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Wednesday 30 March 2016
Birmingham Man Indicted for Preparing False Tax Returns and Intimidating WitnessesRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Birmingham man for preparing false income tax returns and for intimidating witnesses who the Internal Revenue Service contacted to question about returns he had prepared, announced U.S. Attorney Joyce White Vance and IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
An 11-count indictment filed in U.S. District Court charges DONALD E. STEELE, 41, with seven counts of aiding in the preparation of a false federal income tax return in 2010 or 2011, and with four counts of witness tampering in 2011. At the time, Steele operated Max Tax, a Birmingham tax return preparation business owned by his wife.
Steele is charged with making false claims and fabricating tax deductions on federal tax returns for five different taxpayers. Among the charges is that, in 2011, Steele prepared a 2010 tax return for “H.N.D,” fraudulently claiming an exemption for her disabled dependent brother, identified as “K.L.,” when Steele knew that K.L. was H.N.D.’s boyfriend and not disabled. Steele also claimed a $1,000 “American opportunity” tax credit based on a false claim that K.L. was a student and had incurred $4,000 in education expenses during the 2010 tax year.
In the witness-tampering counts, Steele is charged with calling K.L. about seven or eight times after learning IRS agents were inquiring about the preparation of H.N.D.’s 2010 tax return and telling K.L. to lie to the agents and tell them that Steele’s wife had prepared H.N.D.’s return.
Two other counts of the indictment charge Steele with preparing returns for “A.E.T.” for the calendar years 2009 and 2010, falsely claiming business losses for the taxpayer when she was not self-employed in either year and did not provide Steele any information pertaining to self-employment. Steele claimed a net business loss of $12,049 for A.E.T. in 2009 and a net loss of $11,938 in 2010, according to the indictment.
In another witness tampering count, Steel is charged with contacting a former tax preparer at Max Tax and telling her that if IRS agents contacted her, she should withhold information and tell them that he did not prepare any tax returns, that his wife prepared and transmitted the returns.
The maximum penalty for aiding in the preparation of a false federal income tax return is three years in prison and a $250,000 fine. The maximum penalty for witness tampering is 20 years in prison and a $250,000 fine.
IRS-CI investigated the case, which Assistant U.S. Attorney J. Patton Meadows is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Assistant Attorney General John P. Carlin Delivers Keynote Remarks at Intellectual Property Protection and Cybersecurity Roundtable at Iowa State UniversityRead the Press Release
Remarks as prepared for delivery
AMES, IOWA
Thank you for that introduction, [U.S. Attorney] Kevin [Techau].
And thank you for inviting me to speak today about the national security threats facing our nation. This event comes on the heels of a landmark week for the department’s national security cyber program, and I want to start by saying a few words about our strategy and recent successes in this space.
For many years, nation states and their affiliates enjoyed what they perceived to be a cloak of anonymity when acting in cyber space. A cloak they hid behind to break our laws through cyber intrusions and to threaten our security and economic well-being. They had this perceived cloak because they thought we couldn’t figure out who did it and, if we did figure it out, we would keep it a secret.
Last week, we proved yet again – through a number of law enforcement actions – that we will find and expose those who threaten our national security through cyber attacks or theft.
First and foremost, we unsealed an indictment charging seven experienced Iranian computer hackers for their roles in an extensive campaign of distributed denial of service attacks against the U.S. financial sector.
The damage was real: 46 major financial institutions attacked over 176 days, hit by as much as 140 Gigabits of data per second, costing the victims tens of millions of dollars.
In addition, one defendant is also charged with obtaining unauthorized access into the Supervisory Control and Data Acquisition systems of the Bowman Dam, located in Rye, New York. The intrusion could have given the hacker control of the dam’s water levels and flow rates if it had not been disconnected from the system for maintenance.
These attacks threatened public health and safety, and our economy. And this indictment exposes the faces and names behind the keyboards in Iran used to orchestrate these attacks against us – the attackers were employed by two computer security companies that work on behalf of the Iranian Government, including the Islamic Revolutionary Guard Corps.
That same week, we unsealed a complaint against members of the Syrian Electronic Army, for activity that sought to harm the economic and national security of the United States in the name of Syria and sought to extort law-abiding people all over the world to line their own pockets.
And, following a successful extradition from Canada, we convicted a Chinese businessman in Los Angeles for hacking into the computer networks of U.S. defense contractors, including Boeing, and stealing sensitive information, including data related to fighter jets.
Last week’s announcements prove, once again, there is no free pass for nation state affiliated computer intrusions.
The Role of the National Security Division
Disrupting these national security threats is among the highest priorities of the Department of Justice and the National Security Division. Let me share a bit of background on the National Security Division, and what our experience combatting the threat of terrorism has taught us about combating other national security threats, including threats to our national assets.
The September 11th terrorist attacks showed us that putting walls up between foreign intelligence and law enforcement makes connecting the dots of a plot very difficult. So a decade ago, Congress created the department’s first new litigating division in almost half a century, the National Security Division.
We ensure unity of purpose in the department’s number-one mission – to protect against terrorism and other threats to our national security. And we unite prosecutors and law enforcement officials with intelligence attorneys and the intelligence community, to ensure that we approach national security threats using every tool and resource available to the federal government.
In the years since National Security Division’s creation, it is increasingly clear that the factors that motivated our creation and guided our efforts to combat terrorism are equally true in our efforts to protect our valuable national assets.
As with counterterrorism, we realized that prosecution is only one of the many tools the U.S. government brings to bear. So the National Security Division restructured and adapted to support a whole-of-government approach to national security cyber threats. Criminal prosecutions, sanctions, trade pressure and diplomatic options are just some of the responses available to us as we combat online threats to the national security.
Underlying all of the government’s policy options is the need for attribution – to attribute online intrusions with confidence, down to the country, government agency, organization or even individuals involved.
Law enforcement agencies and the Department of Justice are uniquely well suited for these kinds of investigations. And these investigations are the bedrock of our whole-of-government approach because they facilitate the use of so many other tools that promote deterrence.
In some cases, attribution leads to public charges and a criminal prosecution. In other cases, a prosecution may not be the right option, but attribution opens the door for sanctions, disruption operations and bilateral diplomacy.
Our attorneys live by that whole-of-government approach. We work with our government partners to pick the best tool or combination of tools to get the job done under the rule of law.
We ensure that we have the necessary expertise no matter who is behind the threat, what their motivation is or what tool we need to use.
Under unified NSD leadership, we have integrated the department’s full range of national security expertise under one roof, bringing varied skills and knowledge to the full range of national security challenges.
The Threats to our National Assets
The threat landscape we face is ever-changing and evolving, and while our top priority remains combating terrorism, we have also sharpened our focus and increased our attention on the emerging threats to our national assets, including the threat of economic espionage.
And we have seen that these threats are not confined to banks in New York or defense contractors in California. Our entire nation, including America’s heartland here in Iowa, is under constant attack from foreign adversaries and competitors who try to steal trade secrets and other intellectual property, at the expense of our economy and national security.
When certain foreign entities eager for sensitive and valuable information can’t buy it, they may take another approach: they try to steal it. Corporate theft can occur through insiders employed by a company – or it can occur remotely, through cyber intrusions that exploit a vulnerability present in a company’s networks. Companies must be ready for all of these vectors of vulnerability.
Iowa is a fitting place to address these topics. Iowa’s agricultural and food production, renewable energy, biotechnology and advanced manufacturing are an integral part of the country’s economic engine. Between 2002 and 2011, Iowa’s agricultural production grew over 200 percent. This growth is attributable in part to the tremendous innovation that is taking place
in the American agriculture sector. According to one government study, agricultural biotech accounts for $80 billion of a $260 billion biotechnology sector.
You are revolutionizing the way America grows crops. You invest in biotechnology research to develop higher-yielding, drought-resistant crops. You rely on data from sophisticated soil sensors, satellites and drones to optimize the use of water and pesticides.
But, while you spend your days innovating, others spend their days on campaigns to steal the fruits of Americans’ labor.
Just this year, here in Iowa, Mo Hailong, a lawful permanent resident and employee of a China-based seed company, was convicted of participating in a long-term conspiracy to steal trade secrets from DuPont Pioneer and Monsanto, for the purpose of covertly transferring the technology to China.
Hailong and his co-conspirators brazenly stole inbred corn seeds from production fields not far from here. Although he knew that this technology was the valuable and confidential intellectual property of DuPont Pioneer and Monsanto, he stole it for the benefit of his China-based company.
The threat of this kind of economic espionage is serious. Some estimate that, every year, the U.S. loses more than $300 billion from theft of our intellectual property. That figure is about equivalent to the current annual level of U.S. exports to Asia. Losses of that magnitude cost the American economy untold numbers of jobs.
They reduce the profit that American firms make from research and development, which in turn reduces the incentives and resources for innovation. And the activity undermines the trust between countries and companies that is necessary to do business in a globalized economy.
As companies move to digital storage, economic espionage increasingly occurs not just through insider threats but also through cyber activity. As a result of the proliferation of technology – and the myriad ways to exploit it – we face a changing world order in which lone hackers, organized crime syndicates and nation states are all increasingly able to harm our shared networks and our livelihood. Every sector of the economy is a target – agriculture, energy, financial institutions, infrastructure, entertainment and more.
And hackers come in all shapes and sizes. We have seen state and non-state actors using the Internet to steal our intellectual property and export-controlled information at unprecedented levels.
For example, in May 2014, after a lengthy investigation, the department indicted five Chinese military officers by name for computer hacking, economic espionage and other offenses directed at American companies. The indictment describes numerous and specific instances where uniformed officers of the People's Liberation Army hacked into the computer systems of American nuclear power, metals and solar-products companies to steal trade secrets and sensitive, internal communications that could be used by Chinese companies to give them a commercial leg-up.
The investigation, and the public charges it led to, have had a lasting impact. At the time, our indictment was met with indignant denials. But a year later, after rumors circulated that additional costs might be imposed, Chinese President Xi Jinping publicly declared, during his state visit in September, that, “China strongly opposes and combats the theft of commercial secrets and other kinds of hacking attacks.” The United States and China committed that neither country’s government will conduct, or knowingly support, cyber-enabled theft of trade secrets or confidential business information with the intent of providing competitive advantage to companies or commercial sectors.
And, at the G20 Summit last fall, leaders of the world’s most powerful nations pledged not to conduct or support cyber economic espionage. What began with denials ended, at least for now, with a shift in international norms and a commitment from China to change its behavior.
Of course, indictments of state-sponsored hackers will not, on their own, prevent all cyber theft. This is the very point of an all-tools, whole-of-government approach. We need to exert pressure on bad actors from every possible angle. Prosecutions are just one tool in the broader Justice Department approach, which is just one angle from which the U.S. can pressure nation-state actors. The ultimate success of this approach will depend on the ability of U.S. agencies and departments to strengthen and support one another’s actions.
We will not stand idly by as others attempt to steal from us. We will hold them accountable – no matter who they are, where they are or the means by which they steal.
Public-Private Partnership
But we cannot do it alone. Your companies – and thus, you, have a critical role to play.
In the case of Hailong, the investigation was initiated when DuPont Pioneer security staff detected suspicious activity and alerted the FBI. DuPont Pioneer and Monsanto cooperated fully throughout the investigation, and that cooperation was essential to disrupt the theft of American technology and hold the perpetrator accountable.
As leaders in your industries, you are on the front lines defending your companies’ valuable intellectual property against insider threats, cyber-attacks and other bad actors determined to erode America’s status as a global leader in those fields.
We know from experience that those seeking to do us harm will look for any available vulnerability to exploit. In many cases, your adversaries have the full backing of their foreign governments and so should you.
As a nation, we must work together to deter and disrupt these threats, and to change our adversaries’ calculus by increasing their cost. Our strategy must ensure there is no free pass.
But the government’s response is only one half of the equation. We need your help. Our nation’s crown jewels are overwhelmingly in private sector hands. And so we work with U.S. companies, across all industry sectors, to ensure that our national security interests are protected.
We have spent time and energy in face-to-face sit downs so that we may better understand the concerns and challenges facing U.S. companies, share guidance and information, and assist with protection, detection, attribution and response. We can warn companies that manufacture or sell targeted U.S. technology when certain bad actors are seeking the particular technology they make.
Corporate outreach sensitizes industry to the threat they face and helps to stem the flow of sensitive technology out of the United States.
This type of cooperation is especially important with respect to cyber-enabled threats. After all, the Internet runs on private infrastructure and the hardware and software that we all use – including in the government – is developed and maintained by the private sector.
After an attack, if an organization works with law enforcement, it puts both in the best possible position to find out exactly what happened and to remediate and prevent further damage. The evidence is often fleeting, so early notification and access to the data is extremely important.
In addition, we may have seen the same indicators of malicious activity in other attacks, so we can conclude who was responsible and identify possible impacts and means of remediation. Importantly, it also allows us to share information with other potential victims. One organization’s vulnerability is everyone’s vulnerability and it is critical that we work together.
Law enforcement may be able to use legal authorities and tools that are unavailable to non-governmental entities. Law enforcement can also enlist the assistance of international partners to locate stolen data or identify a perpetrator.
These tools and relationships can greatly increase the odds of successfully apprehending an intruder or attacker and securing lost data. Finally, this cooperation is vital to successful prosecutions that, as I explained, can prevent criminals from causing further damage to victim companies and others.
A united front is critical because the threat you face includes hackers with the full backing of their governments or that are part of sophisticated, international criminal syndicates. They have backup, but so do you – because your government is here to help.
Last year, we announced a new position within the National Security Division focused on outreach to the private sector. This position was created in recognition of the importance of relationships and cooperation in cybersecurity. We understand the importance of prevention and of resilience. We want to support our private sector partners, whether they simply want to establish early lines of communication or call while under the strain of a continuing network breach.
The conversations we have at these events are essential to keep our nation secure, to protect the privacy of our citizens, to enable American businesses to compete fairly in our global economy and to ensure that U.S. businesses and institutions are resilient in the face of cyber threats. While we gather here in Iowa to work together to make this country safer, our adversaries likewise gather to strategize against us. The threats are not letting up and neither will we.
Thanks again for inviting me. I look forward to your questions.
Asheville Summit Addresses the Epidemic of Heroin Addiction and Opioid Drug AbuseRead the Press Release
ASHEVILLE, N.C. – Today, the U.S. Attorney’s Office for the Western District of North Carolina hosted a conference in Asheville to address the growing threat of heroin addiction and opioid drug abuse in the western part of the district. The conference was the first-ever held in the area and was co-sponsored by the Drug Enforcement Administration (DEA), the Buncombe County Sheriff’s Office, the Asheville Police Department and Smoky Mountain LME/MCO, a local management entity/managed care organization.
Each year more than 46,000 people in the U.S. die from a drug overdose and half of those deaths are related to opioid abuse, including prescription pain medication. People who take prescription painkillers, which are prescribed by a physician, can become addicted with just one prescription. Most first-time abusers of painkillers obtain them from a friend or relative. A 2014 national survey reported an estimated 1.4 million people in the United States abused a prescription pain killer for the first time that year. In the 1960’s, more than 80% of opioid abusers began using heroin first. In the 2000’s, 75% of opioid abusers started with prescription opioids. More than 10 million people in the United States, age 12 and older, reported non-medical use of prescription opiates in 2014.
“Heroin addiction and opioid drug abuse are public health threats we must tackle head on,” stated U.S. Attorney Jill Westmoreland Rose, who delivered opening remarks this morning. “As heroin is quickly becoming the number one cause of overdose deaths in the area, the consequences of opioid drug abuse are taking a tremendous toll on our communities. Today’s summit puts a spotlight on the devastating impact of heroin and opioid addiction and the importance of combining our resources to address this public health crisis, focusing on awareness, prevention, treatment and developing a coordinated community response to this epidemic.”
Approximately 200 professionals from the fields of law enforcement, medicine, substance abuse and treatment, as well as interested community members attended the summit, held on the campus of the University of North Carolina in Asheville. Speakers from federal and local law enforcement agencies, medical experts and representatives of community organizations presented on a broad range of topics including: the alarming rise in heroin and opioid addiction; heroin trafficking trends and law enforcement efforts to stem the flow of opiates; prevention and medical treatment; and ways community organizations can support combating opioid addiction in western North Carolina and promote second chances for individuals in recovery. Audience members also heard a first-hand account from a parent’s perspective on dealing with the death of a child from heroin overdose and the impact of the loss on the family.
U.S. Attorney Rose thanked the DEA, the Buncombe County Sheriff’s Office, the Asheville Police Department and Smoky Mountain LME/MCO for their co-sponsorship and emphasized importance of the conference stating that, “Today’s summit is not a one-time event. It is the beginning of a focused collaboration between law enforcement, the healthcare field and our community partners to confront heroin addiction and opioid drug abuse, address the problem in real and meaningful ways, and develop a systematic response to this dangerous epidemic.”
Arizona Supplier Sentenced to 11 Years in Prison for Drug Distribution and Money Laundering ConspiraciesRead the Press Release
Baltimore, Maryland – U.S. District Judge Paul W. Grimm sentenced Phillip Bingham, age 56, of Tucson, Arizona, today to 11 years in prison, followed by four years of supervised release, for conspiracy to possess with intent to distribute marijuana, and three counts of attempted possession of marijuana with intent to distribute; conspiracy to commit money laundering and three counts of money laundering; and two counts of interstate travel in aid of a narcotics enterprise. Judge Grimm also entered a forfeiture order requiring Bingham to pay a money judgment of $500,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief Hank Stawinski of the Prince George’s County Police Department; Acting Chief Stanley Johnson, of the Maryland National Capital Park Police, Prince George’s County Division; Chief Antonio DeVaul of the Maryland National Capital Park Police, Montgomery County Division; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, from at least 2011 through December 2013, Bingham conspired with Marvin Taaff, Fernando Gastellum-Rivas, and others to distribute marijuana. Bingham, who was the leader of the drug operation in Arizona, identified sources of marijuana in Arizona and obtained marijuana for customers in Maryland and elsewhere. In September 2013, Taaff and another conspirator, Annis Attar, traveled from Maryland to Arizona to meet with Bingham and Gastellum-Rivas. Taaff and Attar purchased controlled substances, including marijuana, which Bingham packaged and provided to another conspirator, who took the packages to a shipper.
During the investigation, law enforcement overheard conversations and obtained text messages in which Bingham negotiated narcotics and money laundering transactions with Taaff and others located in Maryland and other states, and discussed the shipment of the drugs. Law enforcement intercepted at least three packages shipped by Bingham to Taaff and other conspirators in Maryland which contained a total of 62 pounds of marijuana.
In order to disguise the source and the recipient of the payments for the drug sales, Bingham utilized the bank accounts of at least five individuals. The individuals agreed to allow Bingham to use their bank accounts to receive payments for his narcotics trafficking activities and were paid in return for their assistance. Taaff and other conspirators, including Mahmood Hussain, deposited money to pay for the purchase of narcotics into these accounts, and the recruited individuals would then withdraw the funds in Arizona, as directed by Bingham. Bingham also received bulk cash payments, generally through couriers. For example, on October 28, 2013, law enforcement seized $102,000 bundled into a courier’s suitcase, after the courier checked in for his flight from Maryland back to Arizona. The money was payment for marijuana purchased by a distributor in Maryland, for delivery to Bingham.
On December 5, 2013, search warrants were executed at locations in Prince George’s County, Montgomery County and Tucson, Arizona, in connection with the conspiracy. Narcotics, drug paraphernalia, shipping materials, cash, and firearms were seized from locations associated with the conspiracy.
The court concluded that at least five kilograms of powder cocaine and at least 400 kilograms of marijuana were attributable to Bingham and within the scope of his participation in the conspiracy.
Mahmood Hussain, age 31, of Laurel, Maryland, Fernando Gastellum-Rivas, age 43, of Tucson, and Annis Attar, age 30, of Largo, Maryland, previously pleaded guilty to their roles in the conspiracy and were sentenced to 10 years in prison, 42 months in prison, and 40 months in prison, respectively. Marvin Anthony Taaff, age 29, of Takoma Park, Maryland, also pleaded guilty and is scheduled to be sentenced on April 4, 2016.
United States Attorney Rod J. Rosenstein praised the ATF, Prince George’s County Police Department, Maryland-National Capital Park Police and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Lindsay Eyler Kaplan, who prosecuted the case.
Alabama Man Indicted for Producing Child Pornography Involving Multiple VictimsRead the Press Release
An Alabama man was indicted today by a federal grand jury in Birmingham, Alabama, on charges related to the production of child pornography involving four minor victims, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Joyce White Vance of the Northern District of Alabama.
Gregory Jerome Lee, 53, formerly of Cullman County, Alabama, was indicted on four counts of production of child pornography, one count of conspiracy to advertise child pornography and one count of conspiracy to distribute and receive child pornography.
According to the indictment, from September 1996 through December 2004, Lee used, persuaded, coerced and enticed minors to engage in sexually explicit conduct in order to produce images of that conduct. Between September 1996 and August 2007, Lee conspired with other individuals to distribute and receive child pornography through a variety of means, including the Internet.
The U.S. Postal Inspection Service (USPIS) is investigating the case. Trial Attorney Amy E. Larson of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Jacquelyn Hutzell of the Northern District of Alabama are prosecuting the case.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty. Members of the public who may have information related to this matter should call the USPIS Birmingham Office at (205) 326-2909.
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.
Tuesday 29 March 2016
Utah Man Sentenced for Illegal Possession of a FirearmRead the Press Release
POCATELLO – Jose Angel Lucio, 34, of Ogden, Utah, was sentenced today to 39 months in prison for possession of a firearm by a convicted felon, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Lucio to serve three years of supervised release. Lucio pleaded guilty on December 9, 2015.
According to the plea agreement, on April 12, 2013, Lucio was arrested by the United States Marshals Service for an outstanding warrant. When he was arrested, Deputy U.S. Marshals found a Remington 30-06 rifle in his vehicle. Lucio subsequently admitted he had transported the rifle from Utah to Idaho for the purpose of selling it. Lucio had previously been convicted of aggravated assault in Weber County, Utah, and was prohibited from possession any firearms.
The case was investigated by the United States Marshals Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Idaho State Police.
Upcoming movie screening to provide glimpse into the human impact of painkiller, heroin abuseRead the Press Release
FAIRMONT, WEST VIRGINIA – On Thursday, April 7, 2016, the United States Attorney’s Office will join the Federal Bureau of Investigation and the Drug Enforcement Administration to host a dynamic community forum designed to highlight a unique, realistic perspective on the impact of prescription drug and opioid abuse.
The event will feature a screening of “Chasing the Dragon: The Life of an Opiate Addict,” a documentary film collaboratively produced by the FBI and the DEA in response to increasing prescription painkiller and opioid drug abuse in West Virginia and across the nation. The film, which is designed to better educate students and young adults about the dangers of these drugs and the tragic consequences that often accompany addiction, debuted nationally in February 2016. Students from the Fairmont State University Criminal Justice Program will attend the forum to supplement their current curriculum. The public is also invited to attend.
“It is the FBI's hope this film will start a conversation about the stark reality of drug abuse in this country and the unadulterated impact it has on our friends, families and communities,” noted Stephen L. Morris, Assistant Director of the FBI’s Criminal Justice Information Services (CJIS) Division in Clarksburg, West Virginia.The movie screening will begin at 6:00PM on April 7 in the Colebank Hall Gymnasium at Fairmont State University. The documentary will be followed by an interactive discussion with representatives from the Federal Bureau of Investigation, the United States Attorney’s Office, and the Drug Enforcement Administration. Individuals and community groups interested in obtaining additional information are encouraged to contact the Federal Bureau of Investigation by calling (304) 625-5833 or emailing [email protected].
Universal Aryan Brotherhood Member Sentenced to Nearly 22 Years in Prison for Racketeering and Related ViolenceRead the Press Release
TULSA, Okla. – A member of the Universal Aryan Brotherhood (UAB) prison gang was sentenced today in federal court to 262 months in prison for conspiring to conduct a racketeering enterprise and related charges, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.
Ronnie Dean Haskins II, aka Dirty Red, 43, of Oklahoma, was sentenced by U.S. District Judge Claire V. Eagan of the Northern District of Oklahoma, who also ordered Haskins to serve five years of supervised release.
In connection with his guilty plea, Haskins acknowledged his membership in or association with the UAB, a violent, “whites only” prison-based gang with members and associates operating inside and outside of state prisons throughout Oklahoma.
According to admissions made in connection with his plea, Haskins conspired in racketeering activities to advance the UAB enterprise, including possessing and selling 500 grams or more of methamphetamine. Haskins admitted that he orchestrated and participated in the May 2013 kidnapping and maiming of a former UAB member who violated the UAB by-laws by helping restrain the victim while additional gang members burned off the victim’s UAB neck tattoo using a heated knife, causing permanent scarring.
The U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Tulsa Police Department; Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service-Criminal Investigations Division; FBI; Tulsa County Sheriff’s Office and the Oklahoma Department of Corrections investigated the case. Trial Attorney John C. Hanley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Allen Litchfield and Jan Reincke of the Northern District of Oklahoma are prosecuting the case.
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Universal Aryan Brotherhood Member Sentenced to 262 Months in Prison for Racketeering and Related ViolenceRead the Press Release
A member of the Universal Aryan Brotherhood (UAB) prison gang was sentenced today in federal court to 262 months in prison for conspiring to conduct a racketeering enterprise and related charges, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.
Ronnie Dean Haskins II, aka Dirty Red, 43, of Oklahoma, was sentenced by U.S. District Judge Claire V. Eagan of the Northern District of Oklahoma, who also ordered Haskins to serve five years of supervised release.
In connection with his guilty plea, Haskins acknowledged his membership in or association with the UAB, a violent, “whites only” prison-based gang with members and associates operating inside and outside of state prisons throughout Oklahoma.
According to admissions made in connection with his plea, Haskins conspired in racketeering activities to advance the UAB enterprise, including possessing and selling 500 grams or more of methamphetamine. Haskins admitted that he orchestrated and participated in the May 2013 kidnapping and maiming of a former UAB member who violated the UAB by-laws by helping restrain the victim while additional gang members burned off the victim’s UAB neck tattoo using a heated knife, causing permanent scarring.
The U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Tulsa, Oklahoma, Police Department; Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service-Criminal Investigations Division; FBI; Tulsa County Sheriff’s Office and Oklahoma Department of Corrections investigated the case. Trial Attorney John C. Hanley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Allen Litchfield and Jan Reincke of the Northern District of Oklahoma are prosecuting the case.
U.S. Citizen Residing in Mexico Pleads Guilty to Mailing Threatening Communications Containing a White Powdery SubstanceRead the Press Release
John Milton Nagel, 47, pled guilty to three counts of mailing threatening communications from a foreign country, in violation of Title 18, United States Code, Section 877. At sentencing, Nagel faces a maximum statutory sentence of up to five years in prison, three years of supervised release, and a $250,000 fine on each count. Sentencing has been scheduled for May 26, 2016 at 2 p.m. before U.S. District Judge Jose E. Martinez.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
According to court documents, between September 1, 2015 and September 18, 2015, Nagel entered the Mexico City main post office located at Palacio Postal, Avenida Tacuba No. 1, Centro Historico, Delegacion Cuachtemoc, 06002 Mexico City, Mexico, and knowingly deposited for mailing thirty-seven (37) envelopes all addressed to prominent United States political figures and business leaders, each containing a threatening letter and a white powdery substance. A sample of the powder, removed from within the suspect letters, was thereafter sent to both Mexican and U.S. laboratories for analysis and ultimately revealed that the contents were bicarbonate.
The first page of each letter read “FREE SAMPLE OF EXECUTIVE TOOTH POWDER - ACTIVATES WITH HYDROGEN PEROXIDE. DO NOT SWALLOW! H2O2 MAY BE POISONOUS IF SWALLOWED DON'T PANIC, EVACUATE OR CALL 911…or there will be consequences...Mathew 13:49.” According to the King James version of the Bible, Matthew 13:49 states: “So shall it be at the end of the world: the angels shall come forth, and sever the wicked from among the just.”
Mr. Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant United States Attorneys Marc S. Anton and Ricardo A. Del Toro.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Western Washington Men Get Long Prison Terms in Separate Cases Involving Child PornographyRead the Press Release
Two defendants were sentenced this month to long prison terms in separate cases for distributing or creating sexually explicit images of children, announced U.S. Attorney Annette L. Hayes. In the first case, DANNY ZIMMERMAN, 43, a registered sex offender in SeaTac, Washington was sentenced March 15, 2016, to ten years in prison and 20 years of supervised release. ZIMMERMAN was arrested in June 2015, after an investigation traced images of child rape to ZIMMERMAN’s Twitter account and his internet protocol (IP) address.
ZIMMERMAN pleaded guilty in December 2015, to possession of depictions of minors engaged in sexually explicit conduct. According to records filed in the case, between September 2014 and February 2015, Twitter made multiple reports to the National Center for Missing & Exploited Children (NCMEC) about images of child rape uploaded to the internet. The reports resulted in a law enforcement investigation involving Western Washington’s Internet Crimes Against Children (ICAC) Task Force. The investigation revealed that the internet address involved in the distribution of the sexually explicit images was used by ZIMMERMAN. ZIMMERMAN is a registered sex offender with two 1996 convictions for child molestation in the first degree.
In the second case, GREGORY MARK MOLLEY, 54, of Issaquah, Washington was sentenced today to eight years in prison and 15 years of supervised release for receipt of images of minors engaged in sexually explicit conduct. MOLLEY pleaded guilty in December 2015, admitting he used hidden cameras to film children in the bathroom and bedrooms of his home.
Both men were sentenced by U.S. District Judge John C. Coughenour. Judge Coughenour reminded MOLLEY at his sentencing that his conduct was devastating to the victims of his crime.
The MOLLEY case was investigated by the King County Sheriff’s Office (KCSO) and the U.S. Secret Service. The ZIMMERMAN case was investigated by the Internet Crimes against Children Task Force, the Kent Police Department, the King County Sheriff’s Office, and the Department of Homeland Security Investigations.
Both cases were prosecuted by Special Assistant United States Attorney Cecelia Gregson. Ms. Gregson is a Senior Deputy King County Prosecutor specially designated to prosecute child exploitation cases in federal court.
These cases were 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.justice.gov/psc.
Two Men Admit Roles in Three Year, Cross-Country Insider Trading Scheme That Netted More Than $3.9 MillionRead the Press Release
TRENTON, N.J. - Two day traders today admitted participating in a multi-year insider trading scheme that made over $3.9 million in illicit profits by exploiting material information in violation of confidentiality agreements, U.S. Attorney Paul J. Fishman announced.
Ronald Chernin, 67, of Oak Park, California, and Steven Costantin, 55, of Farmingdale, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to separate informations charging them each with one count of conspiracy to commit securities fraud and one count of securities fraud.
According to documents filed in this case and statements made in court:
Chernin and Costantin worked as day traders for Costantin’s brother-in-law, Steven Fishoff, 58, of Westlake Village, California. Between May 2010 and August 2013, Chernin, Costantin, and Fishoff, as well as a business associate referred to as “Trader A,” expressed interest in participating in numerous stocks offerings by publicly traded companies.
Chernin, Costantin, and other members of the day trading operation falsely characterized their trading entities as legitimate, full-service financial management firms with as much as $150 million in assets under management, in order to increase the likelihood that the investment bankers would solicit them to participate in the stock offerings.
Before providing confidential information concerning the companies or the terms of the proposed sales, the investment bankers first required that Chernin, Costantin, Fishoff, Trader A, and their associated trading entities, enter into confidentiality or “wall-crossing” agreements whereby they agreed not to disclose or trade on the inside information and were brought “over the wall” for the narrow purpose of determining whether to purchase the offered securities.
Instead, Chernin, Costantin, and Fishoff violated the confidentiality agreements by directly or indirectly tipping each other and others with the inside information concerning the stock offerings; short selling the issuers’ stock in anticipation of a drop in price when the stock offerings were disclosed to the public; and covering their short positions once the stock offerings were disclosed. Additionally, Fishoff tipped his friend, Paul Petrello, 54, of Boca Raton, Florida, and another friend identified in the documents as “CC-1.”
By trading on the nonpublic information, Chernin, Costantin, and their conspirators gained more than $3.9 million in illicit profits over the course of the three-year scheme. Chernin and Costantin shared 50 percent of their profits with Fishoff.
The conspiracy count to which Chernin and Costantin each pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine. Chernin and Costantin are both scheduled for sentencing on July 7, 2016.
Petrello previously pleaded guilty to his role in the scheme and is scheduled for sentencing on May 25, 2016. Fishoff has been indicted for his involvement in the insider trading scheme. The charges and allegations contained in the indictment are merely accusations, and Fishoff is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s guilty pleas. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Sanjay Wadhwa.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu and Nicholas P. Grippo of the Criminal Division of the U.S. Attorney’s Office in Newark, as well as Acting Chief Barbara Ward and Assistant U.S. Attorney Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Today’s pleas are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov
Defense counsel:
Ronald Chernin – John P. Lacey, Esq., Roseland, NJ
Steven Costantin – Scott A. Resnik, Esq., New York, NY
Two Inmates at Lewisburg Federal Prison Charged with AssaultRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that two inmates at the United States Penitentiary, Lewisburg, Pennsylvania, have been indicted today by a federal grand jury in Scranton for assaulting another inmate with a homemade weapon.
According to United States Attorney Peter Smith, the superseding indictment charges Kyle Stevens, age 25, and James Sweeney, age 39, with assault with a dangerous weapon and aiding and abetting. The charges stem from an incident in February 2016 in which Stevens and Sweeney allegedly assaulted another inmate with a sharpened piece of metal commonly known as a “shank.” The superseding indictment also charges Stevens with possessing contraband in prison.
Stevens was previously indicted by a federal grand jury in July 2016, for assaulting an inmate in February 2015. The superseding indictment issued today by the grand jury adds the new assault to the previous indictment.
The investigations were conducted by the Federal Bureau of Investigation and the Bureau of Prisons Special Investigative Service. Prosecution is assigned to Assistant United States Attorney Robert J. O’Hara.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Twelve Detroit Public Schools Principals, Assistant Superintendent and Vendor Charged with BriberyRead the Press Release
Criminal charges were filed today against 12 current or former Detroit Public Schools principals, an assistant superintendent and a vendor in an illegal bribery and kickback scheme, announced U.S. Attorney Barbara L. McQuade.
Joining McQuade in the announcement were David P. Gelios, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation, and Jarod J. Koopman, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation.
At the center of the scheme was Norman Shy, 74, of Franklin, owner of Allstate Sales, a DPS vendor of school supplies. The charges allege that each of the school officials conspired with Shy to knowingly certify and submit fraudulent invoices to DPS, causing DPS to pay Shy for goods that were never delivered. Invoiced supplies included auditorium chairs, supplemental teaching materials and raised line paper. In exchange, Shy paid bribes and kickbacks, using a portion of the payments he received from DPS from the fraudulent invoices. The scheme began in 2002 and continued until January 2015.
DPS principals had the primary authority for selecting vendors from a list approved by DPS and for certifying that invoiced goods were received. The principals accepted bribes and kickbacks in various forms, including prepaid gift cards, cash and checks payable directly to them or to third parties or companies for their benefit. The total amount of bribes and kickbacks that Shy paid to the 13 school officials was approximately $908,518. In exchange, Shy and his company received approximately $2.7 million dollars from DPS based on payments for fraudulent invoices.
The 13 charging documents, known as criminal informations, charge each defendant with one count of Conspiracy to Commit Federal Program Bribery as follows:
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Norman Shy (vendor), 74, of Franklin, and Clara Flowers, 61, of Detroit ($324,785); Flowers is the former principal of Henderson Academy and current Assistant Superintendent of DPS’ Office of Specialized Student Services. Additionally, Shy and Flowers were each charged with one count of Tax Evasion for failing to report income.
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Beverly Campbell, 66, of Southfield ($50,000), former principal of Rosa Parks School and Greenfield Union Elementary-Middle School;
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Clara Smith, 67, of Southfield ($194,000), current principal of Thirkell Elementary-Middle School;
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Germla Johnson, 56, of Detroit ($22,884), former principal of Charles R. Drew Academy and current principal of Earhart Elementary-Middle School;
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James Hearn, 50, of West Bloomfield ($11,500), current principal of Marcus Garvey Academy;
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Josette Buendia, 50, of Garden City ($45,775), current principal of Bennett Elementary School;
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Nina Graves-Hicks, 52, of Detroit ($27,385), former principal of Davis Aerospace Technical High School;
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Ronald Alexander, 60, of Detroit ($23,000), current principal of Charles L. Spain Elementary-Middle School;
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Ronnie Sims, 55, of Albion ($58,519), former principal of Fleming Elementary and Brenda Scott Middle School;
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Stanley Johnson, 62, of Southfield ($84,170), current principal of Hutchinson Elementary;
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Tanya Bowman, 48, of Novi ($12,500), former principal of Osborn Collegiate Academy of Mathematics, Science and Technology;
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Tia’von Moore-Patton, 46, of Farmington Hills ($4,000), current principal of Jerry L. White Center High School;
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Willye Pearsall, 65, of Warren ($50,000), former principal of Thurgood Marshall Elementary School.
“It is a heavy blow to public confidence when so many school principals are charged with bribery,” McQuade said. “Public officials should take note that while it may seem easy to take bribes when they are offered, officials who betray their public trust will eventually get caught and will face the consequences.”
"As a former educator, this case strikes to my very core," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "To enrich oneself at the expense of school children is bad enough, but to misapply public funds intended to educate kids in a district where overall needs are so deep, funding sources are so strained, and the need for better education is so crucial, is reprehensible and an insult to those educators working every day to make a better future for our children."
"IRS-CI Special Agent in Charge Koopman stated, “Principals are in positions of public trust and have an obligation to act in the best interest of their schools and the children for which they represent. Those principals, who line their own pockets through fraudulent means, violate this trust by making the conscious decision to deprive teachers of the very resources necessary to provide quality education. It is extremely disappointing when greed and selfishness deteriorate the communities and future possibilities of our youth.”
Each of the 14 defendants face up to five years in prison and fines of up to $250,000 on the charge of Conspiracy to Commit Federal Program Bribery. In addition, Shy and Flowers each face up to five years in prison and fines up to $100,000, together with the costs of prosecution on the Tax Evasion charge.
This case was investigated by agents of the FBI and IRS-CI. This case is being prosecuted by Assistant United States Attorneys J. Michael Buckley and Frances Carlson.
The FBI Detroit Area Corruption Task Force (DACTF) is led by the FBI Detroit Field Office, and consists of Special Agents and law enforcement officers with the FBI Detroit; the Detroit Police Department; the Michigan State Police; the Michigan Attorney General’s Office; the Internal Revenue Service – Criminal Investigation Division; the U.S. Department of Housing and Urban Development–Office of Inspector General; the U.S. Environmental Protection Agency–Office of Inspector General; the U.S. Department of Transportation–Office of Inspector General; the U.S. Department of Homeland Security–Office of Inspector General; the U.S. Department of Education–Office of Inspector General; and the U.S. Department of Labor–Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
A Criminal Information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
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Terminix Companies Agree to Pay $10 Million for Applying Restricted-Use Pesticide to Residences in the U.S. Virgin IslandsRead the Press Release
All TERMINIX Locations Have Ceased Using Pesticides Containing Methyl Bromide in the United States. Employees Illegally Applied Pesticides Containing Methyl Bromide to Residences in St. John, St. Croix, and St. Thomas, U.S.V.I.
WASHINGTON – The pest control corporation Terminix International Company LP TERMINIX LP) and its U.S. Virgin Islands operation Terminix International USVI LLC(TERMINIX, USVI), were charged today with multiple violations of the Federal Insecticide, Fungicide and Rodenticide Act for illegally applying fumigants containing methyl bromide in multiple residential locations in the U.S. Virgin Islands, including the condominium resort complex in St. John where a family of four fell seriously ill last year after the unit below them was fumigated, the Department of Justice and the Environmental Protection Agency (EPA) announced today.
In a plea agreement, TERMINIX LP and TERMINIX, USVI agreed to pay a total of $10 million in criminal fines, community service and restitution payments. Except for completing one government contract at the Port of Baltimore, TERMINIX LP has stopped using pesticides containing methyl bromide in the United States and U.S. Territories. Under the agreement TERMINIX, USVI will pay $5 million in fines and $1 million in restitution to the EPA for response and clean-up costs at the St. John resort. TERMINIX LP will pay a fine of $3 million and will fund a $1 million community service project in the U.S.V.I. The plea agreement is subject to approval by the district court.
“When misused, highly toxic pesticides can have catastrophic consequences, and that’s why those who are certified to apply them must do so responsibly and lawfully,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “The facts in this case show the Terminix companies knowingly failed to properly manage their pest control operations in the U.S. Virgin Islands, allowing pesticides containing methyl bromide to be applied illegally and exposing a family of four to profoundly debilitating injuries. While on probation the companies are required to demonstrate to the EPA changes to their internal management and systems to ensure this type of tragedy does not reoccur.”
“This prosecution demonstrates the importance of complying with environmental laws and regulations,” said U.S. Attorney Ronald W. Sharpe of the District of the Virgin Islands. “Tragically, the defendants' failure to do so resulted in catastrophic injuries to the victims and exposed many others to similar harm. The United States Attorney’s Office is committed to the enforcement of environmental laws and will take all necessary steps to hold those who violate these laws criminally accountable and to protect residents and visitors of the Virgin Islands.”
“When you break a law that protects public health, there are real victims and real consequences, as this case tragically shows,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “This incident illustrates how important it is for EPA to enforce environmental laws and hold anyone accountable for endangering our safety. Today’s charges should send a clear message to the industry, and directs important funds toward training programs to help ensure this can’t happen again.”
In 1984 EPA banned the indoor use of methyl bromide products. The few remaining uses are severely restricted. Pesticides containing methyl bromide in the U.S. are restricted-use due to their acute toxicity, meaning that they must only be applied by a certified applicator. Health effects of acute exposure to methyl bromide are serious and include central nervous system and respiratory system damage. Pesticides can be very toxic and it is critically important that they be used only as approved by EPA.
After the government began its investigation, TERMINIX LP voluntarily ceased its use of methyl bromide in the U.S. and in U.S. territories, except for one remaining supervised government contract.
According to the information filed in federal court in the U.S. District Court of the Virgin Islands today, the defendants knowingly applied restricted-use fumigants at the Sirenusa resort in St. John for the purpose of exterminating household pests on or about Oct. 20, 2014, and on or about March 18, 2015. The companies were also charged with applying the restricted-use pesticide in 12 residential units in St. Croix and one additional unit in St. Thomas between September 2012 and February 2015.
According to the factual basis of the plea agreement, TERMINIX, USVI provided pest control services in the Virgin Islands including fumigation treatments for Powder Post Beetles, a common problem in the islands. These fumigation treatments were referred to as “tape and seal” jobs, meaning that the affected area was to be sealed off from the rest of the structure with plastic sheeting and tape prior to the introduction of the fumigant. Customers were generally told that after a treatment persons could not enter the building for a two to three-day period.
On or about March 18, 2015, two employees of TERMINIX, USVI, performed a
fumigation pesticide treatment at the lower rental unit of Building J at Sirenusa in St. John. The upper unit in Building J was occupied by a Delaware family of four. Via various means, methyl bromide from the lower unit migrated to the upper unit of Building J, causing serious injury to and hospitalization of the entire family.EPA regional staff responded immediately to the incident in St. John, securing the scene, performing testing and addressing the contamination. Within days, the EPA sent out a pesticide use warning to pesticides applicators in Puerto Rico and the U.S. Virgin Islands, followed by a broader pesticide notice to regulators in all states, the British Virgin Islands, and to other Caribbean and Latin American countries.
As a special condition of the companies’ three year probation, the defendants shall make good faith efforts to resolve past and future medical expenses for the family through separate civil proceedings. If they do not do so before the end of the probationary period, they would be subject to an order of restitution and the government may petition the District Court to reopen the sentencing proceedings to seek recovery of past and future medical and other expenses.
The $10 million penalty includes $8 million in criminal fines, $1 million in restitution to the EPA for response and clean-up costs, and a $1 million community service payment to the National Fish and Wildlife Foundation for the purpose of engaging a third party to provide training to pesticide applicators in the U.S. Virgin Islands.
The case was investigated by EPA Criminal Investigation Division working worked cooperatively with the Virgins Islands government and, the Agency for Toxic Substances and Disease Registry.
Senior Litigation Counsel Howard P. Stewart of the Department of Justice, Environmental Crimes Section, and Assistant U.S. Attorney Kim L. Chisholm of the District of the Virgin Islands are prosecuting the case with assistance of Patricia Hick, EPA Region II Regional Criminal Enforcement Counsel.
The investigation is ongoing.
For more information about EPA’s pesticide program and its requirements, visit
www.epa.gov/pesticides/.For more information on methyl bromide, visit www.epa.gov/region2/methyl-bromide.pdf
Tax Service Business Owner and Co-Defendant Pled Guilty for Their Participation in a Stolen Identity Tax Refund Fraud SchemeRead the Press Release
A tax service business owner and co-defendant pled guilty for their participation in a stolen identity tax refund fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcements Homeland Security Investigations (ICE-HSI), Miami Field Office, made the announcement.
Johny Wolf Jasmin, 32, of Boca Raton, pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, and one count of aggravated identity theft in violation of Title 18, United States Code, Sections 1028A and 2. Carneisha Patrice Mitchell, 31, of Miami, pled guilty to one count of theft of government funds, in violation of Title 18, United States Code, Sections 641 and 2. At sentencing, the defendants each face up to ten years in prison for the conspiracy and theft of government money charges. Jasmin also faces a mandatory term of two years’ imprisonment, consecutive to any other prison term, for the aggravated identity theft charge.
According to court documents, Jasmin owned and operated a tax service business called Wolf Vision, Inc. at an address located in Hollywood, Florida. During the course of the investigation, law enforcement learned three separate Electronic Filing Identification Numbers (EFINs) were used to file false and fraudulent tax returns from Jasmin’s business. One of those EFINs was assigned to Mitchell. Based upon this information, law enforcement executed a search warrant at Jasmin’s business and recovered computers, thumb drives, prepaid debit cards, and numerous documents that contained over 2,100 names, dates of birth, and social security numbers that belonged to living and deceased individuals.
In fact, a review of Jasmin’s personal income tax for the 2014 tax year showed that Jasmin obtained the name, date of birth and social security number of a child who had passed away and later used that information to fraudulently claim the deceased child as one of his dependents.
In addition, law enforcement learned that an IRS treasury tax refund check in the name of a deceased individual was deposited into Mitchell’s personal checking account. Thereafter, Mitchell used the money from the IRS treasury check for her personal use.
As a result of Jasmin and his co-conspirator’s fraudulent conduct, over 220 false and fraudulent federal income tax returns were filed with the IRS using stolen personal identifying information (PII) of living and deceased individuals. Further, over $550,000 in tax refunds were sought from the false and fraudulent income tax returns filed from Jasmin’s tax business.
Sentencing for both defendants is scheduled for June 3, 2016 before U.S. District Judge William J. Zloch.
Mr. Ferrer commended the investigative efforts of FBI, IRS-CI and ICE-HSI. This case is being prosecuted by Assistant U.S. Attorney Maurice A. Johnson.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
TERMINIX Companies Agree to Pay $10 Million for Applying Restricted-Use Pesticide to Residences in the U.S. Virgin IslandsRead the Press Release
The pest control corporation Terminix International Company LP (TERMINIX LP) and its U.S. Virgin Islands operation Terminix International USVI LLC (TERMINIX, USVI), were charged today with multiple violations of the Federal Insecticide, Fungicide and Rodenticide Act for illegally applying fumigants containing methyl bromide in multiple residential locations in the U.S. Virgin Islands, including the condominium resort complex in St. John where a family of four fell seriously ill last year after the unit below them was fumigated, the Department of Justice and the Environmental Protection Agency (EPA) announced today.
In a plea agreement, TERMINIX LP and TERMINIX, USVI agreed to pay a total of $10 million in criminal fines, community service and restitution payments. Except for completing one government contract at the Port of Baltimore, TERMINIX LP has stopped using pesticides containing methyl bromide in the United States and U.S. Territories. Under the agreement TERMINIX, USVI will pay $5 million in fines and $1 million in restitution to the EPA for response and clean-up costs at the St. John resort. TERMINIX LP will pay a fine of $3 million and will fund a $1 million community service project in the U.S.V.I. The plea agreement is subject to approval by the district court.
“When misused, highly toxic pesticides can have catastrophic consequences, and that’s why those who are certified to apply them must do so responsibly and lawfully,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “The facts in this case show the Terminix companies knowingly failed to properly manage their pest control operations in the U.S. Virgin Islands, allowing pesticides containing methyl bromide to be applied illegally and exposing a family of four to profoundly debilitating injuries. While on probation the companies are required to demonstrate to the EPA changes to their internal management and systems to ensure this type of tragedy does not reoccur.”
“This prosecution demonstrates the importance of complying with environmental laws and regulations,” said U.S. Attorney Ronald W. Sharpe of the District of the Virgin Islands. “Tragically, the defendants' failure to do so resulted in catastrophic injuries to the victims and exposed many others to similar harm. The United States Attorney’s Office is committed to the enforcement of environmental laws and will take all necessary steps to hold those who violate these laws criminally accountable and to protect residents and visitors of the Virgin Islands.”
“When you break a law that protects public health, there are real victims and real consequences, as this case tragically shows,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “This incident illustrates how important it is for EPA to enforce environmental laws and hold anyone accountable for endangering our safety. Today’s charges should send a clear message to the industry, and directs important funds toward training programs to help ensure this can’t happen again.”
In 1984 EPA banned the indoor use of methyl bromide products. The few remaining uses are severely restricted. Pesticides containing methyl bromide in the U.S. are restricted-use due to their acute toxicity, meaning that they must only be applied by a certified applicator. Health effects of acute exposure to methyl bromide are serious and include central nervous system and respiratory system damage. Pesticides can be very toxic and it is critically important that they be used only as approved by EPA.
After the government began its investigation, TERMINIX LP voluntarily ceased its use of methyl bromide in the U.S. and in U.S. territories, except for one remaining supervised government contract.
According to the information filed in federal court in the U.S. District Court of the Virgin Islands today, the defendants knowingly applied restricted-use fumigants at the Sirenusa resort in St. John for the purpose of exterminating household pests on or about Oct. 20, 2014, and on or about March 18, 2015. The companies were also charged with applying the restricted-use pesticide in 12 residential units in St. Croix and one additional unit in St. Thomas between September 2012 and February 2015.
According to the factual basis of the plea agreement, TERMINIX, USVI provided pest control services in the Virgin Islands including fumigation treatments for Powder Post Beetles, a common problem in the islands. These fumigation treatments were referred to as “tape and seal” jobs, meaning that the affected area was to be sealed off from the rest of the structure with plastic sheeting and tape prior to the introduction of the fumigant. Customers were generally told that after a treatment persons could not enter the building for a two to three-day period.
On or about March 18, 2015, two employees of TERMINIX, USVI, performed a fumigation pesticide treatment at the lower rental unit of Building J at Sirenusa in St. John. The upper unit in Building J was occupied by a Delaware family of four. Via various means, methyl bromide from the lower unit migrated to the upper unit of Building J, causing serious injury to and hospitalization of the entire family.
EPA regional staff responded immediately to the incident in St. John, securing the scene, performing testing and addressing the contamination. Within days, the EPA sent out a pesticide use warning to pesticides applicators in Puerto Rico and the U.S. Virgin Islands, followed by a broader pesticide notice to regulators in all states, the British Virgin Islands, and to other Caribbean and Latin American countries.
As a special condition of the companies’ three year probation, the defendants shall make good faith efforts to resolve past and future medical expenses for the family through separate civil proceedings. If they do not do so before the end of the probationary period, they would be subject to an order of restitution and the government may petition the District Court to reopen the sentencing proceedings to seek recovery of past and future medical and other expenses.
The $10 million penalty includes $8 million in criminal fines, $1 million in restitution to the EPA for response and clean-up costs, and a $1 million community service payment to the National Fish and Wildlife Foundation for the purpose of engaging a third party to provide training to pesticide applicators in the U.S. Virgin Islands.
The case was investigated by EPA Criminal Investigation Division working cooperatively with the Virgins Islands government and, the Agency for Toxic Substances and Disease Registry.
Senior Litigation Counsel Howard P. Stewart of the Department of Justice, Environmental Crimes Section, and Assistant U.S. Attorney Kim L. Chisholm of the District of the Virgin Islands are prosecuting the case with assistance of Patricia Hick, EPA Region II Regional Criminal Enforcement Counsel.
The investigation is ongoing.
For more information about EPA’s pesticide program and its requirements, visit www.epa.gov/pesticides/.
Suspected Smuggler Slams into Semi-Truck, Two Undocumented Immigrants KilledRead the Press Release
Assistant U. S. Attorney Lara A. Stingley (619) 546-8403 or Assistant U.S. Attorney Brandon J. Kimura (619) 546-9614
NEWS RELEASE SUMMARY – March 29, 2016
EL CENTRO – A suspected alien smuggler who said she “panicked” and hit the accelerator when U.S. Border Patrol agents attempted to pull her over has been arrested and charged in connection with a subsequent crash that killed two of her customers, left another brain dead, and another paralyzed.
Lydiana Castro, a United States citizen, was arrested after the crash on March 23, 2016 near Andrade, California, and charged with illegally transporting aliens. In federal court in El Centro today, she elected to forgo a detention hearing and remain in custody.
According to a federal complaint, a Border Patrol agent saw several people running to a Dodge Durango at a gas station at the intersection of Sidewinder Road and Interstate 8 in Andrade, California. The agent alerted colleagues via radio.
When another Border Patrol agent in a marked vehicle saw the Durango, he activated his lights and attempted to stop the vehicle, which was being driven by Castro. At first the Durango began to slow down and pull over, but suddenly the vehicle accelerated and reached a high rate of speed. Castro lost control of the Durango and crashed into a semi-truck that was traveling westbound on Interstate 8. The Durango became entangled in the semi-truck trailer’s frame and the truck driver pulled onto the shoulder.
Border Patrol agents found five undocumented Mexican nationals in the Durango. Two men, Gustavo Sanchez-Orta and Jose Magdiel May-Gonzalez, were pronounced dead at the scene of the crash. Castro was taken to a hospital in Yuma, Arizona. The three men had more extensive injuries and had to be transported to a hospital in Phoenix, Arizona. They were identified as Miguel Angel May-Us, Rogelio Dzul-Castro and Javier Sanchez-Gonzalez.
According to the complaint, Castro told a Homeland Security Investigations agent that she picked up the undocumented immigrants at the gas station and drove away toward Yuma. The complaint said Castro stated that she panicked when she saw Border Patrol and she “pressed on the gas” and did not know what to do. She said she remembers hitting the semi-truck but not much after that.
In court today, Assistant U.S. Attorney Kyle Martin told U.S. Magistrate Judge Peter Lewis that Dzul-Castro is brain dead and on life support; Sanchez-Gonzalez is paralyzed from the waist down; and May-Us is in and out of consciousness.
A status hearing is scheduled for this Friday, April 1 at 10:00 a.m. before Judge Lewis.
DEFENDANTS Case Number 16MJ8265
Lydiana Castro Age: 30 Calexico, CA
SUMMARY OF CHARGES
Illegal Transportation of Aliens – Title 8, U.S.C., Section 1324(a)(l)(A)(ii)
Maximum penalty: 10 years in prison
AGENCY
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations
U.S. Border Patrol
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Stanislaus County District Attorney’s Office Receives Award for Contributions to the Mission of the Department of JusticeRead the Press Release
FRESNO, Calif. — United States Attorney Benjamin B. Wagner is pleased to announce the 2015 winner of the Eastern District of California Outstanding Law Enforcement Agency Award in the Fresno Division. This is one of four awards presented annually to a law enforcement agency and an officer in each of the Sacramento and Fresno divisions of the Eastern District of California to recognize outstanding collaboration between federal, state and local law enforcement in addressing criminal conduct in this region.
The 2015 Fresno division’s Outstanding Law Enforcement Agency Award goes to the Stanislaus County District Attorney’s Office for its participation in task forces that resulted in a number of significant prosecutions involving violent crime and fraud in the mortgage industry.
U.S. Attorney Wagner stated: “Our success is only ever possible because of dedicated, hard-working law enforcement officers in both federal and state law enforcement. The investigators with the Stanislaus County District Attorney’s Office deserve particular recognition for their skill, diligence, and spirit of cooperation.”
“District Attorney Birgit Fladager said, “We truly value the partnership we have with the U.S. Attorney’s Office and are grateful for this recognition. Serving crime victims and holding criminals accountable can best be done when working together.”
Two investigators merit particular mention this year: Lieutenant Froilan Mariscal who worked on the gang task force that investigated the notorious, violent gang Nuestra Familia, and Investigator Glenn Gulley who worked on the FBI’s Mortgage Fraud Task Force while it was in operation and continues to work extensively with our office.
Lt. Mariscal spearheaded a long-term and complex investigation of the Nuestra Familia gang that resulted in a RICO prosecution and a 20-year sentence for the lead defendant. So far, nine co-defendants have pleaded guilty. The case involved a series of assaults executed in jail, drug trafficking, an armed home invasion and carjacking, and a gang fight involving a shooting. Lt. Mariscal was relentless in his pursuit of this investigation and brought with him knowledge, gang expertise, good judgment, and dogged determination.
Investigator Gulley currently has several significant fraud cases pending with the office. He has comprehensive knowledge of real estate fraud, including industry practices and case-specific knowledge of pertinent real estate transactions. Gulley investigated the case against Xue Heu, who was a serial investment fraudster. He posed as a government representative to purportedly sell distressed properties to unwitting investors. Heu was indicted for defrauding victims, and was indicted in the Western District of Texas for a separate real estate investment fraud scheme. Investigator Gulley coordinated the case with other investigators in Texas, marshaled evidence to obtain a guilty plea in the Eastern District of California case, and also found the time and energy to uncover additional criminal conduct Heu perpetrated while out on bond. Investigator Gulley’s determination resulted in a prison sentence of over five years, as well as an additional state court conviction for Heu’s criminal conduct while on bail.
St. Thomas Man Sentenced to 10 Months in Prison for Drug TraffickingRead the Press Release
St. Thomas, USVI - District Court Judge Curtis V. Gomez sentenced Kasimir Asim McClean, 37, of St. Thomas, on March 28, 2016, to 10 months’ imprisonment and three years of supervised release for possession with intent to distribute approximately four kilograms of marijuana, United States Attorney Ronald W. Sharpe announced today. Judge Gomez also ordered McClean to pay a special assessment of $100 and perform 400 hours of community service.
On November 23, 2015, McClean pleaded guilty to possession with intent to distribute marijuana. According to the plea agreement, McClean was arrested on September 26, 2015, when he arrived at the Cyril E. King Airport, St. Thomas, U.S. Virgin Islands, aboard a Delta Airlines flight from Atlanta, Georgia. As part of his plea, McClean admitted that U.S. Customs and Border Protection officers, with the assistance of a canine, found approximately four kilograms of marijuana in his carry-on luggage.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and prosecuted by Assistant United States Attorney Everard E. Potter.
Springdale Man Sentenced to 50 Years in Federal Prison for Child Pornography OffensesRead the Press Release
Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Julian Rivera, age 21, of Springdale, was sentenced today to 600 months in federal prison without the possibility of parole and twenty five years of supervised release on one count of Production of Child Pornography and one count of Possession of Child Pornography. The sentencing hearing took place before the Honorable Timothy L. Brooks in the United States District Court in Fayetteville.
According to court records, in February, 2015, the Springdale Police Department was contacted by a family member of a minor female reporting that a Hispanic male attempted to kidnap and sexually assault her as she walked home from school. After a subsequent investigation, the Springdale Police Department arrested the defendant, Julian Rivera. At the time of his arrest, Rivera’s IPhone was seized pursuant to a search warrant. A subsequent forensic examination of his IPhone revealed numerous videos of the defendant masturbating in front of and sexually assaulting minors, the youngest of which was approximately five (5) years of age. Rivera was indicted by a federal grand jury in October, 2015 and pleaded guilty to the charge in December, 2015.
This case was investigated by the Internet Crimes Against Children Task Force and the Springdale Police Department. Assistant United States Attorney Dustin Roberts prosecuted the case for the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (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.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Settlements Totaling $84,000 Reached with Five Individuals Who Committed FraudRead the Press Release
United States Attorney Randolph J. Seiler announced that five individuals previously convicted of Conspiracy to Commit Theft of Federal Funds, have entered into agreements to pay civil penalties pursuant to the False Claims Act (FCA), 31 U.S.C. §§ 3729-3733. Regardless of criminal penalties, the FCA imposes civil liability on persons who knowingly submit false claims to obtain federal funds. Pursuant to the FCA, persons who submit a false claim must pay to the United States a civil penalty of not less than $5,500, and not more than $11,000 for each false claim, plus three times the amount of damages which the government sustained.
From May through December 2009, Samone Milk, Heather Garcia, Joe Garcia, Wayne Cortier, and Robert Running Bear took federal funds belonging to the Oglala Sioux Tribe’s Low Income Home Energy Assistance Program (LIHEAP) to which they were not entitled. Using their positions as tribal employees, Milk and Heather Garcia drafted fake invoices for work purportedly completed by contractors then shared the funds with those contractors.
In 2014, restitution of $83,585 (joint and severally) was ordered to be paid to the tribe’s LIHEAP program (criminal case 13CR50130). The FCA civil settlements finalized in March 2016 call for payments over a period of years to the United States as follows:
Samone Milk, $30,000 (monthly payments for 29 years);
Heather Garcia, $20,000 (monthly payments for 18.2 years);
Joe Garcia, $20,000 (monthly payments for 18.2 years);
Wayne Cortier, $10,000 (monthly payments for 8.7 years);
Robert Running Bear, $4,000 (monthly payments for 3.5 years).
The United States Attorney’s Office places a high priority on criminal and civil enforcement in cases involving all types of fraud committed against federal programs, and works with various law enforcement agencies to identify and investigate these matters.
This investigation was conducted by the U.S. Department of Health and Human Services, Office of Investigations. Assistant U.S. Attorney Ann M. Hoffman prosecuted the criminal case. Assistant U.S. Attorney Cheryl Schrempp DuPris finalized the civil settlements.
Roofing Company Owner Sentenced for Charges Connected to Employee's Fatal FallRead the Press Release
PHILADELPHIA - James J. McCullagh, 60, of Meadowbrook, PA, was sentenced today to 10 months in prison for charges related to the fatal fall of an employee. McCullagh, who owns James J. McCullagh Roofing, pleaded guilty on December 9, 2015, to four counts of making false statements, one count of obstruction of justice, and one count of willfully violating an Occupational Safety and Health Administration (OSHA) regulation causing death to an employee. In addition to the prison term, U.S. District Court Judge Nitza I. Quinones Alejandro ordered one year of supervised release, and a $510 special assessment.
On June 21, 2013, one of McCullagh’s employees was killed after falling approximately 45 feet from a roof bracket scaffold while performing roofing work for McCullagh. McCullagh, failed to provide fall protection equipment to his employees. In connection with the OSHA investigation of the fatality, McCullagh attempted to cover up his failure to provide fall protection by falsely stating, on four occasions, that he had provided fall protection equipment, including safety harnesses, to his employees. McCullagh knew that he had not provided fall protection to his employees and none of his employees had safety harnesses or any other form of fall protection. McCullagh told an OSHA Compliance Safety and Health Officer that his employees had been wearing safety harnesses tied off to an anchor point when he saw them earlier in the day prior to the fall. McCullagh also directed other employees to falsely state that they had fall protection, including safety harnesses, on the day of the fall.
The case was investigated by the United States Department of Labor-Office of Inspector General Labor Racketeering and Fraud Investigations and the Occupational Safety and Health Administration, with assistance from the U.S. Department of Labor's Occupational Safety and Health Administration and Office of Inspector General. It is being prosecuted by Assistant United States Attorney Mary Kay Costello.
Rapid City Man Pleads Not Guilty to Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Cody Reddy, age 22, was indicted on January 26, 2016. Reddy 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 up to 10 years 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 charge relates to Reddy failing to register and update his registration as a convicted sex offender between December 22, 2015, and January 26, 2016, at Rapid City.
The charge is merely an accusation and Reddy is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Eric Kelderman is prosecuting the case.
Reddy was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for May 31, 2016.
Rapid City Man Indicted on Multiple Fraud ChargesRead the Press Release
United States Attorney Randolph J. Seiler announced that a former auditor and fraud investigator for the South Dakota Department of Revenue has been indicted by a federal grand jury for Conspiracy, Wire Fraud, Bank Fraud, Money Laundering, and Tampering.
Steven Arthur Knigge, 69, of Rapid City, was indicted on March 22, 2016, and appeared before U.S. Magistrate Judge Daneta Wollmann on March 25, 2016. He pleaded not guilty to the Indictment.
The maximum penalty upon conviction is 30 years of imprisonment and/or a $500,000 fine, followed by 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment charges Knigge with receiving funds fraudulently stolen from the bank accounts of unsuspecting depositors in other States. Thereafter, Knigge transferred most, but not all, of the funds either to individuals in other States or out of the country. Following an interview of him conducted by Internal Revenue Service and Federal Bureau of Investigation Special Agents, Knigge, who had used his South Dakota Department of Revenue computer to conduct some of the transactions, deleted thousands of emails and has been, consequently, charged with tampering with evidence. With the assistance of the South Dakota Attorney General’s Office, the emails were recovered from Knigge’s State computer.
“This is a significant prosecution of a public servant committing fraud against innocent citizens, and also represents a serious breach of trust each South Dakota citizen places in its government employees,” said Seiler.
The charges are merely an accusation and Knigge is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Internal Revenue Service Criminal Investigation, and the Federal Bureau of Investigation. Assistant U.S. Attorney Ben Patterson is prosecuting the case.
Knigge was released pending trial. A trial date has not been set.
Puerto Rico Man Pleads Guilty to Drug Conspiracy ChargeRead the Press Release
St. Thomas, USVI – On Tuesday, March 29, 2016, Jose Luis Ponce-Pagan, 36, of Puerto Rico, pleaded guilty in federal c ourt on St. Thomas, U.S. Virgin Islands, be for e the Honorable Curtis V. Gomez to conspi racy to possess cocaine wi th the intent to distribute , United States Attorney Ronald W. Sharpe announced today. Sentencing is scheduled for July 28, 2016.
According to the plea agreement filed with the court, between August 30, 2015, and September 3, 2015, Ponce-Pagan knowingly conspired with other individuals to purchase approximately 100 kilograms of cocaine on St. Thomas for distribution in Puerto Rico. He faces a maximum sentence of life in prison and a $10,000,000 fine. Ponce-Pagan remains in custody pending sentencing.
This case is the result of a joint investigation by the U.S. Drug Enforcement Administration, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives and U.S. Customs and Border Protection. It is being prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
Puerto Rican Man Arrested for Attempting to Receive Kilogram of Cocaine Through MailRead 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 Omar Aponte Vellon a/k/a Chambo, 29, of Puerto Rico, was arrested and charged by criminal complaint with attempt to possess with intent to distribute 500 grams or more of cocaine. The charge carries a minimum penalty of 5 years and maximum penalty of 40 years in prison and a $5,000,000 fine.Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that, on two separate occasions in March 2016, federal law enforcement officials intercepted a package being shipped from Puerto Rico to a particular residence on the East Side of Buffalo. Each of the two packages contained approximately half a kilogram of cocaine. On March 25, 2016, the defendant accepted delivery of and left the residence with one of the packages, after which he was arrested.
The defendant is being held pending a detention hearing before the Honorable Michael J. Roemer on March 31, 2016.
The criminal complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent In Charges James J. Hunt, and the United States Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Pottsboro TX Man Pleads Guilty to Choctaw Nation Casino TheftRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that ALLEN MICHAEL SCOTT, age 22, of Pottsboro, Texas, pled guilty to THEFT BY OFFICERS OR EMPLOYEES OF GAMING ESTABLISHMENT ON INDIAN LANDS, in violation of Title 18, United States Code, Sections 1168(b) and 2.
The Indictment alleged that from on or about February 9, 2015, to on or about February 20, 2015, in the Eastern District of Oklahoma, the defendant, an employee of the Choctaw Nation Casino and Resort, did embezzle, abstract, purloin, willfully misapply and take and carry away in excess of $1,000.00 of moneys belonging to the Choctaw Nation Casino and Resort, an Indian gaming establishment operated by the Choctaw Nation in Indian Country, pursuant to an ordinance or resolution approved by the National Indian Gaming Commission.
The charges arose from an investigation by the Choctaw Nation Tribal Police and the Federal Bureau of Investigation.
The statutory range of punishment is up to 20 years imprisonment, up to a $1,000,000.00 fine or both.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing.
Assistant United States Attorney Edward Snow represented the United States.
Passaic County, New Jersey, Man Charged with Illegally Possessing Machine GunsRead the Press Release
NEWARK, N.J. –A Ringwood, New Jersey, man will appear in federal court today to face charges that he possessed 17 machine guns, which are illegal under federal law, U.S. Attorney Paul J. Fishman announced.
Mariusz Cebula, 36, is charged by complaint with knowingly possessing machine guns, which are defined as weapons that can shoot more than one shot automatically, without manual reloading, by a single function of the trigger. Cebula was arrested yesterday by federal agents and will appear this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to the complaint:
On July 17, 2015, law enforcement officers arrived at Cebula’s residence to serve a temporary restraining order on Cebula. Law enforcement officers conducted a search of his residence in furtherance of the temporary restraining order, as well as pursuant to a search warrant and Cebula’s oral consent. The search revealed that Cebula was in possession of approximately 262 high capacity magazines for firearms, as well as dozens of other firearms components, ammunition, accessories and manufacturing tools.
Approximately 17 of the firearms and firearm components that Cebula possessed were later determined to be machine guns under federal law. Of the 17 machine guns recovered from Cebula’s residence, some were found to be operational as automatic weapons, including, but not limited to, the following:
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A 9mm Lugar caliber, STEN Mk II type firearm, assembled using a machine gun receiver of unknown origin and original STEN-type machinegun parts, bearing a mark of identification of “86939,” but bearing no serial number.
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A C.G. Haenel 9mm caliber, MP-41 select-fire machine gun, bearing serial number 2108.
Cebula was also found to be in possession of two short-barreled rifles and one silencer.
The machine gun possession charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky, and the Ringwood Police Department, under the direction of Chief Joseph Walker, with the investigation leading to the charge. He also thanked the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, for its role in the case.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense Counsel: Miles Feinstein Esq., Clifton, N.J.
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New York City School Guidance Counselor and Union Representative Pleads Guilty to Transportation of Child PornographyRead the Press Release
Earlier today, John Capuano, a New York City school guidance counselor and teacher’s union representative, pled guilty at the federal courthouse in Central Islip, New York, to Transportation of Child Pornography in Interstate and Foreign Commerce. Today’s plea proceeding took place before United States Magistrate Judge Gary R. Brown. At sentencing, Capuano faces a mandatory minimum sentence of five years in prison and a maximum of 20 years.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.
“Protecting the vulnerable, particularly children, is a priority for law enforcement and this Office,” stated United States Attorney Capers. “This crime was particularly egregious in that Capuano was a school guidance counselor entrusted with ensuring the safety and wellbeing of children while he at the same time was victimizing them by distributing images of child pornography.” Mr. Capers thanked the Department of Homeland Security, Homeland Security Investigations (HSI), for its assistance in the investigation.
As set forth in the charging instruments and the defendant’s plea allocution, in April 2015, an undercover HSI agent, as part of an ongoing effort to locate individuals sharing child pornography, found child pornography images and videos involving children as young as 3-5 years’ old which had been posted by Capuano to a chat room in a publicly available Internet application. After tracing location information for the account used to post the images, law enforcement obtained a search warrant and executed on May 28, 2015, at Capuano’s residence in Valley Stream, New York.
During the search, Capuano spoke with law enforcement personnel following a waiver of his Miranda rights and admitted that he used the Internet application to trade child pornography and posted the images located by the undercover agent. Capuano also identified his personal telephone and his work telephone as a teacher’s union representative as devices he used to access these materials. Capuano was arrested and remains incarcerated.
This prosecution is 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 United States Attorneys’ Offices, 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.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorney Allen Bode is in charge of the prosecution.
The Defendant:
John Capuano
Age: 43
Valley Stream, New YorkE.D.N.Y. Docket No. 15 CR 312 (DRH)
Muskogee Man Pleads Guilty to Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that CHARLES RAY BENEFIELD, age 32, of Muskogee, Oklahoma, pled guilty to FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2).
The charge arose from an investigation by the Federal Bureau of Investigation, Violent Crime Task Force. The defendant was indicted in March, 2016.
The Indictment alleged that on or about December 30, 2015, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm which had been shipped and transported in interstate commerce.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is not more than 10 years imprisonment, up to a $250,000 fine or both.
Assistant United States Attorney Tim Hammer represented the United States.
Muskogee Man Pleads Guilty to Failure to Register as Sex OffenderRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that CHARLES ALBERT GRINDLE, age 42, of Muskogee, Oklahoma, pled guilty to FAILURE TO REGISTER AS SEX OFFENDER, in violation of Title 18, United States Code, Sections 2250(a)(1), 2250(a)(2)(B) and 2250(a)(3).
The charge arose from an investigation by the United States Marshals Service. The defendant was indicted in March, 2016.
The Indictment alleged that from in or October 2014 to on or about January 26, 2016, in the Eastern District of Oklahoma, and elsewhere, the defendant, an individual required to register as a sex offender under the Sex Offender Registration and Notification Act, after having received a felony conviction from the State of Texas on or about August 25, 1997, for the felony offense of Aggravated Sexual Assault to a Child, traveled in interstate commerce and knowingly failed to register and update his registration as required by the Sex Offender Registration and Notification Act.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is not more than 10 years imprisonment, up to a $250,000 fine or both.
Assistant United States Attorney Edward Snow represented the United States.
Muldrow Man Pleads Guilty to Firearm Possession in Furtherance of Drug TraffickingRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that EDWARD ROBERT SALDANA II, age 30, of Muldrow, Oklahoma, pled guilty to FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2); POSSESSION OF FIREARM IN FURTHERANCE OF A DRUG TRAFFICKING CRIME, in violation of Title 18, United States Code, Section 924(c)(1)(A) and POSSESSION WITH INTENT TO DISTRIBUTE METHAMPHETAMINE AND OXYCODONE, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C).
The charge arose from an investigation by the Sallisaw Police Department and the Drug Enforcement Administration. The defendant was indicted in February, 2016.
The Indictment alleged that on or about December 10, 2015, within the Eastern District of Oklahoma, the defendant, knowingly and intentionally possessed with intent to distribute a mixture or substance containing a detectable amount of methamphetamine and a mixture or substance containing a detectable amount of oxycodone, Schedule II controlled substances.
It further alleges on the same date, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm and did so in furtherance of a drug trafficking crime.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is not less than 5 years or more than Life imprisonment, up to a $1,500,000.00 fine or both.
Assistant United States Attorney Dean Burris represented the United States.
Montana U.S. Attorney's Office and Confederated Salish and Kootenai Tribal Defenders Program to Host Offender Reentry TrainingRead the Press Release
PABLO – The U.S. Attorney’s Office for the District of Montana and the Tribal Defenders Holistic Defense Program of the Confederated Salish and Kootenai Tribes (CSKT) will present a training on offender reentry issues on March 29 and 30, 2016, on the campus of the Salish Kootenai College in Pablo, Montana. The program is titled “Reentry in Tribal Communities” and will focus on the difficulties faced by Native American offenders returning to their communities following incarceration in state and federal prison facilities.
The training is in keeping with efforts in recent years by both the State of Montana and the US Department of Justice to reduce the rate of recidivism and promote successful reintegration into society for individuals who have been incarcerated. The goal of such efforts is to break the cycle of incarceration that is too prevalent in both tribal and non-tribal communities. A critical step towards accomplishing that goal is to address the many obstacles to successful reentry that offenders face following their release. The speakers bring a broad range of knowledge and expertise on how to navigate those obstacles.
The focal point of Day One of the training will be presentations by members of the Muscogee (Creek) Nation Reintegration Program, which has received national recognition and is considered a model for effective reentry programs. The second day will begin with a presentation on historical trauma by University of Montana professor Dr. Gyda Swaney, followed by a presentation by the CSKT Tribal Defenders on the Flathead reentry program, which is currently under development. Their program includes work programs for returning offenders, reentry intake and assessment tools, mental health issues for reentering adults, and the collateral consequences of convictions and special legal issues faced by those returning to the community after incarceration. Day two will also include presentations from Montana Department of Corrections staff. They will discuss the accomplishments of the Montana Reentry Task Force, and the resources available through the Task Force.
“This training reflects a concerted federal, tribal, and state effort to reduce recidivism and promote successful offender reintegration into our tribal communities,” said U.S. Attorney for the District of Montana Mike Cotter. “The diverse range of expertise possessed by the presenters represents a unique opportunity to share and exchange experience and knowledge about successful reentry techniques both on and off the reservation. By continuing to work cooperatively and to share our accumulated knowledge, we can facilitate successful reentry in all Montana communities.”
“This training will give a perspective regarding the circumstances of reentry in a tribal community, said Ann Sherwood, Managing Attorney for the CSKT Tribal Defenders. “We also hope to begin a discussion regarding better ways for the criminal justice system to address mental health and addiction issues in order to reduce recidivism.”
The Training will take place at the Johnny Arlee and Victor Charlo Theatre on the Salish Kootenai Campus.
Mississippi Woman Pleads Guilty in Terrorism InvestigationRead the Press Release
Jaelyn Delshaun Young, 20, of Starkville, Mississippi, pleaded guilty today in the Northern District of Mississippi to conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.
The plea was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Felicia C. Adams of the Northern District of Mississippi and Special Agent in Charge Donald Alway of the FBI’s Jackson, Mississippi, Division.
Young pleaded guilty before Chief U.S. District Judge Sharion Aycock of the Northern District of Mississippi to conspiring with Muhammad Oda Dakhlalla to provide material support to ISIL. Dakhlalla pleaded guilty to the same charge on March 13, 2016. Young was remanded to the custody of the U.S. Marshals Service to await sentencing, which will be scheduled at a later date.
The investigation was conducted by the FBI’s Jackson Division Joint Terrorism Task Force and the Washington Field Office. The case is being prosecuted by Assistant U.S. Attorneys Clay Joyner and Bob Norman of the Northern District of Mississippi and Trial Attorney Rebecca Magnone of the National Security Division’s Counterterrorism Section.
Mississippi Woman Pleads Guilty in Mail Fraud InvestigationRead the Press Release
OXFORD, Mississippi – Tammi Henderson Palasini, 53, of Indianola, Mississippi, plead guilty today in the Northern District of Mississippi to Count One of the attached Indictment which charged her with devising and executing a scheme to defraud investors, including U.S. Military veterans, through the use of the U.S. Mail, in violation of 18 U.S.C. 1341.
The plea was announced by U.S. Attorney Felicia C. Adams of the Northern District of Mississippi, Inspector in Charge Tom Noyes of the U.S. Postal Inspection Service, and U.S. Veteran’s Affair Special Agent in Charge John Werner.
Palasini plead guilty before Chief U.S. District Judge Sharion Aycock of the Northern District of Mississippi. Palasini was remanded to the custody of the U.S. Marshals Service to await sentencing which is currently scheduled for August 10, 2016, at 11:00 a.m. in Aberdeen, Mississippi. Palasini faces a maxmium of 20 years in prison, a $250,000 fine or both.
The investigation was conducted by the U.S. Postal Inspection Service and U.S. Department of Veteran Affairs, Office of Inspector General. The case is being prosecuted by the U.S. Attorney’s Office, Northern District of Mississippi.
Minnesota Resident Sentenced for His Role in A Staged RobberyRead the Press Release
United States Attorney Deborah R. Gilg announced today that Michael Bambery, age 21, of Minneapolis, Minnesota, was sentenced for his conviction of theft of property in Indian Country. Magistrate Judge Thomas D. Thalken sentenced Bambery to nine months of incarceration to be followed by a one year term of supervised release. Bambery was further ordered to pay restitution in the amount of $907. Bambery’s accomplice, Steven Schulze, was sentenced to three years of probation on March 28, 2016.
Schulze was an employee of the Pony Express, a convenience store in Rosalie, Nebraska owned by the Winnebago Tribe of Nebraska. On August 15, 2015, Schulze and Bambery executed a staged robbery wherein Bambery purported to rob Schulze at gunpoint. In actuality, Bambery used a toy gun. Schulze gave Bambery $907 from the register. Bambery later reneged on a promise to give Schulze some of the money.
Bambery was on probation in Minnesota at the time of this offense.
This case was investigated by the Federal Bureau of Investigation.
Michigan Man Pleads Guilty to Scheme to Defraud Hospitals and UniversityRead the Press Release
Troy Mitchell McCormick, 50, of Commerce Township, Michigan, pleaded guilty today in U.S. District Court in Nashville, Tenn., to charges of mail and wire fraud, announced Jack Smith, Acting United States Attorney for the Middle District of Tennessee for the administration of this case.
During a plea hearing before U.S. District Court Judge Marvin E. Aspen, McCormick admitted engaging in a scheme to defraud while employed as a sales representative and Vice President for Business Development at Emdeon, a company headquartered in Nashville, Tennessee, that provided data and information services to hospitals, health systems and other customers in the healthcare industry. McCormick was responsible for overseeing the accounts of certain Emdeon customers located in Michigan, including Memorial Health Care, Spectrum Health Systems, CareTech Solutions and the University of Michigan.
McCormick admitted that he fraudulently fabricated contracts between his Emdeon and these client customers and that he forged signatures on these contracts. As a result of McCormick’s forged contracts, these customers were billed inflated amounts and McCormick received more than $100,000 in additional incentive compensation.
McCormick further admitted taking certain steps to conceal his scheme, including posing as fictitious hospital and university employees and using email addresses in the names of these fictitious employees to correspond with his employer regarding the fraudulent contracts. McCormick also acknowledged that he manufactured and mailed a counterfeit check for $77,304.12 in an effort to cover up a forged contract.
After Emdeon learned of this scheme, Emdeon refunded any improper payments to its customers.
McCormick is scheduled to be sentenced by Judge Aspen on September 19, 2016.
He faces up to 20 years in prison and a $250,000 fine on each fraud count, in addition to forfeiture of any money or property derived from the fraud. McCormick will also be ordered to pay restitution to any victims of his offense. McCormick’s sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
This case was investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Mexican Man Sentenced for Illegal Reentry After DeportationRead the Press Release
CONCORD, NEW HAMPSHIRE –United States Attorney Emily Gray Rice announced today that Angel Rayas-Villasenor, of Mexico, was sentenced to time served after pleading guilty today to illegally reentering the United States after having been previously deported. Rayas-Villasenor will be deported to Mexico.
The Nashua Police Department arrested Rayas-Villasenor on November 26, 2015 for driving without a license. Fingerprints taken by the Nashua Police in connection with the arrest matched fingerprints on file relating to the defendant’s prior deportation. ICE ERO Deportation Officers arrested Rayas-Villasenor on December 8, 2015, after observing the Rayas-Villasenor exit his residence. Following his arrest, Rayas-Villasenor was transported to the Manchester ICE Office where he was booked and processed, which included obtaining a full set of his fingerprints. Those fingerprints were submitted to the Department of Homeland Security’s Automated Biometric Identification System (IDENT) for comparison to a database of known fingerprints. IDENT matched the fingerprints to those in the database taken from the defendant on the occasion of his previous deportations to Mexico from Nogales, Arizona on August 6, 2014, and again on August 12, 2014.
The case was investigated by the Nashua Police Department and the Department of Homeland Security and prosecuted by Assistant U.S. Attorney Alfred Rubega.
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Methamphetamine Dealer Sentenced to 7 YearsRead the Press Release
ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced today a methamphetamine dealer to 84 months in prison, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Paul Corbi, 35, of Asheville, N.C. was also ordered to serve four years of supervised release following his prison term.
Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Sheriff Van Duncan of the Buncombe County Sheriff’s Office (BCSO) join U.S. Attorney Rose in making today’s announcement.
According to filed documents and statements made in court, on July 18, 2014, law enforcement conducted a traffic stop of the vehicle Corbi was driving. During the course of the traffic stop, law enforcement recovered methamphetamine, some of which was packaged in a manner consistent with re-distribution, and a set of scales. They also found a plastic bag containing methamphetamine and $3,130 in cash in Corbi’s pockets. In total, law enforcement seized approximately 47 grams of methamphetamine, with an approximate street value of $4,700. According to court records, at the time of his arrest Corbi had several outstanding state arrest warrants, including one for assaulting a government employee in state court. In June 2015, Corbi pleaded guilty to one count of possession with intent to distribute methamphetamine.
Corbi is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled DEA and the Buncombe County Sheriff’s Office. Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville prosecuted the case.
Merced Man Arrested for Distributing Marijuana and Cocaine Nationwide Through the Silk Road and Other Dark-Web Marketplace WebsitesRead the Press Release
FRESNO, Calif. — David Ryan Burchard, 38, of Merced, was arrested late Monday, charged in a criminal complaint with distribution of marijuana and cocaine on dark-web marketplaces, including the Silk Road, United States Attorney Benjamin B. Wagner announced. Burchard made his initial appearance on the complaint today before U.S. Magistrate Judge Erica P. Grosjean in Fresno.
According to the criminal complaint, Burchard, using the moniker “Caliconnect,” was a major narcotics vendor on the Silk Road and other dark-web marketplaces, including Agora, Abraxas, and AlphaBay. Dark-web marketplaces are operated on computer networks designed to conceal the true Internet Protocol (IP) address of the computers accessing the network. In addition, dark-web marketplaces allow for payments to be made only in the form of digital currency, most commonly in Bitcoin. While not inherently illegal, digital currency is used by dark-web marketplaces because online transactions in digital currency can be completed without a third-party payment processor and are therefore perceived to be more anonymous and less vulnerable to law enforcement scrutiny.
According to the complaint, Burchard accepted orders for marijuana and cocaine on dark-web marketplaces and then mailed the narcotics from post offices in Merced and Fresno County to his customers throughout the United States. Burchard was paid primarily in Bitcoin. Federal law enforcement estimates that Burchard, whose sales through the Silk Road were in excess of $1.4 million before that website was closed, was one of the largest vendors on the Silk Road. The complaint alleges that after federal law enforcement shut down the Silk Road website and arrested its founder in October 2013, Burchard transferred his narcotics business to Agora and then to AlphaBay, which are other dark-web marketplaces.
“The Department of Justice and our federal law enforcement partners will continue to investigate and prosecute major interstate narcotics traffickers,” said U.S. Attorney Wagner. “Those traffickers who believe they can escape the scrutiny of law enforcement by conducting their business on the dark-web and receiving payments in digital currency are mistaken.”
“HSI and our partners are at the forefront of combating illicit activities and financial crimes now seen in virtual currency systems,” said Ryan L. Spradlin, special agent in charge of HSI San Francisco. “Criminals continue to spread their businesses through online black‑markets using digital currency like Bitcoin, however they do not escape the reach of law enforcement who will continue to investigate, disrupt, and dismantle hidden illegal networks that pose a threat in cyberspace.”
“The combined efforts of law enforcement agencies in this type of investigation produce a formidable force against narcotics trafficking,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “With the increase use of the dark-web to facilitate the drug trade and other illicit activities, IRS-CI will continue to trace the complex financial transactions that identify where the money comes from and where it goes.”
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated: “Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners in law enforcement on this investigation and will continue to vigorously protect the U.S. Mail against all forms of criminal misuse.”
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service-Criminal Investigation, the U.S. Postal Inspection Service, and the Fresno Police Department, with assistance from Trial Attorney Anitha Ibrahim of the U.S. Department of Justice’s Computer Crimes and Intellectual Property Section. Assistant United States Attorney Grant Rabenn is prosecuting the case.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Louisville Man Detained Pending Charges of Advertising, Receipt and Transportation of Child PornographyRead the Press Release
Defendant is a former high school teacher who was employed by Kentucky Country Day of Louisville
LOUISVILLE, Ky. – A Louisville man formerly employed by Kentucky Country Day of Louisville as a high school physical education teacher and assistant coach with the school’s athletics department was detained today pending trial for violating child exploitation laws, announced United States Attorney John E. Kuhn, Jr.
Matthew Graves, age 38, is charged in an indictment with Advertising, Transportation, and Receipt of child pornography. These charges stem from his use of the social media messaging application KIK.
Matthew Graves was arrested by federal authorities on March 21, 2016, and arraigned on March 24, 2016. Defendant is currently in the custody of the U.S. Marshals Service. A Detention hearing was held today before Magistrate Judge Lindsay. No trial date has been set.
If convicted at trial, defendant faces a mandatory prison term of fifteen years and a maximum of 100 years. He also faces a period of supervised release of between 5 years and life.
This case is being prosecuted by Assistant United States Attorney A. Spencer McKiness and is being investigated by the FBI and LMPD.
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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 and click on the tab "resources."
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The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty
Leader of Pharmacy Burglary Ring Sentenced to More Than 12 Years in Federal PrisonRead the Press Release
WAYCROSS, GA – Bradley Williams, 33, from Russell Springs, Kentucky, was sentenced yesterday by Chief District Court Judge Lisa Godbey Wood to 151 months in prison following his conviction for possession with intent to distribute oxycodone and hydrocodone, Schedule II controlled substances. Williams was one of three defendants charged and convicted in the United States District Court for the Southern District of Georgia in an indictment involving a pharmacy burglary in Waycross, Georgia.
The evidence presented during multiple guilty plea and sentencing hearings showed that Williams and his coconspirators traveled from Russell Springs, Kentucky to Waycross on January 25, 2015, where they broke into a local pharmacy and stole more than 9,000 oxycodone and hydrocodone pills. The group intended to distribute the stolen drugs in Russell County, Kentucky. Williams was the leader of the group and had a long history of similar conduct dating back to 2004. His history of pharmacy burglaries included locations in Ohio, Tennessee and Kentucky.
U.S. Attorney Edward Tarver said, “Williams and his cohorts traveled far and wide in search of a vulnerable pharmacy from which to steal powerful pain meds. The ill-gotten fruit of their crime spree was intended to put money in their pockets and to fuel drug addictions in their home towns. Fortunately, the excellent working relationship between the DEA and local police forces in Georgia and Kentucky put an end to their criminal activities.”
In addition to Bradley Williams, the other Defendants convicted and sentenced as part of this prosecution were:
Stephen Williams, 37, Russell Springs, Kentucky, 27 months in prison; and,
Shawn Weddle, 34, Windsor, Kentucky, 32 months in prison.
The prosecution of this case resulted from an investigation conducted by the DEA, the Waycross Police Department, the Russell Springs (KY) Police Department, the Jamestown (KY) Police Department, the Russell County (KY) Sheriff’s Office, and the United States Marshal’s Service. The case was prosecuted by Assistant United States Attorney Karl Knoche. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Laurel Resident Sentenced for His Role in A Staged RobberyRead the Press Release
United States Attorney Deborah R. Gilg announced today that Steven Schulze, age 29, of Laurel, Nebraska, was sentenced for his conviction of theft of property in Indian Country. Magistrate Judge Thomas D. Thalken sentenced Schulze to three years of probation and ordered him to pay restitution in the amount of $907. Schulze’s accomplice, Michael Bambery, is scheduled for sentencing on March 31, 2016.
Schulze was an employee of the Pony Express, a convenience store in Rosalie, Nebraska owned by the Winnebago Tribe of Nebraska. On August 15, 2015, Schulze and Bambery executed a staged robbery wherein Bambery purported to rob Schulze at gunpoint. In actuality, Bambery used a toy gun. Schulze gave Bambery $907 from the register. Bambery later reneged on a promise to give Schulze some of the money.
This case was investigated by the Federal Bureau of Investigation.
Last of the Defendants Involved in the Wal-Mart Check Cashing Scheme Pleads GuiltyRead the Press Release
Montgomery, Ala. – Audrey Valisha Porterfield, 44, of Montgomery, Alabama, pleaded guilty yesterday to conspiring to steal federal funds, announced George L. Beck, Jr., U.S. Attorney for the Middle District of Alabama. Previously, all six of Porterfield’s co-defendants pleaded guilty to the same offense. Those co-defendants were: Courtney Deon Gardner, 26; Joye Nicole Perdum, 31; Tamala Caprice Avery, 34; Tocory Dewayne Washington, 31; Brittney Kae Ball, 33; and Joshua Jerome Bean, 25, all from Montgomery. The defendants’ convictions stemmed from their involvement in a scheme to cash fraudulent United States Treasury checks at the Wal-Mart Stores, Inc. store on Ann Street in Montgomery.
According to court documents, Gardner and Ball worked as tellers in the money center of the Ann Street Wal-Mart store. Porterfield was a cashier. While on their jobs, Gardner, Ball, and Porterfield cashed fraudulent and stolen Treasury checks brought to the store by the other members of the scheme—Washington, Bean, Perdum, and Avery. The seven co-conspirators shared the proceeds of the fraudulently cashed checks. The investigation revealed that the scheme resulted in a total loss of around $290,000.00 to the victims—including the United States Government and Wal-Mart Stores, Inc.
Each defendant faces a maximum sentence of 5 years in federal prison. Chief United States District Judge Keith Watkins will sentence all defendants on July 20, 2016 at 9:30 AM.
The case was investigated by the United States Secret Service and the Montgomery Police Department. Assistant United States Attorney Jonathan S. Ross is prosecuting the case.
Jury Convicts Mesquite Man of Trafficking in MarijuanaRead the Press Release
CORPUS CHRISTI, Texas – A federal jury in Corpus Christi has returned guilty verdicts against Edilberto Maso Diaz, 55, of Mesquite, on all counts as charged in a marijuana conspiracy, announced United States Attorney Kenneth Magidson. The jury deliberated for less than five hours today before convicted Diaz of conspiracy to possess with intent to distribute marijuana and three separate counts of possession with intent to distribute marijuana.
The conspiracy, which occurred primarily in 2013, involved more than 2,200 kilograms of marijuana.
During the two-day trial, the government presented testimony that Diaz owned a small trucking company, E & E Trucking, and conspired with others to transport marijuana within his tractor trailers concealed amongst a load of produce. One of the co-conspirators would obtain the marijuana from Mexico. Two drivers that worked for E & E Trucking would drive one of Diaz’s tractor trailers to the Rio Grande Valley to pick up a load of produce and would then proceed to another location to load the marijuana.
The government presented 10 witnesses which included testimony regarding three seizures of marijuana at the Border Patrol Checkpoint near Falfurrias - 1,110 kilograms, 348 kilograms and 815 kilograms on March 27, May 10, and Sept. 6, 2013, respectively. In each instance, law enforcement arrested the driver and seized the marijuana that was concealed in Diaz’s tractor trailers. Each seizure of marijuana was intended for delivery to the Dallas area and the proceeds shared amongst Diaz and his co-conspirators.
Senior U.S. District Judge Janis Graham Jack presided over the trial and will set sentencing at a later date. At that time, Diaz faces a minimum of 10 years and up to life in prison as well as a possible $10 million fine.
The charges are the result of an investigation conducted by the Drug Enforcement Administration. Assistant U.S. Attorneys Chad W. Cowan and Amanda Gould are prosecuting the case.
Jury Convicts Binghamton Man on Eight Counts of Sex Trafficking and Prostitution of MinorsRead the Press Release
BINGHAMTON, NEW YORK –Antonio Ballard, 25, of Binghamton, New York, was convicted yesterday on eight counts of engaging in a sex trafficking and prostitution business involving three minor girls. The verdict followed a week-long trial, announced United States Attorney Richard S. Hartunian. Ballard faces a minimum sentence of 10 years and up to life in prison when he is sentenced on July 27, 2016 by Senior United States District Judge Thomas J. McAvoy. Sentences are imposed by a judge based upon the particular statute the defendant is charged with violating, the United States Sentencing Guidelines and other factors.
"The exploitation of minors in the commercial sex trade represents inhumanity in its worst form. It violates our laws, shocks our conscience and will be vigorously prosecuted," said United States Attorney Hartunian.
"The sexual exploitation of minors will not be tolerated," said FBI Special Agent in Charge Andrew W. Vale. "Mr. Ballard's crimes are as shocking as they are heinous and thanks to the combined efforts of law enforcement, our community is safe from a depraved and dangerous man."
The evidence at trial showed that from August 2014 through December of 2014, in Broome County, New York, Ballard recruited three minor girls to engage in commercial sex acts and prostitution with men. Ballard benefitted from prostituting these minors by receiving 50% of the proceeds that they earned from performing sex acts. Using a cellular telephone, Ballard caused the minors to be photographed in sexually provocative poses and then posted these images on an internet advertising site.
This case was investigated by the Federal Bureau of Investigation ("FBI")-Albany Division, New York State Police, and the Binghamton Police Department and is being prosecuted by Assistant U.S. Attorney Miroslav Lovric.
Judge Orders New Jersey Investor to Serve a Year in Prison for Bid Rigging at Tax Lien AuctionsRead the Press Release
Thirteen Individuals and Three Companies Have Been Convicted or Pleaded Guilty in the Investigation to Date
A former bidder for a Pennsylvania tax liens investment company was sentenced to serve a prison term of 12 months and one day and pay a $25,000 criminal fine for conspiring to rig bids at New Jersey tax lien auctions, the Department of Justice announced today.
James Jeffers Jr., of Mount Holly, New Jersey, was sentenced today by U.S. District Judge Susan D. Wigenton of the District of New Jersey. Jeffers was convicted by a jury on Oct. 2, 2015 after a multi-week criminal trial. The jury found Jeffers guilty of violating Section One of the Sherman Act by conspiring to allocate and rig bids at municipal tax lien auctions that were held in the state of New Jersey from at least 1998 until at least February 2009. Jeffers’s conviction resulted from his conduct as a bidder for Crusader Servicing Corp., which pleaded guilty in September 2012 to participating in the same conspiracy. Jeffers also bid for Crusader’s successor company during the conspiratorial period.
Jeffers participated with others in the conspiracy not to bid against one another at municipal tax lien auctions. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.
Today’s charge is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. For more information on the task force, visit www.stopfraud.gov.
This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office. Including Jeffers, a total of thirteen individuals and three companies have been convicted or have pleaded guilty as part of the investigation. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.
Jefferson County, Kentucky, Man Sentenced to 92 Months for an Attempted Murder-For-Hire SchemeRead the Press Release
LOUISVILLE, Ky. – A Jefferson County, Kentucky, man was sentenced today in United States District Court, by Senior Judge Charles R. Simpson III, to 92 months in prison followed by a three year period of supervised release, for an attempted murder-for-hire scheme, announced United States Attorney John E. Kuhn, Jr.
Earl D. Grigsby, 52, was charged with use of interstate commerce facilities in the commission of murder-for-hire, in a single count indictment on January 21, 2015. Grigsby pleaded guilty to the charge on January 8, 2016. The defendant is currently in federal custody, but was in the custody of the Louisville Metro Department of Corrections at the time of the charged incident.
According to the plea agreement, during the late summer months of 2014, defendant Grigsby attempted to find someone to kill his wife, with whom he was involved in a divorce. The FBI learned of the plan and arranged for an undercover FBI agent, posing as a “hit man” to visit with the defendant, who by this time was serving a jail sentence. The undercover FBI agent discussed the plan with the defendant, at one point telling the defendant that he would "kill the [expletive]" for "25 grand." This jailhouse conversation was conducted telephonically in jail and was recorded by the jail phone system and on a concealed video recorder used by the undercover FBI agent. The defendant planned to pay the undercover FBI agent with the proceeds of an insurance policy on his wife. After the meeting with the "hit man," the defendant wrote a letter to an associate which refers to "Dutch" (the undercover FBI agent) and tells the associate that "Dutch" was going to take care of "that other truck" and wants to make sure "that other truck ... will not come back on us." The defendant placed the letter in the mail on or about October 15, 2014.
This case was prosecuted by Assistant United States Attorney Thomas W. Dyke and was investigated by the Federal Bureau of Investigation (FBI).
Indictment: Clerk Stole $13,000 from Post OfficeRead the Press Release
WICHITA, KAN. - A postal clerk was indicted today on a federal charge of stealing more than $13,000 from the Rock, Kan., post office where she worked, U.S. Attorney Barry Grissom said.
Micah E. Hutchinson, 25, Arkansas City, Kan., is charged with one count of employee theft from the U.S. Postal Service.
The indictment alleges that from October to December 2015 Hutchinson issued to herself money orders worth approximately $13,780. She cashed the money orders and used the money for her own benefit.
If convicted, she faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The U.S. Postal Service – OIG investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
OTHER GRAND JURY INDICTMENTS
Lindsay Lee McElfresh, 39, Le Roy, Kan., is charged with one count of distributing child pornography and one count of possessing child pornography. The crimes are alleged to have occurred June12, 2014, in Coffey County, Kan.
If convicted, he faces a penalty of not less than five years and not more than 20 years on the distribution charge, and a maximum penalty of 10 years and a fine up to $250,000 on the possession charge. The Wichita Police Department and the Kansas Internet Crimes Against Children Task Force investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
Steven Alfaro (alias Felipe Alfaro), 27, Wichita, Kan., and Danielle K. Blaes, 27, are charged with two counts of possession with intent to distribute methamphetamine, two counts of possessing a firearm in furtherance of drug trafficking, and two counts of unlawful possession of a firearm by users of controlled substances.
In addition, Alfaro is charged with one count of possession with intent to distribute methamphetamine, one count of possession of a firearm in furtherance of a drug trafficking crime, three counts of unlawful possession of a firearm following a felony conviction, one count of unlawful possession of a firearm by a user of controlled substances, and one count of unlawful possession of ammunition following a felony conviction.
The crimes are alleged to have occurred in 2015 and 2016 in Sedgwick County, Kan.
Upon conviction, the crimes carry the following penalties:
Possession with intent to distribute methamphetamine: Not less than 10 years in federal prison and a fine up to $10 million.
Possession of a firearm in furtherance of drug trafficking: Not less than five years and a fine up to $250,000.
Unlawful possession of a firearm or ammunition following a felony conviction: A maximum penalty of 10 years and a fine up to $250,000.
Unlawful possession of a firearm by users of controlled substances: A maximum penalty of 10 years and a fine up to $250,000.
The Wichita Police Department investigated. Assistant U.S. Attorney Lanny Welch is prosecuting.
Gabriel Romero-Miramontes, 36, a citizen of Mexico, is charged with two counts of unlawful possession of a firearm or ammunition while unlawfully in the United States. The crimes are alleged to have occurred Feb. 2, 2016, in Sedgwick County, Kan.
If convicted he faces a maximum of 10 years in federal prison and a fine up to $250,000 on each count. The Kansas Highway Patrol and Immigration and Customs Enforcement’s Enforcement Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Arturo Garcia-Olivas, 25, a citizen of Mexico, in charged with unlawfully re-entering the United States after being deported. He was found March 25, 2016, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of two years and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement Removal Operations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.
Randy J. Johnson, 30, Wichita, Kan., is charged with unlawful possession of a firearm following a felony conviction. The crime is alleged to have occurred Jan. 13, 2015, in Sedgwick County, Kan.
If convicted, he faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney David Lind is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.