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Wednesday 23 March 2016
Montana U.S. Attorney's Office and Missoula Police Department Host Regional Law Enforcement Training on Sex TraffickingRead the Press Release
MISSOULA – The U.S. Attorney’s Office for the District of Montana and the Missoula Police Department will host a two-day training titled “Sex Trafficking: Investigation and Prosecution.” The Mansfield Center at the University of Montana, the Montana DOJ Children’s Justice Center, FBI’s Montana Regional Violent Crime Task Force and the Montana Human Trafficking Task Force have also collaborated on the event. The training will take place at the University of Montana March 23-24, 2016, and is open to registered law enforcement personnel. Attendees come from Idaho, Montana, Utah, and Washington.
The training is designed to help law enforcement personnel gain a comprehensive understanding of the crime of sex trafficking, recognize common indicators to identify victims, and learn effective techniques for victim interviews and investigative strategies. A primary goal of the training is to promote law enforcement awareness and provide tools and techniques for the successful prosecution of sex trafficking that law enforcement personnel can take back to their communities.
This training is one of several held this year in Montana that reflect the Office’s focus on the issue of sex trafficking. Similar trainings hosted by the U.S. Attorney’s Office and the FBI were held earlier this year on three Montana Indian Reservations for the benefit of law enforcement officers working in Indian Country. Following this training, the U.S. Attorney’s Office will have collaborated in the training of more than 300 law enforcement personnel from multiple jurisdictions.
“This training reflects our shared commitment to eradicating the scourge of sex-trafficking that plagues communities regionally, nationally, and internationally,” said U.S. Attorney for the District of Montana Mike Cotter. “Human trafficking is a crime that occurs in the shadows, in the margins of our country and around the world. It is not just a federal matter; it is a matter that needs to be tackled with all available resources: by federal, state, tribal and local law enforcement along with our community and faith based organizations.”
“This training is a product of the long-standing collaborative relationship between the Missoula Police Department, the U.S. Attorney’s Office, and the FBI,” said Missoula Police Chief Mike Brady. “Our Department has been working with the Federal Government on this issue for some time. This training gives us the opportunity to share the results of that collaboration with the regional law enforcement community.”
The training is closed the public and the press.
Monongahela Man Accused of Creating and Mailing False Court DocumentsRead the Press Release
PITTSBURGH -- A Washington County resident has been indicted by a federal grand jury in Pittsburgh on charges of mail fraud and forging and counterfeiting a Seal of a Court of the U.S., United States Attorney David J. Hickton announced today.
The three-count indictment returned yesterday named Steven P. Grados, 51, of Monongahela, Pa.
According to the indictment, Grados created false documents that consisted of a Memorandum opinion and Court Order and mailed them to the Pennsylvania State Employees Retirement System offices in Harrisburg in order to deceive that office into discontinuing paying a portion of his State Police pension to his former spouse.
The law provides for a maximum total sentence of up to 20 years on each count of mail fraud and five years on the single count for forging the signature of a federal judge, a fine of up to $250,000 on each of the three counts, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Miami Businessman Pleads Guilty to Foreign Bribery and Fraud Charges in Connection with Venezuela Bribery SchemeRead the Press Release
HOUSTON - The owner of multiple U.S.-based energy companies has pleaded guilty to foreign bribery and fraud charges for his role in a scheme to corruptly secure energy contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA).
U.S. Attorney Kenneth Magidson made the announcement along with Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Special Agent in Charge Sean McElroy of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Houston and Special Agent in Charge Rick Goss of Internal Revenue Service-Criminal Investigation’s Houston Field Office (IRS-CI).
Abraham Jose Shiera Bastidas (Shiera), 52, of Coral Gables, Florida, pleaded guilty yesterday in federal court before U.S. District Judge Gray H. Miller to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and commit wire fraud and one count of violating the FCPA. Sentencing is scheduled for July 8, 2016. Four others charged in relation to the case had previously entered guilty pleas, including three foreign officials.
“The five convictions announced today hold to account bribe payors as well as the corrupt foreign officials who laundered the bribe money through the United States,” said Caldwell. “These individual prosecutions are the result of a tenacious and coordinated effort by our prosecutors and agents to unravel a complex web of bribes paid to Venezuelan officials. And they demonstrate our commitment to building cases from the ground up, instead of counting on companies and other wrongdoers to self-disclose their crimes.”
“The pleas of guilty in this case are the result of the strict enforcement of the FCPA in this district,” said Magidson. “Bribery under this law is a serious federal crime that undermines commercial and political relations around the world. This case is an example of our reach to expose this criminal conduct.”
Shiera was arrested in Miami on Dec. 16, 2015, after a federal grand jury returned an 18-count indictment against him and Roberto Enrique Rincon Fernandez (Rincon), 55, of The Woodlands.
According to admissions made in connection with Shiera’s plea, Shiera and Rincon worked together to submit bids to provide equipment and services to PDVSA through their various companies. Shiera admitted that beginning in 2009, he and Rincon agreed to pay bribes and other things of value to PDVSA purchasing analysts to ensure his and Rincon’s companies were placed on PDVSA bidding panels, which enabled the companies to win lucrative energy contracts with PDVSA. Shiera also made bribe payments to other PDVSA officials in order to ensure his companies were placed on PDVSA-approved vendor lists and given payment priority so that they would get paid ahead of other PDVSA vendors with outstanding invoices, he admitted.
“The corruption of foreign officials through bribery has a damaging impact on the stability of trade, industries and even nations,” said McElroy. “HSI and our partners will tirelessly investigate anyone who cultivates the corruption of officials abroad and bribe their way to financial gain.”
“Bribery and corruption undermines honest, free enterprise and creates an atmosphere of back room dealing that impairs the ability for honest businesses to compete,” said Goss. “IRS-CI tirelessly untangles the web of illicit transactions that lead to corrupt individuals being held accountable.”
Judge Miller also unsealed charges yesterday against four other individuals charged in connection with the investigation. In January 2016, Moises Abraham Millan Escobar (Millan), 32, of Katy, pleaded guilty under seal to one count of conspiracy to violate the FCPA for his role in the PDVSA bribery scheme. Milan was Shiera’s former employee. In December 2015, three former PDVSA officials, Jose Luis Ramos Castillo (Ramos), 38; Christian Javier Maldonado Barillas (Maldonado), 39; and Alfonzo Eliezer Gravina Munoz (Gravina), 53, all from Katy, each pleaded guilty under seal to conspiracy to commit money laundering. As part of their guilty pleas, Ramos, Maldonado and Gravina each admitted that while employed by PDVSA or its wholly owned subsidiaries or affiliates, they accepted bribes from Shiera and Rincon in exchange for taking certain actions to assist companies owned by Shiera and Rincon in winning energy contracts with PDVSA. Ramos, Maldonado and Gravina also admitted they conspired with Shiera and Rincon to launder the proceeds of the bribery scheme. Gravina also pleaded guilty to making false statements on his 2010 federal income tax return by failing to report the bribe payments he received from Shiera, Rincon and others. As part of their plea agreements, Shiera, Millan, Ramos, Maldonado and Gravina all agreed to forfeit proceeds of their criminal activity.
The indictment as to Rincon remains pending. He is charged with one count of conspiracy to violate the FCPA and commit wire fraud, one count of conspiracy to commit money laundering and seven counts of money laundering. Rincon is also charged with four counts of violating the FCPA. He was ordered detained pending trial following a detention hearing held on Dec. 18, 2015, before U.S. Magistrate Judge Nancy K. Johnson of the Southern District of Texas. The charges contained in the indictment are merely accusations, and Rincon is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
ICE-HSI and IRS-CI are conducting the ongoing investigation with assistance from the FBI. Deputy Chief John Pearson and Assistant U.S. Attorney Robert S. Johnson are prosecuting the case along with Trial Attorneys Aisling O’Shea and Jeremy R. Sanders of the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Kristine Rollinson and Vincent Carroll are handling the forfeiture aspects of the case.
The Criminal Division’s Office of International Affairs also provided assistance.
Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Miami Businessman Pleads Guilty to Foreign Bribery and Fraud Charges in Connection with Venezuela Bribery SchemeRead the Press Release
The owner of multiple U.S.-based energy companies pleaded guilty yesterday to foreign bribery and fraud charges for his role in a scheme to corruptly secure energy contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA).
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Acting Special Agent in Charge Sean McElroy of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Houston and Special Agent in Charge Rick Goss of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office made the announcement.
Abraham Jose Shiera Bastidas (Shiera), 52, of Coral Gables, Florida, pleaded guilty yesterday in federal court before U.S. District Judge Gray H. Miller of the Southern District of Texas in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and commit wire fraud and one count of violating the FCPA. Sentencing is scheduled for July 8, 2016. Four others charged in relation to the case have pleaded guilty, including three foreign officials.
“The five convictions announced today hold to account bribe payors as well as the corrupt foreign officials who laundered the bribe money through the United States,” said Assistant Attorney General Caldwell. “These individual prosecutions are the result of a tenacious and coordinated effort by our prosecutors and agents to unravel a complex web of bribes paid to Venezuelan officials. And they demonstrate our commitment to building cases from the ground up, instead of counting on companies and other wrongdoers to self-disclose their crimes.”
“The pleas of guilty in this case are the result of the strict enforcement of the FCPA in this district,” said U.S. Attorney Magidson. “Bribery under this law is a serious federal crime that undermines commercial and political relations around the world. This case is an example of our reach to expose this criminal conduct.”
Shiera was arrested in Miami on Dec. 16, 2015, after a federal grand jury returned an 18-count indictment against him and Roberto Enrique Rincon Fernandez (Rincon), 55, of The Woodlands, Texas. According to admissions made in connection with Shiera’s plea, Shiera and Rincon worked together to submit bids to provide equipment and services to PDVSA through their various companies. Shiera admitted that beginning in 2009, he and Rincon agreed to pay bribes and other things of value to PDVSA purchasing analysts to ensure that his and Rincon’s companies were placed on PDVSA bidding panels, which enabled the companies to win lucrative energy contracts with PDVSA. Shiera also made bribe payments to other PDVSA officials in order to ensure that his companies were placed on PDVSA-approved vendor lists and given payment priority so that they would get paid ahead of other PDVSA vendors with outstanding invoices, he admitted.
“The corruption of foreign officials through bribery has a damaging impact on the stability of trade, industries and even nations,” said Acting Special Agent in Charge McElroy. “HSI and our partners will tirelessly investigate anyone who cultivates the corruption of officials abroad and bribe their way to financial gain.”
“Bribery and corruption undermines honest, free enterprise and creates an atmosphere of back room dealing that impairs the ability for honest businesses to compete,” said Special Agent in Charge Goss. “IRS-CI tirelessly untangles the web of illicit transactions that lead to corrupt individuals being held accountable.”
Judge Miller also unsealed charges yesterday against four other individuals charged in connection with the investigation. In January 2016, Moises Abraham Millan Escobar (Millan), 32, of Katy, Texas, pleaded guilty under seal to one count of conspiracy to violate the FCPA for his role in the PDVSA bribery scheme. Millan was Shiera’s former employee. In December 2015, three former PDVSA officials, Jose Luis Ramos Castillo (Ramos), 38; Christian Javier Maldonado Barillas (Maldonado), 39; and Alfonzo Eliezer Gravina Munoz (Gravina), 53, all from Katy, each pleaded guilty under seal to conspiracy to commit money laundering. As part of their guilty pleas, Ramos, Maldonado and Gravina each admitted that while employed by PDVSA or its wholly owned subsidiaries or affiliates, they accepted bribes from Shiera and Rincon in exchange for taking certain actions to assist companies owned by Shiera and Rincon in winning energy contracts with PDVSA. Ramos, Maldonado and Gravina also admitted that they conspired with Shiera and Rincon to launder the proceeds of the bribery scheme. Gravina also pleaded guilty to making false statements on his 2010 federal income tax return by failing to report the bribe payments he received from Shiera, Rincon and others. As part of their plea agreements, Shiera, Millan, Ramos, Maldonado and Gravina all agreed to forfeit proceeds of their criminal activity.
The charges against Rincon remain pending. He is charged with one count of conspiracy to violate the FCPA and commit wire fraud, one count of conspiracy to commit money laundering, seven counts of money laundering and four counts of violating the FCPA. Rincon was ordered detained pending trial following a detention hearing held on Dec. 18, 2015, before U.S. Magistrate Judge Nancy K. Johnson of the Southern District of Texas. The charges contained in the indictment are merely accusations, and Rincon is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
ICE-HSI and IRS-CI are conducting the ongoing investigation with assistance from the FBI. Trial Attorneys Aisling O’Shea and Jeremy R. Sanders of the Criminal Division’s Fraud Section and Deputy Chief John Pearson and Assistant U.S. Attorney Robert S. Johnson of the Southern District of Texas are prosecuting the case. Assistant U.S. Attorneys Kristine Rollinson and Vincent Carroll of the Southern District of Texas are handling the forfeiture aspects of the case.
The Criminal Division’s Office of International Affairs also provided assistance.
Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Mexican Businessman Sentenced to Federal Prison for Role in Los Zetas Money Laundering Scheme and BriberyRead the Press Release
In Austin, 55-year-old Veracruz, Mexico businessman Francisco Antonio Colorado-Cessa (aka “Pancho”), was sentenced to 20 years in federal prison for laundering Los Zetas drug proceeds and attempting to bribe a federal judge announced United States Attorney Richard L. Durbin, Jr., FBI Special Agent in Charge Christopher Combs and Internal Revenue Service Criminal Investigation Special Agent in Charge William Cotter.
In addition to the prison term, U.S. District Judge Donald E. Walter ordered that Colorado-Cessa forfeit to the U.S. Government $60 million in U.S. Currency and property—proceeds seized by authorities involved in the money laundering scheme—including two planes and five bank accounts.
In December 2015, a federal jury in Austin convicted Colorado-Cessa, the owner of ADT Petroservicios, an oil services company in Mexico doing business with the Mexican National Oil Company PEMEX, of one count of conspiracy to commit money laundering. The conspiracy charge centered on a scheme to launder millions of dollars in Los Zetas drug distribution proceeds through purchasing, training, breeding and racing American quarter horses in the United States. Testimony during that trial revealed a shell game by Colorado Cessa, a close associate of the Zetas drug cartel’s top leaders including Miguel Angel Trevino Morales (aka “Z-40”), Oscar Omar Trevino Morales (aka “Z-42”), and others involving straw purchasers and transactions worth millions of dollars in New Mexico, Oklahoma, California and Texas to disguise the source of the drug money and make the proceeds from the sale of quarter horses or their race winnings appear legitimate.
Over 400 quarter horses seized by federal authorities in June 2012 as part of the above mentioned money laundering operation have been sold for approximately $12 million. One of the seized horses, Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, TX, in October 2009, sold at an auction for a record $1.7 million in November 2013.
In January 2016, a separate federal jury found Colorado-Cessa guilty of one count of conspiracy to bribe a public official and one substantive count of bribery, by offer or promise, of a public official. Evidence during trial revealed that Colorado-Cessa and others conspired in 2013 to pay a $1.2 million bribe to a federal judge in order to secure a reduced sentence for Colorado-Cessa in the above-mentioned money laundering case. According to court records, at no time before or during this investigation was the federal judge involved in the alleged criminal activity.
“Today’s resentencing of Francisco Colorado-Cessa to 20 years in prison is confirmation that the American public is steadfast in their conviction that he was properly found guilty of money laundering and bribery the first time,” said IRS Criminal Investigation Special Agent in Charge William Cotter, San Antonio Field Office. “Even with a second trial, the jury quickly came to the same conclusion – guilty. IRS Criminal Investigation was proud to be part of the law enforcement team that brought this criminal to justice.”
“The sentence handed down today ends years of litigation, and imposes significant punishment upon the defendant. The FBI appreciates the hard work and dedication of all the prosecutors and agents who have handled this important case, which demonstrates our collective commitment to protect the United States from the violence and corruption associated with Mexican drug cartels,” stated FBI Special Agent in Charge Christopher Combs, San Antonio Division.
This investigation was conducted by agents with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Drug Enforcement Administration with assistance from the United States Marshals Service, Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) and U.S. Border Patrol. Other judicial districts involved in this matter include the Western District of Oklahoma, Central District of California, Southern District of Texas, District of New Mexico and the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC).
Mercer County, New Jersey, Man Sentenced to More Than 15 Years in Prison for Series of Armed RobberiesRead the Press Release
TRENTON, N.J. - A Mercer County, New Jersey, man was sentenced today to 188 months in prison for committing four armed robberies of commercial establishments in Mercer county, U.S. Attorney Paul J. Fishman announced.
Samuel Matias Cruz, 36, formerly of Trenton, New Jersey, previously pleaded guilty to an information charging him with one count of conspiracy to commit Hobbs Act robberies. U.S. District Judge Michael A. Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Between September 2012 and March 2013, Cruz and his conspirators planned and executed a number of violent armed robberies of various commercial establishments in the Trenton area, including gas stations, restaurants, travel agencies and money-remitting businesses. In several robberies, Cruz and others brandished firearms and physically restrained victims with plastic zip ties before absconding with large quantities of money taken from the respective establishments’ cash drawers and registers.
On one occasion in December 2012, Cruz and two conspirators robbed the Sabor Latino Bar in Trenton. During this robbery, the men held five individuals who were then present in the bar at gunpoint and subsequently restrained them by tying their hands with plastic zip ties. Cruz and the other conspirators then stole approximately $12,000 from the bar’s cash register, as well as approximately $2,000 in cash and jewelry from the bar’s patrons.
Subsequently, on Dec. 29, 2012, Cruz helped plan and execute the robbery of the Woodrow Wilson Service Plaza Sunoco Gas Station on the New Jersey Turnpike, located in Hamilton Township, New Jersey. During that robbery, Cruz and another conspirator entered the station carrying handguns and physically restrained a Sunoco employee with plastic zip ties. The men stole approximately $26,000 from the station’s cash register before fleeing the location.
In addition to the prison term, Judge Shipp sentenced Cruz to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky; the Mercer County Prosecutor’s Office, under the direction of Acting Prosecutor Angelo J. Onofri; and the Burlington County Prosecutor’s Office, under the direction of Prosecutor Robert D. Bernardi, with the investigation leading to today’s sentencing. He also thanked officers from the N.J. State Police, under the direction of Col. Rick Fuentes, the Trenton Police Department, under the direction of Director Ernest Parrey, Jr., and the Westampton Police Department, under the direction of Police Chief Joseph Otto, for their roles in the case.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Adalgiza A. Nunez, Newark, NJ
Medical Device Company Employee Charged with Accepting $75,000 Bribe for Securing Contract with His CompanyRead the Press Release
NEWARK, N.J. – A Monroe, New York, man, was charged today with accepting a $75,000 bribe for his assistance in securing a contract between a metallurgical technology company and his employer, a medical device company in New Jersey, U.S. Attorney Paul J. Fishman announced.
Daniel Lawyrnowicz, 46, is charged by complaint with violating the Federal Travel Act for accepting $75,000 from the technology Company in consideration for his assistance in obtaining the contract. Lawyrnowicz is expected to appear later today before U.S. Magistrate Judge James B. Clark III in Newark federal court.
According to documents filed in this case and statements made in court:
On Dec. 22, 2015, an individual representing the technology company made a consensually recorded call to Lawyrnowicz during which the representative said he was nervous about a purported upcoming government audit of his company, and he raised concerns about the $75,000 payment to Lawyrnowicz.
Representative: “I am more worried about that 75k in cash that eh you know that we gave you, I don’t know if that ever comes up, or we deny it right, obviously.”
Lawrynowicz: “Yeah, yeah . . . when is that happening?”
Representative: “It’s ongoing, they called us to say they are auditing us and they just showed up. . .”
Lawrynowicz: “Let’s get a story together so that ah you know it all has legs and a tail.”
The count of violating the Federal Travel Act carries a maximum potential punishment of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s charge.
The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office of the District of New Jersey, including creating a stand-alone Health Care and Government Fraud Unit, which handles both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Peter Till Esq., Springfield, New Jersey
Massachusetts Man Sentenced in Manhattan Federal Court to 151 Months in Prison for Trafficking of Cocaine, Heroin, and Oxycodone PillsRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced today that HECTOR SANTILLAN, a/k/a “Bane,” a/k/a “Bene,” a/k/a “Liro,” was sentenced in Manhattan federal court to 151 months in prison for conspiring to distribute cocaine, heroin, and oxycodone pills, and possessing with intent to distribute cocaine. He was convicted in November 2015 following a five-day jury trial before U.S. District Judge Robert W. Sweet. SANTILLAN was sentenced today before Judge Sweet.
U.S. Attorney Bharara stated: “Hector Santillan was convicted by a jury of serious drug trafficking crimes. Heroin and prescription pill abuse is ravaging our neighborhoods, and those like Santillan who peddle these drugs are fueling this national epidemic.”
According to the evidence presented at trial and documents filed in the case:
From in or about the summer of 2012, up to and including February 12, 2013, SANTILLAN sold cocaine, heroin, and oxycodone pills as a member of a drug trafficking organization spanning the east coast of the United States. On February 12, 2013, SANTILLAN and a co-conspirator travelled from Massachusetts to the Washington Heights neighborhood of Manhattan, where SANTILLAN purchased four kilograms of cocaine. As they turned around to return to Massachusetts, their car was pulled over by a Westchester County Police officer for a traffic violation. A search of the car later revealed the cocaine in a compartment hidden under the seat on which SANTILLAN was sitting. The evidence at trial also showed that SANTILLAN owned an assault rifle, and in concert with other co-conspirators, SANTILLAN used his assault rifle to make a credible threat to use violence against an individual he believed was planning to rob the organization of drugs and drug proceeds.
SANTILLAN, 38, of Methuen, Massachusetts, was sentenced to 151 months in prison, to be followed by four years of supervised release, and a $200 special assessment.
United States Attorney Bharara praised the investigative work of the Drug Enforcement Administration and the Westchester County Department of Public Safety.
The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Kristy J. Greenberg and Noah D. Solowiejczyk are in charge of the prosecution.
Martin County Man Convicted of Bank and Mail FraudRead the Press Release
A Martin County man was convicted yesterday, following a federal jury trial, on charges stemming from his harassment of police officers and the obstruction of civil lawsuits, during the course of extensive bank and mail fraud schemes.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Mark Alan Yoder, 55, of Hobe Sound, was charged by indictment with five counts of bank fraud, in violation of Title 18, United States Code, Section 1344; and four counts of mail fraud, in violation of Title 18, United States Code, Section 1341. Yoder was convicted on all counts of the indictment and faces a statutory maximum sentence of up to 30 years in prison and/or a $1,000,000 fine. A sentencing date has not yet been scheduled. Sentencing will be imposed by Senior United States District Judge Paul C. Huck in Fort Pierce.
According to trial testimony and court documents, Yoder carried out bank and mail fraud schemes. On October 18, 2010, Yoder received a traffic citation, for driving without a seat belt, from a Tequesta Police Department Officer. Yoder objected to the ticket, demanded to speak to a supervisor and denied the officer had any authority for the stop. The officer’s supervisor arrived on the scene to provide assistance. Beginning in the months following the traffic stop and into early 2011, Yoder sent, by mail, a succession of fraudulent formal demands and notices, claiming the two police officers and the Tequesta Police Department each owed him $150,000 in damages. Yoder also sent similar demands for large damage payments to officers and executives of the bank that was foreclosing upon his home. Not long after the final judgment of foreclosure was entered in the state court, Yoder filed a fraudulent mechanic’s lien against the bank’s property, falsely claiming that he was owed thousands of dollars for his maintenance of the home prior to the foreclosure. Yoder renewed the fraudulent mechanic’s lien, with successive filings, in 2014 and 2015.
Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer also thanked the Martin County Sheriff’s Office, the Tequesta Police Department, and the Office of the Clerk of the Circuit Court for Martin County, Florida, for their assistance with this investigation. The case was prosecuted by Assistant U.S. Attorneys Theodore Cooperstein and Kerry Baron.
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.
Marlborough Man Pleads Guilty to Heroin and Firearms ChargesRead the Press Release
CONCORD, NEW HAMPSHIRE: Robert Ervin, 20, of Marlborough, New Hampshire, pled guilty in the United States District Court for the District of New Hampshire to distributing heroin, possessing heroin with the intent to distribute it, and possessing a firearm as a regular user of heroin, announced United States Attorney Emily Gray Rice.
On October 8, 2015, law enforcement officers from the Keene, New Hampshire Police Department, Homeland Security Investigations (HSI), the New Hampshire State Police, and the Attorney General’s Drug Task Force observed Ervin engaging in what appeared to be a suspicious hand-to-hand transaction in Keene, New Hampshire. When approached by the officers, Ervin admitted that he had just sold a quantity of heroin. A search of his person and vehicle revealed the presence of additional heroin and a loaded firearm.
Ervin is scheduled to be sentenced in June 2016. The statutory maximum prison term for the crimes charged is 20 years, a term of supervised release of at least 3 years, and a fine of up to $500,000. The court will sentence Ervin after it has had an opportunity to review a presentence report prepared by the United States Probation & Pretrial Services Office.
The case was investigated by law enforcement from Homeland Security Investigations (HSI), the Keene, New Hampshire Police Department, the New Hampshire State Police, the Attorney General’s Drug Task Force, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant United States Attorney Nick Abramson.
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Marion County, WV man pleads guilty to possessing child pornographyRead the Press Release
CLARKSBURG, WEST VIRGINIA – Michael P. Lough, 28, of Fairmont, West Virginia, pled guilty today to possession of child pornography, United States Attorney William J. Ihlenfeld, II, announced.Lough utilized an internet based website to access images of child pornography. In July 2015, using online surveillance and investigatory techniques, authorities discovered Lough to be in possession of various images of child pornography.
Lough pled guilty today to an Information charging him with one count of “Possession of Child Pornography.” He faces up to 20 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Sarah Montoro prosecuted the case on behalf of the government. The Federal Bureau of Investigation led the inquiry.
U.S. Magistrate Judge Michael John Aloi presided.
Mandeville Postal Worker Sentenced for TheftRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ANGELA MITCHELL, age 40, of Mandeville, was sentenced today for Theft of Mail.
U.S. District Court Judge Susie Morgan sentenced MITCHELL to two years’ probation and ordered MITCHELL to pay restitution in the amount of $4,050.90.
According to court records, as a result of a complaint from the Postmaster of the
Mandeville Post Office, the Office of Inspector General for the United States Postal Service (“Postal OIG”) initiated an investigation into MITCHELL, an employee of the Postal Service assigned to the Mandeville Post Office. It was determined that MITCHELL had stolen a credit card from a post office box and used the stolen card on three occasions without authorization, resulting in approximately $460 in fraudulent charges. Additionally, investigators determined that MITCHELL had embezzled $3,591 from the Post Office.
U.S. Attorney Polite praised the work of the U.S. Postal Inspection Service, Office of Inspector General. The prosecution of this case is being handled by Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba.
Logan County, Kentucky, Tax Return Preparers Charged with Preparing False Tax ReturnsRead the Press Release
Falsified taxpayer education expenses resulting in education credits on prepared tax returns
BOWLING GREEN, Ky. – Logan County, Kentucky, tax preparers appeared in United States District Court this morning, before Magistrate Judge H. Brent Brennenstuhl, charged with conspiring to defraud the United States through preparing false tax returns and aiding in the preparation of the false returns, announced United States Attorney John E. Kuhn, Jr.
Defendants Tara L. Mitchell and Mechelle Blankenship were charged last week in a 21 count grand jury indictment that was unsealed Monday, March 21, 2016. According to the charges, the defendants worked together at Triple J Tax, a tax return preparation office located in Russellville, Kentucky. Mitchell managed the office and in 2012, hired and trained defendant Blankenship to prepare tax returns.
Between March 2012, and November 2014, the defendants allegedly prepared electronically filed U.S. Individual Income Tax Returns, on behalf of themselves and clients of Triple J Tax, which stated that the taxpayers had incurred educational expenses, when they had not, and thus falsely claimed education-related credit, to which the taxpayers were not entitled.
Further, the defendants are separately charged, in counts 2-21, with aiding in the preparation of false returns.
If convicted at trial, Blankenship could be sentenced to up to 41 years in prison, fined $1,450,000 and required to serve a 3 year period of supervised release. Mitchell could be sentenced up to 29 years in prison, fined $1,050,000 and required to serve a 3 year period of supervised release.
Assistant United States Attorney Amanda E. Gregory is prosecuting the case. The Internal Revenue Service (IRS) Criminal Investigation office is conducting the investigation.
Local Doctor Convicted of Defrauding Medicare of $2.9 MillionRead the Press Release
HOUSTON – A federal jury in Houston has found two Houston men guilty of engaging in a conspiracy to defraud Medicare of $2.9 million, announced U.S. Attorney Kenneth Magidson. Dr. Leonard Kibert, 65, and Tsolak “Mike” Gevorgyan, 30, were found guilty of conspiracy and health care fraud. Kibert was also found guilty of money laundering, while Gevorgyan was convicted of paying kickbacks to marketers in return for bringing patients to the fraudulent clinic. The jury deliberated for approximately seven hours before finding both guilty as charged following 14 days of trial.
The fraudulent Medicare billing was for diagnostic testing at the New Life Sleeping & Allergy Disorder Center located on Chenevert Street in Houston, which either was never performed or was not medically necessary. Kibert owned New Life and Gevorgyan managed the clinic.
Gevorgyan paid recruiters/marketers to bring patients to the clinic.
The defendants face a maximum penalty of 10 years imprisonment for the conspiracy and each of 37 health care fraud convictions. Gevorgyan faces a maximum of five years imprisonment for the conspiracy to pay and receive kickbacks and each of the four counts of paying and receiving of kickbacks, while Kibert faces up to 10 years imprisonment for each of the three money laundering counts. All convictions also carry a possible $250,000 fine. Kibert and Gevorgyan were allowed to remain free on bond pending their sentencing.
U.S. District Judge Keith P. Ellison presided over the trial and has set sentencing for Aug. 30, 2016.
The criminal charges are the result of a joint investigation conducted by agents of the FBI, U.S. Department of Health and Human Services, Office of Inspector General, the Internal Revenue Service, Criminal Investigations and the Medicaid Fraud Control Unit of the Texas Attorney General's Office. This case will be prosecuted by Assistant United States Attorney Al Balboni and Special Assistant United States Attorney Rodolfo Ramirez.
Leaders of Lorenzana Drug Trafficking Organization Convicted on International Narcotics Trafficking ChargesRead the Press Release
Eliu Elixander Lorenzana-Cordon and Waldemar Lorenzana-Cordon, leaders of a Guatemala-based international drug trafficking organization responsible for importing multi-ton quantities of cocaine into the United States, were convicted on international narcotics trafficking charges in the District of Columbia following a four-week trial.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced the conviction.
“For well over a decade, the defendants led a major Central American drug trafficking organization responsible for importing tons of cocaine into the United States,” said Assistant Attorney General Caldwell. “This verdict sends a powerful message that the United States and its partners will pursue and obtain justice against international drug traffickers.”
“Eliu and Waldemar Lorenzana-Cordon’s crimes have destroyed families and communities,” said Acting Deputy Administrator Riley. “Their organization fed a pipeline of drugs ultimately sold on American streets, fostering violence and drug addiction. Their conviction marks the end of their criminal reign and the beginning of their life behind bars.”
Eliu, 43, and Waldemar, 49, were each convicted on one count of conspiring to unlawfully import and distribute cocaine into the United States. The defendants were arrested in Guatemala after their indictment on this conspiracy charge and then extradited to the United States.
According to evidence presented at trial, the Lorenzana-Cordons were leaders of an international drug trafficking organization with close ties to the Sinaloa Cartel. Evidence at trial demonstrated that between 1996 and 2009, the defendants and their co-conspirators received, stored and distributed multi-ton quantities of cocaine from Colombia at their properties in Zacapa, Guatemala, for importation into Mexico and then ultimately into the United States.
On April 27, 2010, the Department of Treasury’s Office of Foreign Asset Control designated both defendants as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act due to their significant roles in international narcotics trafficking and their ties to the Sinaloa Cartel, according to evidence presented at trial.
The Drug Enforcement Administration’s 959/Bilateral Investigations Unit and Guatemala City Country Office led the investigation, which was part of the Organized Crime Drug Enforcement Task Force. Trial Attorneys Michael Lang, Stephen Sola and Emily Cohen of the Criminal Division’s Narcotic and Dangerous Drug Section are prosecuting the case. The Criminal Division’s Office of International Affairs provided substantial assistance. The Chicago Police Department and the governments of El Salvador and Panama provided support and assistance in this prosecution. The Justice Department in particular wishes to convey its gratitude to the government of Guatemala for its steadfast commitment, collaboration and assistance in the investigation, extradition and prosecution of this case.
Laurel Man Sentenced to 10 Years in Prison for Cocaine Distribution and Money Laundering ConspiraciesRead the Press Release
Baltimore, Maryland – U.S. District Judge Paul W. Grimm sentenced Mahmood Hussain, age 31, of Laurel, Maryland today to 10 years in prison, followed by four years of supervised release, for conspiracy to possess with intent to distribute cocaine, and for conspiracy to commit money laundering.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief Hank Stawinski of the Prince George’s County Police Department; Acting Chief Stanley Johnson, of the Maryland National Capital Park Police, Prince George’s County Division; Chief Antonio DeVaul of the Maryland National Capital Park Police, Montgomery County Division; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, from at least April 2013 through November 2013, Hussain conspired with Marvin Taaff and others to distribute powder and crack cocaine. In addition to supplying crack cocaine purchased by a confidential informant, Hussain was overheard by law enforcement discussing the delivery of drugs, the amount of drugs, locations to conduct the transactions, and money involved in the purchase of drugs. For example, in one conversation Hussain and Taaff discuss a batch of cocaine that Taaff received from Hussain that was of poor quality. Hussain subsequently coordinated with Taaff and was observed by law enforcement retrieving the cocaine to return to Hussain’s supplier so that Taaff could get a refund. Hussain was also overheard telling Taaff that he needed to get a gun because someone stole $1,000 from him.
In addition, Hussain deposited money into a bank account, as directed by Taaff, for the purchase of drugs. The bank account was held in the name of a recruited individual, who withdrew the money as directed by another co-conspirator.
On December 5, 2013, search warrants were executed at locations in Prince George’s County, Montgomery County and Tucson, Arizona, in connection with the conspiracy. At Hussain’s residence, law enforcement recovered drug packaging materials and drug paraphernalia, approximately $1,261 in cash and approximately $1,200 in counterfeit currency, as well as 9.3 grams of crack cocaine.
Hussain admitted that during his participation in the conspiracy, at least 500 grams of powder cocaine and 28 grams of crack cocaine were distributed; and at least $91,261 was furnished in exchange for drugs.
Marvin Anthony Taaff, age 29, of Takoma Park, Maryland, previously pleaded guilty to his role in the conspiracy and is scheduled to be sentenced on April 4, 2016
United States Attorney Rod J. Rosenstein praised the ATF, Prince George’s County Police Department, Maryland-National Capital Park Police and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Lindsay Eyler Kaplan, who prosecuted the case.
Justice Department Obtains $130,000 Settlement in Lawsuit Against Indiana Mobile Home Park for Discriminating Against Families with ChildrenRead the Press Release
The Justice Department announced that the corporate owner and agent of Gentle Manor Estates have agreed to pay $130,000 to settle a Justice Department lawsuit alleging familial status discrimination. The settlement must still be approved by the U.S. District Court for the Northern District of Indiana.
The lawsuit, filed in May 2015, alleged that Gentle Manor Estates LLC and John Townsend violated the Fair Housing Act by maintaining and enforcing a discriminatory policy of refusing to allow families with children to live at Gentle Manor Estates, a 173-lot mobile home park in Crown Point, Indiana. The allegations were based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
“The Fair Housing Act guarantees families with children the right to choose a home without facing unlawful barriers of discrimination,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act to ensure that equal access to housing – a bedrock of the American dream – remains a reality for all families in our country.”
Under the terms of the proposed settlement, the defendants must pay $100,000 into a settlement fund to compensate victims of discrimination and an additional $30,000 to the government as a civil penalty. In addition, the proposed settlement requires the defendants to implement a nondiscrimination policy, establish new nondiscriminatory application and rental procedures and undergo training on the Fair Housing Act. Anyone who believes that they have been discriminated against by Gentle Manor Estates because they have children should call the Justice Department at 1-800-896-7743, mailbox number 9994 or email the department at [email protected].
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt/.
Gentle Manor Estates Consent Order
Justice Department Obtains $130,000 Settlement in Lawsuit Against Indiana Mobile Home Park for Discriminating Against Families with ChildrenRead the Press Release
WASHINGTON – The Justice Department announced that the corporate owner and agent of Gentle Manor Estates have agreed to pay $130,000 to settle a Justice Department lawsuit alleging familial status discrimination. The settlement must still be approved by the U.S. District Court for the Northern District of Indiana.
The lawsuit, filed in May 2015, alleged that Gentle Manor Estates LLC and John Townsend violated the Fair Housing Act by maintaining and enforcing a discriminatory policy of refusing to allow families with children to live at Gentle Manor Estates, a 173-lot mobile home park in Crown Point, Indiana. The allegations were based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
“The Fair Housing Act guarantees families with children the right to choose a home without facing unlawful barriers of discrimination,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act to ensure that equal access to housing – a bedrock of the American dream – remains a reality for all families in our country.”
Under the terms of the proposed settlement, the defendants must pay $100,000 into a settlement fund to compensate victims of discrimination and an additional $30,000 to the government as a civil penalty. In addition, the proposed settlement requires the defendants to implement a nondiscrimination policy, establish new nondiscriminatory application and rental procedures and undergo training on the Fair Housing Act. Anyone who believes that they have been discriminated against by Gentle Manor Estates because they have children should call the Justice Department at 1-800-896-7743, mailbox number 9994 or email the department at [email protected].
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt/.
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Jury Finds Mexican Businessowner Guilty in Stolen Identity Refund Fraud CaseRead the Press Release
In El Paso today, a federal jury convicted Elizabeth “Betty” Garcia de Nieto of Delicias, Chihuahua, Mexico, of her role in an income tax return scheme that resulted in more than $2.9 million in fraudulent refunds being issued by the IRS announced United States Attorney Richard L. Durbin, Jr., and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge William Cotter.
Jurors convicted Garcia (aka “Elizabeth Jurado”) of one count of conspiracy to defraud the United States; five counts of mail fraud; three counts of aiding and abetting aggravated identity theft; and, one count of conspiracy to defraud the United States with respect to claims.
Evidence presented during trial revealed that from January 2010 to February 2015, Garcia used stolen identities to create fraudulent U.S. tax returns. Each return claimed an approximate $5,000 refund from the IRS. Garcia gave some of the IRS refund checks to individuals to bring into the United States to be cashed at money service businesses in El Paso. She mailed others to individuals residing in the U.S. (namely El Paso, Chaparral, NM, and Oklahoma City, OK) to be converted to U.S. currency. All monies derived from the scheme, minus agreed-to-fees retained by co-defendants, were wired back to Garcia.
Trial testimony also revealed that in September 2014, U.S. Customs agents at the Paso del Norte Port of Entry seized ten fraudulent tax returns from an employee of Garcia.
“Garcia used false and fraudulent tax returns to steal from the IRS, and ultimately, from American taxpayers. Working from Mexico, she thought she was beyond the reach of U.S. justice. This verdict introduces her to the American justice system, and should serve notice on others that U.S. prosecutors and IRS criminal investigators will not stop at the border,” said U.S. Attorney Richard L. Durbin, Jr.
“Today’s guilty verdict for Elizabeth Garcia de Nieto demonstrates the power of the American judicial system when it comes to stealing from the United States Treasury,” said Special Agent in Charge William Cotter, IRS-CI San Antonio Field Office. “Despite the fact that Ms. Garcia lived in Mexico, IRS-CI special agents tracked the fraudulent IRS tax returns she filed and, because of our strong relationships with our international law enforcement partners, brought her to justice.”
Garcia faces up to 20 years in federal prison on each mail fraud charge; up to ten years imprisonment for conspiracy to defraud with respect to claims; up to five years imprisonment for conspiracy to defraud the United States; and, a mandatory two years imprisonment for each aggravated identity theft charge to run consecutive to any other term of imprisonment assessed. Garcia also faces restitution to the United States to be determined at sentencing.
Prior to jury selection, 38-year-old co-defendant Christina Perez Altamirano of Oklahoma City, OK, pleaded guilty to conspiracy to commit mail fraud prior. Garcia and Perez remain in federal custody pending sentencing. No sentencing dates have been scheduled.
Two other co-defendants--42-year-old Rodolfo Ramirez-Estrada of El Paso, and 35-year-old Alberto Altamirano Armendarie of Montgomery, AL— remain in custody awaiting trial on two counts of conspiracy to defraud the U.S. No trial date has been set for Ramirez-Estrada and Altamirano.
This case was investigated by special agents with the Internal Revenue Service-Criminal Investigation, Homeland Security Investigations and U.S. Department of State—Diplomatic Security Service. Assistant United States Attorneys Jose Luis Gonzalez, Adrian E. Gallegos and Anna Arreola are prosecuting this case on behalf of the Government.
Jury Finds Mexican Businessowner Guilty in Stolen Identity Refund Fraud CaseRead the Press Release
In El Paso today, a federal jury convicted Elizabeth “Betty” Garcia de Nieto of Delicias, Chihuahua, Mexico, of her role in an income tax return scheme that resulted in more than $2.9 million in fraudulent refunds being issued by the IRS announced United States Attorney Richard L. Durbin, Jr., and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge William Cotter.
Jurors convicted Garcia (aka “Elizabeth Jurado”) of one count of conspiracy to defraud the United States; five counts of mail fraud; three counts of aiding and abetting aggravated identity theft; and, one count of conspiracy to defraud the United States with respect to claims.
Evidence presented during trial revealed that from January 2010 to February 2015, Garcia used stolen identities to create fraudulent U.S. tax returns. Each return claimed an approximate $5,000 refund from the IRS. Garcia gave some of the IRS refund checks to individuals to bring into the United States to be cashed at money service businesses in El Paso. She mailed others to individuals residing in the U.S. (namely El Paso, Chaparral, NM, and Oklahoma City, OK) to be converted to U.S. currency. All monies derived from the scheme, minus agreed-to-fees retained by co-defendants, were wired back to Garcia.
Trial testimony also revealed that in September 2014, U.S. Customs agents at the Paso del Norte Port of Entry seized ten fraudulent tax returns from an employee of Garcia.
“Garcia used false and fraudulent tax returns to steal from the IRS, and ultimately, from American taxpayers. Working from Mexico, she thought she was beyond the reach of U.S. justice. This verdict introduces her to the American justice system, and should serve notice on others that U.S. prosecutors and IRS criminal investigators will not stop at the border,” said U.S. Attorney Richard L. Durbin, Jr.
“Today’s guilty verdict for Elizabeth Garcia de Nieto demonstrates the power of the American judicial system when it comes to stealing from the United States Treasury,” said Special Agent in Charge William Cotter, IRS-CI San Antonio Field Office. “Despite the fact that Ms. Garcia lived in Mexico, IRS-CI special agents tracked the fraudulent IRS tax returns she filed and, because of our strong relationships with our international law enforcement partners, brought her to justice.”
Garcia faces up to 20 years in federal prison on each mail fraud charge; up to ten years imprisonment for conspiracy to defraud with respect to claims; up to five years imprisonment for conspiracy to defraud the United States; and, a mandatory two years imprisonment for each aggravated identity theft charge to run consecutive to any other term of imprisonment assessed. Garcia also faces restitution to the United States to be determined at sentencing.
Prior to jury selection, 38-year-old co-defendant Christina Perez Altamirano of Oklahoma City, OK, pleaded guilty to conspiracy to commit mail fraud prior. Garcia and Perez remain in federal custody pending sentencing. No sentencing dates have been scheduled.
Two other co-defendants--42-year-old Rodolfo Ramirez-Estrada of El Paso, and 35-year-old Alberto Altamirano Armendarie of Montgomery, AL— remain in custody awaiting trial on two counts of conspiracy to defraud the U.S. No trial date has been set for Ramirez-Estrada and Altamirano.
This case was investigated by special agents with the Internal Revenue Service-Criminal Investigation, Homeland Security Investigations and U.S. Department of State—Diplomatic Security Service. Assistant United States Attorneys Jose Luis Gonzalez, Adrian E. Gallegos and Anna Arreola are prosecuting this case on behalf of the Government.
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Judge Orders Recall of Dangerous MagnetsRead the Press Release
A federal judge yesterday ordered a Colorado company to recall powerful, small magnets that can cause fatal injuries when swallowed, the Justice Department announced.
U.S. District Court Judge Christine M. Arguello of the District of Colorado had previously issued a preliminary injunction that prohibited Zen Magnets LLC and its owner, Shihan Qu, from further sale of the magnets. On Tuesday, Judge Arguello made the injunction against the sale of the magnets permanent, ordered Zen Magnets to conduct a recall in which the company must provide refunds to consumers who return the magnets and directed Zen Magnets to destroy the remaining magnets in the company’s inventory.
The court found that Zen Magnets purchased approximately 917,000 small magnets at a substantial discount from another company that one week later agreed to recall the magnets as part of an agreement with the U.S. Consumer Product Safety Commission (CPSC). Judge Arguello ruled that Zen Magnets violated the Consumer Product Safety Act when it subsequently resold the magnets.
“We are pleased that the district court recognized that putting a dangerous consumer product in a different box and calling it a different name does not permit a company to circumvent a recall,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work with the Consumer Product Safety Commission to protect consumers—especially children—by enforcing recalls of dangerous products.”
The company had argued that by placing the magnets in different packaging and selling the magnets under different names, the magnets were no longer covered by the recall. Judge Arguello rejected that argument, saying that Zen Magnets’ interpretation “would allow manufacturers and importers of consumer products to simply circumvent (and effectively disarm)” the Consumer Product Safety Act “by merely repackaging recalled products as they saw fit.”
Judge Arguello noted that Qu knew when his company purchased the magnets in July 2014 that the seller was about to enter into an agreement with the CPSC to recall the magnets and that it was likely that it would soon be illegal to sell the magnets. Nonetheless, Zen Magnets ignored repeated warnings by the CPSC and continued to sell the magnets until the court issued the preliminary injunction last year. Judge Arguello stated that allowing consumers to return the magnets “will reduce the likelihood that such consumers are injured by those products” and would deter future violations of the law by forcing Zen Magnets to issue refunds.
“Thanks to the hard work of Assistant U.S. Attorneys from Colorado and Department of Justice Trial Attorneys, a dangerous product has been successfully removed from the market,” said U.S. Attorney John Walsh for the District of Colorado. “This product is known to harm children, and based on that fact alone, the litigation to remove it was critical to protect consumers.”
“Today’s decision puts the rule of law and the safety of children above the profits sought by Zen Magnets,” said Chairman Elliot F. Kaye for CPSC. “Far too many children have been rushed into hospital emergency rooms to have multiple, high-powered magnets surgically removed from their stomachs. Young children have suffered infections and one child tragically died from swallowing loose magnets that often look like candy. The ruling is a major victory for the safety of consumers. Our pursuit of this case makes clear we will not tolerate the sale of recalled goods in any form. I am pleased that Judge Arguello ordered Zen to issue refunds to consumers, and I urge anyone who purchased these magnets to immediately seek a refund from Zen.”
The magnets at issue are typically sold in sets of hundreds and are commonly marketed and sold as “sculptural” desk toys. According to the CPSC, when a person ingests more than one of the powerful small magnets, the magnets are attracted to each other in the digestive system, creating the potential for serious damage to the intestinal tissue trapped in between or even death.
Zen Magnets is separately challenging a rule issued by the CPSC that prohibits the sale of magnets or magnet sets that are small enough to be swallowed and that have a high degree of magnetic attraction. That rule went into effect and applies only to magnets sold after April 1, 2015. That case remains pending on appeal.
The case is being handled by Senior Litigation Counsel Patrick Jasperse of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys Jamie Mendelson and Jacob Licht-Steenfat of the District of Colorado.
Internet predator from Avon sentenced in Federal CourtRead the Press Release
Indianapolis –United States Attorney Josh J. Minkler announced today the sentencing of an Avon, Indiana, man who terrorized young girls on the internet. Spencer Wheeler, 27, was sentenced to 36 years in federal prison by Chief District Judge Richard L. Young.
“Wheeler targeted girls as young as 11 years for sexual exploitation,” said Minkler. “That cannot be tolerated in our society. Now he will spend the next three decades in federal prison. That is a clear message to others who would consider exploiting our children.”
From October 2013, to January 2014, Wheeler used the Internet to search for personal information about the victims including their name and location of their schools. He used this data, together with their name and address to target victims and threaten their reputation. He used what he learned to mislead the girls to believe he was another student at their school. Because he knew who the victims were and where they went to school, these threats terrified his victims.
To obtain the sexually explicit videos and images, Wheeler would coerce them by making devastating threats to their reputation in their schools, circle of friends and their families. He told his victims he would notify their school as well as family and friends that the young girls were communicating on line about sexual matters or sending nude or partially clothed images of themselves to others on line. These victims took the threats so seriously one attempted suicide and several others threatened.
Eventually, Wheeler assembled a large collection of child pornography and related visual materials including 100’s of images produced at his demand. He used this child pornography to fuel his sexual fantasies and to exploit further victims by posing as a prior victim.
This case was investigated by the Federal Bureau of Investigation, the Indianapolis Metropolitan Police Department, the Indiana State Police and the Internet Crimes Against Children Task Force.
According to Senior Litigation Counsel Steven D. DeBrota who prosecuted this case for the government, Wheeler must serve 10 years of supervised release after his sentence.
Inmate Pleads Guilty to Escaping from Halfway HouseRead the Press Release
Joshua James Morrow, 28, a Federal Bureau of Prisons inmate housed at the Centerstone Halfway House in Marion, Illinois, pled guilty today in United States District Court in Benton to an indictment charging him with escaping from that facility, announced James L. Porter, Acting United States Attorney for the Southern District of Illinois. The indictment, returned by a Federal Grand Jury on February 2, 2016, alleged that the escape occurred on January 6th. Morrow was taken into custody by the United States Marshal’s Service on January 8th in Carrier Mills, Illinois. At the time of the escape, Morrow was serving a 30 month federal sentence for various counterfeiting offenses.
Sentencing was set for June 29, 2016, at 10:30 a.m. at the United States Courthouse in Benton. Morrow faces up to an additional 5 years in prison, a $250,000 fine, and 3 years of supervised release following his incarceration.
Morrow was returned to the custody of the Federal Bureau of Prisons to await sentencing on the escape charge.
Morrow’s codefendant, Jessica Hayden, is charged with aiding and abetting Morrow’s escape. A trial date of May 23rd at 9:00 a.m. has been set in her case.
Note: Hayden is presumed innocent of this charge until proven guilty beyond a reasonable doubt.
The case was investigated by the United States Marshals Service and is being prosecuted by Assistant United States Attorney James M. Cutchin.
Houma Interpreter SentencedRead the Press Release
U.S. Attorney Kenneth A. Polite announced that TRINA MARIE BOURG, age 45, of Houma, was sentenced today after previously pleading guilty to five counts of a Superseding Indictment for crimes involving the solicitation of illegal payments from undocumented clients and their family members.
United States District Judge Susie Morgan sentenced BOURG to four years probation and ordered restitution in the amount of $5,500 to the victims.
According to court records, on May 7, 2014, the U.S. Department of Homeland Security-Homeland Security Investigations (“HSI”) received information that BOURG, who worked as a Spanish language interpreter contract employee for the Office of the District Defender for the 32nd Judicial District for Terrebonne Parish (“Public Defender’s Office”), was soliciting illegal payments from undocumented clients. According to court records, BOURG, while providing Spanish interpreting services for attorneys employed by the Public Defender’s Office, identified clients facing criminal charges who were subject to potential removal from the United States. BOURG then initiated contact with the client, or the client’s family, outside of the presence or knowledge of their court appointed attorney and falsely represented to the client or the client’s family that for a certain amount of money, she could bribe federal immigration officials not to seek federal prosecution or initiate removal proceedings against the client. BOURG charged the client, or the client’s family, approximately $2,000 to $4,000 and said she would use the money to pay federal immigration officials in order to secure the client’s release from immigration custody. The defendant pled guilty to knowingly devising a scheme and artifice to defraud undocumented Hispanic aliens and through false material misrepresentation was able to accomplish her scheme through lies, misrepresentations, coercion, and threats.
In 2011 and again in 2014, BOURG solicited illegal payments totaling $5,000 from Client “A” and his family members. BOURG admitted to employing threats and intimidation to coerce the family members into paying BOURG.
It is important to note that no federal immigration officials have been implicated in this investigation, nor is it believed that any federal officials were complicit in BOURG’s crimes. BOURG was originally indicted in August 2014.
U.S. Attorney Polite praised the work of the U. S. Department of Homeland Security-HSI (McAllen, TX and Houma, LA offices), the Louisiana State Police-Criminal Investigation Division, and the Terrebonne Parish Sheriff’s Office in investigating this matter. Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba and Assistant U.S. Attorney Marquest Meeks were in charge of the prosecution.
Hilton Head Island Man Sentenced to 108 Months in Prison for Child Pornography OffensesRead the Press Release
Contact Person: Dean H. Secor (843) 727-4381
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that David Christman Berg, Jr., age 55, of Hilton Head Island, South Carolina was sentenced on Tuesday in federal court in Charleston, South Carolina for Possession of Child Pornography, a violation of 18 U.S.C. § 2252A(a)(5)(B). Senior U.S. District Judge Margaret B. Seymour sentenced Berg to 108 months in federal prison. Judge Seymour also ordered Berg to serve a lifetime term of supervised release after he is released from prison.
Evidence presented at the change of plea hearing last June established that in April 2012 an undercover FBI agent was browsing a website known to be used by child pornographers. The agent determined that Berg had posted child pornography images on the website. A search warrant was executed at Berg’s residence in Hilton Head Island on May 14, 2012. Agents seized computers and thumb drives from Berg that contained approximately 14,000 child pornography images and 41 child pornography videos, including child pornography involving prepubescent minors and sadistic and masochistic conduct. Berg was interviewed and admitted that he possessed child pornography.
The case was investigated by agents of the Federal Bureau of Investigation (FBI). Assistant United States Attorney Dean H. Secor of the Charleston office prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Justice Department in May 2006 to combat the growing epidemic of child exploitation and abuse. Led by U.S. Attorney’s Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Guatemalan National Sentenced for his Role in $10 Million Tax Fraud ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CARLOS HUMBERTO FUENTES CORDON, 36, a Guatemalan national, was sentenced today for conspiracy to defraud the United States by filing false tax returns.
U.S. District Court Judge Susie Morgan sentenced FUENTES CORDON to 24 months in prison, one year of supervised release, and ordered him to pay restitution in the amount of $393,031 to the United States. In November 2014, FUENTES CORDON’s sister, JACQUELINE J. ARIAS, a tax return preparer from Spruce Pine, Alabama was sentenced to serve 97 months in prison for her role in the scheme and ordered to pay more than $10,000,000 in restitution.
On February 11, 2015, FUENTES CORDON pleaded guilty to one count of conspiracy to defraud the United States. According to court documents, FUENTES CORDON and his co-conspirators filed false returns listing Individual Taxpayer Identification Numbers (ITINs). An ITIN is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who do not have, and are not eligible to obtain, a Social Security Number. The indictment charged that ARIAS filed false applications for ITINs, false income tax returns, and collected preparation fees from the fraudulently-obtained tax refunds. As alleged in the superseding indictment, FUENTES CORDON worked at ARIAS’s income tax preparation business when he was present in the United States, filing false income tax returns listing a Post Office Box under his control.
To date, seventeen defendants have pleaded guilty in the case and four remain fugitives believed to be overseas. All of the defendants in this case who pleaded guilty thus far were sentenced to terms of imprisonment, including OLSEN SARAVIA HERNANDEZ (43 months); CESAR ALEJANDRO SORIANO (42 months); OSCAR ARMANDO PERDOMO (42 months); YONI PERDOMO (38 months); ARNULFO SANTOS-MEDRADO, (38 months); ELSIDES EDGARDO ALVARADO-CANALES (36 months); ELIECER OBED RODRIGUEZ (34 months); OCTAVIO JOSUE PERDOMO (34 months); ELBER MENDOZA-LOPEZ (34 months); AURELIO MONTIEL-MARTINEZ (24 months); MILLER PERDOMO-ACEITUNO (24 months); SANTOS MARTIN HERNANDEZ, (24 months); and SUSANA CARILLO MENDOZA (19 months).
U.S. Attorney Polite praised the work of the U.S. Immigration and Customs Enforcement, which oversees U.S. Homeland Security Investigations; IRS-Criminal Investigation; the U.S. Secret Service; the U.S. Postal Inspection Service; and the Social Security Administration, Office of the Inspector General, in partnership with the St. Tammany Parish and Jefferson Parish Sheriffs’ Departments in investigating this matter. Assistant United States Attorneys Hayden Brockett and Assistant United States Attorney David Haller were in charge of the prosecution.
Gladstone Man Pleads Guilty to Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Gladstone, Mo., man pleaded guilty in federal court today to charges related to receiving and attempting to distribute child pornography over the Internet.
Jack E. Grubb III, 34, of Gladstone, pleaded guilty before U.S. Chief District Judge Greg Kays to all three counts of a Sept. 10, 2015, federal indictment. Grubb was taken into custody at the conclusion of the hearing.
By pleading guilty today, Grubb admitted that he received child pornography over the Internet on Oct. 27, 2013. Grubb also admitted that he attempted to distribute child pornography over the Internet on Nov. 7, 2013, and that he was in possession of child pornography on Jan. 23, 2014.
Under federal statutes, Grubb is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 50 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Catherine A. Connelly. It was investigated by the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Galax Woman Sentenced on Oxycodone ChargesRead the Press Release
ABINGDON, VIRGINIA – A former licensed nurse practitioner, who illegally prescribed more than 3,700 pills of 15 mg oxycodone pills, was sentenced yesterday in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney John P. Fishwick announced today.
Gloria W. “Faye” Kennedy, 52, of Richlands, Virginia, previously pled guilty to one count of conspiring to distribute oxycodone. Yesterday in District Court she was sentenced to imprisonment for a term of 46 months.
“The abuse of prescription pain killers has decimated communities in Southwest Virginia and all across the Western District,” United States Attorney John P. Fishwick said today. “The abuse of prescription opioids, quite often, leads to the abuse of more dangerous and addictive drugs, like heroin. We must continue to be vigilant in prosecuting those who provide rescription drugs for illicit purposes.”
Between April 22, 2014 and September 3, 2015, Kennedy and her husband, Darryl Lynn Wells, conspired to distribute 3,780 pills of 15 mg oxycodone, without a legitimate medical purpose. Kennedy, using her position as a licensed medical practitioner, wrote prescriptions in the name of her husband and various other people for the purpose of having the prescriptions filled. The pills were then illegally distributed. Evidence was presented at yesterday’s sentencing hearing that Kennedy was upset with Wells because he was not selling all of the pills.
Kennedy’s husband, Darrell Lynn Wells, was previously sentenced to imprisonment for a term of 41 months for his role in the offense.
The investigation of the case was conducted by the United States Drug Enforcement Agency Tactical Diversion Squad, with the assistance of the Virginia Medicaid Fraud Control Unit, Virginia State Police, and Tazewell Regional Drug Task Force. Special Assistant United States Attorney Brian Patton and Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Fraudster Sentenced to 78 Months in Federal Prison for Running Lottery/Sweepstakes ScamRead the Press Release
FORT WORTH, Texas — Andre Hugh Saunders, 35, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to 78 months in federal prison and ordered to pay $505,403 in restitution to the victims. This sentence followed his guilty plea in November 2015 to an indictment charging one count of mail fraud stemming from a lottery/sweepstakes scheme targeting elderly victims, announced U.S. Attorney John Parker of the Northern District of Texas.
Saunders, a/k/a David Turner, has been in custody since his arrest in October 2015 in New York on a criminal complaint. He resided in and/or operated the scam out of Jamaica, Florida and New York. Saunders is a citizen of Jamaica and a lawful permanent resident of the U.S.
According to plea documents filed in the case, from approximately November 2012 to July 2015, Saunders defrauded a Fort Worth, Texas, resident by advising him he had won a multimillion-dollar prize in the “Las Vegas, Sidney, Australian Lottery and Sweepstakes,” but that he must pay various administrative fees and taxes prior to collecting the sweepstakes winnings. This Fort Worth resident believed he had won a sweepstakes and began sending money as Saunders directed.
As a result of the fraudulent lottery/sweepstakes scheme, Saunders obtained approximately $505,000 from elderly victims, including more than $300,000 from the Fort Worth victim.
The U.S. Postal Inspection Service and Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated the case. Assistant U.S. Attorney Mark Nichols prosecuted.
# # #Former USP-Marion Employee Pleads Guilty to Providing Contraband to Inmate and Lying to Federal InvestigatorsRead the Press Release
Renee D. Strauss, 42, of Marion, Illinois, pled guilty today in United States District Court in Benton to a four-count information charging her with two counts of making false statements to a special agent of the United States Department of Justice Office of the Inspector General, one count of providing a cellular telephone to an inmate, and one count of attempting to provide other contraband to an inmate, announced James L. Porter, Acting United States Attorney for the Southern District of Illinois. The information to which Strauss pled guilty alleged that between June 2015 and September 27, 2015, while she was employed as a case manager and correctional officer by the Federal Bureau of Prisons and assigned to the United States Penitentiary at Marion, Strauss provided contraband to an inmate and then lied to agents who were investigating that misconduct. Strauss, who has been on administrative leave since September 27th, resigned her position with the federal government prior to pleading guilty.
Sentencing was set for June 29, 2016, 2016, at 10:00 a.m., at the United States District Courthouse in Benton. Strauss faces up to 5 years in prison, a $250,000 fine, and 3 years of supervised release to follow any term of incarceration imposed on each of the two false statement counts. She faces a terms of up to 1 year in prison for providing the cellular telephone and up to 6 months in prison for providing the other contraband. Strauss was placed on bond pending sentencing.
The investigation leading to the charges and guilty plea was conducted by the United States Department of Justice Office of the Inspector General. The case is being prosecuted by Assistant United States Attorney James M. Cutchin.
Former Truck Driver Sentenced for Transporting and Sexually Abusing MinorsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. – U.S. Attorney Williams J. Hochul, Jr. announced today that David Allen Vickers, 51, of Stanley, NY, who was convicted following a jury trial of transportation of minors with the intent to have sex, was sentenced to life in prison by U.S. District Judge Richard J. Arcara.“The harm inflicted upon the victims in this case by the defendant continues to impact those victims to this day,” said U.S. Attorney Hochul. “Given that the victims’ complete recovery could very well take a lifetime, it is particularly appropriate that the defendant today received a life sentence - the highest permitted by law. Such a sentence is directly proportional to the harm caused, and ensures that no other minor will ever again be abused by this defendant.”
Assistant U.S. Attorneys Aaron J. Mango and Elizabeth R. Moellering stated that the jury found the defendant guilty of transporting two minors in interstate commerce with the intent to engage in criminal sexual activity. According to the evidence introduced at trial, the defendant, an over the road truck driver, transported two victims to Canada, New Jersey and Pennsylvania, and repeatedly abused and molested them while he was making deliveries. This abuse occurred in the time frame of 1999 to 2007.The trial evidence also disclosed that the defendant abused other children, with the first abuse beginning in 1983. This pattern of abuse included extensive psychological manipulation of the victims (sometimes referred to as “grooming”), and was facilitated through the defendant’s projection of benevolence to the victims’ families. Vickers also established and operated a bed and breakfast on Seneca Lake, “Paradise on the Lake,” where he took the eventual victims in an effort to manipulate and gain their trust. The defendant also gave the victims alcohol, cigarettes, toys, and access to ATVs.
Vickers cover was so devious, in fact, that both of the victims named in the indictment against the defendant had at one time been assigned to his custody by a Family Court Judge.
The sentencing is the culmination of an investigation on the part of Agents of the Federal Bureau of Investigation, under the direction of Adam S. Cohen, Special Agent in Charge, and the Batavia City Police Department under the direction of Chief Shawn Heubusch.
Former Tennessee Probation Officer Pleads Guilty in Tax Fraud SchemeRead the Press Release
Memphis, TN – A former State of Tennessee probation officer has pleaded guilty in a tax fraud scheme that defrauded the government of more than $50,000. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the plea today.
According to information presented in court, between January 2011 and April 2014, LaShear Poole, 41, of Memphis, operated Five Star Tax Professionals, a tax preparation business. Poole, a probation officer at the time, used the business’ Professional Tax Identification Number (PTIN) and Electronic Filing Identification Number (EFIN) to file federal income tax returns.
On at least 15 occasions for the tax years 2011–2013, the defendant prepared, and caused to be filed with the Internal Revenue Service (IRS), federal income tax returns containing false and fraudulent misrepresentations. The majority of these misrepresentations pertained to the filing of false IRS Schedule C forms, which claimed income from businesses that either did not exist or were not actively engaged in business during the tax year as claimed.
Poole filed the fraudulent tax returns by means of wire communication. As a result of the scheme, she obtained more than $50,000 in tax refunds.
On Tuesday, March 22, 2016, Poole pled guilty before U.S. District Judge Sheryl H. Lipman to one count of conspiracy to violate the False Claims Act.
Poole is scheduled to be sentenced on Friday, June 24, 2016 at 10:30 a.m.
She faces up to 10 years imprisonment and a fine of up to $250,000.
This case is being investigated by IRS-Criminal Investigation.
Assistant U.S. Attorney Christopher E. Cotten is prosecuting this case on the government’s behalf.
Former Teamster Sentenced for Extorting Boston Businesses and Benefit FraudRead the Press Release
BOSTON – A former member of Boston Teamster Local 82 was sentenced today in connection with extorting businesses in Boston and fraudulently receiving more than $40,000 of unemployment benefits.
James Deamicis, 52, of Quincy, was sentenced by U.S. District Court Judge Denise J. Casper to 12 months and one day in prison, one year of supervised release and restitution and forfeiture in the amount of $42,091. In November 2015, Deamicis was convicted by a federal jury of three counts of extorting businesses in Boston. Additionally, he pleaded guilty to three counts of mail fraud and one count of theft of government property.
Deamicis, a former member of Teamsters Local 82, worked in the trade show and moving industries loading and unloading trucks. Since 2007, Deamicis, and others, extorted various entities in Boston including hotels, event planners, catering companies, pharmaceutical companies, hospitals, music entertainment companies, and non-profit organizations, none of which had collective bargaining agreements with Local 82. Deamicis threatened to picket and disrupt business, sometimes just hours before an event, if the entity did not accede to his demand to hire and pay him and fellow union members for unwanted and unnecessary jobs.
Additionally, from 2008 to 2011, Deamicis received $41,391 in unemployment insurance benefits that he was not entitled to receive because he was working as a member of Local 82. During the three year period, Deamicis earned $126,423, making him ineligible for benefits; however, he falsely reported to the Massachusetts Department of Unemployment Insurance that he earned only $22,249 so that it appeared that he was eligible to receive unemployment insurance. Although Deamicis was employed, he endorsed each of the 73 unemployment insurance checks he received and thereby falsely certified that he had no earnings except as reported in his benefit claim certification.
United States Attorney Carmen M. Ortiz; Scott S. Dahl, Inspector General of the U.S. Department of Labor, Office of Inspector General; Jonathan Russo, District Director of the U.S. Department of Labor, Office of Labor-Management Standards; and Susan A. Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Laura J. Kaplan of Ortiz’s Organized Crime and Gang Unit.
Former Postal Clerk Pleads Guilty to Stealing MailRead the Press Release
NORFOLK, Va. – Trazzonna Jacobs, 27, of Virginia Beach, pleaded guilty today to one charge of stealing from the United States Mail.
In a statement of facts filed with the plea agreement, Jacobs, who worked as a postal clerk at the Bayside Postal Station in Virginia Beach, admitted to stealing a $100 gift card and $7,000 in cash from two separate packages. According to court records, an investigation ensued when a postal customer complained of the missing gift card. An investigation determined the gift card had been used at local retailers and surveillance video identified Jacobs as the individual redeeming the gift card.
The Postal Service received another complaint against Jacobs when a postal customer had $7,000 in cash stolen from a package being sent overseas. The customer identified Jacobs as the mail clerk who had handled her package. The customer stated she informed Jacobs of the $7,000 in the box to ensure its safety. When the package arrived, the money was missing. The package was provided to the United States Postal Inspection Service, Office of Inspector General, where it was sent off to be fingerprinted by the U.S. Postal Inspection Service. The U.S. Postal Inspection Service processed the package for fingerprints and Jacobs’ fingerprints were found on the inside of the package.
Ultimately, Jacobs confessed to her actions and admitted to stealing the items in question, as well as other gift cards, in order to help pay bills and support her family.
Jacobs was indicted by a federal grand jury on February 18, 2016. Jacobs faces a maximum penalty of five years in prison when sentenced on July 7, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul L. Bowman, Special Agent in Charge, United States Postal Service, Office of Inspector General, made the announcement after the plea was accepted by U.S. District Judge Arenda Wright Allen. Assistant U.S. Attorney Joseph L. Kosky is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-26.
Former Joint Powers Authority Finance Director Sentenced to A Year in Prison and Six Months Home ConfinementRead the Press Release
SAN FRANCISCO– Clarke J. Howatt was sentenced today to a year and a day in prison for his conviction for wire fraud stemming from a series of embezzlements from the Association of Bay Area Governments (ABAG) and the related ABAG Finance Authority for Nonprofit Corporations (FAN), announced Acting United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.
Howatt, 56, who now resides in Portland, Ore., pleaded guilty on December 15, 2015, to committing wire fraud. In connection with his plea agreement, Howatt acknowledged perpetrating a scheme to embezzle funds from various bond accounts and other accounts established by FAN. Howatt is the former finance director of ABAG, a state Joint Powers Agency formed in the 1960s for the principal purpose of providing its members with planning and advice regarding land use issues. FAN was formed as a separate legal entity to act as a conduit issuer of debt instruments, or bonds. As part of his plea agreement, Howatt admitted he provided false information to the trustees of bond accounts and to others in order to fraudulently induce people to wire funds from FAN bond accounts and other accounts, to bank accounts that Howatt controlled. Howatt admitted that from June 2011 through January 2015, he embezzled a total of $3,876,135.21. Howatt, was charged in an information filed on February 13, 2015, with the single count of wire fraud, in violation of 18 U.S.C. § 1343, and pleaded guilty to that charge.
The sentence was handed down by the Honorable Charles R. Breyer, U.S. District Judge. In addition to the prison term, Judge Breyer also sentenced the defendant to a three year period of supervised release, six months of which will be served in home confinement. Howatt will begin serving the sentence no later than May 23, 2016.
Assistant U.S. Attorneys Kyle Waldinger and David Countryman are prosecuting the case with the assistance of Jessica Meegan and Carolyn Jusay. The prosecution is the result of an investigation by the FBI.
Former Faculty Member at UW Business School Sentenced to Prison for Investment Fraud SchemeRead the Press Release
A Seattle man who operated an investment advisory business for more than 20 years was sentenced today in U.S. District Court in Seattle to 40 months in prison, three years of supervised release and $547,461 in restitution for wire fraud, announced U.S. Attorney Annette L. Hayes. SATYEN CHATTERJEE, a/k/a Satyen Chattopadhyay, 65, owned and operated Strategic Capital Management, Inc. from 1992 until the Washington State Department of Financial Institutions ordered it to cease operating illegally in October 2013. At the sentencing hearing U.S. District Judge Thomas S. Zilly told him, “You did, over a long period of time, commit fraud…. stealing money from your friends and clients.”
“This defendant, a native of India, took advantage of the trust that members of his own Bengali community placed in him,” said U.S. Attorney Annette L. Hayes. “As is so often the case, his victims were harmed not only financially, but also in their ability to trust those around them.”
CHATTERJEE, who once taught at the University of Washington Business School, pleaded guilty in May 2015, admitting engaging in a scheme to defraud investors between 2007 and 2013. According to records filed in the case and with the Department of Financial Institutions (DFI), the investigation revealed that at least five victims were defrauded of more than $600,000. CHATTERJEE convinced various investors to make investments with him in what he represented were fixed rate securities. But in fact CHATTERJEE transferred the funds to his own bank accounts, used the money for his own expenses, or lost it as a day trader in the stock market.
For one investor CHATTERJEE created a false account statement making the investor believe his investment was secure. In 2011, CHATTERJEE sent a series of lulling emails to some clients falsely indicating that long time investment associates had defaulted on agreements he had with them, and blaming them for losses in the investments.
The case was investigated by the Washington State Department of Financial Institutions (DFI) and the FBI. The case is being prosecuted by Assistant United States Attorney Justin W. Arnold and Special Assistant United States Attorney Robert Kondrat. Mr. Kondrat is an attorney with DFI.
Former Corporate General Counsel Admits Conspiring to Obstruct Justice in Federal Criminal TrialRead the Press Release
CAMDEN, N.J. – The former general counsel of VO Financial Corp. today admitted conspiring to obstruct justice in a federal criminal case tried in 2013, U.S. Attorney Paul J. Fishman announced.
Joshua L. Gayl, 36, of Lafayette Hill, Pennsylvania, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to obstruct justice.
According to documents filed in this and other cases and statements made in court:
Adam and Ashley Lacerda, Ian Resnick, and several others were charged in April 2012 with conspiracy to commit mail and wire fraud based on their actions at the Vacation Ownership Group, which offered phony consulting services to owners of timeshares. After they were charged, the VO Group became VO Financial, and Gayl was hired as general counsel. The Lacerdas continued to run VO Financial through their July 2013 criminal trial.
Gayl admitted misleading a witness, identified as “Victim 1,” after he learned that Victim 1 had told the FBI about being defrauded by the VO Group. Gayl contacted Victim 1 intending to obtain statements favoring the defense in the criminal case, but he concealed his true intentions from Victim 1. Instead, he wrote Victim 1 offering assistance if Victim 1 would tell him what Victim 1 told the FBI. Gayl and an accomplice then called Victim 1 and misleadingly said that they were recording the call for quality assurance and training purposes, when in fact they were trying to get Victim 1 on tape making statements favorable to the defense. Victim 1 told Gayl that the VO Group had promised to sell Victim 1’s timeshare, a VO Group misrepresentation alleged in the indictment. Gayl omitted this allegation when he told Victim 1 what was alleged in the criminal case. Although he did not know what the VO Group representative actually told Victim 1, Gayl told Victim 1 that “we do not sell timeshares” and that Victim 1 had some “confusion” in recalling a promise to sell Victim 1’s timeshare. Gayl ended the call and consulted with Adam Lacerda. Gayl then called Victim 1 back at Lacerda’s request to persuade Victim 1 that Victim 1’s recollection was mistaken – but Gayl did not tell Victim 1 that his purpose was to get recorded statements to help the criminal defense. Gayl told Victim 1 in the second call that it was “likely” and “logical” that Victim 1 had misunderstood that the VO Group sold timeshares.
Gayl also helped the defendants send potential trial witnesses payments intended to influence their testimony. Adam and Ashley Lacerda wanted these refunds paid to help the defense case at trial and make the recipients testify more favorably to the defense, but Gayl did not tell the potential witnesses that these were the purposes of the payments. Gayl wrote a letter urging “Victim 2” to take a refund, knowing that Resnick wanted Victim 2 to take the refund because Victim 2 was a potential trial witness against Resnick. A month before trial, Gayl wrote letters offering refunds to “Victim 3” and “Victim 4,” but failed to tell them that they were being offered refunds because they were potential trial witnesses.
Gayl also lied in responding to a trial subpoena asking VO Financial to produce records. After Adam Lacerda’s criminal lawyer told the U.S. Attorney’s Office and Gayl that he had advised Lacerda not to be involved in the subpoena response, Gayl told Adam Lacerda about one subpoenaed recording harmful to the defense and saw Lacerda access the recording. Lacerda deleted the damaging portion of the recording. When Gayl gave the U.S. Attorney VO Financial’s response to the subpoena, he included the altered recording and a false certification that he did not consult with Lacerda about the subpoena response. Gayl subsequently listened to the recording and realized that Lacerda had altered it.
Adam Lacerda, Ashley Lacerda, and Ian Resnick were convicted of conspiracy to commit mail and wire fraud and other offenses. Adam Lacerda was sentenced to 27 years in prison; one factor in his sentence was his involvement in what the court called a “comprehensive, calculated, and targeted effort at obstruction of justice.” Ashley Lacerda and Ian Resnick have yet to be sentenced.
The defendant faces a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the gain or loss caused by the offense. Sentencing is currently scheduled for Sept. 2, 2016.
U.S. Attorney Fishman credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Jonathan Mellone, New York Region, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office in Camden.
Defense counsel: Ellen C. Brotman, Esq., Philadelphia
Former CEO of $3 Billion TierOne Bank Sentenced to 11 Years in Prison for Orchestrating Scheme to Hide More than $100 Million in Losses from Shareholders and RegulatorsRead the Press Release
The former CEO of TierOne Bank, a $3 billion publicly-traded commercial bank formerly headquartered in Lincoln, Nebraska, was sentenced to 132 months in prison today for orchestrating a scheme to defraud TierOne’s shareholders and to mislead regulators by concealing more than $100 million in losses on loans and declining real estate.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Randall C. Thysse of the FBI’s Omaha, Nebraska, Division and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Goldsmith Romero made the announcement.
Gilbert G. Lundstrom, 74, of Lincoln, was sentenced by U.S. District Judge John M. Gerrard of the District of Nebraska, who also ordered Lundstrom to pay a $1.2 million fine. The court deferred entering a restitution order until after sentencing. On Nov. 6, 2015, after a two-week jury trial, Lundstrom was convicted of 12 of 13 counts charged, including conspiracy to commit wire fraud and securities fraud, conspiracy to falsify bank entries, wire fraud, securities fraud and falsifying bank entries.
“Today’s sentence shows the Justice Department’s commitment to prosecuting individuals who abuse their corporate positions to commit fraud,” said Assistant Attorney General Caldwell. “Gilbert Lundstrom and his co-defendants’ crimes not only contributed to the collapse of a major regional bank during the financial crisis, but also destroyed the jobs of hundreds of bank employees and led to massive losses for the bank’s shareholders. The defendants recklessly gambled with bank assets and lied to shareholders and government regulators, and through their actions drove a respected regional bank into the ground. They have now been held accountable for their crimes.”
“The entire financial system is dependent upon full and truthful disclosure by the executives of financial institutions and the sentence imposed today sends a message to high level executives who abuse their position of trust,” said Special Agent in Charge Thysse. “The FBI will continue to investigate and bring to justice those who exploit their influence or position for personal gain at the expense of the investing public.”
“Lundstrom is now another bank CEO investigated by SIGTARP to be sentenced to prison,” said Special Inspector General Romero. “He was the architect of the bank’s aggressive and risky growth plan that backfired when the housing bubble burst. Instead of honestly communicating TierOne’s losses, this bank CEO took intricate steps to conceal the bank’s true financial picture and dig the bank into an even deeper financial hole. Lundstrom applied for $86 million in TARP funds on behalf of the bank. This was a critically important conviction and we commend the commitment by the DOJ Criminal Division and the FBI in holding bankers who commit crimes accountable.”
According to the evidence presented at trial, Lundstrom designed an aggressive strategy to expand TierOne’s portfolio beyond traditional lending in Nebraska to riskier areas, including commercial real estate in Las Vegas, which decimated the bank once the financial crisis hit. Trial evidence showed that Lundstrom and his co-conspirators then intentionally concealed more than $100 million in losses in TierOne’s loan and real estate portfolio from investors and regulators and provided inflated figures in its required reports to the U.S. Securities and Exchange Commission (SEC) and the Office of Thrift Supervision. In April 2009, Lundstrom and his co-conspirators learned that TierOne needed to increase its reserves and “loan loss allowance” by between $34 million and $114 million, but concealed this information from shareholders and regulators in TierOne’s financial statements, the evidence showed. In addition, trial evidence demonstrated that during TierOne’s annual shareholder meeting held on May 21, 2009, Lundstrom misrepresented the state of TierOne’s capital ratios and reserves and whether TierOne had applied for TARP funding.
In June 2010, following TierOne’s ultimate disclosure of $120 million in loan losses and its subsequent delisting from the NASDAQ exchange, TierOne was shut down by the Federal Deposit Insurance Corporation. At the time of the closure, TierOne had more than 750 employees working at its headquarters in Lincoln and its 69 branch offices located in Nebraska, Iowa and Kansas.
In 2014, co-conspirators James Laphen, 67, of Omaha, TierOne’s former president and chief operating officer, and Don Langford, 65, of College Station, Texas, TierOne’s former chief credit officer, pleaded guilty to multiple felonies in connection with their participation in the scheme. Laphen and Langford are scheduled to be sentenced tomorrow by Judge Gerrard.
The FBI’s Omaha Division and SIGTARP investigated the case. The SEC also provided substantial assistance in the investigation. Trial Attorneys Henry P. Van Dyck and L. Rush Atkinson and Senior Deputy Chief Sandra Moser of the Criminal Division’s Fraud Section prosecuted the case.
Flight Attendant Who Allegedly Tried to Bring nearly 70 Pounds of Cocaine through Security at LAX Arrested on Federal Drug ChargesRead the Press Release
LOS ANGELES – A JetBlue flight attendant who allegedly attempted to use her credentials to bring nearly 70 pounds of cocaine through a security checkpoint at Los Angeles International Airport on Friday was charged today with a federal narcotics trafficking offense.
Marsha Reynolds, 31, of Jamaica, New York, was taken into custody this afternoon after she surrendered herself to the Drug Enforcement Administration at John F. Kennedy International Airport in New York.
Reynolds was charged in United States District Court this afternoon with possession with the intent to distribute cocaine after she allegedly abandoned 68.49 pounds of cocaine after being directed to a secondary screening area at LAX on Friday.
The affidavit in support of the criminal complaint alleges that Reynolds approached the Known Crew Member security checkpoint in Terminal 4 at LAX Friday evening. After showing her official badge and identification to the Transport Security Administration officer on duty, Reynolds was randomly selected for additional screening. Reynolds was then escorted to a secondary screening area. Upon arriving at this checkpoint, Reynolds dropped her luggage, removed her shoes, and fled the area, running down an upward-traveling escalator and away from TSA officers.
According to the affidavit by an FBI agent, law enforcement officials followed protocol to determine that Reynolds’ luggage did not contain explosives or any dangerous devices. An LAX police officer then conducted an inspection of the bag and discovered a total of 11 individually wrapped packages which were later determined to contain cocaine.
“Our nation’s security depends on every individual with security clearances to honor the trust placed in them,” said United States Attorney Eileen M. Decker. “The defendant’s conduct violated that trust and, in the process, exposed the public to a major narcotics transaction and the dangers inherent to such a transaction. The intervention of the Transportation Security Administration and law enforcement ensured the safety of the passengers and staff at LAX.”
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Reynolds is expected to make her initial court appearance tomorrow in United States District Court in Brooklyn.
If she is convicted of the narcotics trafficking offense, Reynolds would face a statutory maximum penalty of life in federal prison, and a mandatory minimum sentence of 10 years.
This investigation was conducted by the Los Angeles International Airport Criminal Enterprise Task Force (LAACETF), an inter-agency task force based at LAX. The Task Force, which includes representatives of the FBI, the DEA, United States Customs and Border Protection, the Transportation Security Administration, the Los Angeles International Airport Police Department, the Los Angeles Police Department, and the Los Angeles Sheriff’s Department. The LAACETF provides a coordinated law enforcement effort to target airport/airline internal criminal enterprises that use the aviation system to transport large amounts of illicit drugs throughout the United States and various international destinations. The LAACETF focuses on LAX and other Southland airports, including John Wayne International Airport, the Los Angeles/Ontario International Airport, the Long Beach Airport, Bob Hope Airport, the Van Nuys Airport, and the Santa Monica Airport.
Financial Services Company Executive Pleads Guilty to Obstruction of JusticeRead the Press Release
The CEO of Preferred Merchants LLC, a financial services company based in Napa, California, pleaded guilty yesterday to engaging in an elaborate obstruction of justice scheme to conceal millions of dollars—which were subject to a freeze order and seizure warrant—from the government using a series of offshore accounts, domestic and foreign nominee accounts, a shell company and related bank and brokerage accounts.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina, Special Agent in Charge Michael Rolin of the U.S. Secret Service’s Charlotte, North Carolina, Field Division and Special Agent in Charge Thomas J. Holloman III of the Internal Revenue Service-Criminal Investigation (IRS-CI) Charlotte Field Office made the announcement.
Jaymes Meyer, aka James Meyer, 47, of Napa, pleaded guilty yesterday before U.S. Magistrate Judge David S. Cayer of the Western District of North Carolina in Charlotte to obstruction of justice.
According to the plea agreement, in or about 2012, the U.S. Securities and Exchange Commission’s (SEC’s) Division of Enforcement commenced a securities fraud investigation concerning a Ponzi scheme centering on Rex Ventures Group LLC (RVG), a North Carolina-based company for which Preferred Merchants held millions in assets in treasury and trust accounts. As a result of its investigation, the SEC filed a civil enforcement action against RVG, after which the court entered a freeze order that appointed a receiver and froze all of RVG’s assets. Among other things, the receiver was responsible for marshaling, managing and distributing remaining RVG assets to impacted RVG investors. In addition to the freeze order, the U.S. Secret Service also obtained a seizure warrant of RVG assets held by Meyer through Preferred Merchants. Meyer admitted that in August 2012, the SEC informed him of, among other things, the investigation and the court order freezing RVG’s assets and requested that Meyer freeze any RVG assets in his possession, custody or control.
According to the plea agreement, in response to this request, Meyer misled the SEC by falsely implying that Preferred Merchants did not exercise dominion or control over any RVG assets when, in fact, Meyer controlled approximately $17.4 million in RVG assets. Meyer further admitted that he wired approximately $4.8 million from an RVG trust account to a brokerage account under his control within an hour of learning about the SEC’s investigation. Over the next 10 months, Meyer used that money to purchase homes in Napa and the Turks and Caicos, to which he subsequently made $1.5 million in improvements, and withdrew approximately $195,000 in cash. He also established a Cook Islands-based trust account, formed a shell company and opened a brokerage account in the shell company’s name to further conceal the trail of RVG assets subject to the freeze order and seizure warrant.
Meyer also admitted that throughout the pending civil litigation surrounding the RVG scheme, he made fraudulent and misleading statements to the U.S. District Court for the Western District of North Carolina, the SEC and the court-appointed receiver during depositions.
In connection with his plea agreement, Meyer agreed to pay an approximately $4.8 million money judgment and to forfeit the homes that he purchased in the Turks and Caicos and Napa as proceeds of the obstruction of justice offense.
The U.S. Secret Service and the IRS-CI investigated the case.
Trial Attorney Kevin Lowell of the Criminal Division’s Asset Forfeiture and Money Laundering Section-Bank Integrity Unit and Assistant U.S. Attorney Mark T. Odulio of the Western District of North Carolina are prosecuting the case.
Feds Seize Another Tunnel; Multiple Arrests and More Than a Ton of Marijuana ConfiscatedRead the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – March 23, 2016
CALEXICO – Federal officials seized a cross-border tunnel this morning following a lengthy multiagency investigation that resulted in the arrests of four people in Calexico, California and Arizona and the confiscation of more than a ton of marijuana.
The tunnel, approximately 415 yards in length, stretches from El Sarape Restaurant in Mexicali, Baja California, Mexico to a three-bedroom, two-bath house, located at 902 E. Third Street in Calexico, California, about 300 yards north of the international border. In the front room of the residence, agents found a hole in the floor covered with tile leading to a shaft descending underground.
Two people were arrested in Arizona yesterday and two people were arrested today in Calexico and charged by federal complaint with various drug trafficking, money laundering and tunnel-related charges, including conspiracy to import a controlled substance and conspiracy to use border tunnels and passages.
Defendants Joel Duarte Medina and Manuel Gallegos Jiminez were arrested in Calexico. Defendant Duarte Medina was arrested inside a residence located on Horizon Street, in Calexico, which was used as a stash location for the tunnel organization. Agents also seized approximately 1,532 pounds of marijuana inside the Horizon Street residence this morning. Defendant Gallegos Jiminez was arrested today inside the tunnel residence. Both defendants are scheduled to make their first court appearances tomorrow in El Centro before U.S. Magistrate Judge Pete Lewis.
Among those charged in Arizona was Marcia Manuela Duarte-Medina, who was taken into custody in Nogales, Arizona, on Tuesday night. In court documents, she and others are alleged to be the purchasers of the tunnel residence in Calexico. She is scheduled to appear today before U.S. Magistrate Judge Eric Markovich in Arizona.
Also arrested in Arizona was Marcia Manuel Duarte Medina’s mother, Eva Duarte De Medina, who was charged in the Southern District of California, with various crimes including conspiracy to import drugs, conspiracy to distribute drugs and maintaining drug related premises. As stated in court documents, Eva Duarte De Medina assisted in moving vehicles loaded with narcotics between the tunnel residence and the Horizon Street stash location. She is scheduled to appear today before Judge Markovich in Arizona.
This is the first operational tunnel discovered in Calexico in a decade. According to federal investigators, it also represents the first time drug traffickers are known to have purchased property and constructed a house for the sole purpose of concealing the exit of a subterranean drug tunnel. The search warrant affidavit and charging documents allege the traffickers scouted properties in the area and selected the Third Street parcel in a residential section of Calexico. The property sale was finalized in April of 2015 for $240,000 by the drug traffickers.
“This house and tunnel were constructed under the watchful eye of law enforcement,” said U.S. Attorney Laura Duffy. “For the builders, the financiers and the operators of these passageways, there is no light at the end of the tunnel. We will seize your drugs and your tunnel before you even have a chance to use it.”
“Today’s enforcement actions are the culmination of months of tireless investigative work by HSI and its enforcement partners, showing yet again our collective resolve to use all of the resources at our disposal to combat this increasingly dangerous form of cross-border smuggling,” said Dave Shaw, special agent in charge for HSI San Diego. “I’d emphasize that our investigation in this case is still very much ongoing, but preliminarily we believe the shuttering of this latest sophisticated smuggling tunnel has dealt a serious blow to yet another narcotics trafficking organization that was determined to succeed at all costs.”
“If these drug trafficking organizations think they can move their operations east and no one will be the wiser, they are mistaken,” said DEA San Diego Special Agent in Charge William R. Sherman. “With the assistance of our law enforcement partners, we will remain vigilant in both San Diego and Imperial Counties to ensure that these dangerous cross border drug tunnels are shut down and the organizations responsible are put out of business.”
Court documents describe how HSI special agents used court-authorized wiretaps and other investigative techniques to monitor the construction of the house during October and November of 2015. According to the case affidavit, the property owners told the construction contractor to leave a space for a floor safe when pouring a cement foundation for the house. Investigators believe the owners intended to use that hole in the foundation as the tunnel’s exit point. In late December, 2015, coconspirators rented a “walk behind saw and concrete blade” from a local business in El Centro, California, presumably to create the tunnel exit. The residence was completed in December of 2015 at a cost of approximately $86,000.
Once the house was finished, the drug trafficking organization opened the tunnel’s exit point and began smuggling narcotics through the tunnel. Based on intercepted calls and surveillance, agents believe the traffickers began smuggling narcotics through the tunnel after February 28, 2016. Investigators are confident that was the first time the tunnel was used.
According to court records, the drug traffickers used another residence four miles from the tunnel exit as a stash house at 1056 Horizon Street, Calexico, to store the smuggled narcotics. Eventually, the traffickers moved the narcotics from that stash location to a warehouse located at 260 Avenida Campillo, Suite A, Calexico, where the smuggled narcotics were stored until they could be moved northbound by the transportation cells.
Drivers transported the marijuana from the tunnel exit to a stash house and then to the Santo Thomas Swap Meet in Calexico, where a new driver would transport the load to another stash location. Thus drivers taking contraband to the Horizon Warehouse Street site were not aware of the original stash location at the Third Street property. Using multiple locations and multiple drivers is a means for drug traffickers to compartmentalize their operations and keep various players in the dark about the organization’s methods.
On March 7, 2016, HSI agents and West Covina Police Department seized over 1,350 pounds of marijuana that were smuggled through the tunnel and funneled into the two stash locations before being transported northbound to Los Angeles via Brawley. This was the only known time that traffickers moved the drugs from Calexico stash houses for distribution via Brawley and Los Angeles.
In total, authorities seized almost 3,000 pounds of marijuana.
Calexico is generally considered a less desirable place to construct tunnels because soil composition is more difficult to penetrate, and because it is a largely a residential city, making tunnel exits and smuggling activity more difficult to conceal.
Traffickers have found the Otay Mesa region, where the majority of super tunnels have been discovered along the California-Mexico border in recent years, to be a more attractive option because the terrain is easier to excavate and the thousands of warehouses on either side of the border provide convenient camouflage.
The tunnel dismantled today is the 12th large-scale operational drug smuggling tunnel discovered along the California border since 2006. In the last five years, federal authorities have detected more than 75 cross-border smuggling tunnels, most of them in California and Arizona.
For visuals please see:
https://www.dvidshub.net/search?q=calexicotunnel
AGENCIES
U.S. Immigration and Customs Enforcement Homeland Security Investigations
Homeland Security Investigations, Calexico
U.S. Border Patrol,. El Centro Sector
Drug Enforcement Administration
Customs and Border Protection
IRS Criminal Investigations
El Centro Police Department
Brawley Police Department
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
**This case stems from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the agencies noted above. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Federal Jury Convicts Destrehan Woman in Scheme to Sell Illegal and Mislabelled Diet PillsRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced that last night a federal jury convicted Darlene V. Krueger, age 54, of Destrehan, Louisiana, of six federal felony offenses in connection with a scheme to sell illegal and mislabelled diet pills to victims throughout Louisiana. She was acquitted on one count. The jury’s verdicts followed a seven-day trial before U.S. District Judge John W. deGravelles. The sentencing date has not yet been set.
Specifically, Krueger was convicted of three counts of distributing a controlled substance and three counts of introducing misbranded drugs into interstate commerce. This conduct was part of a multi-state scheme to illegally distribute diet pills containing sibutramine, a Schedule IV controlled substance, which were falsely labeled and marketed as “all natural” dietary supplements. Sibutramine was the active pharmaceutical ingredient in Meridia, a prescription weight loss drug removed from the market in 2010 following studies that showed significantly increased risk of strokes and heart attacks. Since the removal of Meridia, no drug containing sibutramine has been approved for use in humans in the United States.
The evidence at trial demonstrated that, between 2009 and 2014, Krueger engaged in a scheme to sell purportedly “all natural” dietary supplements under various names, such as “Slim Forte Slimming Capsules,” “Slim Forte Double Power Slimming Capsules,” “Slim-Vie Slimming Capsules,” and “Slim-Vie Double Power Slimming Capsules,” which she knew contained sibutramine, to customers throughout Louisiana. Even after she learned that the diet pills contained sibutramine and had potentially serious side effects, Krueger continued to distribute the diet pills and disseminate false and misleading information about the safety and efficacy of her products. Krueger made approximately $100,000 as a result of the scheme.
In a related case, on July 29, 2015, John Wesley Hoag, age 52, of Ft. Lauderdale, Florida, pled guilty before U.S. District Judge John W. deGravelles to a Bill of Information charging him with conspiring with Krueger to distribute and possess with the intent to distribute sibutramine and introducing misbranded drugs into interstate commerce. During the guilty plea hearing, Hoag admitted to unlawfully importing the diet pills from manufacturers based in China and then distributing the diet pills to his distributors, including Krueger, and consumers.
As a result of their respective roles, Krueger and Hoag face significant incarceration, fines, restitution, forfeiture of proceeds, and supervised release following imprisonment.
U.S. Attorney Green stated: “To sell diet pills containing illegal substances is bad enough. Selling diet pills containing illegal substances and concealing that fact from unsuspecting customers by mislabelling the pill containers is intolerable. The actions taken by the defendant in this matter – which appear driven purely by greed – will consistently result in our office’s full attention and action. I commend the excellent work by the FDA Office of Criminal Investigations and our prosecutors who worked hand-in-hand to bring this case to its rightful conclusion.”
“Consumers are put at serious risk when they are unknowingly exposed to undeclared active pharmaceutical ingredients in products falsely labeled as natural dietary supplements,” said Robert J. West, Special Agent-in-Charge, Miami Field Office, FDA Office of Criminal Investigations. “Our office will continue to defend the public’s health by ensuring that dietary supplements are accurately labeled, and do not contain dangerous undeclared active pharmaceutical ingredients.”
This matter was handled by the U.S. Attorney’s Office for the Middle District of Louisiana and the U.S. Food and Drug Administration’s Office of Criminal Investigations, with the assistance from other FDA components, the Louisiana State Police, the Slidell, Louisiana, Police Department, and the Drug Enforcement Administration. The matter was prosecuted by Assistant United States Attorneys Cam T. Le and Paul L. Pugliese.
Health care professionals and patients are encouraged to report adverse events or side effects related to the use of these products to the FDA. For more information regarding dietary supplements and to report adverse events, please visit the FDA’s website at http://www.fda.gov/Food/DietarySupplements/.
Federal Jury Convicts Armed Career Criminal for Possessing FirearmRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced that last night a federal jury convicted Larry W. Kelly, Jr., age 36, of Baker, Louisiana, of possessing a firearm and ammunition while a convicted felon. The verdict followed a multi-day jury trial before Chief U.S. District Judge Brian A. Jackson. The defendant is scheduled to be sentenced on July 14, 2016.
The evidence at trial established that, on April 14, 2015, the Baton Rouge Police Department received a 911 call that reported that the defendant, who had previously been convicted of multiple felonies, was threatening to shoot the defendant’s father. When BRPD officers responded to the scene, the defendant fled and attempted to hide a firearm in the backyard of a house. Officers eventually secured the defendant and located the firearm. Because his criminal history makes him an armed career criminal under federal law, the defendant faces a mandatory minimum of 15 years in prison.
U.S. Attorney Green stated: “Through this jury verdict, our community has once again demonstrated its intolerance toward convicted felons with guns. Armed felons pose a threat to our safety and security and will continue to receive our well-deserved attention, particularly armed career criminals, like the defendant in this matter. I appreciate the hard work of the ATF, BRPD, and our prosecutors who collectively helped to ensure justice and a safer community for all.”
ASAC Kurt Thielhorn stated: “ATF remains focused on reducing firearm violence. This is an example of ATF working with our law enforcement partners to protect our communities from the most violent criminals.”
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Baton Rouge City Police Department. It was prosecuted by Assistant United States Attorneys Adam Ptashkin and Rene Salomon.
Federal Grand Jury Indicts Arizona Truck Driver for Manslaughter in Bus Crash that Left One Man Dead on Fort Irwin Army BaseRead the Press Release
RIVERSIDE, California – An Arizona man was indicted today on federal charges of involuntary manslaughter for his role in a fatal bus crash that allegedly occurred because he parked his truck on a highway on the Fort Irwin Army Base in the Mojave Desert.
Steven Kilty, 49, of Apache Junction, Arizona, was named in a single-count indictment that charges him with involuntary manslaughter, a felony offense that carries a penalty of up to eight years in federal prison.
On the evening of June 2, 2014, Steven Kilty was delivering equipment to the Army’s National Training Center at Fort Irwin. Kilty arrived at the base the night before his scheduled delivery, and he parked his tractor-trailer in the right lane of the road on Fort Irwin property, according to investigators, who determined that Kilty turned off the lights on the truck and failed to place any warning devices or reflectors near his truck.
At approximately 5:00 a.m. on June 3, prior to sunrise, a commuter bus bringing people to Fort Irwin collided with the parked truck. As a result of the collision, one man was killed and seven people suffered major injuries.
The indictment alleges that Kilty was illegally blocking traffic on the roadway and that he failed to place any warning reflectors, both of which are violations of the California Vehicle Code. This “grossly negligent” operation of the truck “imperiled the lives of others,” according to the indictment.
“Commercial truck drivers are professionals who have a heightened obligation to operate their vehicles in a safe and responsible manner,” said United States Attorney Eileen M. Decker. “The tragedy that resulted of Mr. Kilty’s negligent conduct was entirely avoidable.”
Kilty will be summoned to appear for an arraignment in the United States District Court in Riverside in the coming weeks.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
This case was investigated by the California Highway Patrol, the U.S. Army Criminal Investigation Command, and the Fort Irwin Police Department.
Fargo Man Sentenced for the Production of Child PornographyRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on March 23, 2016, Dewayne William Barth II, 30, Fargo, North Dakota, was sentenced before U. S. District Judge Ralph R Erickson to serve the statutory maximum of 30 years in prison for Production of Child Pornography, Receipt and Distribution of Child Pornography, and Possession of Child Pornography. Judge Erickson also sentenced Barth to lifetime of supervised release and to pay a $300 special assessment to the Crime Victims Fund. Barth is also required to pay $16,000 in restitution.
U.S. Attorney Chris Myers noted, “This cases illustrates the commitment by law enforcement nationwide to work together to identify, target and arrest individuals who abuse children. The sentence handed down in this case is a strong message that protection of children from this reprehensible conduct remains a priority with the US Attorney’s office in North Dakota and all of our law enforcement partners.”
“No prison sentence can restore what was taken from Mr. Barth’s victim,” said acting Special Agent in Charge William Lowder of HSI St. Paul, “but the lengthy sentence imposed on him by the court serves as a warning to those who would seek to abuse the most vulnerable members of our community. HSI will continue to work with our state and local partners to ensure those who prey on children are caught and punished.”
This case came to the attention of law enforcement after Homeland Security Investigation Special Agents arrested an individual for production and possession of child pornography in Gatling, Tennessee. A forensic examination of the computer in Tennessee revealed that the individual was sharing child pornography with multiple persons, including Barth. Specifically, Barth produced and distributed images depicting a 3-year-old child engaged in sexually explicit conduct.
A Special Agent with the Homeland Security Investigations obtained and executed a search warrant for Barth’s email account which revealed that Barth was receiving and distributing child pornography via a yahoo email account from May 2014, continuing through October 2014. Internet Crimes Against Children (ICAC) task force members also executed a search warrant at Barth’s residence where law enforcement recovered multiple electronic devices collectively containing more than 11,000 files of child pornography.
This case was investigated by the Department of Homeland Security - Homeland Security Investigations, the North Dakota Bureau of Criminal Investigations, and the Fargo Police Department.
Assistant U. S. Attorney Jennifer Puhl prosecuted the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by U.S. Attorneys’ Offices throughout the nation, Project Safe Childhood, in conjunction with Internet Crimes Against Children Task Force (ICAC), help federal, state, and local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communications systems, or computer technology to sexually exploit children. The ICAC Program is a national network of 61 coordinated task forces engaging in proactive investigations, forensic investigations, and criminal prosecutions. Project Safe Childhood also helps to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Fargo Business Man Has Been Sentenced in Connection with Tax FraudRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on March 23, 2016, Mrkonja Redic, 50, Fargo, ND, was sentenced before U. S. District Judge Ralph R. Erickson to serve five (5) years supervised probation and ten (10) months Electronic Home Monitoring after pleading guilty in Dec. 2015 to an Information charging him with Making and Subscribing a False Federal Tax Return. Judge Erickson also ordered Redic to pay $45,000 in restitution to the IRS as well as a $100 special assessment to the Crime Victims Fund.
"Tax crimes have erroneously been referred to as victimless, but that position could not be more wrong since we all end up paying when someone attempts to evade our tax system," said Shea Jones IRS Criminal Investigation Special Agent in Charge of the St. Paul Field Office. With the April 15 tax deadline looming, it is important for people to have confidence that when they pay their taxes, their friends and neighbors are doing the same."
On or about Feb. 16, 2010, Redic filed a United States amended tax return for the year 2008, which included a Schedule C, Profit or Loss from Business. Redic also verified under the penalties of perjury that the amended tax return was true and correct. Redic, who owned a scrap metal business in Fargo, falsified the amount of his gross receipts and sales on his federal tax return by $174,654 in an attempt to minimize the amount of taxes he would owe to the IRS. In 2008, Redic had gross sales and receipts of $344,621.00, but only reported to the IRS $169,967.00 in gross sales and receipts. Redic’s under-reporting to the IRS of $174,654.00 in gross sales and receipts resulted in a tax loss to the United States of $45,000.
This case was investigated by the Internal Revenue Service.
Assistant U. S. Attorney Scott Schneider prosecuted the case.
Drug Trafficker Accomplice Sentenced to Five Years in PrisonRead the Press Release
EUGENE, Ore. – Nikita Rose Garcia, 28, a former resident of Douglas County, Oregon, was sentenced yesterday to five years in prison and four years of supervised release by U.S. District Judge Ann Aiken for aiding in the distribution of more than 50 grams of methamphetamine. Garcia previously pleaded guilty in November 2015 for assisting another individual who was armed with a firearm in the distribution of 1.244 kilograms of methamphetamine in Douglas and Benton Counties.
On August 6, 2014, a Benton County Sheriff’s deputy attempted to stop a car in which Garcia was a passenger near Monroe, Oregon. The driver attempted to elude the deputy by driving at speeds over 100 mph. The car crashed through a fence and collided with a piece of farm equipment. The driver fled and avoided arrest, but Garcia was apprehended. In the car, deputies found methamphetamine and a loaded pistol.
On September 15, 2014, U.S. Marshals arrested the alleged driver, Greyson Scott Lindenfelser, on federal drug and firearm charges and Oregon kidnapping and drug charges outside a motel in Creswell, Oregon. On January 21, 2015, a federal grand jury indictment charged Lindenfelser with being a felon in possession of a stolen firearm, possessing a firearm to further a drug trafficking crime, and distribution of methamphetamine. He has pleaded not guilty and is pending trials in federal and Douglas County courts.
This case was jointly investigated by the Drug Enforcement Administration, Douglas County Interagency Narcotics Team, Benton County Sheriff’s Office, and the Corvallis Police Department, and resulted in the seizure of a total of 1.913 kilograms of methamphetamine, two pistols and 37 hydrocodone tablets.
The case was prosecuted by Assistant U.S. Attorney Frank R Papagni, Jr., with the assistance of Benton County District Attorney John Haroldson and Douglas County District Attorney Rick Wesenberg.
District Man Pleads Guilty to Armed Rapes of Two StrangersRead the Press Release
WASHINGTON – Paul Williams, 32, of Washington, D.C., pled guilty today to raping and assaulting two women in separate attacks that took place in Northeast Washington within a three-week period in November 2014, U.S. Attorney Channing D. Phillips announced.
Both women were strangers that Williams and his accomplice, Rai-Jon Gerald, kidnapped off public sidewalks and forced into deserted areas, where Williams and Gerald sexually assaulted them. One attack took place on Thanksgiving Day.
Williams pled guilty in the Superior Court of the District of Columbia to two counts of first-degree sexual abuse, one count of assault with a dangerous weapon, and one count of armed robbery. The plea, which is contingent upon the Court’s approval, calls for a prison sentence between 35 and 38 years. It also requires the defendant to register as a sex offender for life upon his release. The Honorable Michael Ryan scheduled sentencing for May 27, 2016.
According to the government’s evidence, in the early morning hours of Nov. 7, 2014, Williams and Gerald planned to rob a convenience store at 49th Street and Nannie Helen Burroughs Avenue NE. When a suspicious employee thwarted their plans, Williams and Gerald, armed with a BB gun that looked like a real handgun, walked eastbound down Nannie Helen Burroughs Avenue. They soon spotted a woman walking alone, whom they approached. Gerald displayed the gun to the woman, while Williams grabbed her by the hair and forced her to the ground. Williams then put the woman in a headlock and dragged her into a deserted alley near an abandoned wooded lot. There, in the dark and amidst such debris as discarded mattresses and tires, Williams and Gerald orally and vaginally raped the woman. They also robbed her of cash and phones, and Williams threatened to kill her if she reported the assault.
Three weeks later, on Nov. 27, 2014 – which was Thanksgiving Day - Williams and Gerald again met up in the early morning hours to rob the convenience store at 49th Street and Nannie Helen Burroughs Avenue NE. Once again, their plans were thwarted, causing them to head down Nannie Helen Burroughs Avenue in search of other victims. They encountered a woman, who, like their first victim, was a complete stranger to them. Armed with a BB gun and Taser, Williams and Gerald assaulted the woman, robbing her of her purse and forcing her off the sidewalk toward tall bushes at nearby Kelly Miller Middle School. While Gerald led the way, Williams dragged the woman, repeatedly striking her in the head and face with his gun. Once behind the bushes, Williams forcibly removed the woman’s clothing and orally sexually assaulted her. Williams also attempted forced vaginal sex. Throughout, the woman fought back. In response, Williams continued to pistol whip her, as well as strike her in the face with his fists. Williams and Gerald Tasered the woman multiple times. With Williams’s assistance, Gerald also sexually assaulted the woman orally, and attempted to do so vaginally.
A neighbor heard the woman’s screams and the sounds of her being Tasered. He called the police, who quickly arrived on scene. Gerald escaped, but Williams was arrested nearby hiding in a yard. Williams has been in custody since his arrest.
Gerald, 20, also of Washington, D.C., was identified and arrested two months later, and he earlier pled guilty to first-degree sexual abuse, attempted first-degree sexual Abuse, and two counts of robbery. He is awaiting sentencing.
In announcing the plea, U.S. Attorney Phillips commended the work of the detectives of the Metropolitan Police Department’s Sexual Assault Division, the patrol officers who responded, and the crime scene officers who processed both crime scenes. He thanked the District of Columbia Forensic Nurse Examiners who examined the victims shortly after the assaults, the FBI’s Footwear Examiners, the forensic biologists and DNA analysts at Bode Cellmark Forensics and the D.C. Department of Forensic Sciences, and Teel Technologies, which performed forensic analysis of the defendant’s phone.
U.S. Attorney Phillips also commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Veronica Vaughn; Paralegal Specialists Jessica Moffatt and Joyce Arthur; Legal Assistant Brendan Conye; Criminal Investigation Unit Investigator John Marsh; Information Technology Specialists Leif Hickling, Aneela Bhatia, Paul Howell, and Joshua Ellen; Investigative Analyst William Hamann, Witness Security Specialist Michael Hailey; current and former interns Allison Denton, Stephanie Dinan, Emma McArthur, and Marissa Moshell; former Paralegal Specialist Chantal Corrigan; Special Assistant U.S. Attorney Brian Morgan, and Assistant U.S Attorney Jodi Lazarus, who assisted with the initial investigation of the case.
Finally, U.S. Attorney Phillips thanked Assistant U.S. Attorneys John L. Hill and Kara Traster, who investigated, indicted, and prosecuted the case.
Detroit-Area Physician Sentenced to 45 Months in Prison for Role in $5.7 Million Medicare Fraud SchemeRead the Press Release
A Detroit-area doctor who prescribed medically unnecessary controlled substances and billed for office visits and diagnostic testing that never took place was sentenced to 45 months in prison today for his role in a $5.7 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Region and Special Agent in Charge Jarod J. Koopman of Internal Revenue Service-Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.
Laran Lerner, 59, of Northville, Michigan, was sentenced today by U.S. District Judge Victoria A. Roberts of the Eastern District of Michigan, who also ordered Lerner to pay $2,789,409 in restitution. Lerner pleaded guilty on Aug. 31, 2015, to one count of health care fraud and one count of structuring cash transactions to avoid bank reporting requirements.
According to admissions made as part of his plea agreement, Lerner lured patients into his clinic with prescriptions for medically unnecessary controlled substances and then caused Medicare to be billed for a variety of unnecessary prescriptions, diagnostic tests and office visits to make it appear as though he was providing legitimate medical services. Lerner admitted that in reality, the controlled medications were simply used to facilitate and conceal his scheme to steal millions of dollars from the Medicare program. According to Lerner’s plea agreement, Medicare was billed $5,748,237 as a result of Lerner’s unnecessary prescriptions, office visits and diagnostic testing.
Lerner also admitted that he structured cash deposits he received as a result of his scheme in $5,000 increments on consecutive days at various branch locations in the Detroit area in order to avoid the requirement that domestic banks file a currency transaction report with the Secretary of the Treasury for all currency transactions over $10,000. According to his plea agreement, for example, in April 2013, Lerner deposited $70,000 in cash by making deposits of $5,000 on 14 different days.
As part of the plea agreement, Lerner agreed to permanently surrender his Drug Enforcement Administration controlled substance registration and agreed to not to re-apply for this license in the future, and agreed that were he granted any application from any agency to prescribe or dispense controlled substances, it would be against the public interest.
The FBI, HHS-OIG and IRS-CI investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan. Fraud Section Trial Attorney Elizabeth Young is prosecuting 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 HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Department of Justice Releases Report on Identifying and Preventing Gender Bias in Law Enforcement Response to Sexual Assault and Domestic ViolenceRead the Press Release
The Department of Justice today announced a new publication, Identifying and Preventing Gender Bias in Law Enforcement Response to Sexual Assault and Domestic Violence: A Roundtable Discussion. The report was released at the International Conference on Sexual Assault, Domestic Violence, and Engaging Men & Boys and is published by the Office of Community Oriented Policing Services (COPS Office).
This publication serves as a companion to the guidance on this topic issued by the department on Dec. 15, 2015, and summarizes a roundtable discussion hosted on Aug. 4, 2015. The roundtable was hosted by the COPS Office and the Police Executive Research Forum, in partnership with the department’s Office on Violence Against Women and Civil Rights Division. The roundtable provided an opportunity for stakeholders to share feedback on the department’s guidance. The final guidance, which includes that feedback, has been embraced by multiple law enforcement and advocacy organizations.
“As a retired police chief with close to 30 years in the field, I believe the lessons learned from this publication serve as a stark reminder of the need to ensure victims of sexual assault and domestic violence are not further victimized by gender bias – whether intentional or implicit,” said COPS Office Director Ronald Davis. “I recommend that every law enforcement executive read this report.”
The publication provides recommendations from law enforcement officers and executives, victim advocates, academics, and subject matter experts who attended the August roundtable, and shared insights on improving law enforcement response to victims of sexual assault and domestic violence, particularly amongst vulnerable populations such as the lesbian, gay, bisexual and transgender community; racial, cultural and religious minorities; and immigrants.
The publication recommends:
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Addressing gender bias in agency culture through officer training and accountability;
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Developing clear policies, resources, and partnerships; and
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Applying a survivor-centered approach.
The COPS Office, headed by Director Ronald Davis, is the federal component of the Department of Justice responsible for advancing community policing nationwide. Since 1995, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 127,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
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