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Monday 28 March 2016
Leaders of Colombian Drug Trafficking Organization Sentenced to Two Decades in PrisonRead the Press Release
Two leaders of Colombia’s largest and most influential BACRIM (banda criminal or criminal group), CLAN USUGA (formerly referred to as Los Urabeños), were sentenced to 20 and 24 year prison terms for their involvement in a cocaine trafficking conspiracy.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and A.D. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office, made the announcement.
On June 4, 2015, nine defendants, including Oscar David Pulgarin-Ganan, a/k/a “Niño,” a/k/a “Coroso,” and Ramiro Caro-Pineda, a/k/a “Nolasco,” a/k/a “Hugo” were charged in a single-count Indictment, in the Southern District of Florida, for their participation in large-scale drug trafficking organization based out of Colombia (Case No. 15cr20403). Pulgarin-Ganan and Caro-Pineda conspired to traffic large amounts of cocaine from Colombia, through Central America, with the eventual destination being the United States, in violation of Title 21, United States Code, Sections 959 and 960. Pulgarin-Ganan and Caro-Pineda pled guilty to the indictment and were respectively sentenced, in 2016, to 240 and 284 months’ imprisonment.
Pulgarin-Ganan and Caro-Pineda were top-level members of the CLAN USUGA drug trafficking organization. Caro-Pineda oversaw transportation and shipments of all loads owned, controlled, or protected by the criminal group. Pulgarin-Ganan was an owner, manager, and investor in loads with other high-level members of the drug trafficking organization. Pulgarin-Ganan managed multi-ton loads being sent by airplane and go-fast vessels to Central American and eventually being imported into the United States. In addition, Pulgarin-Ganan was in charge of coordinating all CLAN USUGA cocaine loads that arrived in Central America, with the final eventual destination being the United States.
Caro-Pineda was also indicted in the Middle District of Florida, Eastern District of Texas, and Eastern District of New York and pled guilty to each indictment.
These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Ferrer commended the investigative efforts of the DEA. Mr. Ferrer also recognized the U.S. Attorney’s Offices in the Middle District of Florida, Eastern District of Texas, and Eastern District of New York for their collective assistance with the prosecution of CLAN USUGA leaders and high-ranking members. This case is being prosecuted by Assistant U.S. Attorney Michael B. Nadler.
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.
Leaders of Colombian Drug Trafficking Organization Sentenced to Nineteen Years in PrisonRead the Press Release
Two Colombian nationals were each sentenced to more than 19 years in prison for their involvement in an international cocaine trafficking conspiracy.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and A.D. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office, made the announcement.
On July 20, 2010, German Bustos-Alarcon a/k/a “Puma” and Rafael Alvarez-Pineda a/k/a “Chepe,” were charged in a single-count indictment in the Southern District of Florida for their participation in large-scale drug trafficking organization based out of Colombia (Case No. 10cr20554). Bustos-Alarcon and Alvarez-Pineda conspired to traffic large amounts of cocaine from Colombia, through Central America, with the eventual destination being the United States, in violation of Title 21, United States Code, Sections 959 and 960. On March 23, 2015, German Bustos-Alarcon was extradited from Colombia to the Southern District of Florida. On April 29, 2015, Alvarez-Pineda was also extradited from Colombia to the Southern District of Florida. Bustos-Alarcon and Alvarez-Pineda each pled guilty to the indictment and were sentenced to 235 months’ imprisonment.
Bustos-Alarcon and Alvarez-Pineda were members of the Autodefensas Unidas de Colombia (AUC) and were principal lieutenants of AUC Leader Ramiro Vanoy-Murrillo a/k/a “Cuco Vanoy” (Case No. 99-CR-6153-KMM). After the AUC leaders were extradited from Colombia to the United States in May 2008, Bustos-Alarcon and Alvarez-Pineda moved into leadership roles in the area of Caucasia, Colombia. Bustos-Alarcon and Alvarez-Pineda formed a drug trafficking alliance with Colombia’s largest and most influential BACRIM (banda criminal or criminal group), CLAN USUGA (formerly referred to as Los Urabeños). Bustos-Alarcon and Alvarez-Pineda purchased cocaine from laboratories and sold it to members of the CLAN USUGA, who then transported the narcotics to Central America and eventually on to the United States.
These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Ferrer commended the investigative efforts of the DEA. This case is being prosecuted by Assistant U.S. Attorney Michael B. Nadler.
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.
Largest cocaine supplier to Alaska sentenced to 16 years imprisonmentRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced that on Friday, March 25, a Las Vegas man was sentenced by United States District Court Judge Sharon Gleason to serve 16 years in prison for supplying large quantities of cocaine to Alaska and Michigan over the past five years; he was also fined $40,000, and required to forfeit expensive vehicles and over $700,000 in drug proceeds.
Clarence Anthony Hatton, a/k/a “C-Money,” 47, of Las Vegas, previously pled guilty to conspiring with others to distribute cocaine, as well as to launder the proceeds of cocaine trafficking. As part of his guilty plea, Hatton admitted that he conspired to distribute over 50 kilograms of cocaine to both Alaska and Michigan over a three year period, and that he received payment in cash through mail and parcel services. Hatton, who lived in Las Vegas, would obtain large quantities of cocaine from California, where he was from. He then paid employees at Las Vegas McCarran International Airport to take the cocaine into the employee entrance at the airport so that it was not subjected to normal security. The employee would then meet with a traveler to Alaska (or Michigan) in the men’s bathroom in the secure area of the terminal and transfer the cocaine. Typically, ten kilograms were sent at a time, approximately twice a month.
According to Deputy Criminal Chief Frank Russo, who handled the sentencing hearing, the testimony at sentencing indicated that over 250 kilograms of cocaine were sent to Alaska in this manner, and over 100 kilograms of cocaine were sent to Michigan using the same scheme. The evidence submitted to the Court also showed that Hatton had been sending cocaine to Alaska for the past 20 years, and had amassed great wealth in doing so. Within the government’s sentencing memo, Russo pointed out that Hatton was dealing cocaine at the kilogram level back in 1996, and was identified as a source of supply in at least four other major cases prosecuted in Alaska. However, evidence was insufficient to charge Hatton until the current case, which proved what witnesses had been saying about Hatton all along: that he was the organizer of the most prolific cocaine trafficking network ever to be prosecuted in Alaska.
Russo stated that Hatton ran his drug organization as a business, thousands of miles removed from the human misery that his product was causing in Alaska. The sentencing memo alleged that Hatton built comfortable houses in Las Vegas, purchased expensive cars, was a high roller in casinos, and provided for his family on the profits that were mailed back to Las Vegas: “Prior to his incarceration, [Hatton] likely never thought about the fact that each individual twenty dollar bill in a postal box overflowing with them had a story of despair behind it.”
Hatton was required to forfeit the seized proceeds of his drug trafficking activity, over $620,000 in cash and a Mercedes Benz valued at over $80,000. Hatton forfeited an additional $88,700 in cash just prior to sentencing, and Judge Gleason imposed an additional $40,000 fine. Judge Gleason found that Hatton was the leader of the drug conspiracy, and cited the need to deter others from believing that they could profit from trafficking drugs in Alaska as one of the reasons for the sentence imposed.
United States Attorney Karen Loeffler cited the significance of the case from a public safety perspective, not only protecting Alaska’s residents from drug trafficking but also securing the airports: “This case demonstrated that there is a loophole in airport security when it comes to allowing employees unscreened access. It is a loophole that must be scrutinized by all airports.”
Hatton is the latest and most significant in a string of sentencing hearings related to this drug trafficking scheme. To date, the following individuals have been sentenced as part of this case:
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Daren Cole:previously sentenced to 64 months in prison;
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Michael Langdon: previously sentenced to 60 months in prison;
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Antonio Beckwith:previously sentenced to 24 months in prison; and
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Bryan Bledsoe, previously sentenced to 36 months in prison.
This case was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF). In announcing the sentence, U.S. Attorney Loeffler praised the work of the law enforcement agencies involved, including the Drug Enforcement Administration (DEA), the Internal Revenue Service Criminal Investigation (IRS-CI), and the U.S. Postal Inspection Service (USPIS). These agencies were assisted by the FBI Anchorage Safe Streets Task Force, the Anchorage Police Department, the Las Vegas Metropolitan Police Department, the Henderson Police Department, the North Las Vegas Police Department and the Clark County Department of Aviation.
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Jamaican National Pleads Guilty to Airport Drug ConspiracyRead the Press Release
CHARLOTTE, N.C. – Winston Sherif Richards, 40, a citizen of Jamaica, appeared in federal court and pleaded guilty to one count of conspiracy to possess with intent to distribute cocaine, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. Magistrate Judge David S. Cayer presided over today’s plea hearing.
Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Patti Fitzpatrick, Port Director of the U.S. Customs and Border Protection (CBP) Area in Charlotte join U.S. Attorney Rose in making today’s announcement. This investigation is a direct result of HSI’s Airport Drug Interdiction initiative.
According to filed plea documents and today’s plea hearing, on October 24, 2015, Richards flew into Charlotte Douglas International Airport directly from Montego Bay, Jamaica. Upon entering the United States, Richards presented himself to CBP agents at the airport. Richards, who acknowledged packing his own luggage, had in his possession a suitcase and a computer bag. After initial questioning, Richards was sent to secondary inspection. According to filed court documents, at secondary inspection, CBP agents opened Richards’ luggage and discovered an orange-and-grey colored backpack. Agents examined these items and discovered anomalies within the lining of the backpack. Court records show that upon further inspection, the agents discovered two bags of cocaine hidden within the backpack lining, weighing approximately eight-hundred-twenty-two (822) grams with a street value, after sale and distribution, of approximately $100,000.
According to court records, upon discovery of the drugs, Richards was interviewed by HSI agents and gave multiple inconsistent statements about his luggage and eventual destination in the United States. Over the course of interview, Richards told HSI agents that he was hired by a man to bring some “stuff” to the United States and to deliver this bag to an unknown man in New York. In court today, Richards admitted to actively participating to the drug conspiracy.
Richards is currently in federal custody. The charge levied against him carries a maximum prison term of 20 years and a $1,000,000 fine. Richards also faces deportation proceedings upon completion of his prison term, which will be determined by the Court at sentencing. A sentencing date has not been scheduled yet.
In making today’s announcement U.S. Attorney Rose thanked HSI, CBP and the North Carolina Department of Public Safety, Alcohol and Law Enforcement, for their investigation of the case. The prosecution for the government is being handled by Assistant U.S. Attorney Sanjeev Bhasker of the U.S. Attorney’s Office in Charlotte.
Jacksonville Woman Indicted for Sex Trafficking A MinorRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Lisa C. Glass (38, Jacksonville) with child sex trafficking. If convicted, she faces a mandatory minimum of 10 years, up to life, in federal prison.
According to the indictment, Glass recruited, enticed, harbored, transported, provided, and maintained a juvenile female for the purpose of engaging the girl in commercial sexual activity.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Northeast Florida Human Trafficking Task Force that includes investigators from the Jacksonville Sheriff’s Office and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Mac D. Heavener, III.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to 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.justice.gov/psc.
Four Conspirators Plead Guilty in $1.4 Million Unemployment Benefit Fraud SchemeRead the Press Release
Baltimore, Maryland – Four defendants pleaded guilty to a wire fraud conspiracy involving a scheme to fraudulently obtain unemployment benefits:
Eric Gonzalez, age 34, of Alexandria, Virginia;
Tawana McClain, age 51, of Washington, D.C.;
Ferny Alexander Moreno Puente, age 26, of Gaithersburg, Maryland;
Wilfredo Torres, age 35, of Alexandria, VirginiaThe guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge John Dolce, 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.
“The Office of Inspector General is committed to working with our law enforcement partners to aggressively pursue and hold accountable those who defraud the Department of Labor’s Unemployment Insurance program,” stated John Dolce, Acting Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
According to their plea agreements, from 2012 to 2015, members of the conspiracy 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 unemployment benefits in the names of individuals by submitting false applications for monetary benefits for their own personal use and benefit.
McClain, Moreno Puente, Torres and his half-brother, Gonzalez all pleaded guilty to their participation in the conspiracy. Moreno Puente, Torres and Gonzalez admitted that they agreed to have a co-conspirator file fraudulent unemployment claims in their names. 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. McClain, Moreno Puente, Torres and Gonzalez used the fraudulently obtained unemployment insurance benefits prepaid debit cards that were either mailed to them, or provided to them by a co-conspirator, at ATMs or stores in order to withdraw and use the funds. Generally, McClain, Moreno Puente, Torres and Gonzalez kept a portion of the fraudulently obtained funds for themselves and provided the remainder to a co-conspirator. 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.
Moreno Puente admitted that he personally used at least 14 fraudulently obtained unemployment benefits cards; McClain personally used at least 12 cards; Torres used at least six cards; and Gonzalez used at least five cards. 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. During the course of the conspiracy the actual loss was approximately $1,468,463.80 in fraudulently obtained unemployment insurance benefits.
McClain, Moreno Puente, Torres and Gonzalez, face a maximum sentence of 20 years in prison for conspiracy to commit wire fraud. U.S. District Judge Ellen L. Hollander has scheduled sentencing 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.
Former Trucking Company Owner Pleads Guilty to Federal Tax EvasionRead the Press Release
TOPEKA, KAN. – The former owner of a trucking company in Kansas City, Kan., pleaded guilty Monday to evading federal income taxes, U.S. Attorney Barry Grissom said.
Clifford C. Copp, 47, Overland Park, Kan., who owned Copp Trucking Co. in Kansas City, Kan., pleaded guilty to one count of tax evasion. In his plea, he admitted he filed reports to the Internal Revenue Service in 2001 indicating the company owed approximately $939,408 in employment taxes for that year. However, the company did not pay the employment taxes due.
In February 2004 Copp was assessed trust fund recovery penalties of $669,037. When the IRS began collection efforts he concealed income. He filed a false statement to the IRS concealing his ownership interest in assets including livestock, life insurance and farm equipment. He also formed Wildcat Limo, LLC, and concealed his ownership interest in the company.
Sentencing will be set for a later time. He faces a maximum penalty of five years in federal prison, restitution, and a fine up to $250,000. Grissom commended the Internal Revenue Service and Assistant U.S. Attorney Chris Oakley for their work on the case.
Former Tallassee Assistant Police Chief Sentenced for Beating Suspect During Interrogation, False Statements to the FBI, and Selling DrugsRead the Press Release
Montgomery, Ala. – Today, former Tallassee, Alabama, Assistant Police Chief, Chris Miles, 41, was sentenced to 41 months in prison for depriving a suspect of his federally protected rights by beating the suspect with a phone book-sized packet of paper during an interrogation and then lying about the incident to an FBI agent investigating the matter. Miles was also sentenced for selling marijuana that he stole from the police evidence room.
Miles’ pleaded guilty on Nov. 17, 2015, to one count of deprivation of civil rights, two counts of false statements and one count of possession with intent to distribute. He was sentenced by U.S. District Judge Myron H. Thompson of the Middle District of Alabama.
According to admissions made during his plea hearing, in April of 2013, while he was on duty as assistant police chief, Miles beat a prisoner who was serving a sentence at Tallassee jail while Miles was interrogating that prisoner about uncharged crimes the prisoner was suspected of having committed. During the questioning, Miles grabbed a thick packet of copy paper and used it to strike the victim multiple times across the victim’s face and head. Miles also repeatedly slapped the victim across the face and head with his hand. His abuse caused the victim to suffer bruising and physical pain. Miles also admitted that earlier in 2013 he stole approximately 16 pounds of marijuana from the police evidence room and later sold it to a known drug dealer.
“Law enforcement leaders serve as role models for their fellow officers, and at all times they must act with integrity, fairness and professionalism,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Justice requires even-handed treatment for all, and without exception, we will aggressively prosecute any officer who beats an inmate, breaks the law and lies to federal investigators.”
“Miles was a maverick, working outside the law,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama. “While we expect interrogations to be thorough, an officer cannot turn an investigation into a punishment. Fortunately, the overwhelming majority of our law enforcement officials act reasonably and within the bounds of the Constitution.”
This case was investigated by the Auburn resident agency of the FBI’s Mobile Field Office, with the assistance of Alabama’s State Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Jerusha T. Adams for the Middle District of Alabama, and Trial Attorney Gabriel Davis of the Civil Rights Division.
Former President of Honduran Soccer Federation Pleads Guilty to Racketeering and Corruption ChargesRead the Press Release
Earlier today in federal court in Brooklyn, New York, Rafael Callejas, the president of the Honduran soccer federation (FENAFUTH) from 2002 to 2015, pleaded guilty to racketeering conspiracy and wire fraud conspiracy in connection with his receipt of bribes in exchange for the awarding of contracts for the media and marketing rights to FIFA World Cup qualifier matches. Callejas, who served as the President of the Republic of Honduras from 1990 to 1994, also agreed to forfeit $650,000. At sentencing, Callejas faces a maximum sentence of 20 years for each count. Today’s plea proceeding took place before U.S. Magistrate Judge Robert M. Levy.
The guilty plea was announced by U.S. Attorney Robert L. Capers for the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez for FBI’s New York Field Office and Acting Special Agent in Charge Anthony J. Orlando for the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Los Angeles Field Office.
According to court filings and facts presented during the plea proceeding, Callejas negotiated and accepted bribes totaling hundreds of thousands of dollars in exchange for his agreement to exercise his influence as the president of FENAFUTH to award contracts to Media World, a Florida sports marketing company, for the media and marketing rights to the Honduran national soccer team’s home World Cup qualifier matches for the 2014, 2018 and 2022 editions of the World Cup. Over a period of years, Media World transmitted these bribes from its U.S. bank accounts, through an intermediary, to the foreign bank accounts of the defendant and a co-conspirator.
The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI’s New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section and the Fraud Section, as well as from INTERPOL Washington.
Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Paul Tuchmann, Nadia Shihata, Keith D. Edelman and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.
The government’s investigation is ongoing.
Former President of Honduran Soccer Federation Pleads Guilty to Racketeering and Corruption ChargesRead the Press Release
Earlier today in federal court in Brooklyn, Rafael Callejas, the president of the Honduran soccer federation (FENAFUTH) from 2002 to 2015, pleaded guilty to racketeering conspiracy and wire fraud conspiracy in connection with his receipt of bribes in exchange for the awarding of contracts for the media and marketing rights to FIFA World Cup qualifier matches. Callejas, who served as the President of the Republic of Honduras from 1990 to 1994, also agreed to forfeit $650,000. At sentencing, Callejas faces a maximum sentence of 20 years for each count. Today’s plea proceeding took place before United States Magistrate Judge Robert M. Levy.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director in Charge, FBI, New York Field Office; and Acting Special Agent in Charge Anthony J. Orlando, IRS Criminal Investigation, Los Angeles Field Office.
According to court filings and facts presented during the plea proceeding, Callejas negotiated and accepted bribes totaling hundreds of thousands of dollars in exchange for his agreement to exercise his influence as the president of FENAFUTH to award contracts to Media World, a Florida sports marketing company, for the media and marketing rights to the Honduran national soccer team’s home World Cup qualifier matches for the 2014, 2018, and 2022 editions of the World Cup. Over a period of years, Media World transmitted these bribes from its U.S. bank accounts, through an intermediary, to the foreign bank accounts of the defendant and a co-conspirator.
The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section, and the Fraud Section, as well as from INTERPOL Washington.
Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Paul Tuchmann, Nadia Shihata, Keith D. Edelman, and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.
The government’s investigation is ongoing.
The Defendant:
RAFAEL CALLEJAS
Age: 72
Nationality: HondurasE.D.N.Y. Docket No. 15 CR 252 (S-1)
Former Insurance Salesman Sentenced for Tax EvasionRead the Press Release
BOSTON – A former insurance salesman was sentenced today in U.S. District Court in Boston for evading taxes in connection with the theft of more than $470,000 that he stole from three clients.
Paul Disidoro, 64, of Georgetown, Mass., was sentenced by U.S. District Judge William G. Young to 18 months in prison, three years of supervised release and restitution of $613,806. In December 2015, Disidoro pleaded guilty to attempting to evade taxes.
For many years, Disidoro operated an insurance business in Massachusetts, and from 2007 through 2010 he also acted as a financial adviser for some clients. During that period, Disidoro stole more than $470,000 from three clients and used the money for his personal benefit, including online gambling. He concealed the income from his tax preparer, and failed to report the embezzled funds on his federal income tax returns. In doing so , Disidoro evaded $144,000 in taxes.
United States Attorney Carmen M. Ortiz; Manny J. Muriel, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Anthony DiPaolo, Chief of Investigations of the Insurance Fraud Bureau of Massachusetts, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
Former Insurance Company Service Rep Sentenced for EmbezzlementRead the Press Release
TOPEKA, KAN. – A former insurance company service representative in Topeka was sentenced Monday to a year and a day in federal prison for embezzlement, U.S. Attorney Barry Grissom said. In addition, she was ordered to pay $215,000 in restitution.
Erin Rebecca Thomas, 47, formerly of Topeka, Kan., pleaded guilty to one count of embezzlement. In her plea she admitted the crime took place while she worked for American Home Life Insurance Company.
In her position, she processed death claims, policy loans, beneficiary changes and so on. Between July 2010 to July 2012, she created 22 separate fraudulent transactions. In one instance, she processed the policy of a person who died in 2010. She created a fictitious change of beneficiary request naming herself as beneficiary and had the benefit check deposited in her personal account.
Grissom commended the U.S. Secret Service and U.S. Assistant Attorney Christine Kenney for their work on the case.
Former Fargo Business Owner Sentenced for Failure to Pay over Employment TaxesRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on March 28, 2016, Tammy J Devier, 43, Crary, ND, was sentenced before U. S. District Judge Ralph R. Erickson to serve five (5) years of supervised probation for Willfully Causing the Failure to Pay Over Employment Taxes. Judge Erickson also ordered Devier to serve 12 months of home confinement, pay restitution in the amount of $377,163.34 to the United States, and pay a $25 special assessment to the Crime Victims’ Fund.
Between 2007 and 2010, Devier was the owner of Red Arrow Recruiters, LLC, a Professional Employment Organization which provided various employment and payroll services to businesses. On or about Feb. 1, 2010, Devier failed to pay the 4th quarter of 2009 employment and payroll taxes she had received from the companies she represented to the IRS. Over the course of a two-year period beginning in mid-2008 through 2009, Devier received, from her clients, quarterly taxes for the third and fourth quarters of 2008 and the first, third, and fourth quarters of 2009 in the total amount of $377,163.34, but failed to pay those taxes over to the IRS.
“Professional Employment Operations companies, such as Red Arrow Recruiters, LLC, and TDJ Enterprises, LLC, were hired by employers to assist them with the withholding and collection of taxes from employees and to prepare and file accurate payroll tax returns. Ms. Devier had a duty to prepare correct tax returns and accurately pay over the taxes withheld to the IRS; instead she used her position of power to defraud her clients by not making tax payments or payroll tax deposits to the IRS,” stated Shea Jones, Special Agent in Charge of the St. Paul Field Office IRS Criminal Investigation Division. “The IRS is committed to aggressively investigating those individuals who engage in tax fraud.”
This case was investigated by the Internal Revenue Service, Criminal Investigative Division.
Assistant U. S. Attorney Scott Schneider prosecuted the case.
Former Executive of Stamford Company Admits Insider TradingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that DENNIS W. HAMILTON, 45, of Norwalk, waived his right to indictment and pleaded guilty today in New Haven federal court to one count of securities fraud.
According to court documents and statements made in court, HAMILTON was employed as Vice President of Tax at Harman International Industries, Incorporated (“Harman”) in Stamford. Harman is a publicly-held company whose shares trade on the New York Stock Exchange under the ticker symbol “HAR.” Beginning in 2009, Harman allowed directors, members of its executive committee and certain other insiders to buy or sell Harman securities in the public market only during a declared trading window period. In August 2013, HAMILTON was included on Harman’s insider trading list, and he was subsequently notified when the window in which he could engage in open market purchases of Harman securities was open, and that all trades must be cleared in advance with Harman’s general counsel. On September 27, 2013, HAMILTON and other Harman employees were advised via email that the “window period” within which they may engage in open market purchases or sales of Harman securities had closed.
In October 2013, HAMILTON received material, non-public information about Harman’s financial results for the first quarter for the fiscal year ending 2014, including drafts of Harman’s Form 10-Q filing and an earnings press release. He and other Harman executives also participated in a conference call with Harman’s Audit Committee, during which a draft resolution declaring a quarterly cash dividend on Harman’s common stock was discussed.
On October 30, 2013, HAMILTON, an insider in possession of material, non-public information, purchased 17,000 shares of HAR for between $72.07 and $72.67 per share, through a Charles Schwab account in the name of HAMILTON and his wife. On October 30, 2013, the closing price of HAR was $72.02. On October 31, 2013, Harman announced positive first quarter earnings for fiscal year 2014. On that date, the closing price of HAR was $81.02.
Between October 31, 2013 and November 5, 2013, through his Charles Schwab account, HAMILTON wrote at least 200 covered calls on HAR at a strike price of $70.00 with an expiration date of November 16, 2013 for a premium of $203,366. Through the use of some of these covered calls, HAMILTON realized a gain of $131,958 on the 17,000 shares of HAR he had purchased on October 30, 2013.
HAMILTON was arrested on a criminal complaint on February 5, 2016. He is scheduled to be sentenced by U.S. District Judge Alvin W. Thompson on June 10, 2016, at which time he faces a maximum term of imprisonment of 20 years and a fine of up to $5 million. He is released on bond pending sentencing.
In a parallel action, the Securities and Exchange Commission has filed related civil charges against HAMILTON. (Securities and Exchange Commission v. Dennis Wayne Hamilton, 3:16-cv-00192)
This investigation is being conducted by the Federal Bureau of Investigation with valuable assistance from Harman International Industries. The case is being prosecuted by Assistant U.S. Attorney Heather Cherry.
Former City of Del Rio Employee Sentenced to Federal Prison for EmbezzlementRead the Press Release
This morning, Ernesto Valdez, Jr., a former clerk in the City of Del Rio’s utility department, was sentenced to 21 months in federal prison for embezzling more than $33,000 from the City announced United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs.
In addition to the prison term, United States District Judge Alia Moses ordered that Valdez pay a total of $33,714 restitution to the City of Del Rio, perform 300 hours of community service and be placed on supervised release for a period of three years after completing his prison term.
In March 2013, Valdez pleaded guilty to one count of theft concerning programs receiving federal funds. By pleading guilty, Valdez admitted that from September 2007 to June 2010, he pocketed approximately $17,000 in cash payments made by utility customers. At sentencing, Judge Moses also found that during that same time period, Valdez manipulated the billing account of a relative and thus, is liable for an additional $16,954 in free water services provided to that relative.
Valdez remains on bond pending U.S. Bureau of Prisons facility designation.
This case resulted from an investigation conducted by the Federal Bureau of Investigation with assistance from the Del Rio Police Department. Assistant United States Attorney Todd R. Keagle prosecuted this case on behalf of the Government.
Financial Services Firm Partner Arrested and Charged in Manhattan Federal Court with $95 Million Scheme to Defraud InvestorsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced the arrest and unsealing of a complaint charging ANDREW CASPERSEN, 39, with securities and wire fraud in connection with a scheme to defraud investors of over $95 million. From at least July 2015 through March 2016, CASPERSEN, a partner in the New York office of a multinational financial services firm involved in private equity and alternative asset advisory work, fraudulently solicited investments in securities by falsely representing that he had authority to conduct deals on behalf of his employer with another private equity fund, and that investors’ funds would be invested in a secured loan to an investment firm, when in fact no such security existed and no such investments were made, and which funds CASPERSEN converted to his own use without the authorization of his investors. As a result of the scheme, CASPERSEN converted to his own use approximately $24.6 million from a charitable foundation affiliated with a multinational hedge fund based in New York, and $400,000 from an employee of the hedge fund. Rather than invest his victims’ funds as promised, CASPERSEN used a portion of the $25 million to trade securities in his personal brokerage account, which funds he largely lost as a result of aggressive options trading. In addition, shortly before his arrest, CASPERSEN fraudulently attempted to solicit an additional $20 million investment from the same charitable foundation and a $50 million investment from another multinational private equity firm headquartered in New York. CASPERSEN will be presented today before Magistrate Judge James C. Francis.
In a separate action, the SEC filed civil charges against CASPERSEN.
U.S. Attorney Preet Bharara said: “Andrew Caspersen, a partner at a major financial advisory firm, allegedly scammed his clients into investing tens of millions in sham private equity investments. To advance his $95 million fraud scheme, Caspersen allegedly put on a shameful charade – creating fake email addresses, setting up misleading domain names, and inventing fictional financiers. When confronted by a suspicious client who had invested $25 million, Caspersen had no good answers. He will now have to answer to federal securities and wire fraud charges.”
According to the allegations in the Complaint unsealed in Manhattan federal court:[1]
The Scheme to Defraud Firm-3
In October 2015, CASPERSEN sent an email to an individual (“Individual-1”)[2], in which CASPERSEN described “a new investment” that he had structured and in which he claimed he was personally investing. Individual-1 was employed at a multinational hedge fund headquartered in New York (“Firm-3”), and was responsible for evaluating and recommending investments for a charitable foundation affiliated with the fund (the “Foundation”). Over the course of additional correspondence in the ensuing days, CASPERSEN offered Individual-1 the opportunity to invest in an $80 million credit facility secured by a private equity portfolio, which CASPERSEN’s employer (“Firm-2”) was purportedly creating to facilitate investments in the private equity secondary market by a firm in New York (“Firm-1”). On or about November 5, 2015, the Foundation wired $24.6 million of its own money and $400,000 of Individual-1’s money into an account designated by CASPERSEN (“Account-1”) for purposes of investment in the special purpose vehicle CASPERSEN had created in connection with this proposed transaction. Although CASPERSEN had represented to Individual-1 that CASPERSEN had already raised $30 million for this investment opportunity that he had presented to Individual-1, as of the Foundation’s November 5, 2015, investment, Account-1 had only received a total of $2.51 million in incoming wire transfers since the special purpose vehicle was incorporated.
The next day, November 6, 2015, CASPERSEN wired $17.6 million from Account-1 into CASPERSEN’s own personal brokerage account. Notwithstanding the representations he had made to Individual-1 about what he would do with the Foundation’s investment, CASPERSEN immediately began using the funds to engage in largely unprofitable securities transactions. As of December 31, 2015, CASPERSEN’s brokerage account had a net loss of approximately $25 million for the year. In addition, on November 6, 2015, CASPERSEN wired approximately $8 million from Account-1 to a bank account controlled by Firm-2, for the purpose of covering up an earlier unauthorized wire transfer of the same amount CASPERSEN had diverted for his own use from its intended beneficiary, Firm-2.
On March 1, 2016, CASPERSEN began soliciting Individual-1 for an additional $20 million investment in the same purported deal. CASPERSEN falsely claimed that he intended to have his own family make an additional $5 million investment. When Individual-1 raised questions about the purported signatory for the special purpose vehicle (“Individual-3”), CASPERSEN falsely claimed that Individual-3 worked at Firm-1, even though, in reality, no such person worked at Firm-1. On March 7, 2016, Individual-1 told CASPERSEN that he wanted to speak directly with Individual-3. In response, CASPERSEN sent an email to Individual-1, as well as to an email address containing both the name of Individual-3 and the name of Individual-3’s firm (the “Email Address”) to set up a conference call for later that day. Individual-1 later learned that the domain name for the Email Address had been registered on March 7, just twenty minutes after Individual-1 requested a telephone call with Individual-3, and that the domain name for the Email Address was not the same as the domain name associated with the real Firm-1. Individual-1 also subsequently learned that a representative of Individual-1’s employer had called Firm-1’s New York office and been told that no one with Individual-3’s name worked at Firm-1.
Later on March 7, 2016, Individual-1 spoke by telephone with a person who identified himself as Individual-3. Individual-3 claimed to be a vice president in the New York office of Firm-1. During the call, Individual-1 asked Individual-3 for his telephone number, which Individual-3 refused to provide. After the call, Individual-1 received an email from the Email Address with a telephone number purporting to belong to Individual-3. Later that day, Individual-1 called CASPERSEN and confronted him with what he had learned about Individual-3 (i.e., the discrepancy between the newly created domain name for the Email Address, Firm-1’s real domain name, and that no one with Individual-3’s name worked at Firm-1). CASPERSEN responded that he found the information “strange,” and said he would get to the bottom of it. CASPERSEN called Individual-1 later and confirmed that the domain name of the Email Address had been recently registered, but stated that Individual-3 was actually a former outside administrator for Firm-1 in Guernsey.
Individual-1 then told CASPERSEN that the Foundation wanted its $25 million investment back, plus interest. On March 11, 2016, CASPERSEN told Individual-1 that the Foundation would receive the funds back by the end of the month.
The Foundation ultimately did not invest an additional $20 million with CASPERSEN, but has not received any of the $25 million principal back.
Firm-1, Firm-2, and a private equity firm referenced by CASPERSEN as part of the scheme (“Firm-4”) have confirmed that they had no knowledge of the special purpose vehicle that CASPERSEN had created as part of the scheme, nor did Firm-1, Firm-2, or Firm-4 authorize CASPERSEN to solicit funds on their behalf.
The Scheme to Defraud Firm-5
Beginning in October 2015, CASPERSEN began soliciting another multinational private equity firm (“Firm-5”) for an investment in a purported security similar to the one he had offered Individual-1 and the Foundation. In December 2015, when employees of Firm-5 sought to put their counsel in touch with CASPERSEN’s counsel, CASPERSEN put them off. On March 8, 2016, CASPERSEN sent a promissory note to Firm-5 employees for $50 million with terms nearly identical to those offered the Foundation in November 2015. The next day, CASPERSEN emailed Firm-5 employees and represented that his employer, Firm-2, had arranged a loan facility, and had asked him and two others who purportedly worked at Firm-1 (“Individual 6” and “Individual 7”) to be monitors.
As with the scheme to defraud Individual-1 and the Foundation, Firm-1, Firm-2, and Firm-4 confirmed that they had not authorized CASPERSEN to solicit funds from Firm-5 on their behalf, nor did they agree to participate in an offering of $80 million worth of promissory notes. Firm-1 also neither employed nor was represented by anyone with the names of Individual-6 or Individual-7.
Firm-5 did not ultimately invest $50 million with CASPERSEN.
As of March 18, 2016, Account-1 (where the Foundation and Individual-1 had wired their $25 million investment) had a balance of approximately $40,000.
* * *
CASPERSEN is charged with one count of securities fraud and one count of wire fraud. Each count carries a maximum term of 20 years in prison. The maximum fine on these counts is $5 million, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the Office’s criminal investigators, and thanked the Securities and Exchange Commission for its assistance.
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. Attorney Christine I. Magdo is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
[2] For ease of reference, the defined terms in this press release mirror the defined terms in the Complaint.
Final member of Culloden heroin-dealing family sentenced to prison on Federal drug chargeRead the Press Release
HUNTINGTON, W.Va. – A Culloden woman who, together with her husband and son, sold heroin from their home in 2014 and 2015 was sentenced today to two years in federal prison, announced Acting United States Attorney Carol Casto. Toni Lynn Cremeans, 41, previously pleaded guilty in December 2015 to distributing heroin.
From early 2014 to May 2015, Toni Cremeans, her husband Sanford Dale Cremeans, and their son, Shawn Cremeans, conspired to sell heroin from their residence at 2246 3rd Street in Culloden. During that time period, Toni Cremeans frequently transported heroin to their residence where she and others would prepare it for distribution.
On December 2, 2014, a confidential informant working with law enforcement contacted Shawn Cremeans to arrange a heroin purchase. The informant traveled to the Cremeans’ residence and met with Shawn and Sanford Cremeans while they waited for Toni Cremeans to arrive with additional heroin. Once Toni Cremeans arrived, the informant paid Shawn Cremeans and received the heroin from Sanford Cremeans. Toni Cremeans admitted that she was responsible for distributing up to 100 grams of heroin during the conspiracy. Sanford and Shawn Cremeans both admitted that they assisted in the sale of heroin from the family residence and were also responsible for the distribution of up to 100 grams of heroin.
Sanford Cremeans was sentenced in January 2016 to three-and-a-half years in federal prison. Shawn Cremeans was sentenced earlier this month to five years of probation.
The Huntington FBI Drug Task Force and the Cabell County Sheriff’s Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecutions. Chief United States District Judge Robert C. Chambers imposed the sentences.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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East St. Louis Resident Pleads Guilty to Firearm OffenseRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today that on March 24, 2016, Antwoine D. Sanders, 38, East St. Louis, IL, pled guilty to an Indictment charging him with the Unlawful Possession of a Firearm by a Previously Convicted Felon. For this offense, Sanders faces a term of imprisonment of not more than ten (10) years, a fine up to $250,000, or both, and a term of supervised release of not more than three (3) years. Sanders also agreed to the forfeiture of the firearm he illegally possessed. Sanders’ sentencing is scheduled for July 26, 2016, in Benton, Illinois. Sanders has been detained since his bond was revoked on March 11, 2016.
The charge arose on May 20, 2015, when Sanders was present at a residence during a parole compliance check of another resident. During a search of the residence, a firearm was found under the mattress in the bedroom Sanders shared. Sanders provided statements regarding the recovered firearm. Investigation revealed that Sanders had been convicted of Burglary in 1997 in St. Clair County, Illinois.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is assigned to Assistant United States Attorney Angela Scott.
Department of Justice resumes program to share federally seized assets with local law enforcementRead the Press Release
WHEELING, WEST VIRGINIA – United States Attorney William J. Ihlenfeld, II, announced today that, effective immediately, Department of Justice Equitable Sharing payments will resume to local and state law enforcement agencies throughout the Northern District of West Virginia.
The Department of Justice Equitable Sharing Program is an initiative through which the Department of Justice distributes an equitable share of forfeited property and proceeds to participating state and local law enforcement agencies that directly participate in an investigation or prosecution that result in a federal forfeiture.
As the result of budget reductions contained in the Bipartisan Budget Act of 2015 and the December 2015 Consolidated Appropriations Act, the Department of Justice announced that Equitable Sharing payments would be deferred beginning on December 21, 2015. Those payments will resume immediately, beginning with payments that were already being processed when the program was suspended.
“With the suspension of the federal equitable sharing program having been lifted today, millions of dollars that were in the pipeline will now be disbursed to law enforcement agencies in Northern West Virginia,” noted Ihlenfeld. “The system has been modified to streamline and speed up the process so that payments can be made as soon as possible, and so that the funds can be used to fight crime in our communities.”
Individuals interested in obtaining additional information about the Department of Justice Equitable Sharing Program are encouraged to visit the Department of Justice website at https://www.justice.gov/criminal-afmls/equitable-sharing-program.
Delaware Real Estate Developer Pleads Guilty to Bank Fraud and Environmental ViolationRead the Press Release
WILMINGTON, Del. - David C. Weiss, Acting United States Attorney for the District of Delaware, announced that Joseph L. Capano, age 73, of Middletown, Delaware, pled guilty today to one count of bank fraud and one count of knowingly violating the Clean Water Act. Capano faces up to 30 years of imprisonment and a $1,000,000 fine for the bank fraud charge, and 3 years of imprisonment and a $250,000 fine for the Clean Water Act charge.
According to the charging document and information provided in open Court, both charges relate to Capano’s conduct during construction of the Riverbend at Old New Castle development off of State Route 9 in New Castle, Delaware (“Riverbend Development”). The Riverbend Development was funded in part by a $1.5 million commercial line of credit from Cecil Bank, headquartered in Elkton Maryland. In October 2007, Capano signed an agreement for a line of credit on behalf of his company Riverbend Community, LLC, wherein and he represented that the purpose of the line of credit was to fund construction and other costs associated with the Riverbend Development. From October 2007 until August 2008, Capano signed and submitted funding requests, referred to as draw requests, to Cecil Bank which contained false representations and statements concerning the reasons for the requests. In reliance on those false representations, Cecil Bank continued to lend Capano money. Capano used some of the funds released by Cecil Bank for his personal use and not for construction of the Riverbend Development. For example, on December 21, 2007, Capano submitted a draw request seeking $300,000 for various Riverbend Development expenses. Instead of using those funds for Riverbend Development expenses, Capano used some of the funds for personal expenses, including approximately $63,000 to pay for a jewelry purchase. As part of his guilty plea, Capano has admitted that he converted at least $146,909.96 in loan proceeds to his personal use.
In addition to his misrepresentations regarding bank loan funds, the information states that Capano knowingly discharged pollutants into wetlands without a permit during the Riverbend Development. Capano directed employees and contractors of his company to perform earthmoving, construction and excavation activities in wetlands areas. Specifically, Capano directed contractors and employees to expand the entrance road to the development, referred to as the causeway, into wetlands subject to federal jurisdiction. Capano also directed contractors and employees to place a water main pipe through the causeway wetlands area, even after the Army Corps of Engineers instructed Capano to stop performing construction in wetland areas and issued Capano a Cease and Desist letter to that effect.
“It is important to the integrity of the land use and development process that all developers operate under the same set of rules. Mr. Capano was determined to make his own rules, and to use whatever means necessary to get the Riverbend Development completed. In so doing, he lied to the bank about the use of project funds and he ignored federal wetland regulations and the directives of the Army Corps of Engineers. Now he stands as a convicted felon.” said Acting U.S. Attorney Weiss.
“Capano committed fraud by using commercial loans from Cecil as a personal piggy bank,” said Christy Goldsmith Romero, Special Inspector General for TARP (SIGTARP). “As managing member of Riverbend Community LLC, he obtained commercial loans from Cecil and then illegally transferred the money to bank accounts of other affiliated companies so he could take the money for his personal use. Cecil received more than $11 million from the taxpayers during the financial crisis, and we will continue to aggressively investigate fraud committed at the expense of taxpayers’ TARP investments. SIGTARP commends Acting U.S. Attorney Weiss and our law enforcement partners for their work.”
This case is the result of a joint investigation conducted by the Federal Bureau of Investigation, the Office of the Special Inspector General for the Troubled Asset Relief Program, and the United States Environmental Protection Agency, Criminal Investigation Division Philadelphia Area Office. The prosecution is being handled by Assistant U.S. Attorney Jennifer K. Welsh.
Culpeper Man Sentenced on Heroin ChargeRead the Press Release
CHARLOTTESVILLE, VIRGINIA – United States Attorney John P. Fishwick announced today the sentencing of a man who was previously convicted of distributing heroin and crack cocaine.
Paul Vincent Brown, 40, of Culpeper, Virginia, previously waived his right to be indicted and pled guilty to an Information charging him with one count of conspiring to distribute and possess with the intent to distribute heroin and crack cocaine.
Today in the United States District Court for the Western District of Virginia in Charlottesville, Brown was sentenced to 120 months incarceration, followed by three years of supervised release. In addition, Brown was sentenced today to an additional 48 months in federal prison for violating the terms of his supervised release from a previous conviction.
“We must continue to be vigilant in our fight against heroin abuse,” United States Attorney John P. Fishwick Jr. said today. “We will continue to work with our local, state and federal law enforcement partners to not only put those in jail who sell this drug, but also support those providers who offer treatment and prevention options to addicts.”
The investigation of the case was conducted by the Drug Enforcement Administration, the Culpeper County Sheriff’s Office and the Culpeper Police Department. Assistant United States Attorney Ronald Huber prosecuted the case for the United States.
Convicted Felon from Fort Worth is Sentenced to 10 Years in Federal Prison on Firearm ConvictionRead the Press Release
FORT WORTH, Texas — A multi-convicted felon, Roderick Johnson, 35, of Fort Worth, Texas, was sentenced this morning by U.S. District Judge Reed O’Connor to 10 years in federal prison, following his conviction at trial in December 2015 on one count of being a felon in possession of a firearm, announced U.S. Attorney John Parker of the Northern District of Texas.
Johnson has been in custody since his arrest in June 2015 when officers with the Fort Worth Police Department responded to a report of a domestic disturbance at a motel room in Fort Worth. A search of that room, where Johnson was staying, revealed a .357 caliber pistol belonging to Johnson under the mattress. Johnson has been convicted of theft and controlled substances felony offenses in Tarrant County in 2004, 2005, 2009, 2011 and 2013.
The case was investigated by the Fort Worth Police Department, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant U.S. Attorney A. Saleem was in charge of the prosecution.
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Connecticut Insurance Salesman Convicted of Tax FraudRead the Press Release
Defendant Attempted to Obstruct IRS with False Tax Returns and Threatening Correspondence
A Newington, Connecticut, insurance salesman was convicted of tax fraud today in the U.S. District Court for the District of Connecticut in Hartford following a seven-day jury trial, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Terry DiMartino, 62, was convicted of one count of corruptly interfering with the due administration of the internal revenue laws, two counts of filing false tax returns and five counts of willfully failing to file tax returns. DiMartino was an insurance salesman for numerous insurance companies located in Connecticut and elsewhere. Despite earning millions of dollars in insurance commissions over the last decade, DiMartino did not file accurate tax returns or pay the taxes owed.
“As we approach the end of the tax return filing season, today’s verdict serves as a clear reminder that willfully failing to file, filing false returns, and attempting to obstruct the Internal Revenue Service (IRS) are crimes and those U.S. taxpayers who engage in such criminal conduct face prosecution, substantial fines and restitution, and prison,” said Acting Assistant Attorney General Ciraolo. “The department is committed to working with its partners in the IRS to enforce our nation’s tax laws by holding offenders such as Mr. DiMartino accountable.”
According to the evidence presented at trial, DiMartino attempted to obstruct the IRS by mailing false documents to the IRS, including three false tax returns for the 2007 tax year, one of which requested a fraudulent $14 million refund. He sent false and threatening correspondence to the IRS in an attempt to defeat the IRS’s assessment, collection and investigative efforts. He submitted false and threatening correspondence to insurance companies that sought to cooperate with the IRS collection activities. DiMartino also set up nominee entities which he used to divert his insurance commissions. He used the nominees to hide and conceal assets to prevent the IRS from collecting on his tax liabilities. DiMartino has not filed an accurate individual income tax return since the 1996 tax year.
“The IRS enforces the nation’s tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belongs to others to include the American taxpayer,” said Special Agent in Charge Manny Muriel, IRS Criminal Investigation. “Taxes are the price we pay for the public goods and services we want; yet Mr. DiMartino tried to undermine and corrupt the tax system when he attempted to steal $14 million in taxpayer money. Furthermore, he tried to intimidate insurance companies that sought to cooperate with the IRS. As the stewards of your tax dollars, the IRS will stand to protect and defend the American taxpayer.”
U.S. District Judge Alvin W. Thompson set sentencing for July 20. DiMartino faces a maximum sentence of three years in prison for the charge of obstructing the IRS, three years in prison for each of the false tax return charges and one year in prison for each count of willfully failing to file tax returns. DiMartino also faces monetary penalties.
Acting Assistant Attorney General Ciraolo commended agents of IRS Criminal Investigation, who investigated the case and Trial Attorneys Erin B. Pulice and Jason M. Scheff of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Charlotte Man Sentenced to Seven Years for Robbing A Bank at GunpointRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced today Jemichael Lovelle Strong, 34, of Charlotte, to seven years in prison, followed by two years of supervised release on firearms charges for robbing a Charlotte-area bank in July 2015, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Kerr Putney of the Charlotte Mecklenburg Police Department (CMPD).
According to court documents and today’s sentencing hearing, on July 27, 2015, Strong robbed a First Citizen’s Bank branch located at 4325 Randolph Road, in Charlotte, stealing $3,871 in cash. Court records show that Strong walked into the branch, pointed a handgun at a teller and showed her a note that read, “Put 100s, 50s, and 20s in a bag.” Court records indicate that the teller retrieved money from the drawer and attempted to hand it to Strong. Strong pushed his gun more in the teller’s direction, shook his head “no” and pointed his gun back at the teller’s drawer, nodding “yes” when the teller asked Strong if he wanted more money. Court records show after the teller began walking toward Strong’s direction to hand him the cash, he shook his head “no” again, and nodded “yes” when the teller asked him if he wanted a bag for the money. Strong fled the scene after the teller handed him the bank bag containing the cash.
According to court records, law enforcement retrieved Strong’s fingerprints from a bank deposit slip he had used to cover his gun at the time of the robbery. A bank employee also told CMPD officers that she believed Strong had visited the bank on a previous occasion, wearing what looked like a security guard’s uniform. Court records show that on July 31, 2015, CMPD officers arrested Strong at his residence, and recovered a security guard uniform matching the description of the bank employee, which they determined belonged to Strong’s girlfriend. Law enforcement also seized from the residence the handgun that Strong used to carry out the bank robbery.
Strong pleaded guilty in December 2015 to one count of possession of a firearm in furtherance of a crime of violence. He remains in federal custody and will be turned over to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI’s Safe Streets Task Force and CMPD. The prosecution for the government was handled by Assistant U.S. Attorney George Guise of the U.S. Attorney’s Office in Charlotte.
Carbondale Man Sentenced for Cocaine OffenseRead the Press Release
On March 22, 2016, Ryan L. Gibbs, a/k/a "Blood," 37, of Carbondale, was sentenced for a cocaine offense, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Gibbs, who had previously pled guilty to a one-count indictment charging possession with intent to distribute cocaine, was sentenced to 216 months in federal prison, 3 years of supervised release following the prison sentence, and fined $300.00. Evidence at the plea and sentencing hearings established that, in September 2014, Gibbs was serving a term of home confinement while on parole from the Illinois Department of Corrections for a 2011 felony drug conviction. In addition to home confinement, Gibbs was also subject to electronic monitoring. Agents received information that Gibbs was distributing crack cocaine out of his Carbondale residence. During a September 16, 2014, IDOC parole compliance check, Gibbs was arrested after agents saw him pass a package of drugs off to a relative. Agents recovered over 39 grams of crack cocaine and over 27 grams of cocaine. Gibbs was also in possession of a large amount of U.S. currency. At the time of sentencing, Gibbs had been convicted of seven drug offenses, along with multiple firearm offenses. Gibbs received an enhanced sentence based on his classification as a Career Offender.
The investigation was conducted by the Southern Illinois Enforcement Group, Carbondale Police Department, Jackson County Sheriff’s Office, and Illinois Department of Corrections. The Jackson County State’s Attorney’s Office assisted in the investigation. The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Bangor Resident Pleads Guilty to Maintaining a Drug Involved PremisesRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Daniel Lyons, 42, of Bangor pleaded guilty today U.S. District Court to maintaining a drug involved premises.
According to court records, in 2014, the defendant maintained a residence on Essex Street in Bangor where he allowed dealers to store and sell heroin to customers on a daily basis and for which he was compensated in heroin.
The defendant faces up to 20 years in prison, a $500,000 fine and three years of supervised release.
The case was investigated by the U.S Drug Enforcement Administration and the Maine Drug Enforcement Agency.Bangor Man Sentenced to over 12 Years for Possessing Child Pornography and Violating Release ConditionsRead the Press Release
Contact: Chris Ruge
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Joshua Dunston, 38, of Bangor, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 121 months in prison and a lifetime of supervised release for possessing child pornography and a consecutive term of two years for violating his conditions of supervised release, also followed by a lifetime of supervised release. In addition, the defendant was ordered to pay $13,000 in restitution. He pled guilty on October 29, 2015.
According to court records, from about March 17 to about May 5, 2015, Dunston uploaded multiple images of child pornography to online accounts he controlled, and kept scores of additional images depicting the sexual exploitation of young children on his cell phone. At the time of these acts, Dunston was on supervised release for a 2006 child pornography conviction.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Maine State Police Computer Crimes Unit, the Penobscot County Sheriff’s Office and the Bangor Police Department.
Arizona Man and U.S. Citizen Residing in Germany Sentenced for Sexual AssaultRead the Press Release
Two men were sentenced today in the District of Arizona for the sexual assault of a 17-year-old girl in Landstuhl, Germany, in October 2013.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John S. Leonardo of the District of Arizona, Special Agent James Boerner of the U.S. Army Criminal Investigative Command (CID), Acting Special Agent in Charge Justin Tolomeo of the FBI’s Phoenix Division and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement.
U.S. District Judge David G. Campbell of the District of Arizona sentenced Joseph S. Martin, 20, of Peoria, Arizona, to 96 months in prison, and Christopher J. Heikkila, 21, a U.S. citizen previously residing in Weilerbach, Germany, to 84 months in prison. In September 2015, a jury convicted the men of one count of sexual abuse and one count of abusive sexual contact each.
According to the evidence presented at trial, on or about Oct. 19, 2013, Martin and Heikkila sexually assaulted a 17-year-old girl in Landstuhl while she was incapacitated after they had used social media to specifically target the victim and plan the assault. At the time, Martin and Heikkila were employees of the Army & Air Force Exchange Service on Ramstein Air Force Base in Ramstein, Germany, as well as dependents of civilian employees of the military, according to trial evidence. The Military Extraterritorial Jurisdiction Act gives U.S. federal courts jurisdiction over felonies committed abroad by certain persons employed by or accompanying the U.S. military.
The Army CID and the FBI’s Phoenix Division and Washington Field Office investigated the case. Senior Trial Attorneys Christine Duey and Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP) and Assistant U.S. Attorney Joseph E. Koehler of the District of Arizona prosecuted the case. HRSP Special Counsel Stacey Luck provided substantial assistance.
Alleged Child Pornographer Deemed Danger to the Community and Ordered into CustodyRead the Press Release
HOUSTON – A 42-year-old man residing in Navasota has been detained on charges of production, transportation and possession of child pornography, announced U.S. Attorney Kenneth Magidson.
Law enforcement arrested John Allen Chumley on March 15, 2016, upon the filing of a federal criminal complaint. Today, he appeared before U.S. Magistrate Judge Dena Hanovice Palermo who found probable cause he committed the crime and that he was a danger to the community. He was ordered into custody pending further criminal proceedings.
According to the complaint, Chumley is a long-haul truck driver who transported child pornography across stateliness and even travelled with one of his victims, now a 10-year-old boy. For some time, Chumley had access to this child and allegedly photographed him with Chumley’s cellular telephone in lewd and lascivious poses in Houston and elsewhere. Chumley then distributed these images via the Internet, according to the charges.
At the hearing today, testimony was also presented that alleged Chumley is also suspected of producing child pornography of two prepubescent children in the Houston area, one of whom Chumley also allegedly molested.
If convicted, Chumley faces a minimum of 15 and up to 30 years imprisonment on the production charges, a minimum of five and a maximum of 20 years for transportation of child pornography as well as another 10-year-maximum for possessing the child pornography. All of the charges, upon conviction, also carry a possible $250,000 fine. Upon completion of any prison term imposed, he also faces a minimum of five years and up to life on supervised release and he will be required to register as a sex offender.
The charges are the result of an investigation conducted by the National Center for Missing and Exploited Children and FBI offices in Houston and Springfield, Illinois. Assistant U.S. Attorney Sherri L. Zack of the Southern District of Texas is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Friday 25 March 2016
Whitehorn Woman Admits to Causing over $100,000 in Environmental Damage to Federal LandRead the Press Release
SAN FRANCISCO – Melinda Van Horne pleaded guilty in federal court in San Francisco on Wednesday, March 23, 2016, to depredation against the property of the United States, announced Acting United States Attorney Brian Stretch and Nathan Mendes, Bureau of Land Management Assistant Special Agent-in-Charge.
In pleading guilty, Van Horne admitted to causing over $100,000 in environmental damage to federal lands in the King Range National Conservation Area through her marijuana cultivation operation. As described in the factual basis for the plea agreement, in October 2007, Van Horne purchased a house next to Paradise Ridge in Humboldt County, California. Paradise Ridge is part of a congressionally designated National Conservation Area administered by the Bureau of Land Management. Commercial activity and development are prohibited on the land, which is to be preserved for the enjoyment of future generations. In 2008, Van Horne proposed to trade portions of her private property for the federal conservation land, but the Bureau of Land Management rejected the trade based on the national conservation status of the land. Van Horne nonetheless decided to proceed with her marijuana cultivation operation.
Van Horne admitted that, with her consent and knowledge, and later at her direction, vegetation was stripped from portions of the federally managed conservation area, land was excavated and graded, and eleven greenhouses and other structures were constructed on federal lands. The work was done in order to grow marijuana plants for sale. Van Horne also used facilities that diverted water from the nearby Bridge Creek to water the marijuana plants.
Van Horne further admitted that, in September 2013, when law enforcement executed a search on the property, agents found 1,654 marijuana plants that she had been growing on federal land and in the adjoining garage in the house. Van Horne admitted that she was continuing to use the land although it had been foreclosed upon by the bank. Agents also executed a search warrant at Van Horne’s residence, where she had moved after the foreclosure, and found over 17 kilograms of marijuana at that location.
Van Horne further admitted that the bulldozing and excavation of federal land she orchestrated caused that land to become unstable and to erode into two rivers that provide crucial spawning and rearing habitats for threatened and federally protected salmon and steelhead. Bureau of Land Management engineers estimate the cost to repair the damage at $107,754.01, which Van Horne has agreed to pay as restitution in connection with her guilty plea.
Van Horne, 43, of Whitethorn, Calif., was indicted by a federal Grand Jury on November 17, 2015. She was charged with conspiracy to distribute marijuana, in violation of 21 U.S.C. Section 846; possession with intent to distribute 1,000 or more marijuana plants, in violation of 21 U.S.C. Section 841(a)(1) and 841(b)(1)(A)(vii); possession with intent to distribute marijuana, in violation of 21 U.S.C. Section 841(a)(1) and 841(b)(1)(C); maintaining a place for manufacturing marijuana, in violation of 21 U.S.C. Section 856(a); and depredation against property of the United States, in violation of 18 U.S.C. Section 1361. Under the plea agreement, Van Horne pleaded guilty to the depredation against property of the United States.
Van Horne is currently released on bond. Bail was set at $130,000.
Van Horne’s sentencing hearing is scheduled for June 29, 2016, at 10:00 a.m., before The Honorable Charles R. Breyer, U.S. District Court Judge, in San Francisco. The maximum statutory penalty for depredation against property of the United States in violation of 18 U.S.C. Section 1361 is ten years in prison and a fine of $250,000, or twice the gross gain or loss generated from the operation, plus restitution if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. Section 3553.
Rita F. Lin is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Theresa Benitez, Rawaty Yim, and Marina Ponomarchuk. The prosecution is the result of a two-year investigation by the Bureau of Land Management and Drug Enforcement Administration.
Virginia Man Sentenced to 42 Months in Prison for Possession of Child PornographyRead the Press Release
WASHINGTON – Donald A. Essex, 68, of Alexandria, Va., was sentenced today to 42 months in prison on a federal charge of possession of child pornography, announced U.S. Attorney Channing D. Phillips, Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Essex pled guilty in September 2015 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Senior Judge Paul L. Friedman. Upon completion of his prison term, Essex will be placed on five years of supervised release. He also will be required to register as a sex offender for a period of 15 years.
According to the government's evidence, on May 14, 2015, Essex contacted an undercover officer with the FBI's Child Exploitation Task Force, through a social network site. He continued this conversation via instant messaging with the undercover officer, who purported to be the father of an under-aged girl. Essex then began sending approximately a dozen images of child pornography. He also expressed interest in engaging in sexual acts with the under-aged girl. Law enforcement soon identified the defendant and obtained arrest and search warrants.
In a search of Essex’s home at the time of his arrest on May 15, 2015, law enforcement recovered a computer, drives, and other devices. A forensic examination of those devices led to the discovery of images and videos depicting child pornography. Essex pled guilty to knowingly possessing more than 600 images of child pornography. He has been in custody since his arrest.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the sentence, U.S. Attorney Phillips, Assistant Director in Charge Abbate, and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also expressed appreciation for the assistance provided by the Fairfax County, Va., Police Department. Finally, they acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Joyce Arthur and Assistant Andrea L. Hertzfeld, who prosecuted the matter.
U.S. Attorney's Office indicted 126 people for firearms violations last yearRead the Press Release
The United States Attorney’s Office for the Northern District of Ohio indicted 126 people on firearms charges last year.
Broken down by geography in the district, the most people indicted came out of the Cleveland office, with 66. That was followed by the Youngstown office (23), Toledo office (19) and Akron office (18).
“Our office and our law enforcement partners will continue to work collaboratively to target the worst of the worst,” said Acting U.S. Attorney Carole Rendon. “These include people who carry firearms, ammunition and sometimes body armor despite prior felony convictions, or those who help prohibited people to obtain firearms.”
“ATF’s mission is to protect the public and serve our nation by combating violent crime,” said Donald J. Soranno, Special Agent in Charge of the Columbus Field Division. “We will continue our partnership with the U.S. Attorney’s Office and our federal, state, and local partners to strive to make our communities safer through the reduction of gun violence.”
Details of selected cases:
U.S. v. Jackson et. al.: Five men were indicted in federal court for a series of carjackings in Cleveland’s Tremont neighborhood, Kenneth Jackson, Jr., 19, of Cleveland; Tervon’tae Taylor, 22, of Cleveland Heights; D’wan Dillard, Jr., 19, of Cleveland; Antowine Palmer, 23, of Cleveland, and Calvin Rembert, 22, of Cleveland, face charges including carjacking and multiple counts of brandishing a firearm during a crime of violence. Palmer is also charged with being a felon in possession of a firearm. Conduct alleged in the indictment includes six different armed robberies that took place in July and August 2015. Their case is pending.
U.S. v. Jackson: Akira Jackson, of Boardman, was sentenced to more than 15 years in prison for illegally possessing a firearm and body armor. Jackson was arrested in March 2015 after police found a .40 caliber pistol, ammunition and body armor in Jackson’s possession. He was forbidden by law to carry a weapon following multiple prior convictions, including conspiracy to commit manslaughter.
U.S. v. Lumpkin: A former police officer was sentenced to five years in prison after a jury convicted him of illegally selling firearms to people he knew were felons. Kevin R. Lumpkin, of North Olmsted, sold a Hi-Point .45-caliber rifle and a Ruger .380-caliber pistol on different occasions to people he knew were convicted of felonies and therefore forbidden from possessing a firearm. These sales took place between 2011 and 2013, when Lumpkin was a North Randall police officer.
U.S. v. Brooks: James E. Brooks, of Roaming Shores, was indicted on firearms and drug charges for possessing Walther, model P22, .22 Caliber Pistol; a Winchester, model 50, 12 gauge shotgun; and a Winchester, model 120, 12 gauge shotgun in August 2015. Brooks was forbidden from having firearms because of previous felony convictions including drug abuse, burglary, aggravated robbery with a firearm specification, felonious assault, escape, and felonious assault with a firearm specification. He is also charged with distributing crack cocaine and heroin. He is detained while his case is pending.
Operation Brownstone: Four people from the Cleveland area were indicted for federal firearms violations and 30 firearms seized as part of a long-term undercover investigation targeting gun and drug trafficking in Cleveland’s 4th Police District, on the city’s southeast side.
Firearm prosecution statistics for previous years:
2002: 117 indictments
2003: 155 indictments
2004: 184 indictments
2005: 220 indictments
2006: 187 indictments
2007: 191 indictments
2008: 157 indictments
2009: 156 indictments
2010: 166 indictments
2011: 218 indictments
2012: 176 indictments
2013: 207 indictments
2014: 167 indictments
Two Metro Denver Residents Sentenced to Prison for Defrauding Department of Education Student Loan ProgramRead the Press Release
DENVER – A Metro Denver couple, Raquel A. Espinoza, age 37, and George F. Durbin, age 55, were both sentenced to federal prison by Senior U.S. District Court Judge Wiley Y. Daniel for their involvement in defrauding the U.S. Department of Education student loan program, the Colorado U.S. Attorney’s Office, the U.S. Department of Education, Office of the Inspector General and the U.S. Postal Inspector in Charge in Denver announced. In addition to the federal prison sentence, both defendants were ordered to pay restitution to the Department of Education, the State of Colorado, and various Denver metro area community colleges. They were remanded into custody at the conclusion of the sentencing hearings.
Espinoza and Durbin both pled guilty to one count of mail fraud and one count of aggravated identity theft. Espinoza was sentenced to serve 54 months in federal prison, followed by 3 years of supervised release. She was also ordered to pay restitution to the U.S. Government totaling $262,853.72. Durbin was sentenced to serve 45 months in federal prison, followed by 3 years of supervised release. He was ordered to pay restitution to the U.S. Government totaling $183,806.45. The two defendants are to pay portions of their restitution jointly and severally.
Both defendants were indicted by a federal grand jury on October 22, 2104. Espinoza pled guilty on December 17, 2015. Durbin pled guilty on December 1, 2015. They were both sentenced on March 10, 2016.
According to the stipulated facts contained in both defendants’ plea agreements, defendants Durbin and Espinoza lived together when they concocted a scheme where they would apply for financial aid and enroll in colleges—with no intent to attend—and pocket the financial aid money. As part of the scheme, they enrolled and applied for money not only in their own names, but also in the names of both witting and unwitting third parties. Defendants Espinoza and Durbin applied for and received financial aid under at least twenty-seven different identities, including their own. All of the identities used were the actual identities of friends, acquaintances, family members, or other known persons. In most cases, Defendant Espinoza would present herself as able to assist others in signing up to attend college. She would obtain identifying information from the potential students and promise to obtain financial aid and college enrollment for the person. In return, she or Durbin asked for a portion of the financial aid funds as a fee. Espinoza frequently told persons without a GED or high school diploma that she could still get them enrolled.
Some of the enrollees were in on the scam—they received their money, minus the fee, but never attended classes. Other applicants, however, including applicants connected to Durbin, never heard back from the defendants and were not privy to the scheme. There were also a few instances where Defendants obtained personal information surreptitiously and enrolled people without any cooperation from the victim.
Defendants would fill out online forms in the names of these people, where they would lie or make up information about the applicant’s income, assets, and diploma/GED status. They would also enroll these people at community colleges in the Denver metro area: Arapahoe Community College, Community College of Aurora, Community College of Denver, Front Range Community College, and Red Rocks Community College. When the person was enrolled and approved for financial aid, the Department of Education would disburse financial aid funds to the college in the student’s name. A small amount of financial aid also sometimes came from the State of Colorado. The college would apply the funds to the outstanding balance on the student’s school account -- which generally constituted tuition and fees for the semester. Then, after attendance was verified, the money would be deposited into an account in the student’s name at Higher One, a company with which the community colleges contracted to help manage the distribution of financial aid funds to students.
Once a Higher One account was created, the defendants would access that account, directing the Higher One debit cards to mailing addresses they controlled. To obscure their activities, the two defendants used a combination of various contact information, including at least five different mailing addresses, eleven different phone numbers, and ten different e-mail addresses. Accessing the Higher One account generally required defendants to confirm their identity, which they were usually able to do using the personally identifiable information they had obtained.
Once the defendants received the debit cards or cashed the checks, they would spend the money for their own personal uses. This included, among other things, significant spending at casinos in Colorado—Defendants’ activities resulted in over $22,000 in financial aid funds being spent on gambling and associated fees.
“The defendants not only victimized government college financial aid programs, but victimized students and others by hijacking their personal information and identities to steal financial aid funds,” said U.S. Attorney John Walsh. “Thanks to a team of investigators, the defendants’ scheme to defraud the government, the State, schools and other victims was uncovered, and now they sit in prison as a consequence to their actions.”
"I'm proud of the work of OIG special agents, our law enforcement partners, and the U.S. Attorneys' Office for shutting down this fraud ring and holding Raquel Espinoza and George Durbin and their coconspirators accountable for their criminal actions," said Natalie Forbort, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Western Regional Office. “OIG is committed to fighting student financial aid fraud, and we will continue to aggressively pursue those who participate in these types of crimes."
“The U.S. Postal Inspection Service will continue to vigorously pursue those who utilize the U.S. Mail to perpetrate fraud schemes.” said Craig Goldberg, Inspector in Charge of the U.S. Postal Inspection Service Denver Division. “We are appreciative of the hard work put into this case and our quality law enforcement relationships with the U.S. Department of Education and the Colorado U.S. Attorney’s Office.”
This case was investigated by the U.S. Department of Education, Office of the Inspector General, the United States Postal Inspection Service and the United States Secret Service.
The defendants were prosecuted by Assistant U.S. Attorney Matthew Kirsch, Chief of the U.S. Attorney’s Office Criminal Division, and Special Assistant U.S. Attorney Daniel Burrows.
Two Hampden County Men Indicted for Large Scale Drug ConspiracyRead the Press Release
A Holyoke man and a Chicopee man were charged in U.S. District Court in Springfield yesterday in connection with operating a scheme to transport drugs and cash between Texas and western Massachusetts that were concealed in secret compartments of vehicles.
Javier Gonzalez, 44, of Holyoke, and Jamil Roman, 38, of Chicopee, were indicted on one count of conspiring to distribute and possess with intent to distribute cocaine and heroin and one count of distribution and possession with intent to distribute cocaine. They were charged in a criminal complaint and arrested in March 2014.
According to charging documents, in January 2014, a long-term investigation of a cocaine distribution conspiracy centered in Holyoke and West Springfield led law enforcement to Gonzalez and Roman. It is alleged that Gonzalez used tractor trailers associated with his business, JGL Truck Sales, to drive to Texas to pick up kilograms of cocaine and heroin from his Mexican supply source. He then returned to Massachusetts where Roman sold the drugs on his behalf. In order to transport the drugs, Gonzalez had vehicles modified to contain hidden compartments. He hid the drugs and cash in the compartments of the vehicles, loaded them onto his tractor trailer, and drove to Texas. Gonzalez allegedly made trips to Texas to transport the drugs and cash multiple times per year for the last several years.
According to court documents, on March 25, 2014, Gonzalez was stopped in Agawam by law enforcement as he drove the JGL tractor trailer south. During a search of the tractor trailer, $1.17 million was recovered from a hidden compartment of the cab. Also that day, $350,000 was recovered from the residence of Roman.
The charge of conspiring to distribute and possess with intent to distribute cocaine and heroin provides for a sentence of no greater than a lifetime in prison, a minimum of five years and up to a lifetime of supervised release and a fine of $10 million and restitution. The charge of distribution and possession with intent to distribute cocaine provides for a sentence of no greater than 40 years in prison, a minimum of four years and up to a lifetime of supervised release and a fine of $5 million and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement. The case is being prosecuted by Assistant U.S. Attorneys Neil L. Desroches and Kevin O’Regan of Ortiz’s Springfield Office.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Three Previously Charged Defendants, Three Additional Defendants Indicted on Charges Involving in Drugs Linked to A Mexican Drug Cartel; One Defendant Includes Bank of America EmployeeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a 23 count superseding indictment charging six defendants allegedly involved in an illegal narcotics operation stretching from Sinaloa, Mexico to Western New York. Named in the superseding indictment are three defendants previous charged in the case, Jose Manuel Lua-Guizar, 25, Max Riestra, 40, both of Mexico, and Pethrod Dunnigan, 37, of Buffalo, NY. Also charged in the superseding indictment:• Gerardo Ballardo, 23 of Stockton, California
• Bryant Hudson, 36, of Buffalo
• Presiliano Garcia, 31, of Los Angeles, California, a Bank of America employee who allegedly used his position to facilitate money laundering activities in the drug operation.“As the scourge of heroin continues to take a deadly toll on our community, this case shows that law enforcement will go wherever necessary to stop these traffickers in their tracks,” said U.S. Attorney Hochul. “Whether across the country or across the border, from street corners to bank offices, to we will stop the flow of these drugs into our community.”
Charges includes conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine and one kilogram or more of heroin, money laundering conspiracy, international money laundering conspiracy, conspiracy to structure transactions, and structuring transactions. The charges carry a minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine.
Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that according to the superseding indictment and previously filed court documents, law enforcement officers began investigating a sophisticated drug trafficking organization with ties to a Mexican drug cartel operating out of Los Angeles, California area in 2014. The organization shipped drug packages to various states including New York, New Jersey, Illinois, and Colorado. Defendant Max Riestra was identified as being responsible for managing multiple bank accounts that were used to launder proceeds from the drug sales. Defendant Presiliano Garcia was a Bank of America employee who is accused of facilitating the opening of multiple accounts used for laundering drug proceeds. Garcia also facilitated wire transfers of drug proceeds from the United States to bank accounts in Mexico.
During the course of the investigation, officers executed search warrants that resulted in the seizure of drugs including one seizure of 21 kilograms of cocaine and three kilograms of heroin. Officers also seized numerous boxes that members of the drug trafficking operation attempted to mail which included an additional kilograms of cocaine and kilograms of heroin.
The investigation further revealed that a FedEx account controlled by Max Riestra was used to send packages to Buffalo, NY, including some to co-defendants Jose Manuel Lua-Guizar and Gerardo Ballardo. Guizar and Ballardo would travel from California to Buffalo to receive the packages and distribute the cocaine to local Buffalo area drug dealers, including defendant Pethrod Dunnigan. Investigators believe approximately 200 packages containing cocaine and heroin were shipped to cities including Buffalo, Chicago, New York and Denver.
The proceeds from the cocaine sales were deposited in local Bank of America branches in amounts just under $10,000. Deposits of $10,000 or more require the bank to report the transaction. There were also deposits in bank branches across the country. The total amount of money deposited in this fashion had reached more than $10,000,000. Local deposits totaled over $1,000,000 and involved at least 120 transactions.
The superseding indictment is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, Immigration and Custom Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office. Additional assistance was provided by ICE-HSI in Los Angeles, California.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Smuggler Sentenced to Five Years for Abandoning His Customers in the Otay MountainsRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Alexandra F. Foster (619) 546-6735
NEWS RELEASE SUMMARY – March 25, 2016
SAN DIEGO – Alien smuggler Efrain Delgado-Rosales was sentenced today by U.S. District Judge Cathy A. Bencivengo to five years in prison for smuggling four non-U.S. Citizens into the United States and then leaving three of them behind in the Otay Mountains once across the border into the United States.
Delgado-Rosales collected four Mexican citizens who sought to enter the United States illegally from a stash house in Tijuana. In anticipation of the trip, Delgado-Rosales sold them brown clothing to wear as camouflage so they would be less visible to U.S. Border Patrol agents as they crossed through the mountains into the United States. Once the four men bought the clothes, Delgado-Rosales took them from the stash house and walked them to the U.S.-Mexico border fence.
Delgado-Rosales left the four men for a period of hours on the Mexico side of the border fence. During that time, thieves swooped in and robbed the men of all their cash (thousands of dollars) and some of their cell phones. When Delgado-Rosales returned to resume the crossing into the United States, according to one of the robbed men, Delgado-Rosales was “indifferent” to the robbery. His lack of surprise caused his four charges to suspect that Delgado-Rosales was involved in the robbery.
Once over the border fence and into the U.S., Delgado-Rosales guided the four men into the Otay Mountains. Three of the four men had a hard time maintaining Delgado-Rosales’s pace. Instead of slowing down, Delgado-Rosales left the men behind. He only grudgingly returned to retrieve them after one of the three men called the one man who had kept pace with the Delgado-Rosales and begged him to return with the guide.
After almost a day of hiking through the mountains, Border Patrol was alerted to the men’s whereabouts. Border Patrol agents responded to the location –about one mile north of the U.S.-Mexico border and three miles east of the closest checkpoint at the Otay Mesa Port of Entry- to find Delgado-Rosales and the four men. All five men were arrested for being illegally in the United States. All four men identified Delgado-Rosales as their foot guide and explained that they and their families each promised to pay others $5,000 to get them each into the United States, for a total of $20,000.
The area where these men were arrested is remote and mountainous, far from human habitation and unlikely to have cell phone service. The location of the arrests matters, because Delgado-Rosales was implicated in another smuggling operation in the Otay Mountains, further east in more rugged and desert-like terrain. In the August 2014 event, one of the smuggled men, Jose de Jesus Hernandez-Adono, died. His mummified body was found by Border Patrol and Homeland Security Investigations Agents in late September 2014. A witness was located, who had been smuggled in with Hernandez-Adono. The witness identified Delgado-Rosales as the foot guide. According to the witness, Hernandez-Adono died, and the other three barely survived the trek.
The facts detailed in the August 2014 smuggling event mirror those detailed by the men in this case. As in this case, the men in August 2014 were housed at a stash house in Tijuana while waiting to be smuggled into the United States. Delgado-Rosales required that the men buy and wear drab, brown clothing during the crossing to hide from Borer Patrol. The group again consisted of four men and again Delgado-Rosales had them cross over the Otay Mountains. The smuggling fee was the same, $5,000, and Delgado-Rosales again appeared to lack any concern for the welfare of his charges.
Delgado-Rosales has been apprehended by Border Patrol 24 times dating back to July 19, 1999. Only once was he apprehended alone. Every other time, he was apprehended with at least two and up to 46 other undocumented individuals. Once, on September 14, 2003, he was apprehended in a load house in Los Angeles with 61 other undocumented individuals.
U.S. Attorney Laura Duffy said, “This case serves as an example of the extreme dangers associated with crossing illegally into the United States. Smuggling activities are run by criminal organizations that have little concern over the welfare of their charges. Our office will aggressively prosecute those who smuggle illegal aliens into the United States for financial gain, place those in their company in grave danger and needlessly cause deaths.”
Chief Border Patrol Agent Richard A. Barlow added, “The sentence of Delgado-Rosales sends a stern message to those who use dangerous means to smuggle individuals into this country for profit. I would like to acknowledge the U.S. Attorney’s Office for their efforts in this case.”
DEFENDANT Criminal Case No. 15CR02830-CAB
Efrain Delgado-Rosales 35 years old
SUMMARY OF CHARGE
Count 1: Title 18, United States Code, Section 1324 - Bringing in Illegal Alien for Financial Gain – statutory minimum of five years, statutory maximum of 10 years, a maximum fine of $250,000, a 3-year term of supervised release, and $100 special assessment.
INVESTIGATING AGENCY
Border Patrol - Chula Vista Intelligence Division
Sex Offender James Campbell of Swanton, Vermont Indicted for Possession of Child PornographyRead the Press Release
The United States Attorney’s Office for the District of Vermont announced that James Campbell, 55, of Swanton, Vermont, was indicted on March 24, 2016 by a federal grand jury for possession of child pornography involving minors under the age of 12. Campbell’s arraignment is scheduled for March 29, 2016.
According to court documents, Campbell was detected sharing child pornography over the Internet. Subsequently, law enforcement agents obtained and executed a warrant to search Campbell’s house in Swanton, Vermont. During the search, law enforcement seized a computer and electronic media containing child pornography. Campbell also made admissions regarding his possession of child pornography. Campbell was arrested and charged via a criminal complaint later that day. On March 17, 2016, Campbell made an initial appearance in federal court and U.S. Magistrate Judge John M. Conroy ordered Campbell detained pending trial.
The charges against Campbell are merely accusations and he is presumed innocent until and unless he is proven guilty. If convicted, Campbell faces a maximum penalty of up to 20 years in prison and up to lifetime supervised release, although the sentence will be advised by the federal sentencing guidelines.
Campbell is a registered sex offender who has a 2007 Vermont state court conviction for sexual assault of a minor. State court records indicate that the victim in Campbell’s prior case was under 12 years of age at the time of the offense.
Campbell’s federal prosecution is part of Project Safe Childhood, a nationwide Department of Justice initiative designed to protect children from online exploitation and abuse. In Vermont, federal prosecutors are teaming up with federal, state, and local law enforcement agents to identify, investigate, and prosecute those individuals who prey upon children and those that distribute, receive, or manufacture child pornography. For more information on Project Safe Childhood, including resources on internet safety education, please visit www.usdoj.gov/psc.
The collaborative team investigating this case includes law enforcement agents from Homeland Security Investigations, the Vermont Attorney General’s Office, and the Internet Crimes Against Children Task Force.
The United States is represented in this case by Assistant United States Attorney Kunal Pasricha. Campbell is represented by Federal Public Defender Michael L. Desautels.
Seattle Area Man who Claimed Fictitious Twin Brother to Collect Additional Federal Benefits Convicted of Theft, Mail Fraud and Making False StatementsRead the Press Release
A SeaTac man who used a second identity to defraud public assistance programs for more than 20 years was convicted late yesterday of multiple federal felonies following a three day jury trial, announced U.S. Attorney Annette L. Hayes. TRAVIS EDWARD FISCHER, 49, lived with his girlfriend and three children in SeaTac, while also claiming benefits under the name Edward Travis Fisher in Seattle. By pretending to be two completely separate people, FISCHER was able to illegally collect hundreds of thousands of dollars in benefits administered by the Social Security Administration, the Washington Department of Social and Health Services, and the United States Department of Housing and Urban Development. The jury deliberated for just under three hours before finding FISCHER guilty on all counts. Sentencing before Chief U.S. District Judge Ricardo S. Martinez is scheduled for June 23, 2016.
According to records filed in the case and testimony at trial, FISCHER applied for Social Security disability benefits in his true name in August 1984, and collects them to the present day. In 1987, FISCHER also applied for Supplemental Security Income (SSI) benefits in the name of Edward Fischer, using a different Social Security number. Benefits were approved and paid to that identity beginning in 1987. In order to keep receiving benefits FISCHER had to make false representations to Social Security at various times over the last 25 years. FISCHER illegally collected more than $160,000 in benefits administered by the Social Security Administration.
The fraud did not stop with Social Security benefits but extended to food and medical assistance from the Washington State Department of Social and Health Services (DSHS) totaling more than $164,000. Further, FISCHER defrauded the Seattle Housing Authority by using the false identity to claim a low income unit in the Queen Anne neighborhood of Seattle while living in SeaTac with his girlfriend and children. From 1990 to 2013, FISCHER used the Queen Anne residence at various times to accommodate guests and to receive mail in his false name. The housing benefits totaled more than $152,000.
A case manager first noticed the potential fraud after finding both names in a DSHS database in 2011. When confronted, FISCHER first claimed he was the victim of identity theft, and then claimed that he had a twin brother who was also collecting benefits.
In all FISCHER was convicted of seven counts of mail fraud, seven counts of theft of government funds, Social Security Fraud, Misuse of a Social Security Number, and two counts of making a false statement to the United States.
Mail fraud is punishable by up to 20 years in prison and a $250,000 fine, Theft of government funds is punishable by up to 10 years in prison and a $250,000 fine, Social Security Fraud, Misuse of a Social Security Number and making false statements are each punishable by up to 5 years in prison and $250,000 fine.
The case was jointly investigated by the Social Security Administration Office of the Inspector General (SSA-OIG), the Department of Housing and Urban Development Office of the Inspector General (HUD-OIG) and the DSHS Office of Fraud and Accountability.
The case was prosecuted by Special Assistant United States Attorney Benjamin Diggs and Assistant United States Attorney J. Tate London. Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court.
Retired Colonel in Orleans Parish Sheriff’s Office Charged with Conspiracy to Commit Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite and FBI Special Agent in Charge Jeffrey S. Sallet announced that ROY AUSTIN, 69, of St. Tammany Parish and a retired Colonel of the Orleans Parish Sheriff’s Office (“OPSO”), was charged today in a one-count Bill of Information with conspiracy to commit wire fraud.
According to the Bill of Information, beginning in 2009 and continuing until January 2014, AUSTIN and others participated in a conspiracy to commit wire fraud. The Bill of Information alleges that AUSTIN, in his role as a Colonel in the Orleans Parish Sheriff’s Office, arranged for security details through a private company (Austin Sales and Service) for local entities and events, including Mardi Gras Krewes, music and food festivals, and sporting events, engaged in a scheme to defraud those local entities and events by padding the billing documents with names of individuals who did not in fact provide any security services (“Ghost Employees”).
Additionally, after submitting the fraudulently inflated invoices via interstate wires, AUSTIN kept a portion of the overbilled amount in the Austin Sales and Service corporate bank account for his own personal use. In some instances, AUSTIN drafted Austin Sales and Service corporate checks made payable to the Ghost Employees who did not work and then fraudulently endorsed those checks and deposited them into his personal bank account for his own personal use. AUSTIN often also drafted checks made payable to other OPSO employee(s)’ family members under the fraudulent guise of payments for detail work that in fact did not take place as those employee(s)’ share of the fraudulently collected funds.
If convicted of conspiring with others to commit wire fraud, AUSTIN faces statutory penalties of up to five years in prison, a $250,000 fine and three years of supervised release.
The Bill of Information also contains Notice of Forfeiture which puts the defendant on notice that the Government intends on forfeiting any and all property and profits concerned with and/or derived from any illegal activity referenced in the bill of information.
U. S. Attorney Polite reiterated that the Bill of Information describes allegations and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter and would also like to acknowledge the assistance provided by the Louisiana Legislative Auditors. Assistant U.S. Attorney Sean Toomey is in charge of the prosecution.
Repeat Offender Sentenced to 121 Months for Possession of Child PornographyRead the Press Release
A Minnesota man was sentenced today to 121 months in prison for possession of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Andrew M. Luger of the District of Minnesota.
On Dec. 8, 2015, Frank Russell McCoy, 72, was found guilty of possession of child pornography after a two-day trial. U.S. District Judge Patrick J. Schiltz of the District of Minnesota sentenced McCoy today and also ordered him to serve a 10 year term of supervised release.
According to the evidence presented at sentencing, for years, McCoy has written and distributed short stories describing extreme sexual abuse and other acts of violence perpetrated against very young children. In 2013, he was convicted in the Middle District of Georgia of one count of transportation of obscene matters after sending one such story via the Internet to an Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) undercover agent. In Dec. 2013, while on bond pending appeal of that conviction, McCoy amassed a large numbers of computers and related equipment in his home in Minnesota that, a search requested by his U.S. Probation Officer revealed, contained dozens of videos of child exploitation. Evidence at trial further demonstrated that though McCoy had installed forensic wiping software on his computers in order to destroy any evidence of child exploitation images, he had transferred the majority of those files onto a portable video player device just before the seizure.
Assistant U.S. Attorney Katharine T. Buzicky of the District of Minnesota and former Trial Attorney Jeffrey Zeeman of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted the case. ICE-HSI and CEOS’s High Technology Investigative Unit investigated the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Repeat Offender Sentenced to 121 Months for Possession of Child PornographyRead the Press Release
An Otsego man was sentenced today to 121 months in prison for possession of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Andrew M. Luger of the District of Minnesota.
On Dec. 8, 2015, Frank Russell McCoy, 72, was found guilty of possession of child pornography after a two-day trial. U.S. District Judge Patrick J. Schiltz of the District of Minnesota sentenced McCoy today and also ordered him to serve a 10 year term of supervised release.
According to the evidence presented at sentencing, for years, McCoy has written and distributed short stories describing extreme sexual abuse and other acts of violence perpetrated against very young children. In 2013, he was convicted in the Middle District of Georgia of one count of transportation of obscene matters after sending one such story via the Internet to an Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) undercover agent. In Dec. 2013, while on bond pending appeal of that conviction, McCoy amassed a large numbers of computers and related equipment in his home in Minnesota that, a search requested by his U.S. Probation Officer revealed, contained dozens of videos of child exploitation. Evidence at trial further demonstrated that though McCoy had installed forensic wiping software on his computers in order to destroy any evidence of child exploitation images, he had transferred the majority of those files onto a portable video player device just before the seizure.
Assistant U.S. Attorney Katharine T. Buzicky of the District of Minnesota and former Trial Attorney Jeffrey Zeeman of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted the case. ICE-HSI and CEOS’s High Technology Investigative Unit investigated the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
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President of Miami-Based Transportation Company Sentenced to 60 Months in Prison for Role in $70 Million Health Care Fraud SchemeRead the Press Release
The president of a transportation company based in Miami was sentenced today to 60 months in prison for his role in a health care fraud scheme involving three mental health centers that resulted in the submission of approximately $70 million in false and fraudulent claims to Medicare.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI’s Miami Division made the announcement.
Damian Mayol, 45, of Miami, was sentenced by U.S. District Judge Ursula Ungaro of the Southern District of Florida, who also ordered Mayol to pay $26,808,841 in restitution and to forfeit the same amount. In January 2016, Mayol was convicted of conspiracy to pay health care kickbacks after a five-day trial.
According to evidence presented at trial, Mayol was the president of Transportation Services Providers Inc. and, along with his co-conspirators, used the company to coordinate the payment of illegal health care kickbacks to recruiters, who in return referred patients to three now-defunct clinics in the Miami area: R&S Community Mental Health Inc. (R&S), St. Theresa Community Mental Health Center Inc. (St. Theresa) and New Day Community Mental Health Center LLC (New Day).
The evidence introduced at trial further established that R&S, St. Theresa and New Day were community mental health centers that purported to provide intensive mental health services to Medicare beneficiaries. On behalf of the recruited beneficiaries, the centers billed Medicare for costly partial hospitalization program (PHP) services that were not medically necessary or not provided to patients, according to trial evidence. Trial evidence demonstrated that patient records, including group therapy session notes, were falsified to support claims for reimbursement from Medicare. Between January 2008 and December 2010, the centers submitted approximately $70 million in false and fraudulent claims to Medicare. Medicare paid approximately $28 million on those claims, the evidence showed.
In December 2015, co-defendants Santiago Borges, Erik Alonso and Cristina Alonso were sentenced to prison terms ranging from 28 months to 120 months on related charges.
The FBI investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. Trial Attorneys A. Brendan Stewart and Timothy Loper of the Criminal Division’s Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
President of Miami-Based Transportation Company Sentenced to 60 Months in Prison for Role in $70 Million Health Care Fraud SchemeRead the Press Release
The president of a transportation company based in Miami was sentenced today to 60 months in prison for his role in a health care fraud scheme involving three mental health centers that resulted in the submission of approximately $70 million in false and fraudulent claims to Medicare.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge George L. Piro of the FBI’s Miami Division made the announcement.
Damian Mayol, 45, of Miami, was sentenced by U.S. District Judge Ursula Ungaro of the Southern District of Florida, who also ordered Mayol to pay $26,808,841 in restitution and to forfeit the same amount. In January 2016, Mayol was convicted of conspiracy to pay health care kickbacks after a five-day trial.
According to evidence presented at trial, Mayol was the president of Transportation Services Providers Inc. and, along with his co-conspirators, used the company to coordinate the payment of illegal health care kickbacks to recruiters, who in return referred patients to three now-defunct clinics in the Miami area: R&S Community Mental Health Inc. (R&S), St. Theresa Community Mental Health Center Inc. (St. Theresa) and New Day Community Mental Health Center LLC (New Day).
The evidence introduced at trial further established that R&S, St. Theresa and New Day were community mental health centers that purported to provide intensive mental health services to Medicare beneficiaries. On behalf of the recruited beneficiaries, the centers billed Medicare for costly partial hospitalization program (PHP) services that were not medically necessary or not provided to patients, according to trial evidence. Trial evidence demonstrated that patient records, including group therapy session notes, were falsified to support claims for reimbursement from Medicare. Between January 2008 and December 2010, the centers submitted approximately $70 million in false and fraudulent claims to Medicare. Medicare paid approximately $28 million on those claims, the evidence showed.
In December 2015, co-defendants Santiago Borges, Erik Alonso and Cristina Alonso were sentenced to prison terms ranging from 28 months to 120 months on related charges.
The FBI investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. Trial Attorneys A. Brendan Stewart and Timothy Loper of the Criminal Division’s Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the Department of Health and Human Services (HHS) Centers for Medicare & Medicaid Services, working in conjunction with the HHS Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
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.
Ocean Springs Man Pleads Guilty to Mail Fraud SchemeRead the Press Release
Gulfport, Mississippi. – Eduardo Guillermo Diaz, 58, of Ocean Springs, Mississippi, pled guilty on Tuesday, March 22, 2016, before U.S. District Judge Louis Guirola, Jr., to one count of mail fraud, U.S. Attorney Gregory K. Davis announced today.
Diaz admitted that, while operating an investment business out of his office in Ocean Springs, he devised a mail and wire fraud scheme to defraud his clients of significant sums of money, totaling over $1 million. Diaz represented that he was providing services to his clients as an investment advisor when, in fact, he converted the funds to his own personal use. Diaz also used new investor’s monies to pay alleged dividends and make repayments or refunds to previous investors while, at the same time, deceiving and lulling his clients into believing that the funds were properly and legitimately invested.
Eduardo Guillermo Diaz will be sentenced on June 21, 2016, at 10:00 a.m., by U.S. District Judge Louis Guirola, Jr. He faces a maximum penalty of 20 years in federal prison and a $250,000 fine. This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Andrea Jones.
Mexican Nationals Plead Guilty to Heroin Trafficking Charges Arising Out of Ten Pound Heroin Seizure in New MexicoRead the Press Release
ALBUQUERQUE – Ignacio Nieblas, Jr., 22, a Mexican national residing in Berino, N.M., and Bryan Gabriel Marquez-Flores Jr., 19, a Mexican national residing in Phoenix, Ariz., pleaded guilty today to heroin trafficking charges in federal court in Albuquerque, N.M.
Nieblas and Marquez-Flores were arrested on a criminal complaint charging them with possession of heroin with intent to distribute after the DEA seized 4.65 kilograms (10.416 pounds) of heroin from them during an interdiction investigation at the Amtrak Train Station in Albuquerque on Feb. 5, 2016. The heroin was concealed inside the men’s luggage.
Nieblas and Marquez-Flores were subsequently indicted on Feb. 24, 2016, and charge with conspiracy to distribute heroin and possession of heroin with intent to distribute on Feb. 5, 2016, in Bernalillo County, N.M.
During today’s proceedings, Nieblas and Marquez-Flores both pled guilty to felony informations charging them with conspiracy and possession of heroin with intent to distribute. Each admitted that on Feb. 5, 2016, they conspired with others to deliver the heroin seized from them to an intended destination.
At sentencing, Nieblas and Marquez-Flores each face a statutory maximum penalty of 20 years in federal prison. Both men remain in custody pending sentencing hearings which have yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA. Assistant U.S. Attorney Samuel A. Hurtado prosecuted the case pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Man Who Resided in Rutland Sentenced to 17 Years in Jail for Multi-Kilo Heroin and Cocaine ConspiracyRead the Press Release
The United States Attorney's Office for the District of Vermont stated that David Baez Garcia, age 49, a citizen of the Dominican Republic, was sentenced on March 18, 2016, to 17 years in jail and five years of supervised release for his role as the leader of a conspiracy to distribute five kilograms or more of cocaine, 100 grams or more of heroin and oxycodone from in or about Summer 2009 through in or about June 2010.
According to documents filed with the Court and testimony from a jury trial that took place starting on September 9, 2015, Baez Garcia, who also used the names Josue Ortiz and Jose Altagracia Ramirez Beltre, came to Rutland, Vermont in 2008. With the assistance of Alexis Jimenez and Florencio Reyes, whom he met in New Hampshire, Baez Garcia brought multiple kilograms of heroin and cocaine and thousands of oxycodone pills into Vermont during the time frame of the conspiracy. Rauddys Barias Tejeda, of Providence, Rhode Island, supplied the heroin as well as some of the cocaine.
In 2009, Baez Garcia also received multi-kilogram shipments of cocaine from two brothers-in-law, Canciano Marquez Mayorga and Candelario Tovar Garcia, who, in turn, were receiving the cocaine from a Mexican drug cartel. After obtaining the cocaine from across the United States-Mexican border in Arizona, Marquez Mayorga and Tovar Garcia, then residing in Manchester, New Hampshire, had it shipped across the country in tractor trailers for redistribution in Vermont and New Hampshire, among other locations. The Vermont group received the final shipment of 10 kilograms of cocaine, worth in excess of $300,000, in late 2009. It traveled across country via tractor trailer to Pawtucket, Rhode Island. Thereafter, it was stored in Worcester, Massachusetts en route to Vermont. Law enforcement seized three kilograms of this shipment during a traffic stop in Massachusetts on December 15, 2009 when it was being transported to Vermont.
As the United States Attorney’s Office stated in its filings, none of these men had any connection to Vermont prior to engaging in drug trafficking here. “Collectively, these men preyed upon addicted individuals in the Rutland area, as well as in other places, for their own profit.”
Baez Garcia pleaded guilty to the charged conspiracy five days into the jury trial. Thereafter, the jury trial was discontinued. In addition to being found responsible for distributing multiple kilograms of cocaine and heroin, the Court also found that Baez Garcia engaged in a drug for guns exchange with one of his customers.
As a result of the broader investigation, the United States Attorney’s Office has convicted seventeen defendants associated with this drug conspiracy, including Baez Garcia. They include Alexis Jimenez, age 48, of Nashua, New Hampshire, Florencio Reyes, age 46, of Worcester, Massachusetts, Canciano Marquez Mayorga, age 29, Candelario Tovar Garcia, age 43, and Rauddys Barias Tejeda, age 43. All of these men are currently serving jail sentences.
The United States also has convicted Justine Durfee, Jessica Lever, Thomas Morrissey, Peter Stout, Samantha Thuman, and Danielle Jankowski, of Rutland, Vermont. These individuals were involved in supporting the drug conspiracy by delivering drugs, providing housing, registering vehicles, or doing other tasks related to the conspiracy for Baez Garcia. In addition, the United States has convicted Edgar Corona and Ramiro Reyes of Worcester, Massachusetts, and Roberto Melendez and Elijah Kleinhans, of Lebanon, New Hampshire for their roles in delivering drugs or otherwise assisting the drug conspiracy. Letitia Carstensen, of Milton, Vermont, also was convicted of drug charges related to her involvement in drug distribution with her then-boyfriend, Alexis Jimenez. These individuals were sentenced to terms of imprisonment by the Court for their roles in assisting the conspiracy.
This case was investigated by the Drug Enforcement Administration with assistance from the Southern Vermont Drug Task Force, the Vermont State Police, and the Burlington Police Department. United States Attorney Eric Miller commends the exemplary work of the federal, state and local law enforcement agencies working collaboratively to investigate this matter.
The United States was represented in this matter by Assistant U.S. Attorney Heather Ross. Baez Garcia was represented by David Williams, Esq. and Brooks McArthur, Esq. of Burlington.
Madisonville, Kentucky, Former Business Owner, Sentenced to 30 Months in Prison for Filing False Tax ReturnsRead the Press Release
Ordered to pay $649,506.15 in restitution
OWENSBORO, Ky. - The former owner of Madisonville, Kentucky businesses was sentenced in United States District Court this week, by Chief Judge Joseph H. McKinley Jr., to 30 months in prison and ordered to pay $649,506.15 in restitution, for filing false tax returns and for conspiring to commit mail and wire fraud, announced United States Attorney John E. Kuhn, Jr.
Gholam A. Sattar-Shamsabadi, 58, operated a photo processing business in Madisonville, which he converted to a café, and a business called Fast Foto Finishing in Henderson, Kentucky, which he began in 2009.
According to court records, Shamsabadi, with the aid of an unindicted co-conspirator, filed false invoices for insurance claims for his business and one personal claim from 2006 to 2012. The total loss amount based on payout on six fraudulent claims totaled $649,506.15. In each of the claims, Shamsabadi claimed that his photo processing equipment was damaged by a power surge from lightning. Also, he claimed that neon signs were destroyed. In each claim, Shamsabadi submitted invoices and estimates for new equipment, and submitted invoices falsely claiming that he had purchased new replacement equipment. According to court documents, Shamsabadi received $135,804 2008 from Hartford Insurance in 2006; $53,993 from Zurich North America in 2010; $216,356 from State Farm Insurance in 2010; $7,613.22 from Liberty Mutual Auto in 2012; $205,000 from Kentucky Farm Bureau (Business Claims and Personal) in 2012; and $30,738.94 from Kentucky Farm Bureau (Personal) in 2012.
Further, Shamsabadi failed to report the proceeds of his insurance fraud as taxable income. In 2010, Shamsabadi failed to report $170,000 of unreported income and in 2012, he failed to report $247,156 in unreported income. Also, in each of these years, Shamsabadi filed tax returns under two different social security numbers creating a total Tax Loss of $82,381.
This case was prosecuted by Assistant United States Attorney Joshua Judd. The Kentucky Insurance Fraud Investigation Division (KIFID) started this investigation and brought it to the attention of the FBI and IRS Criminal Investigations (CI).
Local Woman Sentenced on Health Care Fraud ChargesRead the Press Release
St. Louis, MO – Brandy Archie, St. Louis, Missouri, was sentenced to one year and one day in prison for selling her prescription drugs that had been submitted and paid by Medicaid.
According to court documents, Archie visited a doctor on numerous occasions and falsely represented to the doctor that she needed prescription drugs to treat her medical conditions. She had already decided to sell the drugs.
Archie pled guilty last December to two felony counts of healthcare fraud and two felony counts of possession with intent to distribute prescription drugs. She appeared today for sentencing before United States District Judge Ronnie L. White.
This case was investigated by the U.S. Department of Health and Human Services-Office of Inspector General, the Drug Enforcement Administration and the Missouri Medicaid Fraud Control Unit. Assistant United States Attorney Dorothy McMurtry handled the case for the U.S. Attorney’s Office.
Local Food Service Company Owner Indicted for FraudRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that an Indictment was handed down this week by a federal grand jury charging Frank D. Dolce, age 50, of Wilmington, Delaware with eight counts of tax fraud, one count of structuring to avoid reporting requirements, one count of conspiracy to commit theft from the National School Breakfast and Lunch Programs, and 22 counts of theft from the National School Breakfast and Lunch Programs. Dolce faces up to 10 years of imprisonment for the structuring charge, 3 years of imprisonment on the tax fraud charges, and five years of imprisonment on the conspiracy and each theft offense, and a maximum of a $500,000 fine for structuring, a $100,000 fine for tax fraud, and a $250,000 fine for each remaining offense.
According to the Indictment, Dolce was the owner of Primos Food Service (“Primos”), a food service management company located in Wilmington, Delaware. Primos provided cafeteria services to charter schools in Philadelphia and to the Delaware County Courthouse and Government Center in Media, Pennsylvania. The Indictment alleges that Dolce filed false tax returns both personally and on behalf of Primos, because he failed to report certain cash collected from the schools and the Courthouse Café.
The Indictment further alleges that in January and February 2013, Dolce made or directed one of his employees to make twenty-seven cash deposits, each slightly below $10,000, into different accounts at two branches of TD Bank, N.A. The total cash deposited was over $250,000. The Indictment alleges that Dolce structured the cash transactions in this manner with the intention of avoiding the bank’s requirements to report cash transactions greater than $10,000 to the Department of the Treasury. After the above cash deposits were made, Dolce then used that cash in part to purchase a boat for approximately $355,500.
Finally, the Indictment charges that Dolce conspired with others to steal money directly or indirectly from the U.S. Department of Agriculture (“USDA”), because he falsely inflated claims for reimbursement for meals served to qualifying students at charter schools between April 2011 and January 2014. Specifically, by claiming more meals served under the National School Breakfast and Lunch Programs than were actually served, the Indictment alleges that Dolce stole USDA funds on a number of dates relating to claims for student meals served at Imhotep Institute Charter High School, Community Academy of Philadelphia Charter School, and Mariana Bracetti Academy Charter School, all in Philadelphia.
“This Indictment serves notice to individuals who knowingly defraud federal programs designed to benefit our children. These programs are funded with the tax dollars of the American public. It is the responsibility of all federal contractors to provide all services that have been promised and to accurately report all income earned from those contracts. The Internal Revenue Service, Criminal Investigation Division will gladly provide their financial expertise to pursue those who attempt to enrich themselves by defrauding the federal government.” said Akeia Conner, Internal Revenue Service, Special Agent in Charge.
This case is the result of a joint investigation conducted by the Internal Revenue Service - Criminal Investigation Division, and the United States Department of Agriculture Office of Inspector General - Investigations. The prosecution is being handled by Assistant United States Attorney Jennifer K. Welsh, District of Delaware.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Lincoln Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that on March 25, 2016, Kenneth Lee Johnson, 33, of Lincoln, was sentenced to five years and 10 months, (70 months), in prison for his role in a conspiracy to distribute 50 grams or more of a mixture or substance containing methamphetamine. Following the prison term, Johnson will serve four years on supervised release.
Information provided to law enforcement indicated Johnson was involved in the distribution of at least 350 grams, (approximately 12 ½ ounces) of methamphetamine in the Lincoln area between December 4, 2013, and January 30, 2015.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.