returns can be traced back to IP addresses that originated from Marsha King’s Sprint account and her University of Memphis student account. Marsha King was a student at the University of Memphis and had a student account and access to the University of Memphis intranet system. Based upon the instructions on the false and fraudulent income tax returns, the IRS made direct deposits into a number of different bank accounts. At least one of these accounts was in the name of Marsha King. Other accounts were in the name of Marsha King’s friends and family members, including her ex-husband who was in prison.
During this time period, Marsha King had another sister who lived in Norfolk. Some of the funds obtained from these false and fraudulent tax returns were deposited into accounts in the name of King’s sister. When Marsha King traveled to Norfolk to visit her sister, she ultimately withdrew in excess of $140,000 of the fraudulently obtained income tax refunds. In total, King filed approximately 500 fraudulent returns for approximately $611,000 in loss to the government.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas Jankowski, Special Agent in Charge, Washington D.C. Field Office, IRS-Criminal Investigation, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorneys Stephen Haynie and Joseph Kosky prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-65.
Stevensville Man Convicted of Manufacturing and Dealing Firearms Without a LicenseRead the Press Release
MISSOULA – Following a three day federal trial, a Montana jury found Kyle Robert Wick, 31, of Stevensville, guilty of manufacturing and dealing in firearms without a license. The charges stemmed from Wick’s advertisement and sale of “Uzi parts kits” on a gun sale website. Sentencing has been set for July 22, 2016.
Wick was originally indicted by a grand jury in October of 2015, for transfer of firearms not registered in the National Firearms Registration and Transfer Record. A superseding indictment containing additional counts, including manufacturing and dealing firearms without paying tax, registering as a dealer, or having a license, was filed in March 2016. The Jury acquitted on counts related to transfer of unregistered firearms and failing to pay tax or register as a dealer, but found Wick guilty of dealing firearms without a license.
At trial, the government introduced evidence that in April of 2013, agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), found an advertisement for an “Uzi parts kit” for sale on the website gunbroker.com. In May of 2013, a confidential informant made contact with the seller, who was located in Stevensville, Montana. The seller identified himself as Kyle Wick. The informant purchased an Uzi parts kit from Wick for $1,200. Wick explained to the informant how to machine the parts to assemble them as a semi-automatic weapon.
The parts kit was turned over to ATF. An ATF officer was able to reassemble the parts into a functioning machinegun configuration. The ATF conducted a search for Kyle Robert Wick in the National Firearms Registration and Transfer Record (NFRTR), and failed to locate his name. The Uzi parts kit likewise was not registered with the NFRTR. ATF agents conducted a search of Wick’s Stevensville residence in March of 2014 and seized firearms parts and computers.
The agents interviewed Wick during the search of his residence. Wick said that he had conducted sales on gunbroker.com for approximately four years. He acknowledged that he did not have a license to manufacture firearms or machineguns. He stated that he had sold “at least several dozen” Uzi parts kits in addition to the one purchased by the informant. He said that he did all of the welding work in his garage. The ATF recovered numerous additional kits that Wick had sold online, which contained parts capable of assembling semi-automatic or fully automatic machineguns. Wick did not possess a license to manufacture or deal in firearms as required by the Gun Control Act of 1968.
“The US Department of Justice is dedicated to enforcing our existing gun laws and to ensuring that gun sales are conducted only by reputable dealers in compliance with the law,” said U.S. Attorney Michael Cotter. “The Jury’s verdict in this case reinforces the truth that nobody is above these laws, and that individuals like Mr. Wick, who attempt to circumvent them, will be held accountable.”
“Wick intentionally bypassed federal regulations by manufacturing and dealing firearms without a license,” said ATF Special Agent in Charge Ken Croke. “These federal firearms regulations were enacted to protect American citizens by restricting criminals’ access to guns and assisting law enforcement investigations related to violent gun crime.”
The case was prosecuted by Assistant U.S. Attorney Paulette Stewart and Special Assistant U.S. Attorney Adam Duerk. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives.
St. Louis Man Sentenced in Craigslist Counterfeit ConspiracyRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today, that Lewis Johnson, 38, of St. Louis, Missouri, was sentenced in the District Court in East Saint Louis, Illinois, on the charge of Conspiracy to Manufacture, Possess and Pass Counterfeit United States Currency. The Court sentenced Johnson to 36 months in federal prison to be followed by 3 years of supervised release.
Johnson pled guilty on December 29, 2015. During his plea, Johnson admitted that he, along with several others, had engaged in an agreement to use counterfeit United States currency to buy vehicles off of sellers using Craigslist. Once in possession of the vehicles they would then resell them for genuine currency. During his sentencing on March 31, 2016, the District Court Judge found that Johnson had engaged in the manufacturing of counterfeit currency in addition to passing the counterfeit.
During August of 2013, the group contacted a person in Sandoval, Illinois, who had listed his vehicle for sale on Craigslist. Johnson, along with the other conspirators then met with the seller and purchased the vehicle for $2,400 in counterfeit $100 Federal Reserve Notes. Johnson and others involved in the conspiracy were arrested a short time after the fraudulent purchase.
The investigation in this case was conducted by the Carlyle and Sandoval Police Departments, the Clinton County Sheriff’s Office, and the United States Secret Service. The case is being prosecuted by Assistant United States Attorney Ranley R. Killian.
School Construction Authority General Contractor Sentenced to 96 Months in Prison for Long-Running Scheme to Deprive Workers of the Prevailing WageRead the Press Release
Earlier today in Brooklyn federal court, Muzaffar Nadeem, the owner of SM&B Construction Co., Inc. (SM&B), was sentenced to 96 months’ imprisonment, ordered to pay more than $1.3 million in restitution to the IRS, and ordered to forfeit to the government over $7.1 million in criminal proceeds, following his convictions on May 8, 2015, after a four-week jury trial, for mail and wire fraud, structuring financial transactions, federal programs bribery, making illegal cash payments to a union official, money laundering, unlawful monetary transactions over $10,000, subscribing to false tax returns, and multiple related conspiracy charges.
The convictions arose out of Nadeem’s leadership role in a long-running scheme to pay SM&B’s workers a fraction of the prevailing wage on projects funded by the New York City School Construction Authority (SCA), as SM&B was legally and contractually required to do. Nadeem’s co-conspirators Zainul Syed, Afzaal Chaudry and Irfan Muzaffar were also convicted at trial of various crimes for their participation in this scheme. Muzaffar was previously sentenced to 18 months’ imprisonment, and Chaudry was previously sentenced time served, following approximately ten months of imprisonment. Syed is awaiting sentencing. The sentencing proceedings were held before U.S. District Judge Brian M. Cogan.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Shantelle P. Kitchen, Special-Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York; and Jonathan Mellone, Acting Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
“Contractors who perform public works in New York City and New York State are on notice that if they line their pockets by cheating workers out of the wages to which they are entitled will be vigorously prosecuted,” stated United States Attorney Capers. Mr. Capers expressed his grateful appreciation to the Office of the New York State Attorney General and that office’s Organized Crime Task Force, the New York City Department of Investigation, the New York City School Construction Authority, Office of Inspector General, the New York City Police Department, and the New York County District Attorney’s Office for their assistance in the investigation and prosecution of the defendant.
IRS Special Agent-in-Charge Kitchen stated, “The conviction of Mr. Nadeem and his co-conspirators and now, the sentencing of Mr. Nadeem, will hopefully give the hard working individuals who were defrauded in this multi-million dollar scheme a feeling that justice has been served. Additionally, this investigation should send a reassuring message to the taxpayers, who ultimately fund School Construction Authority projects, that law enforcement will investigate and prosecute such frauds, as well as send a message of deterrence to anyone contemplating taking advantage of public works projects.”
DOL-OIG Special Agent-in-Charge Mellone stated, “Today’s sentencing underscores the Office of Inspector General’s continued commitment to bring to justice those who would bribe Union officials and falsify payroll records to cheat the American worker out of the required prevailing wage to which they are entitled.”
Nadeem owned and operated SM&B, which received over $36 million in fraud-induced payments from the SCA since 2007. Evidence at trial established that SM&B paid workers, including bricklayers and laborers, cash wages on its projects at rates that were a small fraction of the prevailing wage. The defendant and his co-conspirators Syed and Chaudry then falsely certified to the SCA that the workers had been paid the prevailing wage.
To conceal the scheme, and to obtain cash to pay the illegally low wages to workers, Nadeem, Syed and Muzaffar illegally structured financial transactions, cashing hundreds of checks in amounts less than $10,000 for the purpose of avoiding federal reporting requirements. Since July 2006, Nadeem and others acting his direction wrote more than $4.1 million in structured checks on SM&B’s account.
Nadeem and Syed arranged for the payment of $30,000 in cash bribes to an undercover SCA Inspector, and over $7,000 in cash bribes to Russell Argila, a shop steward for Local 1 of Bricklayers. Argila previously pleaded guilty to accepting those bribes. Nadeem also laundered approximately $7 million in proceeds of the scheme by funneling it through shell companies, and sent millions of dollars through these shell companies to Pakistan to invest in an amusement park and resort complex named “Wayzgoose Park.”
Finally, Nadeem filed false tax returns for SM&B and himself that fraudulently inflated SM&B’s business expenses and reduced its profits by more than $4 million.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Lan Nguyen, Gina M. Parlovecchio and Nathan Reilly are in charge of the prosecution. Assistant United States Attorney Claire Kedeshian is handling the forfeiture aspects of the case.
The Defendant:
MUZAFFAR NADEEM
Age: 60
Brooklyn, New YorkE.D.N.Y. Docket No. 13-CR-424 (BMC)
Savannah Man Sentenced to Nearly Thirteen Years in Federal Prison for Armed Bank RobberyRead the Press Release
Savannah, GA: Jerald A. Bowman, 40, was sentenced on Wednesday, March 30, 2016, by Chief United States District Court Judge Lisa Godbey Wood to 155 months imprisonment for the February 3, 2015 armed robbery of the Navy Federal Credit Union in Richmond Hill, Georgia. Bowman was also found to be responsible for armed robberies of the Georgia’s Own Credit Union in Savannah on September 30, 2014; the Wells Fargo Bank on Waters Road in Savannah on November 12, 2014; the Heritage Bank in Savannah on December 4, 2014; and the Wells Fargo Bank on Abercorn Street in Savannah on March 19, 2015.
Evidence showed that Bowman, who disguised his appearance during the robberies, conducted surveillance of the banks and used items such as rocks and door stops to hold the banks’ doors open. He distracted tellers with questions about deposit slips or money orders, then pulled out a gun and demanded money. In total, Bowman stole $15,055.00.
A military veteran, Bowman requested leniency from the Court based upon his service in the U.S. Army. Evidence presented at the sentencing hearing, however, showed Bowman was involuntarily separated from the Army with an Other Than Honorable Discharge following a series of assaults and drug use. Bowman insisted he suffered from mental stress as a result of combat deployments, but service records revealed Bowman never served in a theater of combat operations. “Some people have earned the right to wrap themselves in the flag,” said Chief Judge Wood. “But you, Mr. Bowman, are not one of them.”
United States Attorney Edward J. Tarver said, “Criminals who commit violent acts and endanger the lives of innocent parties should be sentenced to the harshest penalties provided by law. Protection of the American people is the Department of Justice’s number one priority. This U. S. Attorney’s Office will continue its aggressive efforts to prosecute dangerous criminals and remove them from our communities.”
J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated, “The partnership formed between the FBI’s Southeast Georgia Violent Crime Task Force and local police to advance the investigation resulted in this sentencing and removed a dangerous individual from the streets of Savannah. The FBI’s Task Force continues to partner every day with our local, state and federal partners to identify, investigate and arrest violent offenders to mitigate the threat they pose and to make our community a safer place.”
In addition to his prison sentence, Bowman was ordered to pay restitution and serve a period of supervised release after he is released from prison. Regarding the length of the prison sentence, Tarver noted that there is no parole in the federal system.
U. S. Attorney Tarver commended the efforts of the FBI Southeast Georgia Violent Crime Task Force, the Richmond Hill Police Department, the Savannah-Chatham Metropolitan Police Department, and the Savannah Department of Community Service. Assistant United States Attorneys Carlton Bourne, Jennifer Solari and Scarlett Nokes prosecuted the case. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Sabattus Man Sentenced to over 11 Years for Receiving Child PornographyRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Jody G. Moczara, 35, of Sabattus, Maine, was sentenced today in U.S. District Court by Judge George Z. Singal to 135 months in prison to be followed by 10 years of supervised release for receiving child pornography. Moczara pleaded guilty to the charge on October 14, 2015.
According to court records, in June of 2015, Moczara used the internet and a file sharing program to download several child pornography videos to his computer. Information obtained from his computer showed that he used the file-sharing program to search for child pornography. The computer contained large numbers of child pornography video files and still images, including images depicting children in bondage, in pain or discomfort, and engaging in bestiality.
The investigation was conducted by the Maine State Police Computer Crimes Unit and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Romanian National “Guccifer” Extradited to Face Hacking ChargesRead the Press Release
Marcel Lehel Lazăr, 44, of Arad, Romania, allegedly the hacker “Guccifer,” made his initial appearance today in federal court in Alexandria, Virginia.
Lazăr had been temporarily surrendered from Romania to face U.S. charges relating to unauthorized access of protected computers, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, Principal Deputy Assistant Secretary Bill A. Miller of the U.S. Department of State Bureau of Diplomatic Security (DSS) and Special Agent in Charge James M. Murray of the U.S. Secret Service’s Washington Field Office.
“Marcel Lazar is the latest of a dozen high-level cybercriminals who have recently been extradited to face justice in the United States,” said Assistant Attorney General Caldwell. “Old-fashioned investigative work, enhanced international law enforcement relationships, and a long memory can ensure that foreign-based hackers have no safe haven even in the remote corners of the globe. As the saying goes, ‘they can run, but they can’t hide.’”
“Mr. Lazar violated the privacy of his victims and thought he could hide behind the anonymity of the Internet,” said U.S. Attorney Boente. “No matter where they are in the world, those who commit crimes against U.S. citizens will be held accountable for their actions, pursued by our investigators and prosecutors and brought to justice.”
“As a direct result of relentless investigative efforts and cooperation with our international partners, Marcel Lazar, also known as Guccifer, will begin answering for his alleged cyberhacking activities today in the U.S. judicial system,” said Assistant Director in Charge Abbate. “I commend the dedicated work of the agents, analysts, prosecutors and our federal partners to identify Guccifer, who is alleged to have gained unauthorized access to on-line accounts and violated the privacy of victims, while attempting to hide unsuccessfully behind the anonymity of the Internet.”
In the United States, Lazăr is charged in a nine-count indictment with three counts of wire fraud, three counts of gaining unauthorized access to protected computers, and one count each of aggravated identity theft, cyberstalking and obstruction of justice. Lazăr's case will be heard before U.S. District Judge James C. Cacheris of the Eastern District of Virginia.
According to the indictment, from December 2012 to January 2014, Lazăr hacked into the email and social media accounts of high-profile victims, including a family member of two former U.S. presidents, a former U.S. Cabinet member, a former member of the U.S. Joint Chiefs of Staff and a former presidential advisor. After gaining unauthorized access to their accounts, Lazăr publicly released his victims’ private email correspondence, medical and financial information and personal photographs. The indictment also alleges that in July 2013 and August 2013, Lazar impersonated a victim after compromising the victim’s account.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent until and unless proven guilty.
The FBI’s Washington Field Office, the DSS and the U.S. Secret Service are investigating the case with assistance from the Romanian National Police.
Senior Counsels Ryan K. Dickey and Peter V. Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Jay V. Prabhu and Maya D. Song of the Eastern District of Virginia are prosecuting the case. The Criminal Division’s Office of International Affairs has provided significant assistance.
Romanian National “Guccifer” Extradited to Face Hacking ChargesRead the Press Release
ALEXANDRIA, Va. – The hacker "Guccifer," alleged to be Marcel Lehel Lazăr, 44, of Arad, Romania, made his initial appearance today here in federal court on charges relating to unauthorized access of protected computers.
According to the indictment, from December 2012 to January 2014, Lazăr hacked into the email and social media accounts of high-profile victims, including a family member of two former U.S. presidents, a former U.S. Cabinet member, a former member of the U.S. Joint Chiefs of Staff and a former presidential advisor. After gaining unauthorized access to their accounts, Lazăr publicly released his victims’ private email correspondence, medical and financial information and personal photographs. The indictment also alleges that in July 2013 and August 2013, Lazar impersonated a victim after compromising the victim’s account.
“Mr. Lazar violated the privacy of his victims and thought he could hide behind the anonymity of the Internet,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “No matter where they are in the world, those who commit crimes against U.S. citizens will be held accountable for their actions, pursued by our investigators and prosecutors, and brought to justice.”
Lazăr had been temporarily surrendered from Romania to face U.S. charges relating to unauthorized access of protected computers. In the United States, Lazăr is charged in a nine-count indictment with three counts of wire fraud, three counts of gaining unauthorized access to protected computers, and one count each of aggravated identity theft, cyberstalking and obstruction of justice. If convicted, he faces a maximum of 20 years in prison, with a two-year mandatory minimum for the aggravated identity theft charges. Lazăr’s next court appearance will be a detention hearing on Tuesday at 2 p.m.
“Marcel Lazar is the latest of a dozen high-level cybercriminals who have recently been extradited to face justice in the United States,” said Leslie R. Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division. “Old-fashioned investigative work, enhanced international law enforcement relationships, and a long memory can ensure that foreign-based hackers have no safe haven even in the remote corners of the globe. As the saying goes, ‘they can run, but they can’t hide.’”
"As a direct result of relentless investigative efforts and cooperation with our international partners, Marcel Lazar, also known as Guccifer, will begin answering for his alleged cyberhacking activities today in the U.S. judicial system,” said Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office. “I commend the dedicated work of the agents, analysts, prosecutors, and our federal partners to identify Guccifer, who is alleged to have gained unauthorized access to on-line accounts and violated the privacy of victims, while attempting to hide unsuccessfully behind the anonymity of the Internet."
The FBI’s Washington Field Office, the DSS and the U.S. Secret Service are investigating the case with assistance from the Romanian National Police.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Leslie R. Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Bill A. Miller, Principal Deputy Assistant Secretary of the U.S. Department of State Bureau of Diplomatic Security (DSS); and James M. Murray, Special Agent in Charge of the U.S. Secret Service’s Washington Field Office, made the announcement.
The case is being prosecuted by Assistant U.S. Attorneys Jay V. Prabhu and Maya D. Song, along with Senior Counsel Ryan K. Dickey and Trial Attorney Peter V. Roman of the Criminal Division’s Computer Crime and Intellectual Property Section. The Criminal Division’s Office of International Affairs has provided significant assistance.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-213.
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
Rochester Man Pleads Guilty to Sex Trafficking of A MinorRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr, announced today that Harris Hickman, 33, of Rochester, NY, pleaded guilty before the U.S. District Judge Elizabeth A. Wolford to sex trafficking of a minor. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life imprisonment and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that in March 2014, Hickman trafficked a 15 year old minor using by posting photographs of the minor in advertisements on Backpage.com., knowing that the minor was only 15 years old and would be caused to engage in prostitution activity. Hickman also benefitted financially from the prostitution activities of the minor by getting part of the proceeds.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation's Cyber Crimes Task Force, which includes the Monroe County Sheriff's Office, under the direction of Sheriff Patrick O'Flynn, the Rochester Police Department under the direction of Chief Michael Ciminelli, Special Agents of the FBI, under the direction of Special Agent in Charge Adam S. Cohen, and Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.Retired Funeral Director Pleads Guilty to Submitting Fraudulent Claims to the Veterans AdministrationRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Karen Schlager, 60, of Snyder, NY, pleaded guilty to submitting false and fraudulent claims to the Department of Veterans Affairs before U.S. District Judge Lawrence J. Vilardo. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney MaryEllen Kresse, who is handling the case, stated that the defendant, who was the funeral director at Schlager Funeral Home in Amherst, submitted claims to the VA seeking payment for death benefits, including transportation costs, burial services, and funeral costs, that she knew had not provided to veterans or their families. As a result of the defendant’s actions, the VA suffered a loss of approximately $13,800.
The plea is the culmination of an investigation on the part of Special Agents of the United States Veterans Administration, Office of Inspector General, Criminal Investigations Division, under the direction of Special Agent-in-Charge Jeffrey G. Hughes.
Sentencing is scheduled for July 7, 2016 at 10:00 a.m. before Judge Vilardo.Realtor Sentenced to Prison for Defrauding Vacationers Out of More Than $200,000Read the Press Release
Tampa, Florida – U.S. District Judge Steven D. Merryday has sentenced Michael Carleton (53, Bradenton) to 21 months in federal prison for mail fraud. As part of his sentence, the Court also entered a money judgment in the amount of $200,000, which constitutes the proceeds of the mail fraud. In addition, the Court entered an order requiring Carleton to pay restitution to the identified victims of the offense in the total amount of $136,098.96.
Carleton pleaded guilty on November 25, 2015.
According to court documents, from at least April 2012 through July, 2013, more than 70 individuals and families had entered into rental contracts via email with Carleton to rent vacation properties on Anna Maria Island. The contracts called for the renters to pay for the rental period prior to taking possession of the property. As the vacation rental dates approached, many victims were contacted by Carleton and given various excuses for why they could not be placed in their rental property, including that the properties needed repairs, or that he was filing bankruptcy and all monies needed to be secured by the trustee. In some cases, the victims (accompanied by family or friends) physically arrived at the rental properties, only to find another family already utilizing the property. In many cases, Carleton would rent and receive up-front payment from numerous renters for the same rental properties, for the same period of time. Victims arrived in Florida from all over the country, including one victim from as far away as Germany.
Over the course of the scheme, Carleton fraudulently received more than $200,000 from his victims. Some ultimately received refunds, only after threatening to or actually contacting the properties’ owners, or the Holmes Beach Police Department.
This case was investigated by the United States Postal Inspection Service. It was prosecuted by Assistant United States Attorney Rachel Jones.
R.I. Businessman Indicted for Arson, Wire FraudRead the Press Release
PROVIDENCE, R.I. – Daniel E. Saad, 50, of Spencer, Mass., pleaded not guilty in U.S. District Court in Providence, R.I., on Thursday to arson and wire fraud charges, for allegedly devising a executing a scheme to set fire to his business in Glocester, R.I., in an effort to collect insurance.
Appearing before U.S. District Court Magistrate Judge Patricia A. Sullivan, Saad pleaded not guilty to a federal indictment charging him with one count of arson, one count of use of fire to commit wire fraud, and two counts of wire fraud. Saad was released on unsecured bond following his arraignment.
The indictment, returned on Tuesday and unsealed on Thursday following Saad’s arrest and arraignment, is announced by United States Attorney Peter F. Neronha, Glocester Police Chief Joseph S. DelPrete, Daniel J. Kumor, Special Agent in Charge of the Boston Field Division of ATF, and Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police.
According to the indictment and information presented to the court, it is alleged that in late November 2014, Saad, who was encountering significant debt, devised a scheme to collect insurance payments by setting fire to his business, Snow’s Clam Box Restaurant and Pub, and then filing a claim with his insurance company for any damages caused by the fire.
It is alleged in the indictment that on November 30, 2014, Saad intentionally set fire to his business, causing significant damage, and that later the same day he filed an insurance claim with his insurance carrier.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The matter was investigated by the Glocester Police Department, the Rhode Island State Fire Marshal’s Office, and ATF, with the assistance of the Rhode Island Department of the Attorney General.
The case is being prosecuted by Assistant U.S. Attorney William J. Ferland.
###
Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Patient Recruiter and Staffing Company Employee Convicted of $2 Million Home Health Care Fraud SchemeRead the Press Release
A patient recruiter for several Miami-area home health agencies was convicted today for his role in a fraud and kickback scheme that resulted in the submission of millions of dollars in false and fraudulent claims to Medicare.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Division and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Carlos Rodriguez Nerey, 45, of Miami, was convicted after trial of one count of conspiracy to defraud the United States and pay and receive health care kickbacks and one count of receiving health care kickbacks.
According to evidence presented at trial, Nerey claimed to work at a staffing company called Sweet Life Staffing Inc. but was in fact a patient recruiter for D&D&D Home Health Inc. (D&D&D) and Mercy Home Care, Inc. (Mercy), two fraudulent home health care agencies in Miami. Evidence at trial demonstrated that Nerey worked for a number of fraudulent home health care companies in Miami before he began accepting kickbacks from D&D&D and Mercy. The defendant created a shell company for the purpose of accepting kickbacks from Mercy and D&D&D and received approximately $250,000 as a result of his role in the scheme, evidence at trial showed.
The evidence introduced at trial showed that Medicare paid more than $2 million to D&D&D and Mercy for those claims.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. Fraud Section Trial Attorneys Lisa H. Miller and Elizabeth W. Young are prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Omaha Woman Sentenced for Wire FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that on April 1, 2016, Patricia Walker-Halstead of Omaha, Nebraska, age 70, was sentenced for wire fraud. The Honorable Joseph F. Bataillon, Senior United States District Court Judge, sentenced Walker-Halstead to a term of twelve (12) months and one (1) day imprisonment. After her release from prison, Walker-Halstead will begin a term of supervised release of 2 years. Walker-Halstead was also ordered to make restitution in the amount of $500,000.
An investigation conducted by the United States Secret Service and the Nebraska State Patrol determined that from March, 2011, and continuing through November, 2012, Walker-Halstead transmitted false and fraudulent email communications as part of a scheme to obtain money. During this time period Walker-Halstead operated a private investigation company named Walker Investigations. The scheme arose out of Walker-Halstead’s professional relationship with a client who hired Walker Investigations to provide investigative work to the client.
Between March, 2011, and continuing through November, 2012, Walker-Halstead sent email communication to the client which appeared as though they were sent from an Investigator named “Scott.” Walker-Halstead represented to the client that “Scott” worked for the Nebraska State Patrol and was assisting with investigative work being performed by Walker Investigations. Emails sent by Walker-Halstead to the client suggested “Scott” was having financial troubles related to medical expenses, legal expenses, business expenses, and personal expenses and that “Scott” needed the client’s financial assistance. As a result of the emails, Walker-Halstead obtained $500,000 in numerous payments which she represented was then given to “Scott” to assist with his financial needs. Investigators confirmed “Scott” was a person made up by Walker-Halstead and who has never existed. Money received by Walker-Halstead for the purported benefit of “Scott” was used by Walker-Halstead for her personal benefit.
The Court determined that the loss amount relating to the scheme totaled $500,000.
This case was investigated by the United States Secret Service and the Nebraska State Patrol.
New Haven Man Sentenced to 41 Months in Prison for Illegally Possessing and Selling Sawed-Off ShotgunRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that CURTIS GIBBS, 32, of New Haven, was sentenced yesterday by Senior U.S. District Judge Alfred V. Covello in Hartford to 41 months of imprisonment, followed by three years of supervised release, for illegally possessing a sawed-off shotgun.
According to court documents and statements made in court, in January 2014, the ATF and New Haven Police Department received information that GIBBS was in possession of a sawed-off shotgun and a .380 caliber pistol and was looking to sell the firearms for $350. In a meeting with an individual who expressed interest in purchasing the firearms, GIBBS noted that the purchaser be careful because the shotgun “had a body attached to it.”
On February 3, 2014, the purchaser and GIBBS completed the transaction for the sawed-off shotgun and pistol. The pistol that was sold at that time turned out to be a starter’s pistol.
GIBBS has several prior felony convictions, including convictions for weapon in a motor vehicle and assault.
GIBBS has been detained since his arrest on April 23, 2014. On April 7, 2015, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven Police Department. The case was prosecuted by Assistant U.S. Attorney Robert M. Spector.
Neosho Man Indicted for Producing Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Neosho, Mo., man has been indicted by a federal grand jury for producing child pornography.
James Lyndon McFadin, Jr., 32, of Neosho, was charged in a seven-count indictment returned by a federal grand jury in Springfield, Mo., on March 29, 2016. McFadin was arrested this morning and remains in federal custody pending a detention hearing next week.
The federal indictment alleges that McFadin used six children – three females and two males, who ranged in age from approximately 5 to 16 years old – to produce child pornography between Jan. 1 and Dec. 19, 2015.
McFadin is also charged with one count of receiving and distributing child pornography over the Internet from Jan. 1 to Dec. 19, 2015.
The indictment also contains a forfeiture allegation, which would require McFadin to forfeit to the government any property used to commit the alleged offenses, including an HTC cell phone and an Asus laptop computer.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI, the Southwest Missouri Cyber Crime Task Force and the Neosho, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Moro Man Sentenced for Role in Staged Bank RobberyRead the Press Release
Eugene Babcock, 58, of Moro, IL, was sentenced yesterday in the United States District Court for the Southern District of Illinois to 28 months in federal prison, 3 years of supervised release, and ordered to pay remaining restitution in the amount of $165,862 (Babcock had returned $115,000 prior to his plea of guilty), on charges stemming from a staged bank robbery at Liberty Bank in Bethalto, Illinois, that occurred on December 13, 2014.
Evidence showed that on December 13, 2014, Liebheit, a bank manager at Liberty Bank, called police to report a bank robbery, indicating that a masked individual forced him into the bank at gun point prior to the bank opening. He gave a description of the suspect’s vehicle as being a tan station wagon or crossover style vehicle. He stated that he was forced to give the individual over $280,000 from the bank’s vault.
Further investigation revealed that Liebheit’s truck was used as a getaway vehicle and Liebheit was involved in the planning of the staged bank robbery. The masked individual was identified as Babcock. Liebheit recruited Babcock to orchestrate the robbery with an agreement that they would split the proceeds afterwards.
The case was investigated by the Federal Bureau of Investigation and the Bethalto Police Department. The case is assigned to Assistant United States Attorney Laura V. Reppert.
Monmouth County Man Gets 87 Months in Prison for Intent to Distribute over 150 Grams of MethamphetamineRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 87 months in prison for possessing 162 grams of methamphetamine with intent to distribute, U.S. Attorney Paul J. Fishman announced.
Theodore Santaguida, 42, of Ocean Township, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with possessing with intent to distribute methamphetamine. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
On Dec. 23, 2014, a task force of FBI and Ocean Township law enforcement executed a federal search warrant at Santaguida’s apartment, and seized 162 grams of methamphetamine.
In addition to the prison term, Judge Cooper sentenced Santaguida to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked officers of the Ocean Township Police Department under the direction of Chief of Police Steven R. Peters for their assistance.
The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Scott Krasny Esq., West Trenton, New JerseyMine operator sentenced for polluting Alaska RiverRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that James Slade, of Calgary, Canada, was sentenced to 12 months in prison for violating the federal Clean Water Act. Slade was convicted of two Clean Water Act crimes for discharging polluted wastewater into the Salmon River as a result of his operation of the Platinum Creek Mine located in western Alaska. Slade was ordered to serve a one-year term of supervision after he is released from prison. The Court concluded he did not have the ability to pay a fine.
Evidence at trial showed that the polluted discharges from the mine were hundreds of times over the legal limits set in the National Pollution Discharge Elimination System water quality permit issued for the mine. The Clean Water Act violations occurred during the 2010 and 2011 mining seasons, and were shown to be repetitive and ongoing. At the sentencing hearing, the United States presented evidence from a contaminants biologist who took samples of the turbid wastewater being discharged from the mine into the Salmon River in September 2011. Laboratory analysis conducted on the samples showed that the wastewater from the mine contained toxic levels of metals, including aluminum and copper that can be deadly to fish and aquatic life in the river.
Prior to imposing the sentence, U.S. District Judge Sharon L. Gleason noted that Slade made a choice to continue the mining production going even after the turbidity levels in the river were off the charts.
The Salmon River is located in Western Alaska, running past the Platinum Creek Mine and emptying into Kuskokwim Bay. It passes through the Togiak National Wildlife Refuge before entering the bay, and all five species of Alaska Salmon spawn in the river. Evidence admitted at trial showed a flow of up to 1200 gallons per minute of wastewater was discharged from the mine’s processing plant into one or more settling ponds that were not lined, and that did not contain the wastewater. Instead, the wastewater flowed out of the ponds and into the Salmon River, turning it from crystal clear to dirty brown. More than one million gallons of wastewater was therefore discharged each day the plant operated.
“The public must be able to rely upon companies and their executive to follow the laws that our nation has adopted to protect our rivers and oceans from harmful pollution,” said First Assistant U.S. Attorney Kevin Feldis. “Mr. Slade and XS Platinum did not follow these laws. Mr. Slade placed profits above the environment and above the law for his own self-interest. The mine operators said they were going to do one thing when they submitted their Mine Plan of Operations, and they ended up doing something very different that polluted a Salmon River in Alaska. Mr. Slade was the Chief Operating Officer and the man in charge at the mine. His sentence reflects the seriousness of the crime as demonstrated by all the evidence that was gathered thanks to the good work of the EPA, BLM, and all their state and federal partners.”
“Illegal pollution from industrial operations like mining can severely impact the health of Alaska waterways and fish species, like Pacific salmon,” said Ted Owens, Assistant Special Agent in Charge for the U.S. Environmental Protection Agency. “This sentence of incarceration shows that EPA is serious about holding people who knowingly break our critically important clean water laws to account.”
Slade was the Chief Operating Officer for XS Platinum, the company that owned the mining claims, and he is the third manager or senior executive of that company to be convicted in this case. Robert Pate, who was employed as the mine manager previously pled guilty to violating the Clean Water Act, along with James Staeheli, the prior processing plant manager, who also pled guilty to a Clean Water Act crime. All three individuals worked for the now defunct XS Platinum, Inc. That company was registered in name only in Delaware, and was 100 percent owned by an offshore company. Two other senior executives from XS Platinum, both Australian citizens, were also indicted but have refused to return to the United States to stand trial on the charges.
First Assistant U.S. Attorney Kevin Feldis prosecuted the case along with Senior Trial Attorney Chris Costantini from the Department of Justice’s Environmental Crimes Section. The investigation was conducted by the U.S. Department of Interior Bureau of Land Management Office of Law Enforcement and Security and the U.S. Environmental Protection Agency Criminal Investigation Division.
Mexican National Sentenced for Possession of Child PornographyRead the Press Release
LAREDO, Texas – Leobel Fuentes-Piedras, 22, of Puebla, Mexico, has been ordered to prison following his conviction of possession of child pornography, announced U.S. Attorney Kenneth Magidson. Fuentes-Piedras pleaded guilty Dec. 11, 2014.
Today, U.S. District Judge George P. Kazen, who accepted the guilty plea, handed Clark a sentence of 84 months in federal prison to be immediately followed by a 15-year-term of supervised release. He will also be required to register as a sex offender.In May 2014, the Texas Attorney General’s Office received information from Facebook that possible Child pornography was being uploaded to a Facebook account. The IP address was verified and law enforcement executed a search warrant at the identified location. At that time, law enforcement seized computer devices and interviewed Fuentes-Piedras.
He admitted to uploading child pornography through his computer and iPhone to Facebook accounts so he could access them from anywhere. Forensics analysis ultimately identified 54 shared files were consistent with child pornography.
Fuentes-Piedras will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Homeland Security Investigations and the Webb County Sheriff’s Office conducted the investigation.
The arrest of Fuentes-Piedras was a result of Operation Child Guardian, which was launched by the Webb County Sheriff’s Office in 2009. The success of these investigations have put dozens of suspected child predators behind bars.This case, prosecuted by Assistant U.S. Attorney Christopher S. Coker, 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."
Mexican National Sentenced for Illegally Reentering U.S.Read the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Mexican national, who had previously been deported after shooting at a police officer, has been sentenced in federal court for illegally reentering the United States.
Francisco Ortega-Montalvo, 36, a citizen of Mexico residing in Platte City, Mo., was sentenced by U.S. District Judge Beth Phillips on Thursday, March 31, 2016, to four years and three months in federal prison without parole.
On Nov. 4, 2015, Ortega-Montalvo was convicted at trial of illegally reentering the United States after having been deported following his felony conviction for shooting at a police officer.
Ortega-Montalvo was convicted in Arkansas state court in 2001 of aggravated assault and sentenced to 54 months in the Arkansas Department of Corrections. He was deported and removed from the United States in 2013 and permanently barred from entering, attempting to enter, or being in the United States at any time, due to his conviction.
Ortega-Montalvo was arrested at his residence on Dec. 10, 2014.
This case was prosecuted by Assistant U.S. Attorney Brent Venneman. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Mexican National Indicted for Transferring False Social Security CardsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that VIDAL OROSCO-BARRIOS, age 29, was charged today in a four-count indictment for transferring false Social Security Cards in violation of Title 18, United States Code, Section 1028(a)(2).
According to the indictment, OROSCO-BARRIOS sold counterfeit Social Security Cards on four separate occasions to confidential informants working with the Department of Homeland Security.
If convicted, OROSCO-BARRIOS faces a maximum term of imprisonment of fifteen years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U. S. Attorney Spiro G. Latsis is in charge of the prosecution.
Local Woman Sentenced to Prison for Wire Fraud, Identity Theft, and Filing False Tax ReturnsRead the Press Release
PENSACOLA, FLORIDA – Candace B. McLeod, 32, of Holt, Florida, was sentenced yesterday to 75 months in federal prison after pleading guilty to wire fraud, aggravated identity theft, and filing false tax returns. The sentence was announced by Christopher P. Canova, Acting U.S. Attorney for the Northern District of Florida.
Between 2009 and 2013, McLeod embezzled over $1 million from her employer, a family-owned business in Destin. McLeod worked as a bookkeeper, and she stole money by making unauthorized online payments to pay her credit cards with employer funds, using corporate credit cards for unauthorized personal purchases, and issuing extra checks to herself from corporate accounts by fraudulently using the signature of the general manager. She used her position to create false documentation and to manipulate accounting records to cover up her scheme. McLeod also failed to report the embezzled money as income on her income tax returns.
This case resulted from a joint investigation by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and the Okaloosa County Sheriff’s Office. Assistant U.S. Attorney Alicia H. Kim prosecuted the case.
The U.S. Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the U.S. Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Local Drug Dealers Plead GuiltyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Jeffrey Nielsen Zaccanti (29, Tampa) and Sadena Ann Raynor (36, Tampa) have pleaded guilty to conspiracy to distribute crack cocaine and distributing crack cocaine, respectively. Zaccanti faces a mandatory minimum penalty of 5 years, up to a maximum penalty of 40 years in federal prison. Raynor faces a maximum penalty of 20 years’ imprisonment.
According to the plea agreements, on three separate occasions in January 2016, Zaccanti and Raynor sold crack cocaine to an undercover detective from the Hillsborough County Sheriff’s Office. The transactions occurred in the parking lot of a Tampa apartment complex. On each occasion, Raynor arranged the transaction, and then either Zaccanti or Raynor completed the transaction with the undercover detective.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hillsborough County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Taylor G. Stout.
This is another case prosecuted as a part of the Department of Justice’s Project Safe Neighborhoods (PSN) Comprehensive Anti-Gang Initiative (CAGI). The program’s objective is to reduce criminal gangs, violent crime, illegal drugs, and guns through combined enforcement, prosecution, prevention, and re-entry efforts.
Lincoln Man Sentenced for Receiving Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Gerry Lee Peirce, 55, of Lincoln, Nebraska, was sentenced today in Lincoln, Nebraska, to 70 months in prison by United States District Judge John M. Gerrard, for receiving child pornography. After his release from prison, Peirce will also be required to register as a sex offender and complete 7 years of supervised release.
On September 9, 2014, a Task Force Officer operating in an undercover capacity, encountered a user, later determined to be Peirce, in a website chat room where Peirce had posted a link that led to a storage account containing child exploitation material. When law enforcement clicked on the link, they observed a total of 165 files in the account, 113 of which contained child pornography.
After identifying the subscriber information, officers executed a search warrant on the residence of Peirce. Peirce confessed to accessing child porn through the Internet and then distributing the links of the child porn sites and files to others.
In all, investigators found 69 videos of child porn on the computer, along with other images of child erotica that had been received and distributed.
This case was investigated by the Federal Bureau of Investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Lawrence Elementary School Classroom Assistant Charged with Opioid Distribution CrimeRead the Press Release
BOSTON – A 4th grade classroom assistant in a Lawrence school was arrested yesterday afternoon and charged in connection with an undercover operation involving cocaine and oxycodone pills in the greater Boston area.
Reynaldo Sanchez, 25, of Lawrence, was charged in a criminal complaint with one count of attempted possession and intent to distribute oxycodone. Sanchez was released on conditions after an appearance today in U.S. District Court in Boston.
As alleged in the criminal complaint, in August 2015, federal agents began investigating Sanchez for his involvement in a narcotics and money laundering organization operating in the Boston area. During the investigation, Sanchez arranged to purchase from undercover federal agents 10 – 15 kilograms of cocaine for a price of $33,000 per kilogram. The complaint further alleges that between March 29, 2016, and March 31, 2016, Sanchez sought to purchase what he believed were 11,000 oxycodone pills for $13 per pill from an undercover agent posing as a drug courier. At the time of his arrest, Sanchez was carrying a duffle bag containing $48,000.
The charging statute provides for a sentence of no greater than 20 years in prison, a lifetime of supervised release and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Matthew J. Etre, Special Agent in Charge of the Homeland Security Investigations, Boston Field Office; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement. Assistance was also provided by the Middlesex County District Attorney’s Office, Massachusetts Bay Transportation Authority Police; and the Lawrence, Franklin, Wareham and Dartmouth Police Departments. The case is being prosecuted by Assistant U.S. Attorney Carlos A. López of Ortiz’s Narcotics and Money Laundering Unit.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Kent Man Who Stole Identity to Work while Collecting Disability Sentenced to PrisonRead the Press Release
A Kent, Washington man whose disability fraud scheme kept a homeless Denver man from getting assistance was sentenced in U.S. District Court in Seattle to 33 months in prison and $200,118 in restitution, announced U.S. Attorney Annette L. Hayes. RICHARD ALAN DYSON, 62, stole the identity of a homeless man in Denver, Colorado and from 1999 to 2015 used the identity to work in construction while still collecting disability benefits in his own name. When the Colorado man tried to get public assistance he was initially disqualified because of the work history attributed to him in Washington State due to DYSON’s identity theft. At yesterday’s sentencing hearing U.S. District Judge Ricardo S. Martinez also imposed three years of supervised release.
“This defendant did not just steal from a government program. He kept a disabled man from getting the Social Security benefits to which he was entitled,” said U.S. Attorney Annette L. Hayes. “The prison sentence imposed in this case sends a clear message that identity theft does real harm and will not be tolerated.”
According to records in the case, DYSON applied for and was granted Social Security Disability in 1992, claiming he was unable to work due to a mental disability. He collected monthly disability payments until his arrest in 2015. In 1999, DYSON began earning income and reporting wages in Washington State under the name and Social Security number of a Colorado man. Between 2007 and 2014, DYSON collected 99 weeks of unemployment benefits using the Colorado man’s name and Social Security number. DYSON lived a completely separate, working life as the Colorado man. DYSON maintained membership in a labor union, completed training courses, paid dues, and held union membership cards, all in the Colorado man’s name. In all, he inhabited the stolen identity for nearly fifteen years, always careful to keep his two personas separate to further his scheme.
Writing to the court, prosecutors noted the fraud was uncovered when the Colorado victim applied for assistance. “This investigation was initiated when a disabled, homeless man in Colorado applied for the critical public welfare benefits needed for survival, only to be denied because his record showed he was working regularly in Washington State. Defendant’s misappropriation of (the victim’s) identification not only cheated the system as a whole, it specifically harmed (the victim) and deprived him of help he required….The victim’s vulnerability and life on the margin of society may have allowed Defendant’s scheme to go on as long as it did, but the impact of his offense is very real….”
The case was investigated by the Social Security Administration Office of Inspector General (SSA-OIG) and is being prosecuted by Special Assistant United States Attorney Benjamin Diggs. Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court.
Justice Department Warns Public to Beware of Fraudulent Tax Return Preparers and Tax Scheme Promoters, Urges Taxpayers to Pay Federal Income Taxes on Time and in FullRead the Press Release
Washington – With tax season in full swing, the Justice Department urged the public today to avoid dishonest tax-return preparers who fleece their customers and illegally drain the U.S. Treasury. Noting that every taxpayer is ultimately responsible for the contents of his or her own return, Acting Assistant Attorney General Caroline D. Ciraolo of the Tax Division also warned the public to be wary of anyone who guarantees a refund or who claims to sell a sure-fire way to reduce your taxes.
Dishonest Return Preparers Cost Their Clients and the United States
U.S. taxpayers filed approximately 150 million returns in 2014. According to statistics available from the Treasury Inspector General for Tax Administration, the Internal Revenue Service (IRS) identified more than 2.1 million of those returns that claimed fraudulent refunds totaling more than $15.7 billion. As in past years, the IRS has designated return preparer fraud as one of 2016’s “Dirty Dozen” tax scams to avoid during return filing season. In 2015, the Tax Division permanently shut down more than 35 fraudulent tax-return preparers located all over the United States. The defendants in those cases spanned the spectrum from large-scale return preparation franchises to small, independent return preparers.
“Every year, thousands of federal income tax returns are prepared by people who care much more about making a quick buck than about preparing accurate returns,” said Acting Assistant Attorney General Ciraolo. “Most tax return preparers are honest. But some preparers who charge clients a percentage of their tax refund intentionally prepare false returns to increase their clients’ refund, and thus their own fees. Likewise, some preparers who charge by the form will intentionally prepare incorrect forms that their clients don’t need in order to increase their compensation. Taxpayers might think that they’re getting a good deal on their taxes, or that as long as someone else prepares the return, they’re not responsible. They’re wrong. Taxpayers who have their return prepared incorrectly are required to pay the tax they owe, or pay back the refund they weren’t entitled to get. These clients might also owe interest and penalties, which can be substantial. Fortunately, there are red flags that taxpayers can look for and avoid when choosing a return preparer.”
Your refund should never be deposited directly into a preparer’s bank account.
In United States v. Elton L. Barnes, No. 2:14-cv-05621 (C.D. Cal.), the court barred a return preparer who caused other people’s tax returns to be deposited to bank accounts in his name.
Never sign a blank return or a blank form, or sign a return or a form without reading it first.
By law, a return preparer must provide a client with a completed copy of the return no later than the time the customer is asked to sign the return. In United States v. Syed N. Ahmed et al., No. 2:15-cv-11461 (E.D. Mich.), the United States alleged that the defendants’ Liberty Tax Service franchises asked customers to sign blank forms that stated that the customers had non-existent businesses, which were then used to maximize the customer’s refund. Although the defendants did not admit to the allegations in the complaint, they agreed to an order from a federal court permanently shutting down the stores.
Don’t use a preparer who mischaracterizes your expenses.
In United States v. Lawrence Preston Siegel, No. 3:15-00643 (S.D. Cal.), the defendant prepared returns that falsely characterized personal purchases as deductible expenses. For instance, one customer’s return deducted purchases at Tiffany & Co., Louis Vuitton, and Royal Caribbean Cruise Lines as “medical expenses.” The court permanently barred Siegel from preparing tax returns or providing tax advice for compensation.
Do not use a preparer who fabricates business expenses or deductions, or who claims bogus credits to which you are not entitled, such as the Earned Income Tax Credit, the child care credit, or the education credit.
One of the most common dishonest return-preparation practices is to prepare returns that include non-existent businesses, sometimes based on a client’s hobbies. In 2015, for example, federal courts shut down tax return preparers in Kahului, Hawaii; Appleton, Wisconsin; and Chicago, Illinois, who fabricated supposed “businesses” for their clients. Federal courts have also ordered return preparers in Miami, Florida, and Memphis, Tennessee to submit to third-party monitoring at their own expense to make sure they are not preparing returns with fraudulent “businesses.”
Some other fraudulent schemes and practices that have been stopped through injunction orders entered by federal courts throughout the country include:
Fabricating fake Form W-2 (Wage and Tax Statement) information;
Claiming bogus education and first-time homebuyer credits;
Claiming phony child and dependent care credits or residential energy credits;
Claiming fraudulent fuel tax credits;
Falsely exempting foreign earned income;
Inflating unreimbursed employee business expense deductions; and
Fraudulently inflating or decreasing a client’s income or deductions to maximize the Earned Income Tax Credit.
In January 2016, a federal court in Orlando, Florida entered a preliminary injunction against Jason Stinson, who ran a series of tax return preparer storefronts under the name “Nation Tax Services,” requiring him to shut down the stores pending resolution of the case. As part of its explanation for why it was ordering Stinson’s stores to shut down in the middle of the case, the court said that Stinson’s business “exposes . . . [his] customers to individual tax liability. Both the Government and Stinson’s customers will suffer irreparable harm if an injunction is not granted. Moreover, it is in the public’s best interest to protect vulnerable customers from the inaccurate preparation of their taxes, not to deplete Government resources, and to maintain the public trust in the tax system.” The case is United States v. Jason Stinson et al., No. 6:14-cv-1534 (M.D. Fla.).
The IRS advises taxpayers who ask a tax professional to prepare their return to be careful in the professional they select. The IRS offers some basic tips and guidelines to assist taxpayers in choosing a reputable tax professional and is also offering taxpayers a number of instructional YouTube videos to help them prepare their own taxes for the upcoming filing season. Several options, including free assistance with preparation and electronic filing for the elderly and individuals making $50,000 or less, are available to help taxpayers prepare for the current tax season and receive their refunds as easily as possible.
Tax Division Sues to Shut Down Promoters of Fraudulent Tax Schemes
In addition to return preparers who deliberately falsify returns, the Tax Division targets those who peddle schemes that purportedly reduce taxes—but in fact rely on false statements or financial sleight-of-hand.
In United States v. Wayne Reeves et al., No. 12-cv-1916 (D. Nev.), the court found that defendants Wayne Reeves and Diane Vaoga advised their clients “to set up sham trusts and have their wages directed into accounts for those trusts as a way to improperly reduce their tax liability.” They advised their clients that the income the clients received from the trusts was “nontaxable and did not need to be reported on tax returns.” The court further found that Reeves prepared tax returns that “willfully attempted to understate his clients’ correct tax liabilities,” and that Vaoga assisted him in doing so. In January 2015, the court permanently barred both Reeves and Vaoga from preparing returns or giving tax advice to others.
In November 2015, the Tax Division sued to shut down an alleged tax scheme based on a purported solar energy generation facility in Utah. The case is United States v. RaPower-3 LLC et al., No. 2:15-cv-00828 (D. Utah). The United States’ complaint alleges that the defendants purportedly sell “solar thermal lenses” to customers, and tell their customers that they are entitled to claim depreciation expenses and the solar energy credit for the lenses—even though the defendants allegedly know or have reason to know that their customers are not in the business of producing and selling solar energy and that the defendants’ purported solar energy facilities do not actually produce solar energy in a manner that meets the Internal Revenue Code’s requirements for claiming the credit.
And in the same month, in United States v. James Tarpey et al., No. 2:15-cv-00072 (D. Mont.), the Tax Division sued to shut down an alleged timeshare donation scheme. According to the United States’ complaint in that case, the defendants have their customers give rights in a timeshare to “Donate for a Cause,” a tax-exempt entity operated by Tarpey. The complaint alleges that the customers receive an appraisal that grossly overvalues the donated timeshare rights and use that appraisal to claim a large charitable donation deduction, even when the true market value of the timeshare right is a small fraction of the appraised value.
“The Tax Division is committed to stopping those who promote fraudulent tax shelters and other schemes or who prepare false returns,” Acting Assistant Attorney General Ciraolo said. “Along with our colleagues at the IRS, we will find dishonest preparers and fraudulent tax-scheme promoters and work to shut them down. We will hold accountable those who willfully assist taxpayers to file false returns. And in appropriate cases, we will prosecute them. But everyone can help stop fraud and protect our public finances. Pay attention to your tax return and make sure that it’s right. If you think that a tax return preparer is deliberately preparing incorrect returns, or you suspect someone is selling a phony tax-loss scheme, report that person to the IRS.”
The IRS website has information about how to report a dishonest return preparer, as well as information about how to report other types of tax fraud. The Justice Department’s website has a list of tax-return preparers and tax-scheme promoters whom the courts have shut down.
In addition to the civil enforcement through injunctions that stop their illegal actions, many return preparers and promoters also face prosecution. Examples of those investigations can be found for fiscal years 2014 and 2015.
Joplin Man Sentenced to 20 Years for Drugs, Firearm after Ramming into Police VehicleRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Joplin, Mo., man was sentenced in federal court following an investigation in which he rammed into a police vehicle.
Michael L. Watson, 38, of Joplin, was sentenced by U.S. District Judge Roseann Ketchmark on Thursday, March 31, 2016, to 20 years in federal prison without parole. Watson was sentenced as an armed career offender due to his prior felony convictions.
On Aug. 27, 2015, Watson pleaded guilty to possessing methamphetamine with the intent to distribute and to possessing a firearm in furtherance of a drug-trafficking crime.
Watson was arrested on April 10, 2015, when a Joplin police officer contacted a vehicle that Watson was driving. The officer initially stopped a man walking out of the Sunrise Inn motel at 3600 Rangeline, and the man indicated that he was with the four occupants of a Nissan Sentra that was parked nearby. During the conversation, Watson, the driver, drove the Sentra with the three other occupants away from the motel. The officer returned to his patrol vehicle and began to back up in order to follow the Sentra. The Sentra collided with the passenger side of the patrol vehicle at a high rate of speed, which caused significant damage.
Watson got out of the car and fled on foot with the officer in pursuit. Watson stumbled and fell to the ground after he jumped over a fence. The officer caught up with him and, while Watson was on the ground, saw the loaded Ruger 9mm semi-automatic pistol in a holster on Watson’s right side. The officer also found a hard case in Watson’s left front pocket that contained 39.43 grams of methamphetamine and drug paraphernalia.
Watson has prior felony convictions for assaulting a law enforcement officer, possession of a controlled substance, possession of a chemical with intent to create a controlled substance, possession of drug paraphernalia, and resisting a lawful stop.
This case was prosecuted by Assistant U.S. Attorney Nhan D. Nguyen. It was investigated by the Joplin, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Jesse Emerson and Wife Eugenia Emerson of Springfield Sentenced for Distribution of Synthetic Drugs from China and Heroin OffensesRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Jesse Emerson, 36, of Springfield, Vermont was sentenced today to 55 months in federal prison based on his conviction of conspiracy to distribute alpha-pyrrolidinopentiophenone (a-PVP) over an eight-month period in 2014 and 2015. Chief Judge Christina Reiss also ordered that Emerson serve a five-year period of supervised release following his incarceration. On March 21, 2016, Emerson’s wife, Eugenia Emerson, 35, was sentenced to 49 months in prison and three years of supervised release based on her conviction of conspiracy to distribute a-PVP and possession with intent to distribute heroin.
According to court records, on February 1, 2014, the Vermont State Police stopped Ms. Emerson on I-91 as she was returning from picking up heroin in Hartford, Connecticut. Emerson was traveling with her two minor children at the time of the car stop. Troopers conducted a consent search of the vehicle, finding approximately 690 bags of heroin hidden under a seat. Emerson subsequently admitted to agents that in 2013 and 2014 she had been involved in heroin trafficking with a group of individuals known as the “Jersey Boys.” Ms. Emerson acknowledged making a dozen trips during that time period, which resulted in the transportation of approximately 28,000 bags of heroin from New Jersey to Vermont.
Within months of the February 1, 2014 car stop, Emerson became involved in a conspiracy with her husband and others to import a-PVP, a synthetic drug commonly known as “bath salts,” for distribution in the Springfield, Vermont area. The scheme involved the Emersons ordering a-PVP on-line from a supplier in China. The Emersons and others wired payment to the Chinese supplier, who would in turn ship kilogram quantities of the drug directly to addresses in the Springfield area. Once the a-PVP arrived in Springfield, Jesse Emerson and an associate distributed it in neighboring Vermont and New Hampshire communities. The Emersons were responsible for the importation of approximately 12 kilograms of a-PVP to Vermont.
On February 4, 2015, a confidential informant purchased 100 bags of heroin from Ms. Emerson. Law enforcement executed federal search warrants for Emerson’s Bellows Falls home and her Lincoln Navigator on February 6, 2015, where they recovered a Ruger pistol, numerous cell phones and laptop computers, drug paraphernalia, empty heroin bags, and documentation related to bath salts shipments. A simultaneous search warrant at Jesse Emerson’s residence yielded drug paraphernalia, several laptop computers, a rifle, a 9mm pistol, a shotgun, and a muzzleloader. The Emersons were arrested on February 6, 2015 and have remained detained since that time.
This matter was investigated by the Federal Bureau of Investigation, the Vermont Drug Task Force, the Springfield Police Department, the Department of Homeland Security, and the United States Postal Inspection Service, with assistance from U.S. Customs and Border Protection.
Assistant U.S. Attorney Kevin J. Doyle handled the prosecution for the government. Jesse Emerson was represented by David J. Williams, Esq., and Eugenia Emerson was represented by Richard R. Goldborough, Esq.
Indictment Unsealed Charging New Orleans Resident with Heroin and Money Laundering ConspiraciesRead the Press Release
U.S. Attorney Kenneth A. Polite announced a two-count Indictment was unsealed yesterday that charges CORNELL PENDLETON, age 52, of New Orleans, with violations of federal drug and money laundering statutes, announced U. S. Attorney Kenneth Allen Polite, Jr. According to Count One in the Indictment, PENDLETON conspired with others to distribute and possess with intent to distribute one kilogram or more of heroin. According to Count Two, PENDLETON conspired with others to conduct financial transactions knowing that the transactions were designed to conceal the proceeds of an unlawful drug business.
PENDLETON was arrested on March 22, 2016. At the time of his arrest, agents from the Drug Enforcement Administration executed seizure warrants on assets tied to PENDLETON’s illegal drug and money laundering conspiracies. To date, law enforcement has seized from PENDLETON approximately $1 million in bank accounts and cashier’s checks.
If convicted of the heroin conspiracy, PENDLETON faces a minimum sentence of ten years in prison, a maximum life sentence, a fine of not more than $10,000,000, and a minimum of five years of supervised release. If convicted of the money laundering conspiracy, PENDLETON faces a maximum sentence of twenty years in prison, a fine of not more than $500,000, and not more than three years of supervised release.
U.S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in investigating this matter. Assistant United States Attorneys Brandon S. Long and Michael B. Redmann are in charge of the prosecution.
ICE seeks public's help in locating badge counterfeiter believed to be in GermanyRead the Press Release
In July 2013, a man was watching a movie at a theatre in Michigan, wearing body armor and carrying a firearm. When approached by police, he presented a counterfeit Central Intelligence Agency (CIA) badge and credentials.
In January 2014, a man attempted to gain access to the secure area of Reagan National Airport using a counterfeit CIA badge, but was prevented from doing so after Transportation Security Administration officers noticed inconsistencies with the man’s statements and credentials.
In August 2015, a man was indicted for impersonating a federal law enforcement agent. He used a counterfeit Homeland Security Investigations (HSI) badge and credentials to enter the Naval Nuclear Training Command in South Carolina while armed with a Sig Sauer pistol.All three of these situations have one thing in common; the badges and credentials originated from a German-based company called Master Equipment.
Master Equipment is operated by 34-year-old Roberto Craciunica, a Romanian man believed to be residing in Germany. Craciunica was indicted in October 2015 in the Eastern District of Virginia for a variety of charges related to manufacturing and distributing counterfeit badges, including trafficking in counterfeit goods; smuggling; and possession, sale or transportation of false seals. Interpol has also issued a Red Notice for Craciunica’s arrest.
From January 2010 to September 2015, Craciunica’s company, Master Equipment, manufactured and distributed counterfeit U.S. law enforcement badges from HSI, the CIA and the Federal Bureau of Investigation without authorization. Craciunica sold these badges through websites like www.badge-police.com and www.master-equipment.org. Craciunica and his co-conspirators instructed buyers to pay for the counterfeit badges by sending funds through Western Union and Paypal. They then shipped the counterfeit badges from Kaarst, Germany, to buyers in the United States. Individuals utilized the badges and credentials to impersonate federal agents and officers of the U.S. government, and in some situations, attempted to gain access to restricted areas.
As part of this investigation, HSI Washington, D.C., special agents seized counterfeit badges and seals purchased from Web domains operated by Master Equipment and Craciunica.
The Washington Metropolitan Airport Authority, the U.S. Marshals Service for the Eastern District of Virginia and the U.S. Marshals Service Headquarters Tactical Operations Division assisted with the investigation.