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16 May 2016
Court of Appeals Affirms Conviction of Former PhysicianRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. — U. S. Attorney William J. Hochul, Jr. announced today that the United States Court of Appeals for the Second Circuit affirmed the October 2013 jury conviction of John E. Maye, a licensed physician, for the unlawful distribution and dispensing of a controlled substance. The Court also affirmed the defendant’s 12 month prison sentence imposed by Senior U.S. District Judge William M. Skretny.
According to the Government’s trial evidence, between 2004 and 2006, Maye authorized nearly 10,000 prescriptions for medications such as Hydrocodone, Xanax, Loritab, Vicodin, Valium, and Ambien. The Government demonstrated that Maye issued the prescriptions using the internet, and without personally seeing an estimated 12,000 patients. The Government showed that the defendant grossed approximately $1,100,000 through this activity.
In its decision, the Court said that there was sufficient evidence from which the jury could find that Maye did not act in “good faith.” The Court noted that Maye never conducted in-person examinations of patients, authorized prescriptions without obtaining or reviewing medical records, had extremely brief conversations with patients or no conversations at all, and did not make diagnoses prior to prescribing medication. The Court said that this was sufficient to show that Maye was not acting with “a reasonable belief as to proper medical practice.”
“While the vast majority of medical professionals conduct their practice according to legal and ethical standards of reasonable medical care, this case demonstrates that occasionally, a doctor may become nothing other than a drug dealer with a medical license,” said U.S. Attorney Hochul. “This Office will continue to enforce all federal laws regardless of the title or educational achievement of the defendant.”
The conviction and sentencing were the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, and the Food and Drug Administration, Office of Criminal Investigations, New York Field Office, under the direction of Acting Special Agent in Charge Russell Hermann.
Corning International Kabushiki Kaisha to Pay $66.5 Million for Fixing Prices of Automotive PartsRead the Press Release
Corning International Kabushiki Kaisha (Corning International K.K.) has agreed to plead guilty and pay a $66.5 million criminal fine for conspiring to fix prices, rig bids and allocate the market for ceramic substrates sold in the United States and elsewhere, and used in catalytic converters supplied to automobile manufacturers in the United States and elsewhere, the Justice Department announced today.
According to the felony charge filed today in U.S. District Court for the Eastern District of Michigan, Corning International K.K., based in Tokyo, conspired to fix prices, rig bids and allocate the market for ceramic substrates, from at least as early as July 1999 until on or about July 2011. The products were installed in automotive emissions control systems and supplied to automobile manufacturers including Ford Motor Company, General Motors LLC, Honda Motor Company Ltd., and certain of their subsidiaries, affiliates, and suppliers in the United States and elsewhere. Corning International K.K. agreed to cooperate in the department’s ongoing investigation. The plea agreement will be subject to court approval.
“Corning International K.K. – and Nobuhiko Niwa, its former executive, who was indicted last week – spent more than a decade colluding on sales of an important component of emissions systems for use in cars made and sold in the United States and elsewhere,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “But they have now been held accountable for the competitive harm they caused.”
“Corning International K.K.'s conspiracy to rig bids and fix prices brought the company increased revenues at a cost to auto manufacturers, suppliers, and ultimately, consumers,” said Special Agent in Charge David P. Gelios of the FBI’s Detroit Division. “Attempts to thwart the free market system are damaging to our economy, and thereby its consumers, and will be actively investigated and prosecuted.”
Including Corning International K.K., 40 companies have been charged in connection with this investigation and have agreed to pay more than $2.7 billion in criminal fines. In addition, 59 individuals have been charged, including a former executive of Corning International K.K. On May 11, 2016, a federal grand jury in the Eastern District of Michigan returned an indictment against Nobuhiko Niwa, a Japanese national, for his role in the conspiracy. Niwa was charged with participating in the conspiracy from at least as early as July 1999 until on or about July 2011.
This charge results from an ongoing investigation conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Division with the assistance of the FBI Headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
Columbia Man Sentenced for Illegal Firearm Used in Shoot-out with Rival GangRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Mo., man who was injured during a shoot-out with a rival gang was sentenced in federal court today for illegally possessing a firearm.
Coty Thomas Galbreath, 26, of Columbia, was sentenced by U.S. District Judge Stephen R. Bough to six years and five months in federal prison without parole.
On Dec. 1, 2015, Galbreath pleaded guilty to being a felon in possession of a firearm.
According to court documents, Columbia police officers responded to a reported gunfight at the intersection of Garth Avenue and Texas Avenue at about 1 p.m. on July 3, 2013. Investigators determined that there had been an exchange of gunfire between the occupants of two cars. More than 30 shell casings were seized at the scene. Several homes in the neighborhood had been hit by bullets fired during the exchange of gunfire.
No suspects were present at the scene of the gunfight when officers arrived, but a short time later medical personnel notified the police that Galbreath was being treated for a gunshot wound to his shoulder. Galbreath admitted to his involvement in the shoot-out and told investigators that the persons with whom he was exchanging gunfire were gang members sworn to kill him for shooting one of their members in 2008.
Galbreath told investigators that he and his girlfriend were being followed by a carload of Hispanic males. When he heard the first shot and saw his car window shatter, Galbreath said, he stopped, got out of his car and returned fire, emptying his .45-caliber Hi-Point semi-automatic handgun. Galbreath said he was shot when he was getting back in his car to flee the neighborhood. While speeding away, he handed the gun to his girlfriend, and told her to throw it out of the window.
A citizen found the gun on the sidewalk along the route Galbreath took and called the police.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Galbreath was on parole for a prior shooting at the time of this offense. According to court documents, Galbreath stole a firearm in 2007, broke into a home and stole a computer from the home. In November 2007, while the firearm theft and burglary cases were pending, Galbreath acquired another firearm and fired it at a person with whom he was quarrelling. The court placed Galbreath on probation. Galbreath then stole a bottle of vodka and assaulted the victim when that victim tried to retrieve the stolen property.
On Dec. 21, 2008, Galbreath drove past a car containing several juveniles with whom he was feuding. Galbreath fired seven shots into their car, hitting one juvenile in the chest.
On Feb. 6, 2013, nearly four months after he was paroled for the 2008 felony assault on the juvenile, he attacked his child’s mother by hitting her in the face and enlisting the aid of two women to kick her and pull her hair.
This case was prosecuted by Assistant U.S. Attorney Anthony P. Gonzalez. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Columbia, Mo., Police Department.
Columbia Man Pleads Guilty to Child Sex TraffickingRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Mo., man pleaded guilty in federal court today to child sex trafficking.
Kenyata D. Miles, 35, of Columbia, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to the charge contained in a March 19, 2014, federal indictment.
By pleading guilty today, Miles admitted that he booked two rooms for two nights at the Quail’s Nest Inn in Osage Beach, Mo., in April 2013. Law enforcement officers found a 16-year-old female who had been reported as missing in one of the rooms; Miles and two women were in an adjacent room.
According to today’s plea agreement, advertisements had been posted on Backpage.com advertising the availability of the child victim and one of the women for sexual services. Miles arranged hotel reservations and provided transportation to hotels for their prostitution activities.
Under federal statutes, Miles is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of life in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI, the Boone County, Mo., Sheriff’s Department and the Osage Beach, Mo., Police Department in conjunction with the Human Trafficking Rescue Project.
Broward Resident Pleads Guilty to Participating in a Jamaica Based Lottery SchemeRead the Press Release
A Broward County resident pled guilty today, before United States District Judge William J. Zloch, for her involvement in a Jamaica based telemarketing fraud scheme
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Delany De-Leon Colon, Acting Inspector in Charge, United States Postal Inspection Service (USPIS), Miami Division, made the announcement.
Elizabeth Gonzalez, 25, of Hollywood and Miami Gardens, pled guilty to conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349. Gonzalez is scheduled to be sentenced by U.S. District Judge William J. Zloch on July 27, 2016 at 11:00 a.m. Gonzalez faces a maximum statutory sentence of twenty years in prison.
According to the information presented in Court, beginning in or about September 2015, Gonzalez’s co-conspirators are alleged to have contacted elderly victims in the United States and falsely informed them that they had won a lottery prize. The co-conspirators told victims they had to pay several thousand dollars in taxes and fees, in order to collect their purported lottery winnings. The co-conspirators then allegedly instructed the victims on how to send the money, and to whom, including sending wire transfers to Gonzalez. In December 2015 and January 2016, Gonzalez received nine separate wire transfers from various telemarketing lottery fraud victims in California, Connecticut, New York and North Carolina.
The defendant’s husband, Delroy Drummond, was previously convicted of conspiracy to commit wire and mail fraud for his role in a Jamaican based telemarking fraud scheme that involved some of the alleged victims of Gonzalez’s fraud scheme (Case No. 16-60023-CR-WPD). Drummond is scheduled to be sentenced on May 31, 2016 at 1:15 p.m. by U.S. District Judge William P. Dimitrouleas.
Mr. Ferrer commended the investigative efforts of USPIS, U.S. Immigration and Customs Enforcement's Homeland Security Investigations (ICE-HSI), Miami Field Office, U.S. Marshals Service, Broward County Drug Task Force and the Miami-Dade Police Department Economic Crimes Bureau. This case is being prosecuted by Assistant United States Attorney Randy Katz.
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.
Bridgeport Man Sentenced to More Than 4 Years in Federal Prison for Illegal Gun PossessionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CHARLES YOUNG, 30, of Bridgeport, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 50 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, on February 25, 2015, YOUNG was arrested after he had engaged law enforcement officers in a high-speed car chase that began in Bridgeport’s east end, continued on I-95 South and ended when YOUNG crashed into a snow bank after exited the highway in Fairfield. During the chase, a witness saw YOUNG throw something from his car in the vicinity of Exit 24 in Fairfield. A search of the area revealed a loaded Glock 22 .40 caliber firearm.
At the time of his arrest, YOUNG was on state probation following his conviction in 2010 for criminal possession of a firearm and possession of a weapon in a motor vehicle. On October 9, 2015, he was found to have violated his probation and was sentenced to five years of imprisonment.
YOUNG has been detained since his arrest. On January 22, 2016, he pleaded guilty in federal court to one count of possession of a firearm by a convicted felon. Judge Shea ordered YOUNG’s federal sentence to run concurrently with his state sentence.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Connecticut State Police’s Statewide Urban Violence Cooperative Crime Control Task Force, Bridgeport Police Department and Fairfield Police Department. The case was prosecuted by Assistant U.S. Attorneys Brian Leaming and David Nelson.
Bowling Green, Kentucky, Substitute Teacher Guilty of Possession and Distribution of Child PornographyRead the Press Release
Arrest part of an international undercover investigation by Toronto, Ontario police
BOWLING GREEN, Ky. – A substitute teacher, formerly employed by the Bowling Green (Kentucky) School system, pleaded guilty today in United States District Court, before United States District Judge Greg N. Stivers to a single count of possession of child pornography and a single count of distribution of child pornography, announced United States Attorney John E. Kuhn, Jr.
Leon Lussier, age 49, of Bowling Green, Kentucky, was arrested by criminal complaint on September 1, 2015, and charged by grand jury indictment on September 16, 2016.
In court today, Lussier admitted that on three occasions, from June 23, 2015, to July 21, 2015, he participated in video conferencing rooms (chat rooms) where he was a participant in streaming child pornography through his webcam which was shared with other users in the room.
According to the initial charges, the international investigation that led to Lussier’s arrest started in January 2015, when the Toronto, Ontario, Canada Police Service, Child Exploitation Section, received information regarding the investigation of a group of individuals involved in the sexual abuse of children, including the distribution of child pornography. On June 23, 2015, a Toronto Police Service Detective Constable logged into an undercover software account and observed a person with the username “I luv boys” was streaming child pornography videos by sharing his computer screen. The user streamed four videos containing child pornography. Further investigation led law enforcement to Lussier as the person with username “I luv boys.”
A search warrant of Lussier’s Bowling Green home resulted in the seizure of numerous computer media. A preview of an HP Pavilion by a Computer Forensics Agent revealed several videos containing child pornography. Several of the videos had been previously viewed in a chat room by an undercover officer. The videos were being live-streamed on a computer with an IP address assigned to Lussier.
Lussier faces not less than 5 years and not more than 30 years in prison, a 500,000.00 fine, and supervised release of at least five years and could be any number of years, including life. Lussier is being held in the custody of the United States Marshals Service pending sentencing by Judge Stivers in Bowling Green.
This case is being prosecuted by Assistant United States Attorney Jo E. Lawless. This case is being investigated by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), Canadian authorities, Bowling Green Police Department and U.S. Marshals Service.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Bakersfield Man Sentenced to over 12 Years in Prison for Possession of Child PornographyRead the Press Release
FRESNO, Calif. — Ralph Dale Shepherd, 58, of Bakersfield, was sentenced today to 12 years and seven months in prison for possession of child pornography, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, on May 6, 2014, Shepherd was found to have possessed within his cellphone between 300 and 600 images of minors engaged in sexually explicit conduct. The images also involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of pre-pubescent minors.
“We are gratified by the sentence imposed which will provide some measure of justice,” said Ryan L. Spradlin, special agent in charge for HSI San Francisco. “Together, with our local law enforcement partners, we will continue to put predators behind bars and continue our efforts to create a safer community for our children.”
This case was the product of an investigation by the Bakersfield Office of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney Brian W. Enos prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Ambulance Company Owner Charged with Making False Statements in A Health Care MatterRead the Press Release
PHILADELPHIA – Bassem Kuran, 23, of Philadelphia, formerly the owner of VIP Ambulance, Inc., (“VIP”) now defunct, was charged by information with making false statements in a health care matter, announced United States Attorney Zane David Memeger.
The information, filed May 13, 2016, alleges that when defendant Bassem Kuran owned VIP, the company transported patients who were able to walk and could travel safely by means other than ambulance and were, therefore, not eligible for ambulance transportation under Medicare requirements. It is alleged that the defendant, or others acting on his behalf, falsified reports to make it appear that the patients needed to be transported by ambulance when the defendant knew that the patients could be transported safely by other means and that many of them were able to walk. The defendant allegedly billed for the ambulance services as if those services were medically necessary and, as a result, the Medicare program paid more than $66,000 for the inappropriate method of transportation.
If convicted, the defendant faces a substantial term of imprisonment, three years of supervised release, a possible fine, mandatory restitution, forfeiture of assets, and a special assessment. The defendant could also be excluded from participating in federal health care programs.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Paul W. Kaufman and Mary E. Crawley.
An information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Akron man sentenced to 12 years in prison for enticement, possessing videos of child rapeRead the Press Release
An Akron man was sentenced to more than 12 years in prison for sending pornography to what he believed to be a 12-year-old girl and attempting to coerce her into illicit sexual activity, said Acting U.S. Attorney Carole S. Rendon and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.
David T. Beiter, 55, of Akron, was previously found guilty of four counts: enticement, transfer of obscene material to a minor, possession of child pornography and receipt and distribution of minors engaged in sexually explicit conduct.
Beiter knowingly used a device connected to the internet, to attempt to persuade, induce, entice and coerce a 12-year-old girl to engage in illegal sexual activity with him. On Feb. 9, 2015, Beiter used a device connected to the Internet to knowingly attempt transfer obscene matter to a 12-year‑old girl. From February 2014 through March 2015, Beiter knowingly received and distributed in interstate and foreign commerce, by computer, numerous computer files, which files contained visual depictions of real minors engaged in sexually explicit conduct. On March 20, 2015, Beiter possessed a computer that contained videos of the raping and sexual abuse of children, according to court documents.
This case is being prosecuted by Assistant United States Attorney Michael A. Sullivan. The case was investigated by the Akron, Ohio and Richmond, Virginia Offices of the Federal Bureau of Investigation, and the Middlesex County (Virginia) Sheriff’s Office.
15 May 2016
Westerly Resident Admits to Operating Butane Hash Oil LabRead the Press Release
PROVIDENCE, R.I. – Scott Slagel, 41, of Westerly, pleaded guilty in U.S. District Court in Providence on Friday to endangering human life while illegally manufacturing a controlled substance, announced United States Attorney Peter F. Neronha, Michael J. Ferguson, Special Agent in Charge of the DEA’s New England Field Division, Westerly Police Chief Edward W. St. Clair, and Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police.
According to information presented to the court, in the early morning hours of November 27, 2015, in the wake of a fire in a multi-unit apartment building on Apache Drive in Westerly, investigators discovered an active butane hash oil lab in the unit where the fire originated. After extinguishing the fire and securing the scene, investigators located a number of items related to a butane hash oil manufacturing laboratory, including marijuana plants, multiple cans of butane, glass tubes and a vacuum oven containing butane hash oil, commonly referred to as “shatter.”
Appearing before U.S. District Court Judge John J. McConnell, Jr., Slagel admitted to the court that he used the above-described items to manufacture butane has oil in what is known as the open-blast method.
Slagel, who has been free on unsecured bond since his arraignment on April 5, 2016, is scheduled to be sentenced on August 16, 2016.
The case is being prosecuted by Assistant U.S. Attorney Sandra R. Hebert.
The matter was investigated by the Westerly Police Department, DEA and the Rhode Island State Fire Marshal’s Office.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
13 May 2016
Zuni Pueblo Man Pleads Guilty to Domestic Assault by a Habitual Offender ChargeRead the Press Release
ALBUQUERQUE – Fabian Tsethlikai, 46, a member and resident of Zuni Pueblo, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to a domestic assault by a habitual offender charge. Under the terms of his plea agreement, Tsethlikai will be sentenced to 21 months in federal prison followed by a term of supervised release to be determined by the court.
Tsethlikai was arrested on Feb. 10, 2016, on an indictment charging him with assault of an intimate partner by a habitual offender. The indictment alleged that Tsethlikai committed the offense on Dec. 10, 2014, on Zuni Pueblo in McKinley County, N.M. Tsethlikai was charged as a habitual offender based on his two prior domestic violence convictions in Zuni Pueblo Tribal Court. Zuni Pueblo Tribal Court records reflect that Tsethlikai’s prior convictions occurred in 2010 and 2011.
During today’s proceedings, Tsethlikai pled guilty to the indictment and admitted that on Dec. 10, 2014, he assaulted the victim, his intimate partner, by repeatedly striking her in the face with his fist. He also acknowledged his two prior tribal court convictions.
Tsethlikai was remanded into the custody of the U.S. Marshals Service after entering his guilty plea. He will remain in custody pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Zuni Pueblo Tribal Police Department. The case is being prosecuted by Assistant U.S. Attorney David Adams pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico, which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Wichita Man Charged with Sexual Abuse on McConnell Air Force BaseRead the Press Release
WICHITA, KAN. - A Wichita who lived in base housing at McConnell Air Force Base was charged Friday with sexually abusing two teenage girls, Acting U.S. Attorney Tom Beall said.
Random Shane Smith, 36, Wichita, Kan., is charged in a criminal complaint filed in U.S. District Court in Wichita with two counts of aggravated sexual abuse and one count of producing child pornography.
According to court records, Smith used force to make the victims submit to sexual acts with him. Smith sexually assaulted the victims over a period of time while they were 12 to 17 years old. The most recent assaults occurred on the McConnell AFB. Smith used a cell phone camera to take photos of some of the assaults.
If convicted, he faces a maximum penalty of life in federal prison. The FBI and the Air Force OSI investigated. Assistant U.S. Attorney Jason Hart is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
W. Warwick Man Charged with Bank RobberyRead the Press Release
PROVIDENCE, R.I. – John Ryder, 28, of West Warwick, was ordered detained in federal custody today following an initial appearance in U.S. District Court in Providence on a charge of bank robbery. It is alleged that on May 2, 2016, Ryder, while wielding a machete, threatened bank tellers employed at a BankRI branch in Coventry while robbing the bank of nearly $6,000 in cash.
Ryder was arrested earlier today at his home by FBI agents and Coventry Police Department detectives.
Ryder’s arrest and detention are announced by United States Attorney Peter F. Neronha, Coventry Police Chief John S. MacDonald, and Harold H. Shaw, Special Agent in Charge of the Boston Field Office of the FBI.
According to court documents, an investigation by the FBI and Coventry Police determined that beginning on April 29, 2016, and on the days leading up to the robbery, Ryder allegedly spent a considerable amount of time in and around a shopping plaza where the bank is located and in a wooded area directly behind the plaza. It is alleged that Ryder can be seen on video surveillance footage on numerous occasions in and around the plaza, at times with a backpack and camouflaged-patterned hat. It is also alleged that Ryder can be seen spending a considerable amount of time looking in and around the bank.
According to court documents, it is alleged that on May 2, Ryder entered the bank while wearing a mask, dark blue pants, hooded sweatshirt and red jacket, and carrying a machete. It is alleged that he threatened bank tellers with the machete while demanding cash. It is alleged that after robbing the bank of $5,937, he fled from the bank into the wooded area behind the shopping plaza. A short time later, police discovered a backpack and camouflaged-patterned hat in the wooded area behind the plaza. Later that evening, it is alleged that Ryder is seen on video surveillance footage running from the area and getting into a vehicle. The owner of the vehicle allegedly confirmed that he drove Ryder from the area.
On May 6, 2016, law enforcement interviewed Ryder. On May 10, 2016, police obtained a federal search warrant to search Ryder’s cell phone. It is alleged that on the phone they discovered pictures of an individual wearing the same clothing and mask as the alleged bank robber. The photographs were taken in the same area where the backpack and camouflaged-patterned hat were located the day of the robbery.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney Milind M. Shah.
Coventry Police and the FBI were assisted by the West Warwick, Warwick, West Greenwich and Cranston Police Departments and the Rhode Island State Police in the investigation of this matter.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
U.S. Departments of Justice and Education Release Joint Guidance to Help Schools Ensure the Civil Rights of Transgender StudentsRead the Press Release
The U.S. Departments of Justice and Education released joint guidance today to help provide educators the information they need to ensure that all students, including transgender students, can attend school in an environment free from discrimination based on sex.
Recently, questions have arisen from school districts, colleges and universities, and others about transgender students and how to best ensure these students, and non-transgender students, can all enjoy a safe and discrimination-free environment.
Under Title IX of the Education Amendments of 1972, schools receiving federal money may not discriminate based on a student’s sex, including a student’s transgender status. The guidance makes clear that both federal agencies treat a student’s gender identity as the student’s sex for purposes of enforcing Title IX.
“There is no room in our schools for discrimination of any kind, including discrimination against transgender students on the basis of their sex,” said Attorney General Loretta E. Lynch. “This guidance gives administrators, teachers and parents the tools they need to protect transgender students from peer harassment and to identify and address unjust school policies. I look forward to continuing our work with the Department of Education – and with schools across the country – to create classroom environments that are safe, nurturing, and inclusive for all of our young people.”
“No student should ever have to go through the experience of feeling unwelcome at school or on a college campus,” said U.S. Secretary of Education John B. King Jr. “This guidance further clarifies what we’ve said repeatedly – that gender identity is protected under Title IX. Educators want to do the right thing for students, and many have reached out to us for guidance on how to follow the law. We must ensure that our young people know that whoever they are or wherever they come from, they have the opportunity to get a great education in an environment free from discrimination, harassment and violence.”
“Every child deserves to attend school in a safe, supportive environment that allows them to thrive and grow. And we know that teachers and administrators care deeply about all of their students and want them to succeed in school and life,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Our guidance sends a clear message to transgender students across the country: here in America, you are safe, you are protected and you belong – just as you are. We look forward to working with school officials to make the promise of equal opportunity a reality for all of our children.”
“Our federal civil rights law guarantees all students, including transgender students, the opportunity to participate equally in school programs and activities without sex discrimination as a core civil right,” said Department of Education Assistant Secretary for Civil Rights Catherine E. Lhamon. “This guidance answers questions schools have been asking, with a goal to ensure that all students are treated equally consistent with their gender identity. We look forward to continuing to work with schools and school communities to satisfy Congress’ promise of equality for all.”
The guidance explains that when students or their parents, as appropriate, notify a school that a student is transgender, the school must treat the student consistent with the student’s gender identity. A school may not require transgender students to have a medical diagnosis, undergo any medical treatment, or produce a birth certificate or other identification document before treating them consistent with their gender identity.
The guidance also explains schools’ obligations to:
- Respond promptly and effectively to sex-based harassment of all students, including harassment based on a student’s actual or perceived gender identity, transgender status or gender transition;
- Treat students consistent with their gender identity even if their school records or identification documents indicate a different sex;
- Allow students to participate in sex-segregated activities and access sex-segregated facilities consistent with their gender identity; and
- Protect students’ privacy related to their transgender status under Title IX and the Family Educational Rights and Privacy Act.
At the same time, the guidance makes clear that schools can provide additional privacy options to any student for any reason. The guidance does not require any student to use shared bathrooms or changing spaces, when, for example, there are other appropriate options available; and schools can also take steps to increase privacy within shared facilities.
In addition to the departments’ joint Title IX guidance, the Department of Education’s Office of Elementary and Secondary Education also released Examples of Policies and Emerging Practices for Supporting Transgender Students, a compilation of policies and practices that schools across the country are already using to support transgender students. The document shares some common questions on topics such as school records, privacy and terminology, and then explains how some state and school district policies have answered these questions, which may be useful for other states and school districts that are considering these issues. In this document, the Department of Education does not endorse any particular policy, but offers examples from actual policies to help educators develop policies and practices for their own schools.
Many parents, schools and districts have raised questions about this area of civil rights law. Together, these documents will help navigate what may be a new terrain for some.
The Department of Justice’s Civil Rights Division, created in 1957 by the enactment of the Civil Rights Act of 1957, works to uphold the civil and constitutional rights of all Americans, particularly some of the most vulnerable members of our society. The division enforces federal statutes prohibiting discrimination on the basis of race, color, sex, disability, religion, familial status and national origin. Additional information about the Civil Rights Division of the Justice Department is available here.
The mission of the Department of Education’s Office for Civil Rights (OCR) is to ensure equal access to education and promote educational excellence throughout the nation through the vigorous enforcement of civil rights. OCR is responsible for enforcing federal civil rights laws that prohibit discrimination by educational institutions on the basis of race, color, national origin, disability, sex and age, as well as the Boy Scouts of America Equal Access Act of 2001. Additional information about OCR is available here.
The mission of the Department of Education’s Office of Elementary and Secondary Education (OESE) is to promote academic excellence, enhance educational opportunities and equity for all of America's children and families and to improve the quality of teaching and learning by providing leadership, technical assistance and financial support. Additional information about OESE is available here.
Dear Colleague Letter on Transgender Students
Examples of Policies and Emerging Practices for Supporting Transgender Students
U.S. Attorney’s Office welcomes new prosecutorRead the Press Release
CLARKSBURG, WEST VIRGINIA – The newest federal prosecutor in the Northern District of West Virginia was sworn-in today in United States District Court.
Traci M. Cook took the oath of office this afternoon before U.S. District Judge Irene M. Keeley. Cook will work in the Criminal Division of the U.S. Attorney’s Office and also serve as the supervisor of the Clarksburg branch office.
“Traci is a seasoned litigator with a level of skill and dedication that will be a tremendous asset in our efforts to combat drug trafficking and violent crime in Northern West Virginia,” noted U.S. Attorney William J. Ihlenfeld, II. “Her wealth of trial and supervisory experience will allow her to immediately contribute to the office and enhance law enforcement efforts in the region.”
Cook graduated from West Liberty State College in 1992 with a Bachelor of Science in International Studies. She is a 1996 graduate of the West Virginia University College of Law where she was the champion of the Lugar Trial Competition and member of the Order of the Barristers.
Prior to joining the U.S. Attorney’s Office, Cook served as an Assistant Prosecuting Attorney in Harrison County, West Virginia, for over a decade. She also worked as an Assistant Public Defender for the Fifteenth Judicial Circuit in Clarksburg and in the private sector.
Pictured from left to right: United States Attorney William J. Ihlenfeld, II, Assistant United States Attorney Traci Cook, and United States District Judge Irene M. Keeley.
U.S. Attorney Issues Police Week MessageRead the Press Release
Baltimore, Maryland - U.S. Attorney Rod J. Rosenstein sent the following message to police officers serving in Maryland:
“Working with exceptional Maryland law enforcement officers is one of the highlights of my job. It is a tremendous privilege to work with so many officers who serve with honor and integrity. Thank you for your courage and your devotion to justice.”
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In 2016, National Peace Officers Memorial Day falls on Sunday, May 15. The official dates for National Police Week are May 15 through May 21, although many events are taking place before May 15.
During National Police Week, we pay tribute to police officers who have died in the line of duty and give thanks to officers who faithfully protect and serve.
This year, according to the National Law Enforcement Memorial Fund, the names of 123 officers killed in the line of duty are being added to the National Law Enforcement Officers Memorial in Washington, DC. They include officers who died in the line of duty during 2015, and officers who died in previous years but had not been added to the Memorial. Four Maryland officers were added this year:
Craig Anthony Chandler, Baltimore City Police Department (2015)
Brennan Roger Rabain, Prince George’s County Police Department (2015)
Noah Aaron Leotta, Montgomery County Police Department (2015) and
George Oliver Noonan, Bel Air Police Department (1920)At a ceremony in Maryland on May 6, the state honored three officers who died in shooting incidents in 2016:
Patrick Dailey, Harford County Sheriff’s Office
Mark Logsdon, Harford County Sheriff’s Office
Jacai D. Colson, Prince George’s County Police DepartmentTwo Mexican Citizens Face Mandatory Life in Federal Prison After Jury Convicts Them on Federal Charges Related to May 2013 Murder of a Southlake, Texas, ManRead the Press Release
FORT WORTH, Texas — After a trial lasting more than two-weeks, a federal jury has convicted two Mexican citizens on federal charges related to the murder of Southlake, Texas, resident, Juan Jesus Guerrero Chapa, at Southlake Town Square on May 22, 2013, announced U.S. Attorney John Parker of the Northern District of Texas.
Jesus Gerardo Ledezma-Cepeda, a/k/a “Chuy” and “Juan Ramos,” 59, and his cousin, Jose Luis Cepeda-Cortes, 60, were each convicted on one count of interstate stalking and one count of conspiracy to commit murder for hire. Each offense carries a maximum statutory penalty of life in federal prison and a $250,000 fine. Cepeda-Cortes was also convicted on one count of tampering with documents or proceedings, which carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine.
Another defendant charged in the superseding indictment, Ledezma-Cepeda’s son, Jesus Gerardo Ledezma-Campano, 32, pleaded guilty prior to trial to one count of interstate stalking. He is also a Mexican citizen and testified for the government at trial.
All three defendants are scheduled to be sentenced on September 22, 2016, by U.S. District Judge Terry R. Means, who is presiding over the case.
On May 22, 2013, at approximately 6:47 p.m., Juan Jesus Guerrero Chapa was ambushed and shot multiple times with a 9mm pistol while seated in his Range Rover that was parked at Southlake Town Square. A Toyota Sequoia pulled up behind the Range Rover, a gunman got out of that vehicle, walked up to the Range Rover and fired several times through the window at Mr. Chapa, who died at the scene. Nearby, Mr. Chapa’s wife was not harmed.
The government presented evidence during trial that from approximately March 1, 2011, until May 22, 2013, the three defendants traveled in interstate and foreign commerce from Mexico to Southlake, and elsewhere, with the intent to kill, injure, harass and intimidate Mr. Chapa, and that as a result of that travel, Mr. Chapa was killed. In addition, the government presented evidence that Ledezma-Cepeda, Cepeda-Cortes and others conspired to travel from Mexico and elsewhere to Southlake and elsewhere, with the intent to murder Mr. Chapa. Further, the government presented evidence that from approximately May 23, 2013, until September 5, 2014, Cepeda-Cortes took steps to destroy evidence related to the investigation that was on his computer.
The defendants, according to evidence presented at trial, were acting on orders from a man in Mexico, Rodolfo Villarreal Hernandez, known as “El Gato,” or “The Cat,” who wanted Mr. Chapa killed as revenge for his father’s murder.
The defendants exchanged information via email to locate Mr. Chapa - exchanging personal information about Mr. Chapa and his family, as well as information regarding vehicles associated with them and photographs of the Chapa residence in Southlake.
The defendants used various means to locate and track Mr. Chapa and members of his family. Cepeda-Cortes purchased surveillance cameras that were placed in various locations in Mr. Chapa’s neighborhood. In addition, while in the area, the defendants purchased and rented several vehicles that allowed them to frequently change vehicles and use non-descript rental vehicles to avoid detection by Mr. Chapa and his family. They placed automobile tracking devices not only on their vehicles, but on vehicles owned and operated by Mr. Chapa and his relatives, including the Range Rover Mr. Chapa was in when he was murdered.
The government presented further evidence that after the defendants located Mr. Chapa, “El Gato” sent two assassins from Mexico to Southlake to kill Mr. Chapa. One of them was the gunman who killed the victim on May 22, 2013, and the other drove the Toyota Sequoia.
The investigation was led by the FBI and the Drug Enforcement Administration, with assistance from the Southlake Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), U.S. Customs and Border Protection, Texas Department of Public Safety, Tarrant County Sheriff’s Office, Tarrant County District Attorney’s Office, Fort Worth Police Department and Grapevine Police Department.
Assistant U.S. Attorneys Joshua Burgess and Aisha Saleem are prosecuting the case.
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Two Key Players in Illegal Online Pharmacy Scheme Sentenced to PrisonRead the Press Release
A former police officer and a technology consultant who distributed hundreds of thousands of narcotic pills and other prescription drugs via an illegal internet pharmacy were sentenced to prison today, announced U.S. Attorney Annette L. Hayes. CRAIG GREER, 43, of Hollywood, Florida, was sentenced to 60 months in prison. KEVIN KOGAN, 48, of Cedar Park, Texas, was sentenced to 30 months in prison. At the sentencing hearing U.S. District Judge Richard A. Jones said the conspiracy “pumped into our community an enormous amount of drugs…impacting people you will never see but whose lives and families you destroyed by feeding their addiction.”
GREER is a former police officer, who worked to promote the internet pharmacy scheme. GREER sent spam emails promoting the online pharmacy and made sure long-time customers got their drugs even if they did not have a valid prescription. In prior versions of the scheme, GREER used his history as a police officer to lull some doctors into thinking the online pharmacy operated within the law. GREER was also involved in overseas online pharmacies affiliated with lead defendant Juan Gallinal. In addition to the prison term, GREER was sentenced to three years of supervised release, including 250 hours of community service and a money judgment of $88,635.
KOGAN set up the websites and servers for the online pharmacy, and attempted to hide the conspiracy’s databases from investigators. KOGAN not only handled the technology side of the operation, he lied to investigators, destroyed evidence and provided fraudulent information in response to a grand jury subpoena. Records show he moved a critical company database to a server overseas in an effort to frustrate the law enforcement investigation. In addition to the 30 month prison term, KOGAN was sentenced to three years of supervised release, including 150 hours of community service and a money judgment of $155,660.
The internet pharmacy distributed drugs to some 200 customers in Washington State between 2009 and 2012. The pharmacy shipped hundreds of thousands of pills of hydrocodone, phentermine, alprazolam (Xanax) and codeine (Tylenol 4) to people across the country who did not have valid prescriptions for the narcotics. The conspiracy brought in more than $9 million in revenue from the sale of pills during the three year scheme. The pharmacy operated four internet sites through which they solicited customers and allowed customers in Washington State to order drugs. According to the indictment, the conspiracy would continue to refill prescriptions even if no valid prescription existed. In some instances the conspirators simply looked for a physician in the same geographic area as the customer, with a similar sounding name and filled the prescription using the physician’s DEA number without the physician’s knowledge. The pharmacy charged as much as ten times the usual price for the medications.
The conspirators laundered the proceeds of their sales through a brick-and-mortar pharmacy in Florida called Discount Pharmacy of Pines. In June 2012, the DEA seized the websites, computers, and drug inventory associated with the illegal pharmacy.
All but one of the defendants who were indicted in May 2014 have pleaded guilty and are awaiting sentencing:
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The originator of the scheme, JUAN GALLINAL, 48, of Pembroke Pines, Florida is a former police officer from Virginia. He is scheduled for sentencing in October 2016.
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JORDAN TRUXELL, 26, of Davie, Florida served as the registered agent for Discount Pharmacy dba frontierpharmacies.com. He is scheduled for sentencing June 3, 2016.
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THOMAS BROOKE, 54, of Cooper City, Florida was the bookkeeper for Discount Pharmacy was sentenced March 18 to five years in prison.
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ALI LOVINS, 44, of Cooper City, Florida is a registered nurse and was the office manager for Discount Pharmacy. LOVINS was sentenced March 4, 2016 to three years in prison.
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JERRY DELMAN, 83, of Miami, Florida, a pharmacist who ostensibly oversaw the prescriptions going out the door to customers is being evaluated for a medical condition that could impact his ability to participate in a trial.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The case was investigated by the Portland Tactical Diversion Squad which is comprised of the Drug Enforcement Administration (DEA) and the Portland Police Bureau. Substantial investigative assistance was provided by the Food and Drug and Administration (FDA) – Florida, and DEA Miami Field Division.
The case is being prosecuted by Assistant United States Attorneys Mike Lang, Francis Franze-Nakamura and Brian Werner.
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Two Chicago Residents Charged with Defrauding Commerce BankRead the Press Release
BOSTON – Two Chicago residents were arrested and charged on May 11, 2016, in connection with defrauding banks out of $1.5 million in an airplane and car loan scheme.
James Dusten Miller, 29, and Latoya Monique James, 35, were charged in a complaint with conspiracy to commit bank fraud and bank fraud, and conspiracy to commit money laundering and money laundering. Miller and James were arrested yesterday in Chicago and detained pending a detention hearing tomorrow in U.S. District Court in Chicago.
According to the criminal complaint, beginning in January 2014 through January 2016, Miller and James, along with at least two other co-conspirators, obtained and attempted to obtain multiple fraudulent airplane and car loans from banks in multiple states, including Massachusetts. In order to commit these frauds, Miller, James, and their co-conspirators allegedly used false and stolen identities. In one instance, Miller, James, and their co-conspirators obtained a fraudulent airplane loan for $382,500 from Commerce Bank in Worcester by using at least one stolen identity. Miller and James laundered the proceeds of the airplane loan through several bank accounts created in the name of a fictitious entity. The proceeds were then allegedly distributed into financial accounts controlled by the defendants and their co-conspirators, and used to purchase items such as luxury cars and a watch. In total, Miller, James and their co-conspirators obtained or attempted to obtain more than $1.5 million in fraudulent loan proceeds.
The charges of bank fraud and conspiracy to commit bank fraud each provide for a sentence of no greater than 30 years in prison, five years of supervised release and a fine of $1 million or twice the gross gain or loss, whichever is greater. The charges of money laundering and conspiracy to commit money laundering provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Michael J. Anderson, Special Agent in Charge of the Federal Bureau of Investigation, Chicago Field Division; Scott L. Cruse, Special Agent in Charge of the Federal Bureau of Investigation, Oklahoma City Division; and Todd Damiani, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Karin M. Bell, Chief of Ortiz’s Worcester Branch Office.
The details contained in the complaint are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Timeshare Telemarketing Fraudster Sentenced to 97 Months in Federal PrisonRead the Press Release
DALLAS — A Florida man who was convicted for his role in a resort timeshare telemarketing scheme that victimized at least 5000 individuals, many of whom were over age 55, was sentenced today, announced U.S. Attorney John Parker of the Northern District of Texas.
Rani F. Khoury, 41, of Apopka, Florida, was sentenced today by U.S. District Judge Sidney A. Fitzwater to 97 months in federal prison, following his guilty plea in July 2015 to one count of conspiracy to commit mail fraud and wire fraud. Judge Fitzwater also ordered Khoury to pay $1,583,252.28 in restitution and forfeit real estate in Orlando, Florida, as well as a 2010 Mercedes Benz.
Ten defendants were charged in the case; all were convicted, and seven have now been sentenced. For instance, earlier this year, Fabien C. Fleifel, 45, of Winter Springs, Florida, who was convicted at trial last summer on one count of conspiracy to commit mail fraud, wire fraud, and bank fraud; 19 counts of mail fraud telemarketing; and six counts of wire fraud telemarketing, was sentenced to 14 years in federal prison and ordered to pay more than $1.3 million in restitution jointly and severally with co-defendants.
Khoury conspired with others to make unsolicited interstate telephone calls to owners of resort timeshare properties to induce them into paying fees associated with the bogus sale of their property. Khoury and others opened bank accounts and entered into merchant account agreements to process and collect funds raised in the scheme, and they set up phony mailing addresses to collect funds mailed in by timeshare owners. Khoury also hired and trained telemarketers to work in boiler rooms he set up. These telemarketers were instructed to call timeshare owners using scripted sales pitches that falsely represented, for example, that a bona fide buyer was interested in buying their property, that the buyer had paid money into an escrow account, and that the buyer was ready to close on the property. The telemarketers falsely advised timeshare owners that they would receive all the funds from the sale within days, they must pay a one-time fee to cover the title search and other closing costs, and they would be refunded all fees paid if the sale did not close within 90 days.
After the conspirators obtained money from the timeshare owners, they made additional false and fraudulent statements to lull them and to keep them from investigating the transactions, complaining to law enforcement, or requesting charge backs to their credit cards.
During Khoury’s participation in the conspiracy, victims incurred approximately $10,887,684 in losses.
The case was investigated by the U.S. Postal Inspection Service and the Orlando Police Department. Assistant U.S. Attorneys C.S. Heath and Joseph M. Revesz are prosecuting.
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Texas Man Sentenced to Life in Federal Prison for Interstate Transportation of a Minor with Intent to Engage in Criminal Sexual ActivityRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Shilo Watts, age 40 of New Braunfels, Texas, was sentenced today to life in federal prison without the possibility of parole on one count of Interstate Transportation of a Minor with the Intent to Engage in Criminal Sexual Activity. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.
According to court records, in October of 2012, special agents with the Homeland Security Office in San Antonio, Texas, began investigating the sexual abuse of a minor Marshallese male living in Northwest Arkansas by the defendant, Shilo Watts. Based on this investigation, Homeland Security agents were able to determine that Watts had lived in the Marshall Islands for several years and had helped bring several young Marshallese males to the United States. Those males were contacted by law enforcement and interviewed. An interview of one of the minors revealed that Watts began sexually abusing him when he was in the Marshall Islands and continued after he relocated to the United States. Specifically, the minor stated that between 2008 and 2012 when he was living in Springdale, Arkansas, Watts would drive up from his home in Texas and pick-up the minor and other Marshallese boys and transport them from Springdale to his or his family’s residence in New Braunfels, Texas. The minor stated that during one such trip in 2009 when he was 14 years of age, Watts sexually abused him after transporting him from Springdale, Arkansas to New Braunfels, Texas. Shilo Watts was indicted by a federal grand jury on October 28, 2015 and pleaded guilty to the charge on January 6, 2016.
“The lifetime sentence imposed on Watts sends a clear message that there are serious consequences for those who exploit children in any way,” said Special Agent in Charge, Shane Folden, HSI San Antonio. “Targeting crimes of this nature is a high priority for HSI. We will continue to dedicate HSI resources nationwide to identify and bring to justice these individuals."
This case was investigated by Homeland Security Investigations and the Springdale Police Department. Assistant United States Attorney Dustin Roberts prosecuted the case for the United States.
The 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
Tennessee Man Convicted for Romney Tax Return Fraud and Extortion SchemeRead the Press Release
Michael Mancil Brown was found guilty late yesterday by a federal jury sitting in Nashville for engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant United States Attorney Jack Smith of the U.S. Attorney’s Office for the Middle District of Tennessee and Special Agent in Charge Todd Hudson of the U.S. Secret Service’s Nashville Field Office.
Brown, 37, of Franklin, Tennessee, was convicted of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion.
According to testimony at trial, evidence recovered from a computer seized from the home of Brown in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers LLP and others by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010.
Brown was found guilty of participating in the scheme in which a letter delivered in August 2012 to the offices of PricewaterhouseCoopers in Franklin demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns. The letter also invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account.
As part of that scheme, similar letters were delivered to the offices of the Democratic and Republican parties in Franklin and caused similar statements to be posted to Pastebin.com.
A sentencing hearing will be scheduled for a date likely in August. The defendant faces up to twenty years in prison on the charges of wire fraud, up to five years in prison on the charges of extortion, fines of up to $250,000, and orders of restitution to victims.
This case was investigated by the U.S. Secret Service’s Nashville Field Office with assistance from the FBI’s Nashville Division. The case is being prosecuted by U.S. Department of Justice Senior Counsel Anthony V. Teelucksingh and Assistant U.S. Attorney Byron Jones of the Middle District of Tennessee.
Tennessee Man Convicted for Romney Tax Return Fraud and Extortion SchemeRead the Press Release
Michael Mancil Brown was found guilty yesterday by a federal jury sitting in Nashville, for engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant United States Attorney Jack Smith of the United States Attorney’s Office for the Middle District of Tennessee and Todd Hudson, Special Agent in Charge of the U.S. Secret Service, Nashville Field Office.
Brown, 37, of Franklin, Tenn., was convicted of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion.
According to testimony at trial, evidence recovered from a computer seized from Brown’s home in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers, LLP and others, by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010.
Brown was found guilty of participating in the scheme in which a letter delivered in August 2012 to the offices of PricewaterhouseCoopers in Franklin, Tenn., demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns. The letter also invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account.
As part of that scheme, similar letters were delivered to the offices of the Democratic and Republican parties in Franklin and caused similar statements to be posted to Pastebin.com.
“The success of this prosecution is due to the excellent online investigative skill and computer forensic analysis demonstrated repeatedly by the United States Secret Service in this era of increasingly high tech criminal conduct,” said First Assistant United States Attorney Jack Smith. “Hackers, aspiring hackers and identity thieves are identified, caught, prosecuted and convicted because of the work and determination of the Secret Service to stay ahead of people who abuse new technology to commit age-old crimes of fraud and extortion.”
A sentencing hearing will be scheduled for a date likely in August. The defendant faces up to twenty years in prison on the charges of wire fraud, up to five years in prison on the charges of extortion, fines of up to $250,000, and orders of restitution to victims.
This case was investigated by the Nashville Field Office of the U.S. Secret Service with assistance from the Nashville Resident Agency of the FBI. The case is being prosecuted by U.S. Department of Justice Senior Counsel Anthony V. Teelucksingh and Assistant U.S. Attorney Byron Jones of the Middle District of Tennessee.
Telemarketer Sentenced for Role in Multi-Million Dollar ScamRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today that Ms. Chedna Charles, 27, of Orlando, FL, was sentenced in federal court this morning on one count of conspiracy to commit mail and wire fraud in connection with telemarketing. Charles was sentenced to 18 months in prison, to be followed by two years of supervised release. Charles was also ordered to pay $7,650.00 in restitution, a $300 fine, and a $100 special assessment.
The investigation determined that Charles was a telemarketer for National Solutions and related companies located in Orlando, Florida. National Solutions defrauded consumers across the continent using the fictitious names, Bluescape Timeshares International, Country Wide Timeshares, Countrywide Timeshares MA, Landmark Timeshares, Propertys Direct, Quicksale Propertys, Sun Property Networks, Sun Property’s, Universal Propertys, VIM Timeshares, Propertys DRK, Quick Sale Advisers, Quick Sale International, City Resorts, Resort Advisers, American Timeshares, Exit Week, and Resort Advisors International. These companies targeted owners of timeshares throughout the United States and Canada. In various court filings related to the National Solutions scam, the government has alleged that the overall scam bilked over 2,500 consumers out of at least $6 million, including eight victims in the Southern District of Illinois.
This prosecution is one of nearly one-hundred timeshare resale fraud prosecutions brought in the Southern District of Illinois over the past four years. The case is part of an ongoing investigation by the Midwest Region Office of the Federal Trade Commission and the St. Louis Field Office of the Chicago Division of the United States Postal Service. The prosecution of this case was handled by Assistant United States Attorneys Bruce Reppert, Scott Verseman, and William Coonan.
St. Thomas Man Charged with Firearm OffensesRead the Press Release
St. Thomas, USVI – Anthony Williams, Sr., 47, of St. Thomas, Virgin Islands, made his initial appearance May 12, 2016, before U.S. Magistrate Judge RuthMiller after being charged in a one-count indictment with possession of a firearm by a convicted felon, United States Attorney Ronald W. Sharpe announced. Williams was released on a $25,000 unsecured bond, electronic monitoring and a curfew.
According to the Indictment filed on January 14, 2016, Williams was found in possession of a 9mm caliber Taurus pistol on the grounds of the University of the Virgin Islands, St. Thomas campus. He was previously convicted in the District Court for the Middle District of North Carolina for conspiracy to possess with intent to distribute marijuana, possession of a firearm during drug trafficking and possession in commerce of a stolen firearm.
Under federal law, if convicted of possession of a firearm by a convicted felon Williams faces a maximum sentence of 10 years in prison and a $250,000 fine.
United States Attorney Sharpe reminds the public that an Indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
This case is the result of a joint investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Virgin Islands Police Department. It is being prosecuted by Assistant United States Attorney Nelson Jones.
Springfield Latin Kings Leader Pleads Guilty to Cocaine Distribution and Firearm ChargeRead the Press Release
BOSTON – The former “enforcer” of the Massachusetts Latin Kings gang pleaded guilty today in U.S. District Court in Springfield to distributing cocaine and a federal firearm charge.
Bienvenido Nuñez, 38, of Springfield, Mass., pleaded guilty today to being a felon in possession of a firearm and distributing cocaine. U.S. District Court Judge Mark G. Mastroianni scheduled sentencing for Aug. 19, 2016.
In October 2014, an investigation was initiated in an effort to disrupt and dismantle the Latin Kings’ criminal activity in Springfield and Holyoke. According to court documents, members and associates of the Latin Kings were engaged in the distribution of narcotics. In addition, disputes with rival gangs over criminal activity and drug turf were on the rise and resulted in serious crimes of violence, including armed assaults with firearms and murder. The investigation led to the arrest of 12 alleged Latin Kings members, including Nuñez, in connection with drug and firearms offenses in November 2015.
As alleged in court documents, Nuñez held the position of “enforzador,” or “enforcer,” of the Massachusetts chapter of the Latin Kings gang at the time of his arrest on Nov. 9, 2015. Nuñez pleaded guilty today to distributing seven grams of cocaine in Chicopee on Aug. 4, 2015, and to possessing a .40 caliber Beretta pistol on the day of his arrest.
The charge of distribution of cocaine provides for a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $1 million. The charge of being a felon in possession of a firearm provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Katharine A. Wagner of Ortiz’s Springfield Branch Office.
South Antelope Woman Charged with AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that a South Antelope, South Dakota, woman has been indicted by a federal grand jury for Assault with a Dangerous Weapon and Assault Resulting in Substantial Bodily Injury.
Aprielle Poitra, age 20, was indicted on April 13, 2016. She appeared before U.S. Magistrate Judge Mark A. Moreno on May 9, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction of Assault with a Dangerous Weapon is up to ten years in custody and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. The maximum penalty upon conviction of Assault Resulting in Substantial Bodily Injury is up to five years in custody and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
It is alleged that on March 18, 2016, Poitra unlawfully assaulted an individual with a knife and that said assault resulted in substantial bodily injury.
The charge is merely an accusation and Poitra is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Kirk Albertson is prosecuting the case.
Poitra was released on bond pending trial. A trial date has not been set.
Software Company Ceo and Former Adjunct Columbia Business School Professor Sentenced in Manhattan Federal Court for Multi-Million Dollar Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York announced today that GREGORY RORKE was sentenced to two years in prison for his scheme to defraud investors in his company, Navagate, Inc. (“Navagate”), of more than $3 million dollars. RORKE pled guilty on May 7, 2015, to one count of securities fraud and one count of wire fraud before U.S. District Court Judge Katherine Polk Failla, who also imposed today’s sentence.
U.S. Attorney Preet Bharara said: “As he admitted, Gregory Rorke lied to investors while soliciting their investments in his company. He overstated his own net worth and the tax liabilities of the company. Today, Rorke, a former professor at Columbia Business School, learned an important lesson in business ethics, as he was sentenced to two years in prison for his crimes.”
According to the Complaint, Indictment, other documents filed in the case, and statements made in open court:
From at least December 2009 through October 2014, RORKE engaged in a fraudulent scheme to mislead investors into making investments in a convertible debt offering (the “Navagate Offering”) in his company, Navagate. RORKE, a former adjunct professor at Columbia Business School, was the co-founder, chief executive, and principal owner of Navagate. RORKE solicited investments and was involved in the daily management and operation of Navagate.
RORKE solicited investor contributions to the Navagate Offering based on materially false and fraudulent misrepresentations. In particular, RORKE signed and provided to investors a personal guarantee supported by a financial statement. The financial statement falsely indicated that Rorke personally had at least $12 million in assets, including more than $1 million in cash, more than $5 million in “readily marketable securities” and a home worth more than $1 million. In truth, and as RORKE well knew, the majority of the pledged assets did not belong to RORKE.
In addition, in order to obtain access to funds invested by Navagate investors and maintained in an escrow account, RORKE signed a notarized affidavit indicating that he had paid monies owed to the Internal Revenue Service in satisfaction of Navagate’s tax liabilities. In truth, the tax liabilities had not been paid, remained outstanding, and were actually increasing.
As a result of his fraudulent scheme, RORKE raised approximately $3 million in investor money from more than 30 investors.
* * *
In addition to the two-year prison term, RORKE, 63, of Manhattan and Bronxville, New York, was sentenced to three years of supervised release.
Mr. Bharara praised the work of the FBI and also thanked the Securities and Exchange Commission, which has brought civil actions against the defendant.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Andrea M. Griswold and Michael J. Ferrara are in charge of the prosecution.
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Seven Persons Charged with Methamphetamine OffensesRead the Press Release
Six southern Illinois residents and one Cape Girardeau man were indicted on May 3, 2016, for methamphetamine-related offenses, Acting United States Attorney for the Southern District of Illinois James L. Porter announced today.
Kyle E. Easterly, 29, and Charles W. Yearian, a/k/a "Chucky," 29, Randall J. Riley, 42, Lucas L. Holland, 29, and Ivan Weaver, 24, all of Murphysboro, Elizabeth A. Stell, a/k/a "Beth Bramlett," "Elizabeth Albritton," 45, of Dongola, and Devonce C. Patterson, a/k/a "George," "Little Buddy, 22, of Cape Girardeau, are all charged in a superseding indictment charging conspiracy to manufacture and distribute methamphetamine. Easterly and Yearian are also charged with one count of possession of pseudoephedrine knowing that it would be used to manufacture methamphetamine. The indictment alleges that the offenses occurred between April 2015 and March 2016, in Jackson and Perry Counties. Easterly, Yearian, Holland, and Stell have appeared in federal court and are currently being held without bond pending a July 11, 2016, jury trial. Riley, Weaver, and Patterson are scheduled to make their initial appearances in federal court on May 16, 2016.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The methamphetamine offenses carry a maximum penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office, Murphysboro Police Department, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Union County Sheriff’s Office and Jackson County State’s Attorney’s Office also assisted in the investigation.
Seven Charged with Distributing Heroin Near Schools and Playgrounds in DubuqueRead the Press Release
Seven men have been charged with distributing heroin in Dubuque in early 2016. The charges are contained in two indictments filed yesterday in United States District Court in Cedar Rapids. All seven men were previously charged in separate federal Complaints filed in April.
One indictment alleges Derrick Jermaine Brown (a/k/a “Big D”), D’Anthony Lamont Moore (a/k/a “Lil D”), Antwain Deshaun Spratt (a/k/a “T”), Tywone Derrel Matthews, and Jeffery Donta Hitchcock (a/k/a “Buddha”) conspired to distribute fentanyl and 100 grams of heroin near Jackson Park and Prescott Elementary School in Dubuque. That indictment also charges various counts of distribution of heroin against each defendant, and one count of possession with intent to distribute heroin by Brown, Moore, and Matthews. If convicted of the conspiracy charge, Brown, Moore, Spratt, Matthews, and Hitchcock each face a mandatory minimum sentence of five years’ imprisonment, a possible maximum sentence of 80 years’ imprisonment, a $10,000,000 fine, a $100 special assessment, and up to a lifetime term of supervised release following any imprisonment.
The second indictment alleges Antrell Desherron Lewis (a/k/a “Lucky” and “Star”) and Antoine Tavares Mitchell (a/k/a “Nephew”) conspired to distribute heroin near Jackson Park and Prescott Elementary School in Dubuque. It also alleges one count of distribution of heroin by each defendant, and possession with intent to distribute heroin by Mitchell. If convicted of the conspiracy charge, Lewis and Mitchell face a mandatory minimum sentence of one year imprisonment, a possible maximum of 40 years’ imprisonment, a $2,000,000 fine, a $100 special assessment and up to a lifetime term of supervised release following any imprisonment.
If convicted of the various distribution and possession with intent to distribute charges, the defendants would face additional punishments.
All seven men previously appeared in federal court following their arrests in April and early May. Brown, Moore, Spratt, Matthews, Lewis, and Mitchell were all held without bond. Hitchcock appeared in Chicago, Illinois, and was ordered returned to the Northern District of Iowa in custody pending further proceedings. Initial appearances for the defendants on the indictments have not yet been set.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being investigated by the Dubuque Drug Task Force and Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Cedar Rapids Police Department; the Linn County Sheriff's Office; the Marion Police Department; the Iowa City Police Department; and the Iowa Division of Narcotics Enforcement, and is being prosecuted by Assistant United States Attorney Dan Chatham.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number for Brown, Moore, Spratt, Matthews, and Hitchcock is 16-CR-01018-LTS.
The case file number for Lewis and Mitchell is 16-CR-01017-LTS.
The case file numbers for the previously filed Complaints are:
Derrick Brown – 16-MJ-102
Antoine Spratt – 16-MJ-103
Tywone Matthews – 16-MJ-104
Antrell Lewis – 16-MJ-106
D’Anthony Moore – 16-MJ-107
Jeffery Hitchcock – 16-MJ-113
Antoine Mitchell – 16-MJ-117
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Rocky Mount Man Sentenced to 240 Months for Firearm and Drug ChargesRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court, United States District Judge Terrence W. Boyle sentenced DARION DEVON JOHNSON, 35, to 240 months imprisonment, followed by 3 years of supervised release.
DARION DEVON JOHNSON was named in a seven count Indictment filed on May 20, 2015 charging him with various firearm and drug offenses. On October 29, 2015, JOHNSON pled guilty to Possession of a Firearm by a Felon and Distribution of a quantity of Cocaine Base (Crack).
According to the investigation, On April 11, 2013, JOHNSON made a sale of a .22 caliber rifle and a quantity of cocaine base which was captured on audio and video surveillance. Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Carrie Randa represented the government.
Ringleader Sentenced to over 12 Years in Prison for $6.6 Million Broward Securities Fraud SchemeRead the Press Release
Thomas A. Guerriero, 39, of Deerfield Beach was sentenced to 151 months’ imprisonment by United States District Court Judge Beth Bloom for orchestrating a $6.6 million securities fraud scheme. Guerriero was also ordered to pay $6.6 million in restitution and will serve three years of supervised release, upon his release from incarceration.
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.
Guerriero and eight other South Florida residents were indicted on criminal charges, for operating a Broward County telemarketing scheme (“a boiler room”) that targeted investors throughout the country and ultimately defrauded them out of $6.6 million dollars. On February 29, 2016, Guerriero pled guilty to conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code Section 1349.
According to the court record, including the defendant’s plea, Guerriero was the president and owner of a Deerfield Beach, Florida company, Oxford City Football Club, Inc. (“Oxford City”). Guerriero led a group of sales people whom he personally trained. Guerriero and his sales team solicited investors throughout the United States to buy stock shares of Oxford City, a corporation that claimed to manage a portfolio involving sports, education, media, and real estate businesses. Guerriero and his co-conspirators sold stock directly from the company in private placement offerings.
From July 2013 through July 2015, Guerriero and his group conspired to misappropriate investor money for their personal benefit by making material false statements regarding the Oxford City stock. Guerriero and his group used high-pressure, strong-armed tactics to intimidate and coerce individuals to invest in Oxford City. Over the course of the scheme, Guerriero and his team caused over 150 individuals to buy shares of Oxford City restricted stock for approximately $6.6 million dollars. Many of the victims targeted by Guerriero and his co-conspirators were elderly. Many of the victims lost their life’s savings as a result of the fraudulent scheme.
Mr. Ferrer commended the investigative efforts of the FBI. This case was prosecuted by Assistant U.S. Attorneys Roger Cruz and Michelle Alvarez, and Trial Attorneys Kevin B. Hart and Rebecca Ryan from the Antitrust Division of the Department of Justice.
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.
Removed Alien Sentenced to Time Served for Illegally Re-entering U.S.Read the Press Release
PITTSBURGH - An illegal alien found in Allegheny County, Pennsylvania, has been sentenced to time served on his conviction of re-entry into the United States after deportation, United States Attorney David J. Hickton announced today.
United States District Judge Mark Hornak imposed the sentence on Jamie Parra-Serrano, 38, formerly from Mexico.
According to the information presented to the court, Jamie Parra-Serrano, an illegal alien, was removed from the United States by United States Immigration and Customs Enforcement on Aug. 24, 2012. Jamie Parra-Serrano was located in Allegheny County on Oct. 20, 2015.
Assistant United States Attorney Paul E. Hull prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the U.S. Immigration and Customs Enforcement for the successful prosecution of Jamie Parra-Serrano in this case.
Phenix City Doctor Arrested for Unlawful Distribution of Prescription Drugs and Money LaunderingRead the Press Release
Montgomery, Ala. – Dr. Robert M. Ritchea, 53, of LaGrange, Georgia, was arrested yesterday after being indicted by a federal grand jury, announced George L. Beck, Jr, United States Attorney for the Middle District of Alabama. Dr. Ritchea, who maintains a family medical practice in Phenix City, Alabama, is charged with drug distribution and money laundering offenses. Those charges stem from Dr. Ritchea’s operating a “pill mill,” which is a medical clinic created to dispense controlled substances inappropriately, unlawfully, and for non-medical reasons.
Specifically, the indictment charges Dr. Ritchea with writing prescriptions for Schedule II pain medications—such as hydrocodone and methadone—knowing that the patients receiving the prescriptions had no legitimate medical need for the medications. Additionally, according to the indictment, Dr. Ritchea used the proceeds of his pill mill to purchase Schedule II pain medication—specifically, hydromorphone and hydrocodone—directly from a drug manufacturer. With these pills, Dr. Ritchea was able to fill his patients’ unlawful and unnecessary prescriptions, without using a pharmacy.
If convicted, Dr. Ritchea faces a maximum sentence of 20 years’ imprisonment on each count. He also faces substantial monetary penalties and restitution.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
This case was investigated by the Drug Enforcement Administration’s Tactical Diversion Squad and the Internal Revenue Service’s Criminal Investigations Division. The Opelika, Alabama Police Department, Chambers County, Alabama Drug Task Force, the Auburn, Alabama Police Department, the Federal Bureau of Investigation, the Alabama Law Enforcement Agency, the Russell County, Alabama Sheriff’s Office, and the Lawrence County, Alabama Sheriff’s Office all assisted in the investigation. Assistant United States Attorneys Jonathan S. Ross and Rand N. Neeley are prosecuting the case.
Pensacola Tax Preparer Found Guilty of Filing False Tax ReturnsRead the Press Release
PENSACOLA, FLORIDA – Yesterday, Chief U.S. District Court Judge M. Casey Rodgers announced the court’s guilty verdict against Justin T. Phan, 51, of Pensacola, for filing false tax returns. Earlier this year, the court held a bench trial on a three-count Indictment charging Phan with filing false tax returns. Sentencing is scheduled before Chief Judge Rodgers on August 19, 2016, at 1:00 p.m. The court’s verdict was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
Phan owned and operated the business Global Travel and Tours on Mobile Highway in Pensacola, Florida. As a part of the business, Phan prepared income tax returns for individuals in the local Vietnamese community. Phan also sold airline tickets, prepared immigration documents, and transferred money outside the United States for his customers.
During the course of the four-day bench trial, the government proved that Phan prepared and filed false tax returns for himself for tax years 2008, 2009, and 2010. As a part of his tax returns, Phan falsely claimed that this total income for the respective years was $14,317, $23,948, and $23,649. However, the government showed that Phan’s total income for each of the years was in excess of $100,000. As a result of his false tax returns, Phan kept from paying in excess of $100,000 in taxes.
The charges were the result of an investigation by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Tiffany H. Eggers.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Old Saybrook Resident Indicted for Tax EvasionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation in New England, announced that on May 3, 2016, a federal grand jury in New Haven returned an indictment charging DAVID ADAMS, 55, of Old Saybrook, with tax evasion and filing a false tax return. ADAMS, who was arrested on a federal criminal complaint on April 14, 2016, appeared today before U.S. Magistrate Judge Robert A. Richardson in Hartford and entered a plea of not guilty to the charges in the indictment.
As alleged in the indictment, ADAMS sold an online floral business in 2002, which accounted for a significant portion of $6,269,960 in taxable income he claimed on his 2002 tax return. Although ADAMS represented to the IRS on or about August 8, 2003, that he was enclosing payment of $1,250,000, no such payment was enclosed and such tax was still outstanding as of June 2011.
The indictment further alleges that on or about June 7, 2011, ADAMS sold his partnership interest in another online floral business and received $4,708,419.20 wired into his personal bank account as part of the net proceeds owed to him as a result of the sale. Although he knew that he owed substantial taxes on that amount, ADAMS engaged in a number of affirmative acts to conceal and attempt to conceal this income in order to evade the assessment of a tax including: (1) hiring an accountant to prepare his 2011 taxes and then failing to give accountant complete, accurate information by failing to disclose the $4,708,419.20 in income ADAMS received in 2011; (2) providing the accountant with false information about ADAMS’s estimated tax payments for the year, telling the accountant that he had paid $220,000 when in fact, ADAMS knew he had only paid $100,000 in estimated taxes for 2011; (3) causing the accountant to prepare his 2011 tax return with false and fraudulent information; and (4) representing to an IRS revenue officer who was responsible for collecting ADAMS’s delinquent tax payments and securing ADAMS’s overdue tax returns, that he had hoped to have funds to pay down his back tax liability (including tax liability associated with the 2002 sale), but that nothing had been “panning out.” ADAMS failed to disclose to the revenue officer that he had received $4,708,419.20 in cash less than three weeks earlier.
The indictment charges ADAMS with one count of tax evasion, an offense that carries a maximum term of imprisonment of five years, and one count of filing a false tax return, an offense that carries a maximum term of imprisonment three years.
ADAMS owes approximately $4.6 million in back taxes, interest and penalties for tax years 2002, 2006, 2007, 2008, 2009, 2011, and 2012.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter has been investigated by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Susan L. Wines.
North Carolina Man Pleads Guilty to Using Force Against Muslim Woman to Obstruct Her Free Exercise of Religion on an AirplaneRead the Press Release
ALBUQUERQUE – Gill Parker Payne, 37, of Gastonia, North Carolina, pleaded guilty today in the District of New Mexico to one count of using force or threat of force to intentionally obstruct a Muslim woman, identified as K.A., in the free exercise of her religious beliefs.
According to court documents, on Dec. 11, 2015, Payne and K.A. were on board a Southwest Airlines flight from Chicago to Albuquerque, New Mexico. K.A. was wearing a religious headscarf, known as a hijab. Payne was seated several rows behind K.A. on the airplane, and did not know her. Payne admitted that he saw that K.A. was wearing a hijab and was aware that it is a religious practice of Muslim women to wear a headscarf.
Payne further admitted that shortly before landing, but while still in-flight, he walked up the aisle to where K.A. was sitting and stopped next to her seat. Payne proceeded to tell K.A. to take off her hijab, stating something to the effect of, “Take it off! This is America!” Payne then grabbed the back of the hijab and pulled it all the way off, leaving K.A.’s entire head exposed. As a result, K.A. felt violated and quickly pulled the hijab back up and covered her head again.
“No matter one’s faith, all Americans are entitled to peacefully exercise their religious beliefs free from discrimination and violence,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Using or threatening force against individuals because of their religion is an affront to the fundamental values of this nation, and the Civil Rights Division will continue to be vigilant in protecting the religious liberties guaranteed to all Americans.”
“This prosecution sends a clear message to anyone who contemplates the use of threats or intimidation to interfere with the right of individuals, including members of our Muslim community, to express their faith without fear,” said U.S. Attorney Damon P. Martinez of the District of New Mexico. “The U.S. Attorney’s Office is committed to protecting the religious rights of Muslims in New Mexico by aggressively prosecuting those who wish to perpetrate hate crimes against them.”
“All Americans, regardless of their differences, deserve to be treated with respect,” said Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division. “As the lead agency for enforcing federal civil rights laws, the FBI will continue to hold accountable those individuals whose intolerant acts harm others. I would like to thank the FBI staff in Albuquerque and Charlotte, North Carolina, for their work on this case, as well as the U.S. Justice Department's Civil Rights Division, the U.S. Attorney's Office and Albuquerque Aviation Police.”
A sentencing hearing has not yet been set.
This case is being investigated by the FBI’s Albuquerque Division. The case is being prosecuted by Assistant U.S. Attorney Margaret Vierbuchen of the District of New Mexico and Fara Gold of the Civil Rights Division’s Criminal Section.
North Carolina Man Pleads Guilty to Using Force Against Muslim Woman to Obstruct Her Free Exercise of Religion on an AirplaneRead the Press Release
Gill Parker Payne, 37, of Gastonia, North Carolina, pleaded guilty today in the District of New Mexico to one count of using force or threat of force to intentionally obstruct a Muslim woman, identified as K.A., in the free exercise of her religious beliefs.
According to court documents, on Dec. 11, 2015, Payne and K.A. were on board a Southwest Airlines flight from Chicago to Albuquerque, New Mexico. K.A. was wearing a religious headscarf, known as a hijab. Payne was seated several rows behind K.A. on the airplane, and did not know her. Payne admitted that he saw that K.A. was wearing a hijab and was aware that it is a religious practice of Muslim women to wear a headscarf.
Payne further admitted that shortly before landing, but while still in-flight, he walked up the aisle to where K.A. was sitting and stopped next to her seat. Payne proceeded to tell K.A. to take off her hijab, stating something to the effect of, “Take it off! This is America!” Payne then grabbed the back of the hijab and pulled it all the way off, leaving K.A.’s entire head exposed. As a result, K.A. felt violated and quickly pulled the hijab back up and covered her head again.
“No matter one’s faith, all Americans are entitled to peacefully exercise their religious beliefs free from discrimination and violence,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Using or threatening force against individuals because of their religion is an affront to the fundamental values of this nation, and the Civil Rights Division will continue to be vigilant in protecting the religious liberties guaranteed to all Americans.”
“This prosecution sends a clear message to anyone who contemplates the use of threats or intimidation to interfere with the right of individuals, including members of our Muslim community, to express their faith without fear,” said U.S. Attorney Damon P. Martinez of the District of New Mexico. “The U.S. Attorney’s Office is committed to protecting the religious rights of Muslims in New Mexico by aggressively prosecuting those who wish to perpetrate hate crimes against them.”
“All Americans, regardless of their differences, deserve to be treated with respect,” said Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division. “As the lead agency for enforcing federal civil rights laws, the FBI will continue to hold accountable those individuals whose intolerant acts harm others. I would like to thank the FBI staff in Albuquerque and Charlotte, North Carolina, for their work on this case, as well as the U.S. Justice Department's Civil Rights Division, the U.S. Attorney's Office and Albuquerque Aviation Police.”
A sentencing hearing has not yet been set.
This case is being investigated by the FBI’s Albuquerque Division. The case is being prosecuted by Assistant U.S. Attorney Margaret Vierbuchen of the District of New Mexico and Fara Gold of the Civil Rights Division’s Criminal Section.
Payne Plea Agreement
Payne Information
Naperville Man Charged with Violently Forcing Women to Engage in ProstitutionRead the Press Release
CHICAGO — A Naperville man has been arrested for allegedly forcing women to engage in commercial sex acts and brutally abusing them if they wouldn’t comply with his orders.
BENJAMIN BIANCOFIORI used the promise of financial security to entice women into performing commercial sex acts on his behalf, according to a criminal complaint filed in U.S. District Court in Chicago. Biancofiori ran his sex-trafficking operation primarily out of his townhouse in Naperville, the complaint states. The complaint alleges that Biancofiori often beat and punched the women, and that he arranged for one of his victims to be returned to him at gunpoint after she tried to run away. Biancofiori kept a vast majority of the proceeds earned by the women, the complaint states.
Biancofiori, 36, was arrested Wednesday in Colorado. The complaint charges him with one count of sex trafficking by means of force, fraud and coercion. An initial appearance in federal court in Chicago has not yet been scheduled.
The complaint states that once Biancofiori enticed the victims to work for him, he would post their information in commercial sex advertisements on Backpage.com. He then arranged for the women to travel to meet clients at various locations in the Chicago area, the complaint states. Biancofiori recruited one of his victims through an online messaging service on Facebook, according to the complaint.
For the past several weeks Biancofiori has been traveling in the western U.S., according to the complaint. Biancofiori allegedly advertised one of his victims on Backpage.com while in Phoenix and Denver in March.
The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation; and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division. Substantial assistance was provided by the U.S. Attorney’s Office for the District of Colorado, the Denver office of the FBI, the Carol Stream Police Department and the Naperville Police Department.
The sex trafficking charge carries a minimum sentence of 15 years in prison and a maximum sentence of life in prison.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Abigail Peluso and Erika Csicsila.
Missouri Woman Pleads Guilty to Sex Trafficking ConspiracyRead the Press Release
On May 12, 2016, Robin Thompson, a twenty-five year old Park Hills, Missouri, woman pled guilty in federal district court, in East St. Louis, Illinois, to one count of Conspiracy to Commit Sex Trafficking of Minor and by Force, Fraud, or Coercion, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Thompson is scheduled for sentencing on September 15, 2016, before the Honorable Michael J. Reagan, at which time she faces a maximum sentence of life in prison, not more than 5 years of supervised release after her prison term, a mandatory special assessment of $100, and restitution.
Facts presented in court revealed that during a six week period in June and July 2015, Thompson took part in a venture with her husband, co-defendant Marcus Dewayne Thompson, which involved the recruitment, transportation, and advertisement of a minor female from Illinois for commercial sex acts in Florida, Georgia and Louisiana.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Daniel T. Kapsak.
Missouri Man Guilty of Sex Trafficking A Minor and ConspiracyRead the Press Release
On May 13, 2016, Marcus Dewayne Thompson, a twenty-eight year old Park Hills, Missouri, man pled guilty in federal district court, in East St. Louis, Illinois, to one count of Conspiracy to Commit Sex Trafficking of a Minor and by Force, Fraud, or Coercion, and one count of Sex Trafficking of a Minor and by Force, Fraud, or Coercion, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Thompson is scheduled for sentencing on September 29, 2016, before the Honorable Michael J. Reagan, at which time he faces a sentence of fifteen years to life in prison, not more than 5 years of supervised release after his prison term, a mandatory special assessment of $200, and restitution.
Court proceedings revealed that during a six week period in June and July 2015, Thompson orchestrated a venture with his wife, co-defendant Robin Thompson, which involved the recruitment, transportation, and advertisement of a minor female from Illinois for commercial sex acts in Florida, Georgia, and Louisiana.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorney Daniel T. Kapsak.
Mexican Cartel Leader Edgar Valdez-Villareal Pleads Guilty to Cocaine TraffickingRead the Press Release
U.S. Attorney Kenneth A. Polite announced that EDGAR VALDEZ-VILLAREAL, a/k/a “La Barbie,” a United States Citizen who rose to be a high-level leader of Mexico’s Beltran-Leyva Cartel, has pled guilty to charges of conspiracy to distribute and distribution of cocaine in the Eastern District of Louisiana during 2001. VALDEZ-VILLAREAL pled guilty today in the Northern District of Georgia to the Eastern District of Louisiana charges pursuant to Rule 20 of the Federal Rules of Criminal Procedure. VALDEZ-VILLAREAL is in federal custody since his extradition to the United States from Mexico.
VALDEZ-VILLAREAL’s guilty plea to the Eastern District of Louisiana resulted from an investigation by the Drug Enforcement Administration where VALDEZ-VILLAREAL arranged and supervised the transportation of approximately 33 kilograms of cocaine hydrochloride to New Orleans from Mexico in 2001. Two other individuals, CESAR PENA-GIRON and GABRIEL BENAVIDEZ were indicted and pled guilty in 2002 in connection with this investigation and seizure of the 33 kilograms of cocaine.
VALDEZ-VILLAREAL faces a minimum term of ten years imprisonment and a maximum term of life imprisonment, followed by at least five years supervised release, and a maximum fine of $10,000,000. There is also a mandatory $100.00 special assessment for each count associated with this guilty plea.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration for their work investigating this matter. Assistant United States Attorney William J. Quinlan, Jr. is in charge of the prosecution.
Massachusetts Man Pleads Guilty to Tax Fraud for Failing to Report IncomeRead the Press Release
A West Bridgewater, Massachusetts, man pleaded guilty today to one count of filing a false individual income tax return, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
According to court documents, Keith Eaton, 51, did not file federal individual income tax returns with the Internal Revenue Service (IRS) for the years 1998 through 2003. In 2004, the IRS assessed Eaton more than $280,000 in taxes, interest and penalties for the years 1998 through 2001.
From November 2004 to April 2008, Eaton was employed at a heating and air conditioning company in Brockton, Massachusetts. Each year, the company provided Eaton with Forms 1099 reflecting his compensation. Despite receiving these Forms 1099 reporting significant earnings, Eaton did not file timely individual income tax returns with the IRS for years 2004 through 2008. In November and December 2009, Eaton filed Forms 1040 for himself for the years 2000 through 2008 in which he falsely reported receiving no income for any of those years.
In or about November 2008, Eaton began operating Eaton Mechanical LLC, a heating and air conditioning business. In an attempt to thwart the IRS’s effort to collect his back taxes, Eaton caused checks from the business bank account to be made payable to himself and then cashed the checks. Eaton used the cash to pay his personal expenses, including his mortgage. Finally, despite having sufficient income from the operation of his business to require him to file income tax returns, Eaton failed to file individual income tax returns for the years 2009 through 2012.
U.S. District Court Judge William Young for the District of Massachusetts scheduled Eaton’s sentencing for Sept. 14. Eaton faces a statutory maximum sentence of three years in prison and a maximum fine of $250,000. Under the terms of the plea agreement, Eaton is required to pay restitution for his unpaid tax liabilities for the years 1998 through 2012.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation who investigated the case and Trial Attorneys Brittney Campbell and Kenneth Vert of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
M&T Bank Agrees to Pay $64 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
M&T Bank Corp. (M&T Bank) has agreed to pay the United States $64 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today. M&T Bank is headquartered in Buffalo, New York.
“Mortgage lenders that fail to follow FHA program rules put taxpayer funds at risk and increase the chances of borrowers losing their homes,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to hold lenders accountable for knowingly submitting ineligible loans for FHA insurance.”
“M&T Bank bypassed its responsibility to originate and underwrite mortgages in accordance with the standards required by the FHA,” said First Assistant U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “This case demonstrates that when a financial institution takes such a detour, we will work to ensure that it does not bypass the consequences of that conduct.”
During the time period covered by the settlement, M&T Bank participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that M&T Bank failed to comply with certain FHA origination, underwriting and quality control requirements. As part of the settlement, M&T Bank admitted to the following facts: Between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s quality control requirements. Prior to 2010, M&T Bank failed to review all Early Payment Default (EPD) loans, which are loans that become 60 days past due within the first six months of repayment. Between 2006 and 2011, M&T also failed to review an adequate sample of FHA loans, as required by HUD.
Additionally, M&T created a quality control process that allowed it to produce preliminary major error rates that were significantly lower (sometimes below one percent) than what the rate would have been if M&T had calculated its preliminary major error rate by dividing the number of loans with preliminary major errors by the number of loans reviewed to determine what percent of loans contained a preliminary major error.
M&T Bank also failed to adhere to HUD’s self-reporting requirements. While M&T Bank identified numerous FHA insured loans with “major errors” between 2006 and 2011, M&T Bank did not report a single loan to HUD until 2008, and thereafter self-reported only seven loans to HUD. As a result of M&T’s conduct and omissions, HUD insured hundreds of loans approved by M&T that were not eligible for FHA mortgage insurance under the Direct Endorsement program and that HUD would not otherwise have insured. HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
* * *
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and the value of private citizen assistance, including whistleblowers, in pursuing lenders that violate the rules,” said Inspector General David A. Montoya of the Department of Housing and Urban Development.
“It is critically important that FHA-approved lenders comply with HUD’s underwriting standards and originate mortgages that borrowers can sustain,” said HUD General Counsel Helen Kanovsky. “We are pleased M&T Bank worked with the Department of Justice and HUD to arrive at an agreeable settlement that protects FHA’s insurance fund.”
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by a former employee of M&T Bank, Keisha Kelschenbach. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The share to be awarded in this case has not yet been determined.
The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and the U.S. Attorney’s Office for the Western District of New York.
The lawsuit is captioned U.S. ex rel. Kelschenbach v. M&T Bank Corp, 13-CV-0280(S) (W.D.N.Y.).
M&T Bank Agrees to Pay $64 Million to Resolve Alleged False Claims Act Liability Arising from Fha-Insured Mortgage LendingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—The Department of Justice and the United States Attorney’s Office announced today that M&T Bank Corp. (M&T Bank) has agreed to pay the United States $64 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements. M&T Bank is headquartered in Buffalo.
“In some instances, M&T Bank deviated from its responsibility to originate and underwrite mortgages in accordance with the standards required by the FHA,” said First Assistant U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “This case demonstrates that when a financial institution takes such a detour, we will work to ensure that it does not bypass the consequences of that conduct.”
“Mortgage lenders that fail to follow FHA program rules put taxpayer funds at risk and increase the chances of borrowers losing their homes,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to hold lenders accountable for knowingly submitting ineligible loans for FHA insurance.”
During the time period covered by the settlement, M&T Bank participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that M&T Bank failed to comply with certain FHA origination, underwriting and quality control requirements. As part of the settlement, M&T Bank admitted to the following facts: between January 1, 2006, and December 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s quality control requirements. Prior to 2010, M&T Bank failed to review all Early Payment Default (EPD) loans, which are loans that become 60 days past due within the first six months of repayment. Between 2006 and 2011, M&T also failed to review an adequate sample of FHA loans, as required by HUD.
Additionally, M&T created a quality control process that allowed it to produce preliminary major error rates that were significantly lower (sometimes below one percent) than what the rate would have been if M&T had calculated its preliminary major error rate by dividing the number of loans with preliminary major errors by the number of loans reviewed to determine what percent of loans contained a preliminary major error.
M&T Bank also failed to adhere to HUD’s self-reporting requirements. While M&T Bank identified numerous FHA insured loans with “major errors” between 2006 and 2011, M&T Bank did not report a single loan to HUD until 2008, and thereafter self-reported only seven loans to HUD. As a result of M&T’s conduct and omissions, HUD insured hundreds of loans approved by M&T that were not eligible for FHA mortgage insurance under the Direct Endorsement program and that HUD would not otherwise have insured. HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and the value of private citizen assistance, including whistleblowers, in pursuing lenders that violate the rules,” said Inspector General David A. Montoya of the Department of Housing and Urban Development.
“It is critically important that FHA-approved lenders comply with HUD’s underwriting standards and originate mortgages that borrowers can sustain,” said HUD General Counsel Helen Kanovsky. “We are pleased M&T Bank worked with the Department of Justice and HUD to arrive at an agreeable settlement that protects FHA’s insurance fund.”
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by a former employee of M&T Bank, Keisha Kelschenbach. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The share to be awarded in this case has not yet been determined.
The settlement is the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and Assistant U.S. Attorney Kathleen Lynch, U.S. Attorney’s Office for the Western District of New York.
Leader Admits Scheme to Fraudulently Obtain over $1.4 Million in Unemployment BenefitsRead the Press Release
Baltimore, Maryland – Diameter Akala, age 43, of Silver Spring, Maryland, Washington, D.C. and New York, pleaded guilty today to a scheme to fraudulently obtain over $1.4 million in unemployment benefits.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robin Blake, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Postal Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service - Washington Division.
According to his plea agreement, from 2012 to 2015, Akala and his co-conspirators caused the Maryland Department of Labor, Licensing and Regulation (DLLR) and the Pennsylvania Department of Labor and Industry (DLI), which administered the unemployment insurance benefit programs in their respective states, to issue fraudulent unemployment benefits in the names of individuals by submitting false applications for monetary benefits. Akala enlisted his friends and family members to join him in the scheme.
Members of the conspiracy obtained the personally identifying information (PII) of individuals, including Maryland residents. Akala filed false documentation with DLLR and DLI in the names of fictitious companies, falsely stating that the fictitious companies employed and paid wages to actual individuals. In fact, no unemployment insurance taxes were ever paid to DLLR or DLI in the names of the fictitious companies. Akala, electronically and by phone, filed claims in Maryland and Pennsylvania for unemployment benefits in his own name and the names of other individuals, falsely claiming that they previously worked for those fictitious companies. Akala used the PII of individuals who had given permission to have their information used, as well as many who did not. Akala offered money to co-conspirators in exchange for PII.
Akala and other members of the conspiracy used residential mailing addresses of co-conspirators in Maryland, New York, the District of Columbia, Pennsylvania and Virginia to register and receive correspondence for the fictitious companies, and apply for and receive unemployment benefits in the form of prepaid debit cards. In exchange for the use of their addresses, the co-conspirators received funds obtained through the fraud, typically in the form of a fraudulently obtained prepaid debit card. Members of the conspiracy regularly contacted DLLR and DLI, falsely representing themselves either to be a representative of one of the fictitious companies or an individual entitled to unemployment benefits. Akala moved between different states in order to retrieve correspondence addressed to fictitious companies and individuals, including prepaid debit cards issued by DLLR and DLI.
Co-conspirators Wilfred Mendez, Tawana McClain, Ferny Alexander Moreno Puente, Wilfredo Torres and his half-brother, Eric Gonzalez, admitted that they agreed to have Akala file fraudulent unemployment claims in their names. Mendez, Moreno Puente and Torres also provided the personal identification information and/or addresses of other individuals to file additional false claims in the names of those individuals, and others. The co-conspirators used the fraudulently obtained unemployment benefits prepaid debit cards that were either mailed to them, or provided to them by Akala, at ATMs or stores in order to withdraw and use the funds. Some of the cards were in their names, but some of the cards were in the names of other individuals. Generally, the conspirators kept a portion of the fraudulently obtained funds for themselves and provided the remainder to Akala. Torres also allowed his business address to be used to file fraudulent unemployment benefit claims and when the unemployment benefits debit cards arrived, he either used them or distributed them to co-conspirators.
During the course of the conspiracy the actual loss was approximately $1,468,463.80 in fraudulently obtained unemployment benefits. As part of his plea agreement, Akala will be required to pay restitution and forfeiture in that amount.
Akala faces a maximum sentence of 20 years in prison for conspiracy to commit wire fraud and a mandatory minimum of two years in prison, consecutive to any other sentence, for aggravated identity theft. U.S. District Judge Ellen L. Hollander has scheduled sentencing for Akala on August 4, 2016, at 10:00 a.m.
Wilfred Mendez, age 21, of Bronx, New York; Eric Gonzalez, age 34, of Alexandria, Virginia; Tawana McClain, age 51, of Washington, D.C.; Ferny Alexander Moreno Puente, age 26, of Gaithersburg, Maryland; and Wilfredo Torres, age 36, of Alexandria, Virginia, previously pleaded guilty to their roles in the scheme. Mendez has agreed to the entry of an order to pay restitution and forfeiture of $195,422; Torres and Gonzalez have each agreed to the entry of an order to pay restitution and forfeiture of $173,185.32; Moreno Puente has agreed to the entry of an order to pay restitution and forfeiture of $268,911; and McClain has agreed to the entry of an order to pay restitution and forfeiture of $205,613. U.S. District Judge Ellen L. Hollander has scheduled sentencing for Mendez on July 18, 2016, for McClain and Gonzalez on July 15, 2016, and for Moreno Puente and Torres on July 14, 2016.
Co-conspirators Dulce Oleo, age 38, of the Bronx, New York; Yaw Bempa-Boateng, age 35, of Silver Spring, Maryland; and Carmen Benitez, age 29, of Scranton, Pennsylvania, previously pleaded guilty to their roles in the scheme and await sentencing.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the Department of Labor – OIG and U.S. Postal Inspection Service for their work in the investigation, and praised the Maryland Department of Labor, Licensing and Regulation and the Pennsylvania Department of Labor and Industry for their assistance in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Sean R. Delaney, who is prosecuting the case.
Kenner Man Charged with Mail TheftRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ARTHUR RESPERT, age 25, of Kenner, was charged today in a three-count Indictment for theft of mail.
According to the Indictment, RESPERT was employed at Air General, Inc. and worked at the New Orleans International Airport. From on or about October 24, 2014 to September 3, 2015, RESPERT stole letters and other packages addressed to individuals across the United States.
If convicted, RESPERT faces a maximum term of imprisonment of five years, a maximum fine of $250,000, a maximum term of supervised release of up to three (3) years, and a mandatory $100 special assessment, as to each of the three counts of mail theft.
U.S. Attorney Polite reiterated that an Indictment is merely a charge, and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of United States Postal Service, Office of Inspector General, in investigating this matter. Assistant U.S. Attorney Sharan E. Lieberman is in charge of the prosecution.
Kenel Man Convicted of Aggravated Sexual Abuse and Other Domestic Violence ChargesRead the Press Release
United States Attorney Randolph J. Seiler announced that Denny Johnson, age 31, of Kenel, South Dakota, was found guilty of two Counts of Aggravated Sexual Abuse by Force, Assault with a Dangerous Weapon, Domestic Assault by an Habitual Offender, and Simple Assault, as a result of a federal jury trial in Aberdeen, South Dakota. The jury returned the guilty verdict on May 12, 2016, after deliberating for approximately 3 hours.
Johnson was found not guilty of three additional counts of Aggravated Sexual Abuse and one count of Kidnapping.
The convictions carry a maximum penalty of up to life in custody and/or fines of up to $1,005,000, up to life of supervised release, and $410 in special assessments to the Federal Crime Victims Fund.
Johnson was indicted by a federal grand jury on June 17, 2014.
The convictions stemmed from incidents between December 29, 2013, and January 10, 2014, when Johnson, who had been in a tumultuous and violent relationship since early 2000 with the victim, began to physically and emotionally abuse her. Johnson brought the victim home from her shift at work around 12:30 in the morning. Upon arriving home, Johnson began yelling at her because he had been watching her at work and saw her interacting with a co-worker.
As Johnson was displaying hostility, the victim began to gather her belongings so she could leave. She put her clothes in a suit case and headed out of the house. As she opened the door to leave, Johnson suddenly slammed the door shut, told her she was not leaving, grabbed her by her jacket collar, jerked her to the floor, and assaulted her. As she was lying on the floor, Johnson began to repeatedly kick her on the small of her back, as he knew she had been previously injured in that area.
The victim was able to get up and attempted to escape. Johnson again grabbed her by the jacket, but this time he cut it off of her with a large army knife he had grabbed, and chased her into his bedroom with the knife still in his hand. He also began throwing household items at her, striking her on the forehead.
Johnson retrieved her suitcase, opened it, and started taking her clothing out and cutting it with the knife. The victim tried escape out a window, but she was so nervous she could not unlock the window. Johnson returned and began walking towards her and menaced her with the knife, which was still in his hand. The victim was in a fetal position, and Johnson verbally abused her as she pleaded with him. He used the knife to cut her clothes off. After removing her undergarments with the knife, he threw her to the ground. Thereafter, he threw the knife at her, sticking it in the floor beside her, and he told her to kill herself because he could not do it. The victim refused, stating she had her children to live for so she would not kill herself.
Johnson retrieved the knife, and kicked her as she tried to crawl from him. When she cried out, he told her to be quiet or he would kill her. Johnson urinated on the victim. After urinating on her, Johnson told her that she stunk and ordered her to get into the shower. He turned on the cold water only and forced her to stay under the water as he poured shampoo, liquid hand soap, dish soap, a bottle of Mr. Clean, and some Clorox on her head and face. He tried to dilute her with cleaning chemicals. The victim was pleading with him to stop, but Johnson grabbed a mop bucket with dirty water in it and dumped that on her as well. Following this, he ordered her out of the shower and told her to go to a bedroom. Johnson made sure that she did not have any clothes. Johnson came into the room and raped the victim in several ways. During the sexual abuse, he hit her in the face, held a knife to her throat, and continued to menace her.
This case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
A presentence investigation was ordered and a sentencing date was set for August 15th. The defendant was remanded to the custody of the U.S. Marshals Service.
Justice Department Settles Immigration-Related Discrimination Claim Against Netjets ServicesRead the Press Release
The Justice Department announced today that it has reached an agreement with NetJets Services Inc. (NetJets), a business that provides private aviation services based out of Columbus, Ohio. The agreement resolves allegations that NetJets violated the anti-discrimination provision of the Immigration and Nationality Act (INA) by discriminating against work-authorized immigrants.
The Justice Department’s investigation found that NetJets improperly required newly hired, work-authorized non-U.S. citizens to present specific documents to prove their employment eligibility that they did not require of similarly-situated U.S. citizens. The investigation further found that existing employees who were legal permanent residents were subjected to unnecessary post-employment reverification of their employment eligibility because of their immigration status and that employees who had become naturalized U.S. citizens after they were hired were required to present more and different documents than necessary to establish their citizenship status. The INA’s anti-discrimination provision prohibits employers from discriminating based on citizenship, immigration status, or national origin when verifying an employee’s employment authorization.
Under the settlement agreement, NetJets must pay a $41,480 civil penalty, train its human resources staff on the anti-discrimination provision of the INA and be subject to monitoring by the Justice Department for a period of two years.
“It is the responsibility of each employer to ensure that its human resources staff understand and implement proper hiring practices to avoid violating anti-discrimination laws,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Civil Rights Division commends NetJets for its cooperation during the investigation and its commitment to implement remedial measures.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits, among other things, citizenship, immigration status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices in employment eligibility verification; retaliation; and intimidation. The case was handled by Trial Attorney Pablo A. Godoy of the Civil Rights Division’s OSC.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they have been subjected to: different documentary requirements based on their citizenship status, immigration status or national origin; or discrimination based on their citizenship status, immigration status or national origin in hiring, firing or recruitment or referral, should contact OSC’s worker hotline for assistance.
NetJets Settlement Agreement