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3 May 2016
Southern Indiana woman sentenced in fraud schemeRead the Press Release
New Albany –United States Attorney Josh J. Minkler announced today that a former Corydon, Indiana, woman was sentenced in federal court by U. S. District Judge Tanya Walton Pratt sentenced to 75 months (over six years) imprisonment. Deirdre Martin, 45, was convicted of one count of bank fraud, two counts of aggravated identity theft and two counts of access device fraud. This matter was investigated by the United States Secret Service and the Indiana State Police.
Prior to her sentencing, Martin admitted that she devised a scheme in which she committed bank fraud, aggravated identity theft and used unauthorized access devices to obtain goods, merchandise and services for her personal benefit in an amount over $200,000.
According to the plea agreement filed with the Court, Martin obtained the routing number and account number for a First Savings Bank personal checking account without the knowledge or consent of the owner of the account. Martin also obtained a Capital One credit card account using the identifying information of another person without consent and made herself an authorized user of the credit card account.
Additionally, Martin obtained Abercrombie and Fitch and Victoria’s Secret retail merchant credit accounts administered by Comenity Bank using the identifying information of another person without consent and made herself an authorized user for the credit accounts. Martin used the Capital One and Comenity Bank credit accounts to pay for numerous personal expenditures benefiting her and her associates. Martin used the First Savings Bank routing number and account number to direct electronic funds transfers from the First Savings Bank checking account she took over without authorization to make payments to the Capital One and Comenity Bank credit accounts she opened and for other personal expenditures for herself and her associates including utility services.
Martin directed electronic funds transfers from the First Savings Bank checking account in amounts low enough to avoid the attention of the account owner and First Savings Bank, generally less than $1,000, and to cause the transactions to appear to First Savings Bank to have been made in the due course of business. As a result of the scheme, Martin caused the transfer of approximately $202,000 from the First Savings Bank checking account she took control of to pay for personal expenditures benefitting her and her associates.
According to Assistant U.S. Attorney Todd Shellenbarger, who prosecuted the case for the government, Martin also was sentenced to 5 years of supervised release following her release from imprisonment. During the period of supervised release, Martin must submit to drug testing and must pay restitution to the victims of the crimes including $156,701 to the victim of the bank fraud.
Rutland Resident Sentenced to a Year and a Day in Prison for Possession of Child PornographyRead the Press Release
Eric S. Miller, United States Attorney for the District of Vermont, stated that Kenneth Beane, 27, of Rutland, Vermont, was sentenced today by U.S. District Court Judge Geoffrey W. Crawford, to a year and a day in prison for the possession of over 7500 images and videos of child pornography. Beane was also sentenced to five years of supervised release after the completion of his prison term.
According to Court records, as part of an investigation into peer-to-peer file sharing and internet-facilitated child exploitation, agents from Homeland Security Investigations identified Beane as associated with the receipt and distribution of child pornography. On May 20, 2015, agents executed a search warrant at Beane’s residence in Rutland and seized a series of electronics suitable for data storage, including laptop computers, cellular phones, thumb drives, and other storage devices. Imaging of one of the laptops revealed over 7500 videos and images of violent sexual abuse of children.
On June 15, 2015, Beane was indicted by a federal grand jury on a one-count indictment charging him with Possession of Child Pornography, including the possession of at least one visual depiction that involved a prepubescent minor who had not attained twelve years of age. On June 16, 2015, the defendant appeared before United States Magistrate Judge John M. Conroy who released the defendant on conditions pending trial. Beane pled guilty to the indictment on December 3, 2015, before Judge Crawford, who continued Beane’s release. Upon sentencing today, Beane was ordered to surrender to the Bureau of Prisons on June 14, 2016.
This case was investigated by Homeland Security Investigations, the investigative arm of the Department of Homeland Security. The United States Attorney, Eric S. Miller, commends the agency for its work in this critical area. The case was prosecuted by Assistant United States Attorney Abigail Averbach. Beane was represented by Elizabeth Quinn of the Office of the Federal Public Defender.
Riverside Man Sentenced to Decade in Federal Prison for Third Conviction of Possessing Child PornographyRead the Press Release
LOS ANGELES – A Riverside man has been sentenced to 10 years in federal prison for possessing about 100 images depicting child pornography, including sexually explicit pictures of pre-pubescent girls under the age of 12.
James Gregory O’Neill, 58, was sentenced Monday afternoon by United States District Judge R. Gary Klausner.
O’Neill pleaded guilty in January to possessing child pornography on his mobile phone in the spring of 2015. When authorities discovered the pictures of O’Neill’s phone, he was on parole after being convicted in Riverside Superior Court of possessing matter depicting a minor in a sexual act, a crime that led to a two-year sentence. O’Neill had also been convicted in federal court in 2003 of distributing child pornography, a conviction that brought a 40-month prison sentence.
“Mr. O’Neill has now been convicted three separate times of serious felony offenses related to child pornography,” said United States Attorney Eileen M. Decker. “Even after his prior convictions, he was not deterred from continuing to engage in crimes that victimize children. Because of his repeated failure to behave lawfully, Mr. O’Neill earned the decade-long sentence imposed by the Court.”
The case against O’Neill was investigated by the Riverside Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
“Every time a sexually explicit image or video of a minor is downloaded and viewed, the child who’s shown is victimized again,” said Joseph Macias, special agent in charge of HSI Los Angeles. “That’s why HSI, in close collaboration with its law enforcement partners and prosecutors, is using every resource and tool at its disposal not only to target those involved in online child sexual exploitation, but also to identify and rescue the children who’ve fallen prey to these predators.”
O’Neill is one of a half-dozen men from the Inland Empire who currently face federal charges related to child pornography.
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Jeremy Matthew Meyerett, 41, of San Bernardino, has agreed to plead guilty to production of child pornography in a case that carries a 15-year mandatory minimum prison term. During an undercover investigation by the Queensland (Australia) Police Service, Meyerett discussed sexually molesting a 5-year-old girl, and a subsequent search of an online account by federal law enforcement yielded child pornography depicting the young victim. Meyerett is scheduled to enter his guilty plea on June 13, 2016 before United States District Judge Virginia A. Phillips. This investigation was conducted by HSI and the Riverside County Sheriff’s Department.
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Andrew Harrison Fowler, 26, of Perris, a convicted sex offender who was convicted of having sex with minors in San Diego Superior Court, pleaded guilty on April 18 to possession of child pornography, with some of the images depicting victims younger than 10. Fowler came to the attention of law enforcement after his employer discovered that he was distributing and possessing child pornography while using a computer at his job in Corona. Fowler is scheduled to be sentenced by Judge Phillips on June 27, at which time he will face a mandatory minimum sentence of 10 years in federal prison and maximum possible sentence of 20 years. Fowler was on parole in the San Diego case when he committed the offense in the federal case. This case was investigated by the Riverside County District Attorney’s Office Sexual Assault and Felony Enforcement/Internet Crimes Against Children Unit, which includes special agents with HSI.
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Anthony Michael Scotti, 22, of Murrieta, pleaded guilty on April 4 to possession of child pornography. Scotti, who was previously convicted in Riverside Superior court of distributing lewd material to a minor, admitted that he had images on an iPod that was seized by law enforcement last August, and that he used the KIK messaging app to distribute images of children engaged in sex acts with adults. In a plea agreement, Scotti also admitted that he used text messages to convince a 15-year-old girl in another state to take sexually explicit pictures and send them to him. United States District Judge Philip S. Gutierrez is scheduled to sentence Scotti on September 12, at which time the defendant faces a mandatory minimum sentence of 10 years in federal prison, and prosecutors have said they will recommend a sentence of 14 years. This case was investigated by HSI.
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Angelo Harper Jr., 21, of Moreno Valley, is scheduled to go on trial on July 19 on charges of advertising, distributing and possessing child pornography. A grand jury indictment in this case accused Harper of distributing child pornography that includes a six-minute video depicting a man with a pre-pubescent boy. If he is convicted, Harper would face a statutory maximum sentence of 70 years in federal prison. This case was investigated by HSI and the Riverside Sexual Assault Felony Enforcement Task Force.
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Nathan Charles Longino Barba, 21, of Rancho Cucamonga, was indicted on April 13 on charges of receiving and possessing child pornography. Barba has pleaded not guilty and is scheduled to go on trial on June 14. The indictment alleges that Barba received video files depicting child pornography over the Internet and that he possessed images that depicted a child under the age of 12. If he is convicted, Barba would face a statutory maximum sentence of 40 years in federal prison. This case was investigated by FBI.
“Child pornography offenses must be punished,” said United States Attorney Decker. “These crimes create further demand in child pornography market, which by its nature is based on the exploitation and abuse of children. By deterring demand, we are protecting against future abuse.”
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.
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Puerto Rico Man Pleads Guilty to Alien SmugglingRead the Press Release
St. Thomas, USVI –On Tuesday, May 3, 2016, Angel De Jesus Marrero, 31, of Puerto Rico, pleaded guilty in District Court on St. Thomas to encouraging and inducing aliens to illegally enter the United States, United States Attorney Ronald W. Sharpe announced.
According to the plea agreement filed with the court, on December 22, 2015, Marrero was solicited by his co-defendant, Rodriguez Ramirez, to assist in the passage of five illegal Brazilian nationals through the St. Thomas airport by checking them in at the airline ticket kiosk. Afterward, he was to ensure that the illegal aliens made it to the appropriate gate to depart St. Thomas for New York. Federal agents, however, thwarted the plan before anyone boarded the aircraft and apprehended the defendants along with the illegal aliens. Marrero’s sentencing date has been set for September 1, 2016. Rodriguez Ramirez previously pleaded guilty to bribing a Customs officer and is awaiting sentencing on June 16, 2016.
Marrero faces a maximum sentence of 10 years in prison and a $250,000 fine.
The case was investigated by Custom and Border Protection Office of Internal Affairs and the U.S. Immigration and Customs Enforcement Office of Professional Responsibility. The case is being prosecuted by Assistant U.S. Attorney Sigrid Tejo-Sprotte.
Previously Convicted Felon Sentenced for Gun PossessionRead the Press Release
DAYTON – David Pate, 28, of Dayton, was sentenced in U.S. District Court to 90 months in prison for possessing a firearm after having been convicted of a felony.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, Dayton Police Chief Richard Biehl, Donald J. Soranno, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, who are all members of the Community Initiative to Reduce Gun Violence, announced the sentence handed down today by U.S. District Judge Thomas M. Rose.
According to court documents, on November 2, 2015, Dayton Police started to follow Pate as he operated a vehicle. Pate sped away and crashed into a fence before fleeing on foot. He was ultimately arrested and officers found a semi-automatic pistol under the driver’s seat of his vehicle. Pate had been convicted of felony offenses in 2009 and 2011, including trafficking in heroin and felonious assault.
He pleaded guilty on December 29, 2015 to a Bill of Information charging him with one count of possession of a firearm by a convicted felon.
Acting U.S. Attorney Glassman commended the cooperative investigation by those involved in the Community Initiative to Reduce Gun Violence, as well as Assistant United States Attorney Andrew Hunt, who is representing the United States in this case.
Previously Convicted Child Sex Offender, Shane Scott, Sentenced to 33 Years After Using Prison Mail System to Coerce and Entice A Mentally Disabled ChildRead the Press Release
GRAND RAPIDS, MICHIGAN – Shane Scott, age 41, of Coldwater, Michigan, received a sentence of 33 years in federal prison for attempting to coerce or entice a mentally disabled 17-year-old into sex, U.S. Attorney Patrick Miles announced today.
Scott committed the offense while incarcerated at the Bellamy Creek Correctional Facility serving a sentence for criminal sexual conduct involving a 12-year-old girl in 2000. Scott committed the 2000 criminal sexual conduct offense just three months after being released from prison on a previous child sexual abuse conviction in Alabama. Between August 2014 and January 2015, he used the prison mail system to write countless times to a woman whose daughter he wanted to have sex with as soon as he was released. The 17-year-old daughter has severe mental disabilities, and Scott admitted that he knew that she had the mental capacity of someone well under age 10 and that she would not understand what sex was. Scott was scheduled for release from Bellamy Creek Correctional Facility on February 14, 2015, but authorities arrested him on the federal charge of attempted coercion or enticement just prior to his release. Scott pled guilty to the charge in January 2016.
Scott’s efforts to set up a sexual encounter with the child were persistent and detailed. He sent numerous letters directing the girl’s mother to make arrangements so he could sexually molest the child in a car and at his workplace. He specifically requested that the mother tattoo the girl, send him sexually explicit pictures of the girl, and sexually molest the child for him. Scott stated that the mother was the one who initially proposed the idea of Scott having sex with the daughter, but the mother backed out and Scott spent five months trying to persuade her to allow him to do it, thereby attempting to coerce or entice the child into sex with him through the mother as the intermediary. Scott admitted to authorities that he would have gone through with having sex with the child if law enforcement had not intervened. The child’s mother was convicted in state court for this and a related offense and is now serving up to seven years in prison.
In delivering the 33-year sentence, U.S. District Judge Paul L. Maloney described this offense as "shocking" and "virtually incomprehensible" in its gravity. Judge Maloney described Scott as "a predator" who is "virtually certain to reoffend" without a lengthy term of incarceration to incapacitate him. He ordered that the 33-year prison term – which was above the recommended guideline range – be followed by 20 years of supervised release, which will subject Scott to intensive federal monitoring and supervision.2
"If not for careful screening and monitoring of inmate mail by the Michigan Department of Corrections staff at the Bellamy Creek Correctional Facility, this predator would have carried out his perverse plan and victimized a child who never could have reported it," stated U.S. Attorney Miles. "This case represents the priority that West Michigan law enforcement agencies place on collaborating to protect the most vulnerable among us."
"Mr. Scott’s propensity, ambition, and planning to offend again once he was released is disturbing, and it is gratifying to see justice served against someone who was plotting to choose among the most vulnerable of our society to victimize so egregiously," said David P. Gelios, Special Agent in Charge, FBI Detroit Division. "It is our law enforcement partners who got us this result. From the Michigan Dept. of Corrections, to the Social Security Administration, the Ionia County Sheriff’s Office, and the Michigan State Police: their partnership with us kept a predator off the streets, and a vulnerable victim safe."
This case resulted from a joint investigation by the FBI, Michigan State Police, Michigan Department of Corrections, Social Security Administration, and Ionia County Sheriff’s Office working under the FBI’s West Michigan Based Child Exploitation Task Force (WEBCHEX). Assistant U.S. Attorney Tessa K. Hessmiller prosecuted the federal case as part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, visit: http://www.justice.gov/usao/miw/programs/psc.html.
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Postal Employee Indicted on Charged of Embezzlementand TheftRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051Rochester, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury in Rochester, NY has returned a two-count indictment charging Jennifer Passeck of embezzling and converting to her own use proceeds and property of the United States Postal Service. The charges carry a maximum penalty of 10 years in prison, a fine of $250,000, or both.
Assistant U.S. Attorney Bradley E. Tyler stated that, according to the indictment, the defendant she was a Relief Postmaster in the Sodus Point, NY post office between March 2013 and March 2015. During that time, Passeck is accused of stealing stamps, money orders and post office box rental payments totaling $19,504.
The indictment is the culmination of an investigation on the part of Inspectors of the United States Postal Service, Office of Inspector General, under the direction of Monica Weyler, Eastern Area Field Office, Philadelphia, PA.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Philadelphia Man Sentenced for Armed Robbery of West Bloomfield Tappers JewelryRead the Press Release
A Philadelphia man was sentenced to 33 years in prison today for his involvement in the violent armed robbery of Tapper’s Diamonds and Fine Jewelry in West Bloomfield and an attempted armed robbery of Medawar Jewelers in Grand Rapids in April 2014, United States Attorney Barbara L. McQuade announced.
McQuade was jointed in the announcement by Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Chief Michael Patton, West Bloomfield Police Department and Sheriff Lawrence A. Stelma, Kent County Sheriff’s Department.
Nathaniel Pembrook, 43, was sentenced before United States District Judge Laurie J. Michelson in Detroit, Michigan.
Pembrook, along with his co-conspirators David Briley, Shaheed Calhoun, and Orlando Johnson, were convicted of a variety of charges, including conspiracy to interfere with interstate commerce by force, interference with interstate commerce by force, use and carry of a firearm during and in relation to a crime of violence, and being felons in possession of firearms after a four week-long trial in November – December 2015. The evidence produced at trial showed that all four men lived in Philadelphia, Pennsylvania and traveled to Michigan on April 21-22, 2014 to commit armed robberies of jewelry stores, particularly targeting the Rolex distributors, as part of a six-person robbery crew.
This armed robbery crew initially attempted to steal Rolex watches and other valuables from Medawar Jewelers, located at 4518 Plainfield Avenue in Grand Rapids, at approximately 12:28 pm on April 22, 2014. During the course of that attempted robbery, one robber used a hammer to smash the Rolex watch display while three other robbers, one armed with a gun, rushed the back area of the store looking for other valuables. The store owners, who are registered concealed pistol owners, shot the armed robber and all the robbers fled without any valuables. About five hours later, three men, dressed in identical clothes as the robbers in Grand Rapids earlier that day, entered Tapper’s Diamonds and Fine Jewelry, located at 6337 Orchard Lake Road in West Bloomfield, and held employees and customers at gunpoint as they stole approximately $1.3 million worth of Rolex watches. The men then fled the store without being apprehended.
The Federal Bureau of Investigation, Kent County Sheriff Department, and West Bloomfield Police Department coordinated their investigative efforts and began to piece together various pieces of evidence to identify the armed robbers. Nathaniel Pembrook’s blood, and thus, DNA were found at the Medawar Jewelers location. Investigators discovered that Pembrook checked himself into Pennsylvania Prysberatian Hospital in the early morning hours of April 23, 2014 complaining of a gunshot wound. The hospital removed the bullet from Pembrook’s arm and Michigan State Police laboratory personnel were able to match the fired bullet to the Medawars owner’s firearm. Additionally, investigators tracked down video and cell phone information that helped to place all of these men from Philadelphia in Michigan and more specifically the robbery locations during the times of the robbery.
Law enforcement is still attempting to identify the final two persons associated with this robbery crew. If anyone has any information about those person’s identities, they are asked to contact the Federal Bureau of Investigation.
Briley, Calhoun, and Johnson are all scheduled to be sentenced next Friday, May 13, 2016 in the federal courthouse in Detroit.
"Armed robberies create a level of fear and risk to life that are unacceptable," McQuade said. "We are grateful for the collaboration of law enforcement agencies across state lines to build this investigation and bring these offenders to justice."
"The lengthy sentence imposed today, and previous convictions, are the result of hundreds of hours of work and dedication of our team of investigators and prosecutors." said, David P. Gelios, Special Agent in Charge, FBI Detroit Division. "The convictions and lengthy sentence should serve as a reminder to anyone who would travel to Michigan with the intent to commit a crime, particularly violent crimes, that the FBI, along with its federal, state and local partners, will locate them and bring them to justice."
The case was prosecuted by Assistant United States Attorneys Daniel Lemisch and Christopher Graveline
Pensacola Man Pleads Guilty to Multiple Federal Firearm OffensesRead the Press Release
PENSACOLA, FLORIDA – Deangelo A. Rome, 25, of Pensacola, pled guilty today to unlawfully possessing a firearm and ammunition as a convicted felon. The guilty plea was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
During his guilty plea, Rome admitted that, in February 2015, a law enforcement officer discovered a running vehicle with Rome unresponsive in the driver’s seat and located a loaded handgun in view under Rome’s seat.
Later, in December 2015, law enforcement responded to a “shots fired” disturbance call. A shooting victim was located, and the residence had bullet holes through a sliding glass door. Multiple shell casings and a loaded magazine were found on the scene. A fingerprint on the loaded magazine matched that of Rome.
A few days later, law enforcement responded to a call of armed individuals, who, after fleeing, were tracked to a residence with a vehicle in the driveway. A deputy saw an assault rifle in the vehicle, and ammunition was also found on the premises. During a search of the premises, Rome was located hiding under a bed. The rifle inside the vehicle had both a palm print and DNA evidence belonging to Rome, and Rome’s fingerprint was also located on a separate box of ammunition.
For each of the three firearm charges, Rome faces a maximum of 10 years in prison. The sentencing hearing is scheduled for July 18, 2016, at 2:00 p.m. at the United States Courthouse in Pensacola.
The case resulted from investigations by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Escambia County Sheriff’s Office, the Pensacola Police Department, and the ATF Gun Crime Response Team. Assistant United States Attorney David L. Goldberg is prosecuting the case.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Owner of California Company That Offered Mortgage Assistance Pleads Guilty to False Advertising ChargesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOHN VESCERA, 60, of Dana Point, Calif., waived his right to indictment and pleaded guilty today before Chief U.S. District Judge Janet C. Hall in New Haven to false advertising and misusing a government seal in connection with the provision of mortgage modification services.
According to court documents and statements made in court, VESCERA was the President of First One Lending Corporation (“First One”) in San Juan Capistrano, Calif. During the peak of the national mortgage crisis, VESCERA and First One offered home mortgage loan modification assistance to homeowners across the United States, including in Connecticut, who were having difficulty repaying their mortgage loans.
From approximately February 2010 until approximately February 2012, VESCERA and First One solicited clients through television advertisements and infomercials produced by National Media Connection of New London, Conn. These advertisements touted the mortgage modification services of an entity known as the National Mortgage Help Center (“NMHC”).
Matthew Goldreich, of East Lyme, Conn., had incorporated NMHC approximately two months after the U.S. Treasury Department announced that it would partner with financial institutions to reduce struggling homeowners’ monthly mortgage payments through a program called the Home Affordable Modification Program (“HAMP”). HAMP consisted of a number of incentives to encourage homeowners and financial institutions to modify existing loans on owner-occupied primary residences in order to help keep these properties out of foreclosure.
NMHC advertisements misrepresented NMHC as being affiliated with or regulated by the U.S. government and falsely stated that NMHC “help[ed] thousands of homeowners every day.” When viewers called the advertised telephone number, they were connected not to NMHC, which operated only as a front and did not provide mortgage modification services for any homeowners, but to clients of National Media Connection, including First One.
VESCERA and First One used NMHC’s name and logo in First One’s promotional materials, application package and other documents. VESCERA also instructed First One employees to introduce themselves to prospective clients as “with the National Mortgage Help Center.”
First One also misrepresented its status with the U.S. Department of Housing and Urban Development (“HUD”). First One employees were instructed to inform homeowners that “[w]e’re a HUD approved lender and we represent the government loan modification programs.” In addition, certain of First One’s forms claimed that the company provided “HUD . . . Housing Counseling assistance” and bore HUD’s seal. In truth, First One had no affiliation with the government mortgage loan assistance programs and was not licensed or approved by HUD for housing counseling or home mortgage loan modification services.
VESCERA pleaded guilty to one count of misuse of a government seal and one count of false advertising. Chief Judge Hall scheduled sentencing for July 26, 2016, at which time VESCERA faces a maximum term of imprisonment of six years.
Goldreich previously pleaded guilty to one count of false advertising. On November 5, 2015, he was sentenced to two years of probation, in including three months of home confinement. He also was ordered to pay a $100,000 fine and $75,794 in restitution.
This investigation is being conducted by the U.S. Postal Inspection Service, Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), U.S. Department of Housing and Urban Development – Office of Inspector General, and Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Avi Perry and Liam Brennan.
Orem Man Charged with Fraud in Indictment Alleging Business was Run as a Ponzi SchemeRead the Press Release
SALT LAKE CITY – Chad Roger Deucher, age 43, of Orem will make a May 26, 2016, appearance in federal court in Salt Lake City to face charges alleging that from March 2010 to February 2016, he operated a Ponzi scheme through a business he controlled that collected about $28 million from about 250 investors. Investigators involved in the case believe about 170 of the investors lost about $16 million in the scheme.
The indictment includes 18 counts of wire fraud and one count of fraud in connection with the purchase and sale of securities. A summons has been issued to Deucher to appear at 1:30 p.m. in U.S. Magistrate Judge Brooke C. Wells’ courtroom.
According to the indictment, Deucher owned and controlled Marquis Properties, a Utah company engaged in real estate transactions. Deucher marketed Marquis as a company of experienced property professionals specializing in acquiring, repairing, and managing high quality cash-flowing properties in several markets across the country, according to the indictment. Deucher claimed that Marquis owned and managed investment properties in desirable areas.
Deucher used direct solicitations, radio advertisements, a website, and real estate and retirement seminars, among other things, to find investors for three types of investments offered through his company. The investment options included turnkey cash flow real estate investments, promissory notes secured by real properties, and joint ventures.
The indictment alleges that Deucher made oral and written misrepresentations about the investments in communications with potential investors. He represented that Marquis located, purchased, renovated and sold single family and small, multi-family homes in lucrative areas of the country. Deucher told investors that Marquis retained renovation crews, property managers and realtors on the ground to assist with all stages of the projects, eliminating the need for direct involvement. According to the indictment, Deucher represented that investors could earn a significant return on their investments. These returns depended on the type of investment being made and varied in length of time period. For example, some investors were promised approximately 8 percent per year for three years, while others were promised 16 percent to 22 percent over an investment period of about one year when rental income was considered. Later in the scheme, according to the indictment, some investors were promised 12 percent to 18 percent for a period of about two weeks to around two months, or 10 percent for investments of about two to six weeks. In truth, the indictment alleges, Deucher tailored the terms of return based on his need for money and what he believed would induce the investor to invest in his company.
According to the indictment, Deucher failed to disclose to investors that the property Marquis offered as collateral were not owned by the company, were substantially encumbered, or were in uninhabitable or blighted condition. He also did not disclose that Marquis was insolvent, the indictment alleges, and was unable to make interest and principal payments to investors and that investor returns were being paid from the funds of new investors.
Deucher also failed to disclose that the securities he offered were not registered and that he was not registered or associated with a securities broker or dealer, all required by law, the indictment alleges.
The indictment alleges Deucher transferred several millions of dollars of client investment funds from business accounts he controlled for his own business and personal interests unrelated to the acquisition or rehabilitation of real property.
The potential maximum penalty for each of the 19 counts in the indictment is 20 years in federal prison. The potential fine for the securities fraud count is $5 million. Each wire fraud count has a potential $250,000 fine.
Indictments are not findings of guilt. Individuals charged in indictments are presumed innocent until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by FBI special agents. The Orem Police Department and investigators with the Utah County Attorney’s Office also participated in the investigation.
Oahu Woman Given Prison Term for Assaulting Her Child on Alaska-Hawaii FlightRead the Press Release
HONOLULU – U.S. Magistrate Judge Kevin S.C. Chang today sentenced Samantha Lealoha Watanabe, 38, of Oahu, to 30 days of imprisonment and one year of supervised release, including 90 days of home detention for assaulting her 15-month old child while onboard an Alaska Airlines flight from Anchorage to Honolulu on March 3, 2015.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that a jury found Watanabe guilty following a one-week trial in December 2015. According to evidence presented in court, Watanabe repeatedly hit her child in the face with a stuffed doll; hit her child’s face with an open hand; and pulled out tufts of her hair, among other acts. Passengers and flight attendants testified that they did not observe the child do anything to warrant that treatment.
Judge Chang noted that five of Watanabe’s other children had been permanently removed from her custody; that the victim in this case was no longer in her custody; and that Watanabe had just given birth to a seventh child.
The investigation resulting in this prosecution was conducted by the Federal Bureau of Investigation. Assistant United States Attorneys Marc A. Wallenstein and Thomas J. Brady conducted the prosecution.
North Carolina Man Sentenced to Life in Prison for Operating Violent and Extensive Sex Trafficking EnterpriseRead the Press Release
Shahid Hassan Muslim, aka “Sharp,” 33, was sentenced today to life in prison for operating an extensive sex trafficking enterprise that recruited women and girls – some as young as 16 years old – into prostitution.
The sentence was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina, Special Agent in Charge John A. Strong of the FBI’s Charlotte Division and Special Agent in Charge Nick S. Annan of U.S. Immigration and Customs Enforcements Homeland Security Investigations (HSI) Atlanta Division.
In sentencing Muslim, U.S. District Court Judge Robert Conrad Jr. of the Western District of North Carolina also ordered him to pay $13,840 in restitution to the victims of the two sex trafficking counts, which charged Muslim with the sex trafficking of those victims for periods of two months and three months, respectively. On Aug. 11, 2014, a federal jury found Muslim guilty on all counts, including two counts of sex trafficking, one count of kidnapping, one count of production of child pornography, one count of witness tampering and five counts of promoting a prostitution business enterprise.
Evidence presented during Muslim’s four-day trial, including the testimony of five victims, revealed that Muslim’s sex trafficking enterprise operated in Charlotte, North Carolina, and other cities from at least 2010 until his arrest in November 2013. As established by the evidence presented at trial, Muslim recruited vulnerable young women and girls from the Charlotte area and advertised them for prostitution on the internet. He lured them into his scheme by promising that they would be part of a “family” when they had none. Once the women and girls were a part of his enterprise, Muslim demanded all of their proceeds and used brutal violence to control them. As one witness explained, he never hit the victims in the face because it would damage his “merchandise.”
According to the evidence established at trial, Muslim accused one teenage victim of withholding money from him and then proceeded to handcuff and beat her until she admitted to keeping some of her earnings. Muslim’s assaults on other victims included burning one victim’s leg with a cigarette to teach her a lesson; and punching a third victim in the stomach, without warning, as she balanced with her eyes closed during a “DUI test” he forced her to perform. After punching her in the stomach, Muslim then dragged her by her hair to a bathroom and repeatedly punched her until she vomited.
The evidence further showed that Muslim kidnapped one of the victims and viciously beat her after she left and reported him to the police. Witnesses testified that he lured her to a hotel, pretending to be a customer, then attacked her and shoved her into a storage trunk. After transporting the trunk to his house, he handcuffed her, bound her feet and continued to beat her, breaking a toilet in the process. Muslim then left her in the shower – still handcuffed – overnight with cold water running on her until she managed to escape and report the kidnapping to a neighbor the next day.
The evidence also demonstrated that Muslim continued his efforts to intimidate and control the victims even after his arrests on both federal and state charges. He convinced the kidnapping victim to submit a false affidavit declaring his innocence, resulting in dismissal of state charges. He further harassed a victim in the federal case to submit a false affidavit regarding a sexually explicit video that he produced of her when she was 16 years old.
“This defendant preyed on and abused vulnerable young women by running a violent sex trafficking operation,” said Principal Deputy Assistant Attorney General Gupta. “While no amount of jail time can undo the harm he caused and the trauma he inflicted, this sentence sends a clear message that people who engage in human trafficking and violate the most basic standards of human decency will face the full force of justice.”
“Shahid Muslim is a ruthless predator who used lies to lure vulnerable young women and underage girls into his criminal enterprise,” said U.S. Attorney Rose. “But instead of finding the better life his young victims had been promised, they endured unspeakable violence and exploitation in the hands of Muslim for his financial gain. My office will continue to aggressively prosecute those who engage in this illegal business that dehumanizes victims and strips them of their dignity.”
“Shahid Muslim promised his victims the loving support of a family, instead he controlled them through beatings, fear, and intimidation,” said Special Agent in Charge Strong. “The FBI devotes a significant amount of resources to helping sex trafficking victims recover from the trauma they suffer at the hands of ruthless people like Muslim. Today’s sentence is a stark warning, there is a harsh punishment for those who choose to sacrifice another person’s civil rights and freedom for their own profit.”
“Human trafficking is a form of modern-day slavery that Homeland Security Investigations fights as one of its highest priorities via a coordinated global effort with our law enforcement partners,” said Special Agent in Charge Annan. “The sadistic abuse inflicted by this defendant is unspeakable and hopefully victims can now find some relief in knowing the monster who exploited them will be safely locked away for many years.”
This case was investigated by the FBI and HSI, with assistance from the Charlotte-Mecklenburg County Police Department. It is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.
North Carolina Man Sentenced to Life in Prison for Operating Violent and Extensive Sex Trafficking EnterpriseRead the Press Release
CHARLOTTE, N.C. – Shahid Hassan Muslim, aka “Sharp,” 33, was sentenced today to life in prison for operating an extensive sex trafficking enterprise that recruited women and girls – some as young as 16 years old – into prostitution.
The sentence was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina, Special Agent in Charge John A. Strong of the FBI’s Charlotte Division and Special Agent in Charge Nick S. Annan of U.S. Immigration and Customs Enforcements Homeland Security Investigations (HSI) Atlanta Division.
In sentencing Muslim, U.S. District Court Judge Robert Conrad Jr. of the Western District of North Carolina also ordered him to pay a total of $13,840 in restitution to the victims of the two sex trafficking counts, which charged Muslim with the sex trafficking of those victims for periods of two months and three months, respectively. On Aug. 11, 2014, a federal jury found Muslim guilty on all counts, including two counts of sex trafficking, one count of kidnapping, one count of production of child pornography, one count of witness tampering and five counts of promoting a prostitution business enterprise.
Evidence presented during Muslim’s four-day trial, including the testimony of five victims, revealed that Muslim’s sex trafficking enterprise operated in Charlotte, North Carolina, and other cities from at least 2010 until his arrest in November 2013. As established by the evidence presented at trial, Muslim recruited vulnerable young women and girls from the Charlotte area and advertised them for prostitution on the internet. He lured them into his scheme by promising that they would be part of a “family” when they had none. Once the women and girls were a part of his enterprise, Muslim demanded all of their proceeds and used brutal violence to control them. As one witness explained, he never hit the victims in the face because it would damage his “merchandise.”
According to the evidence established at trial, Muslim accused one teenage victim of withholding money from him and then proceeded to handcuff and beat her until she admitted to keeping some of her earnings. Muslim’s assaults on other victims included burning one victim’s leg with a cigarette to teach her a lesson; and punching a third victim in the stomach, without warning, as she balanced with her eyes closed during a “DUI test” he forced her to perform. After punching her in the stomach, Muslim then dragged her by her hair to a bathroom and repeatedly punched her until she vomited.
The evidence further showed that Muslim kidnapped one of the victims and viciously beat her after she left and reported him to the police. Witnesses testified that he lured her to a hotel, pretending to be a customer, then attacked her and shoved her into a storage trunk. After transporting the trunk to his house, he handcuffed her, bound her feet and continued to beat her, breaking a toilet in the process. Muslim then left her in the shower – still handcuffed – overnight with cold water running on her until she managed to escape and report the kidnapping to a neighbor the next day.
The evidence also demonstrated that Muslim continued his efforts to intimidate and control the victims even after his arrests on both federal and state charges. He convinced the kidnapping victim to submit a false affidavit declaring his innocence, resulting in dismissal of state charges. He further harassed a victim in the federal case to submit a false affidavit regarding a sexually explicit video that he produced of her when she was 16 years old.
“This defendant preyed on and abused vulnerable young women by running a violent sex trafficking operation,” said Principal Deputy Assistant Attorney General Gupta. “While no amount of jail time can undo the harm he caused and the trauma he inflicted, this sentence sends a clear message that people who engage in human trafficking and violate the most basic standards of human decency will face the full force of justice.”
“Shahid Muslim is a ruthless predator who used lies to lure vulnerable young women and underage girls into his criminal enterprise,” said U.S. Attorney Rose. “But instead of finding the better life his young victims had been promised, they endured unspeakable violence and exploitation in the hands of Muslim for his financial gain. My office will continue to aggressively prosecute those who engage in this illegal business that dehumanizes victims and strips them of their dignity.”
“Shahid Muslim promised his victims the loving support of a family, instead he controlled them through beatings, fear, and intimidation,” said Special Agent in Charge Strong. “The FBI devotes a significant amount of resources to helping sex trafficking victims recover from the trauma they suffer at the hands of ruthless people like Muslim. Today’s sentence is a stark warning, there is a harsh punishment for those who choose to sacrifice another person’s civil rights and freedom for their own profit.”
“Human trafficking is a form of modern-day slavery that Homeland Security Investigations fights as one of its highest priorities via a coordinated global effort with our law enforcement partners,” said Special Agent in Charge Annan. “The sadistic abuse inflicted by this defendant is unspeakable and hopefully victims can now find some relief in knowing the monster who exploited them will be safely locked away for many years.”
This case was investigated by the FBI and HSI, with assistance from the Charlotte-Mecklenburg County Police Department. It is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Nine Individuals, Including Five Registered Brokers, Indicted for Orchestrating A $131 Million Market Manipulation SchemeRead the Press Release
BROOKLYN, N.Y. – A five-count indictment was unsealed this morning in federal court in Brooklyn, New York, against nine defendants, Jared Mitchell, the Managing Partner of Mitchell & Sullivan Capital LLC; Richard Brown, a registered broker; Christopher Castaldo, the Chief Executive Officer of Stock Traders Press Inc. and the President of Wall Street Buy Sell Hold Inc.; Gerald Cocuzzo, also known as “Gerry,” a registered broker; Naveed Khan, also known as “Nick,” a registered broker; Herschel Knippa III, also known as “Tres,” the owner and Head Trader at Kenai Capital Management LLC; Maroof Miyana, a registered broker; Pranav Patel, a registered broker; and Louis Petrossi, the founder and Chief Executive Officer of the Wealth Research Institute.[1] The charges include securities fraud, conspiracy to commit securities fraud, wire fraud, money laundering and making a false statement to law enforcement officials in connection with the fraudulent market manipulation of ForceField Energy Inc. (ForceField), a publicly-traded company listed on the NASDAQ under the ticker symbol “FNRG.”
Mitchell, Brown, Castaldo and Khan will be arraigned later today before Magistrate Judge Vera M. Scanlon, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York. Cocuzzo and Miyana’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 701 Clematis Street, West Palm Beach, Florida. Patel’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 299 East Broward Boulevard, Fort Lauderdale, Florida. Knippa’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 1100 Commerce Street, Dallas, Texas. Petrossi’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 400 South Virginia Street, Reno, Nevada.
The indictment was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“As alleged, the defendants and their network of registered brokers and stock promoters designed an elaborate but fraudulent scheme built on lies, kickbacks and manipulated trading activity to defraud the securities markets, the investing public and their clients. They took a company with essentially no business operations and little revenue and deceived the market and their clients into believing it was worth hundreds of millions of dollars through a dizzying round of unauthorized trades and deceptive promotions. In the end, the deceived investors were left holding the empty bag,” stated United States Attorney Capers. “Today’s nine arrests, across four states, reflect the scope of this fraud and our commitment to aggressively locate and bring to justice those who view the financial markets as a platform to fraudulently enrich themselves.” Mr. Capers expressed his appreciation to the FBI, the agency that led the investigation, and the United States Securities and Exchange Commission, New York Regional Office, for their significant cooperation and assistance in the investigation.
“As alleged, each of the defendants played a role in their scheme to defraud investors of ForceField Energy by using their positions as a stock promoter, brokers, or investor relations to push stock. The scheme ended up costing investors approximately $131 million in losses. The FBI will continue to work with our partners in an effort at ensuring that our financial markets are legal, fair, and equitable,” stated FBI Assistant Director-in-Charge Rodriguez.
As alleged in the indictment and other court filings, between December 2009 and April 2015, the defendants, together with others, engaged in a scheme to defraud investors in ForceField, a purported worldwide distributor and provider of LED lighting products and solutions, by artificially controlling the price and volume of traded shares of ForceField through, among other means: (1) using nominees to purchase and sell ForceField stock without disclosing this information to investors and potential investors; (2) orchestrating the trading of ForceField stock to create the appearance of genuine trading volume and interest in the stock; and (3) concealing payments to stock promoters and broker dealers who promoted and sold ForceField stock to investors and potential investors while claiming to be independent of the company. The defendants’ fraudulent scheme caused a loss of approximately $131 million to the investing public.
The Corrupt Brokers
In October 2014, a ForceField executive hired Mitchell to distribute kickbacks to a network of allegedly corrupt registered broker dealers, including Brown, Cocuzzo, Khan, Miyana, and Patel, in exchange for purchasing ForceField stock in their clients’ brokerage accounts. Using offshore entities and bank accounts, ForceField paid Mitchell a ten-percent commission, or kickback, for purchases of ForceField stock generated by the corrupt brokers. Mitchell then shared the ten-percent commission with those who had stuffed their clients’ brokerage accounts with ForceField stock. Mitchell, the corrupt brokers and ForceField did not disclose to the brokers’ clients the ten-percent kickbacks the brokers were receiving for purchasing ForceField stock.
Mitchell and the corrupt brokers concealed their participation in the fraudulent scheme by using prepaid, disposable cellular telephones and encrypted, content-expiring messaging applications to communicate with each other. Mitchell, who boasted that he was the “brown bag man,” also attempted to conceal his payment of commissions to the corrupt brokers by withdrawing large sums of money from his bank account and paying the brokers in cash.
Between October 2014 and April 2015 alone, Mitchell and the corrupt brokers conned the brokers’ clients into purchasing more than 425,000 shares of ForceField at a cost of more than $3 million.
The Corrupt Promoters
Throughout its existence, ForceField conducted a series of private placements that raised more than $19.7 million from investors. Unbeknownst to the investing public, a ForceField executive was paying ten-percent kickbacks to a group of allegedly corrupt stock promoters, including Castaldo, Knippa, and Petrossi, to promote ForceField and induce investors to purchase ForceField stock on public exchanges or enter into private stock purchase agreements with the company. The corrupt promoters induced many of these unwitting investors to invest in ForceField at investor conferences or, in Knippa’s case, by touting ForceField during television appearances.
For example, when Knippa appeared on “Varney & Co.,” a financial news show on the Fox Business channel, the host of the show asked Knippa whether he had a stock recommendation. In response, Knippa recommended ForceField, and spoke about the company’s business model. Varney asked Knippa whether he owned ForceField stock, and Knippa responded, “You bet I do. I put my money where my mouth is.” Contrary to his assertion, Knippa did not, at the time, own ForceField stock. Additionally, during this appearance, Knippa failed to disclose that he was being paid kickbacks to promote ForceField.
During the course of this fraudulent scheme, the corrupt promoters duped more than 100 investors into purchasing more than $6.2 million in ForceField stock.
* * *
The wire fraud conspiracy with which all defendants are charged carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud conspiracy count with which all defendants are charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The money laundering conspiracy count with which all defendants are charged carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the value of the funds involved in the illegal transfers. The substantive securities fraud count with which all defendants are charged carries a maximum potential penalty of 20 years in prison and a $5 million fine, or twice the gain or loss from the offense. The false statement count with which Mitchell is charged carries a maximum potential penalty of 5 years in prison and a $250,000 fine.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn Kasulis and Christopher Nasson are in charge of the prosecution.
* * *
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit ww.StopFraud.gov.
The Defendants:
JARED MITCHELL
Age: 34
New York, New YorkRICHARD BROWN
Age: 37
Huntington, New YorkCHRISTOPHER CASTALDO
Age: 44
Glen Head, New YorkGERALD COCUZZO
Age: 37
Delray Beach, FloridaNAVEED KHAN
Age: 33
Staten Island, New YorkHERSCHEL KNIPPA III
Age: 45
Dallas, TexasMAROOF MIYANA
Age: 35
Boca Raton, FloridaPRANAV PATEL
Age: 35
Tamarac, FloridaLOUIS PETROSSI
Age: 75
Reno, NevadaEDNY Docket No. 16-CR-234 (NGG)
[1] The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
New York City Man Sentenced to 27 Months in Federal Prison for Heroin DealingRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that, on May 2, 2016, Jesse Harris, 38, of Brooklyn, New York was sentenced to 27 months in federal prison after his guilty plea to charges that he distributed heroin. U.S. District Court Judge William K. Sessions III also ordered that Harris serve three years of supervised release following his prison term.
According to court records, from 2014 until his arrest on June 30, 2015, Harris regularly traveled from the New York City area to Chittenden County, Vermont with heroin to sell. Harris would stay at the apartment of local residents and use that apartment as a base from which to sell heroin to his customers. On June 30, 2016, agents from the Drug Enforcement Administration (DEA) and the Burlington Police Department, who had been jointly investigating Harris, arrested him after he arrived in Vermont via bus. Harris had approximately 500 bags of heroin on his person.
For his crime, Harris faced a statutory maximum term of 20 years in prison. The United States Sentencing Guidelines, which are advisory, recommended that Harris receive a prison term between 51 and 63 months. The United States argued that Harris should receive a 51-month sentence. In support, the government argued that Harris, who was not a heroin user, trafficked heroin to Vermont solely to earn money and therefore capitalized on Vermont’s heroin epidemic and the suffering of the community.
In determining that a more lenient sentence was appropriate in this case, Judge Sessions considered Harris’ lack of a serious criminal record and the fact that he abided by his pretrial conditions of release, among other factors.
United States Attorney Eric Miller commended the efforts of DEA and the Burlington Police Department for their coordinated efforts in this investigation.
The prosecution is being handled by Assistant U.S. Attorney Timothy C. Doherty, Jr. Harris is represented by David McColgin of the Federal Public Defender’s Office.
Navajo Man Sentenced to 23 Years in Federal Prison for Aggravated Sexual Abuse of a MinorRead the Press Release
PHOENIX - Yesterday, Kenneth Parker, of Keams Canyon, Ariz., a member of the Navajo Nation, was sentenced by U.S. District Judge John J. Tuchi to 23 years in prison, followed by a term of 5 years of supervised release. Parker had previously pleaded guilty to aggravated sexual abuse of a minor.
The case involved the sexual abuse of multiple victims, also Navajo Nation members, over nearly 30 years, from 1987 through 2015. All incidents occurred on the Navajo Nation.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Department of Law Enforcement. The prosecution was handled by Sharon K. Sexton, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR- 158101-JJT
RELEASE NUMBER: 2016-038_Parker
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
NYPD Officer Andre Clarke Pleads Guilty to Conspiracy to Distribute Oxycodone in VermontRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Andre Clarke, age 37, of the Bronx, New York, plead guilty on May 2, 2016 before the Honorable William K. Sessions, III, to conspiring to distribute Oxycodone in Vermont from 2011 through June 2014. Clarke, a New York City police officer, received a preliminary sentencing date of August 29, 2016. Judge Sessions released him on previously imposed conditions until his sentencing.
On July 7, 2015, a federal grand jury sitting in Burlington handed down a multi-count Indictment, which charges Clarke, Michael Foreste, and Dannis Hackney with the Vermont Oxycodone conspiracy. Foreste and Hackney are charged with additional drug trafficking and money laundering offenses. Both men have entered pleas of not guilty and are awaiting trial. According to prosecutors, Clarke, who lived in the Bronx and Long Island during the events in question, supplied oxycodone to Michael Foreste, of Valley Stream, New York. Foreste, in turn, supplied the pills to Dannis Hackney, of Burlington, Vermont, who sold them to Burlington area addicts. Foreste personally brought Hackney pills, and sometimes sent them via U.S. Mail. Clarke, Foreste, and Hackney transferred drug proceeds using various bank accounts. Foreste and Hackney are also each charged with two counts of money laundering based on this banking activity. Foreste and Hackney have been in custody since their arrests in June 2014 and are awaiting trial.
Each defendant faces up to 20 years in prison in the event of conviction on the oxycodone charge. The money laundering counts also carry a maximum penalty of 20 years' imprisonment. The actual sentence, in the event of conviction, will be determined by the Court with reference to the advisory Federal Sentencing Guidelines and other statutory sentencing factors.
The investigation has spanned about two years and is a collaborative effort of Homeland Security Investigations; the Federal Bureau of Investigation; the Drug Enforcement Administration; and the New York City Police Internal Affairs Bureau.
Assistant United States Attorney Christina E. Nolan is handling the prosecution. Clarke is represented by Chandler Matson, Esq., of Stowe, Vermont.
Menlo Worldwide Services Inc. and Its Subcontractor Estes Pay the U.S. $13 Million to Resolve False Claims Act AllegationsRead the Press Release
SACRAMENTO, Calif. — A company and its subcontractor have paid a total of $13 million to resolve allegations under the False Claims Act that they overcharged the government in various ways under the Defense Transportation Coordination Initiative contract in part by billing the cost of moving freight by air when it was actually shipped by ground, Acting United States Attorney Phillip A. Talbert announced today.
Menlo Worldwide Services Inc. has paid the United States $10 million, and Estes Forwarding Worldwide, on behalf of itself and its parent Estes Express Lines, has paid $3 million.
“This settlement demonstrates our commitment to protecting the integrity of federal contracts and ensuring the government only pays for the actual services rendered as required under the contract,” said Acting U.S. Attorney Talbert.
The civil settlement resolves a lawsuit filed in the Eastern District of California under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow private citizens to bring civil actions on behalf of the United States for false claims and share in a portion of the government’s recovery. The whistleblowers in this case will collectively receive $2.86 million of the recovery proceeds.
This settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of California, the United States Transportation Command, the Defense Criminal Investigative Service, the Defense Contract Audit Agency, the U.S. Army Criminal Investigation Command, and the Department of Justice’s Civil Division, Commercial Litigation Branch. Assistant United States Attorneys Kelli Taylor and Colleen Kennedy handled the matter for the United States.
The claims settled by this agreement are allegations only, and there has been no determination of liability. Menlo Worldwide Services Inc., Estes Forwarding Worldwide, and Estes Express Lines cooperated with the United States’ investigation of this matter.
McKeesport Woman Charged with Defrauding Social SecurityRead the Press Release
PITTSBURGH - A resident of Allegheny County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of theft of government property, United States Attorney David J. Hickton announced today.
The one-count indictment named Karen Bosnak, 52, of McKeesport, Pennsylvania, as the sole defendant.
The indictment alleges that, from Nov. 16, 2013 through Sept. 18, 2014, Bosnak converted to her own use $13,970 in Title II Social Security benefits deposited to the bank account of a deceased beneficiary, after his death.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 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.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The U.S. Social Security Administration-Office of Inspector General 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.
Maryland Man Sentenced to Prison for Role in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
Stole Identities from D.C. Government Agency for Use in Filing False Tax Returns
A resident of Bowie, Maryland, was sentenced today to four years in prison after pleading guilty in January for his involvement in a far-reaching identity theft and tax fraud scheme in which he assisted in the filing of fraudulent federal income tax returns seeking more than $4.4 million in refunds, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips of the District of Columbia, Special Agent in Charge Thomas Jankowski of Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service’s Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
Marc A. Bell, 49, a former employee of the District of Columbia’s Department of Youth Rehabilitation Services (DYRS), admitted taking part in a massive and sophisticated identity theft and false tax return scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. According to court documents, the scheme involved the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million from the U.S. Treasury. The false tax returns sought refunds for tax years 2005 through 2013 and were often filed in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated individuals. Refunds also were sent to people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
According to documents filed with the court, from 2005 to 2013, Bell was employed as a program manager, program officer or placement expeditor at the District of Columbia’s Department of Youth Rehabilitation Services (DYRS). The agency is responsible for the supervision, custody and care of young people charged with a delinquent act in the District of Columbia and either detained in a DYRS facility while awaiting adjudication or committed to DYRS by a District of Columbia Family Court judge following adjudication. In his various capacities at DYRS, Bell had access to the agency’s database system, which contained the personal identifying information of DYRS youth, including their names and social security numbers. Bell admitted that between approximately May 2010 and April 2013, he used his computer access to obtain the personal identifying information of at least 645 then-current and former DYRS youth. Bell admitted that he provided this information to other scheme participants, who used the names and social security numbers to file at least 1,160 fraudulent federal income tax returns that claimed refunds of approximately $4,441,194. The IRS issued approximately 700 U.S. Treasury checks, totaling approximately $2,422,211, in the names of the DYRS youth in whose names the tax returns were filed. Bell received financial compensation from co-conspirators for providing the stolen identities.
Bell is one of approximately 20 participants in this scheme who have pleaded guilty to federal charges in the U.S. District Court for the District of Columbia. Bell pleaded guilty in January to one count of conspiracy to defraud the government with respect to claims, one count of aiding and abetting in the filing of fictitious or false claims and one count aiding and abetting fraud and related activity in connection with identification documents. In addition to the prison term, U.S. District Judge Ellen S. Huvelle ordered Bell to serve three years of supervised release and pay restitution to the IRS in the amount of $1,972,710.
This morning, Lakisha Jackson, 40, of District Heights, Maryland, pleaded guilty to one count of conspiracy to commit theft of public money for her role in the scheme. As part of her plea, she admitted that between September 2010 and May 2012 she allowed her residential address to be used to file approximately 70 fraudulent federal income tax returns seeking refunds of approximately $229,199 and to receive 61 fraudulently-procured U.S. Treasury checks totaling approximately $193,977. Jackson faces a statutory maximum sentence of five years in prison and a $250,000 fine. She has agreed to pay restitution to the IRS in the amount of $175,953. Jackson is scheduled to be sentenced on July 13.
Acting Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Special Agent in Charge Jankowski, Inspector in Charge Kelokates and Assistant Inspector General Phillips commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein, Paralegal Specialists Donna Galindo, Corinne Kleinman and Julie Dailey and Legal Assistant Angela Lawrence. Finally, they thanked Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.
Maryland Man Sentenced to Four Years in Prison for Role in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
WASHINGTON – A resident of Bowie, Maryland, was sentenced today to four years in prison after pleading guilty in January for his involvement in a far-reaching identity theft and tax fraud scheme in which he assisted in the filing of fraudulent federal income tax returns seeking more than $4.4 million in refunds, announced U.S. Attorney Channing D. Phillips, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, Special Agent in Charge Thomas Jankowski of Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service’s Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
Marc A. Bell, 49, a former employee of the District of Columbia’s Department of Youth Rehabilitation Services (DYRS), admitted taking part in a massive and sophisticated identity theft and false tax return scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. According to court documents, the scheme involved the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million from the U.S. Treasury. The false tax returns sought refunds for tax years 2005 through 2013 and were often filed in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated individuals. Refunds also were sent to people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
According to documents filed with the court, from 2005 to 2013, Bell was employed as a program manager, program officer or placement expeditor at the District of Columbia’s Department of Youth Rehabilitation Services (DYRS). The agency is responsible for the supervision, custody and care of young people charged with a delinquent act in the District of Columbia and either detained in a DYRS facility while awaiting adjudication or committed to DYRS by a District of Columbia Family Court judge following adjudication. In his various capacities at DYRS, Bell had access to the agency’s database system, which contained the personal identifying information of DYRS youth, including their names and social security numbers. Bell admitted that between approximately May 2010 and April 2013, he used his computer access to obtain the personal identifying information of at least 645 then-current and former DYRS youth. Bell admitted that he provided this information to other scheme participants, who used the names and social security numbers to file at least 1,160 fraudulent federal income tax returns that claimed refunds of approximately $4,441,194. The IRS issued approximately 700 U.S. Treasury checks, totaling approximately $2,422,211, in the names of the DYRS youth in whose names the tax returns were filed. Bell received financial compensation from co-conspirators for providing the stolen identities.
Bell is one of approximately 20 participants in this scheme who have pleaded guilty to federal charges in the U.S. District Court for the District of Columbia. Bell pleaded guilty in January to one count of conspiracy to defraud the government with respect to claims, one count of aiding and abetting in the filing of fictitious or false claims and one count aiding and abetting fraud and related activity in connection with identification documents. In addition to the prison term, U.S. District Judge Ellen S. Huvelle ordered Bell to serve three years of supervised release and pay restitution to the IRS in the amount of $1,972,710.
This morning, Lakisha Jackson, 40, of District Heights, Maryland, pleaded guilty to one count of conspiracy to commit theft of public money for her role in the scheme. As part of her plea, she admitted that between September 2010 and May 2012 she allowed her residential address to be used to file approximately 70 fraudulent federal income tax returns seeking refunds of approximately $229,199 and to receive 61 fraudulently-procured U.S. Treasury checks totaling approximately $193,977. Jackson faces a statutory maximum sentence of five years in prison and a $250,000 fine. She has agreed to pay restitution to the IRS in the amount of $175,953. Jackson is scheduled to be sentenced on July 13, 2016.
U.S. Attorney Phillips, Acting Assistant Attorney General Ciraolo, Special Agent in Charge Jankowski, Inspector in Charge Kelokates and Assistant Inspector General Phillips commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein, Paralegal Specialists Donna Galindo, Corinne Kleinman and Julie Dailey and Legal Assistant Angela Lawrence. Finally, they thanked Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.
Manhattan U.S. Attorney Sues Narco Freedom and Certain of Its Former Executives and Business Associates for Engaging in A Series of Fraudulent SchemesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the United States has filed a complaint alleging violations of the False Claims Act by NARCO FREEDOM, INC. (“NARCO FREEDOM”), a former operator of outpatient chemical dependency clinics, ALAN BRAND, former CEO of NARCO FREEDOM, GERALD BETHEA, former CEO and program director of NARCO FREEDOM, JOINING HANDS MANAGEMENT INC. (“JOINING HANDS”), a former business associate of NARCO FREEDOM and operator of short-term residences known as “three-quarter houses,” and BERNARD RORIE and DEVORAH HAIGLER, co-owners of JOINING HANDS. The complaint alleges that each of the defendants engaged in one or more fraudulent schemes that caused Medicaid to be billed for services in NARCO FREEDOM’s outpatient programs that were premised upon illegal kickbacks, or that were based on false and fraudulent medical records.
Manhattan U.S. Attorney Preet Bharara said: “Having already disrupted Narco Freedom’s fraud and taken steps to protect hundreds whose housing was put at risk by kickbacks, we now bring this follow-on action to recover the funds fraudulently taken from federal healthcare programs and to hold alleged wrongdoers accountable.”
HHS-OIG Special Agent in Charge Scott Lampert said: “The allegations in this complaint continue to underscore the damage that greed does to our nation’s health care system and the tax payers who help fund it. HHS-OIG will continue to ensure that substance abuse providers are held accountable for the way they do business, so the services utilized by the vulnerable individuals that need them are delivered in an honest and appropriate manner.”
The complaint, filed today in Manhattan federal court, alleges three separate fraudulent schemes. In the first scheme, NARCO FREEDOM, BRAND, and BETHEA are alleged to have provided kickbacks in the form of below-cost housing in NARCO FREEDOM’s three-quarter houses, known as “Freedom Houses,” to induce residents of those houses to enroll in and attend NARCO FREEDOM’s outpatient programs. The scheme exploited vulnerable individuals who were forced to comply with NARCO FREEDOM’s rules because they lacked stable housing options. This scheme also was the subject of a lawsuit brought by this Office in October of 2014, United States v. Narco Freedom, Inc., 14 Civ. 8593 (JGK), in which the United States obtained a temporary restraining order and preliminary injunction enjoining NARCO FREEDOM’s conduct. The injunction was granted based on the Government’s preliminary showing of ongoing violations of the Anti-Kickback Statute and ultimately resulted in a Court order that protected the hundreds of Freedom House residents by transferring management of the Freedom Houses away from NARCO FREEDOM to other providers.
The complaint also alleges a second illegal kickback scheme, whereby NARCO FREEDOM paid JOINING HANDS and RORIE in exchange for RORIE and HAIGLER referring residents of JOINING HANDS three-quarter houses to NARCO FREEDOM outpatient programs and enforcing attendance at those programs.
The complaint alleges a third scheme in which NARCO FREEDOM and BETHEA directed and paid employees of NARCO FREEDOM’s outpatient program in Red Hook, Brooklyn, to create false medical records for patients despite the fact that those employees had not treated the patients, and to create and backdate records for services allegedly provided months or years earlier.
According to the complaint, the defendants have subjected HHS to tens of millions of dollars in losses in Medicaid funds paid as a result of the fraudulent kickback schemes.
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Mr. Bharara thanked HHS-OIG for its investigative efforts and ongoing support and assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorneys Kirti Vaidya Reddy and Cristine Irvin Phillips are in charge of the case.
Lebanon Man Indicted for Illegal Firearms Following Standoff with OfficersRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Lebanon, Mo., man was indicted for being a felon in possession of firearms following an eight-hour-long standoff with law enforcement officers while he was in the attic space of a friend’s residence.
Jesse D. Ivey, 39, of Lebanon, was charged in a two-count indictment returned by a federal grand jury in Springfield, Mo.
Today’s indictment alleges that Ivey, having been convicted of a felony, was in possession of a Charter Arms .38-caliber revolver, a high Standard .2-caliber pistol, a Ruger .357-caliber revolver and a Savage .30-06 rifle on Jan. 5, 2016.
The indictment also alleges that Ivey was in possession of a Bushmaster AR-15 .223-caliber rifle on Feb. 10, 2016.
Ivey was arrested on Feb. 10, 2016, after an approximately eight-hour-long standoff with law enforcement officers. Officers entered a residence in Lebanon while searching for Ivey and found the Bushmaster rifle lying on the floor of the second-floor master bedroom. They heard Ivey in the attic space above the bedroom and directed him to come out of the attic space, but he refused to surrender. Ivey finally surrendered about eight hours later, at 8:37 p.m.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Missouri State Highway Patrol, the Laclede County, Mo., Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Las Cruces Man Sentenced to Ten Years for Cocaine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Gilbert G. Caldwell, 45, of Las Cruces, N.M., was sentenced today in federal court to 120 months in prison followed by three years of supervised release for his cocaine trafficking conviction.
Caldwell was arrested in Feb. 2015, and charged by criminal complaint with attempting to possess cocaine with intent to distribute. According to the complaint, Caldwell attempted to purchase 125 grams of cocaine from undercover law enforcement agents on Feb. 12, 2015, in Doña Ana County, N.M. Caldwell was subsequently indicted on the same charge on May 28, 2015.
On Dec. 15, 2015, Caldwell pled guilty to the indictment. In entering the guilty plea, Caldwell admitted meeting a person who unbeknownst to him was an undercover narcotics agent at the Sunland Park Casino on Feb. 12, 2015. Caldwell gave the undercover agent $4,500.00 in exchange for a white powder that he believed was cocaine but was in fact fake cocaine. Caldwell made the purchase with the intention of selling cocaine to others.
This case was investigated by the Las Cruces office of the DEA and was prosecuted by Assistant U.S. Attorney Luis A. Martinez of the U.S. Attorney’s Las Cruces Branch Office.
Lancaster County Man Sentenced for Possession of a Firearm and MarijuanaRead the Press Release
Contact Person: William Witherspoon (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Martiquos Javon McIlwain, age 23, of Lancaster County, South Carolina was sentenced yesterday in federal court in Columbia, South Carolina, for possession with the intent to distribute marijuana, a violation of 21 U.S.C. § 841(a)(1) and possession of a firearm in furtherance of a drug trafficking crime, a violation of 18 U.S.C. § 924(c). United States District Judge Joseph F. Anderson, Jr. of Columbia sentenced McIlwain to sixty-four (64) months incarceration followed by five (5) years of supervised release and a special assessment of $200.
Evidence presented at the change of plea hearing established that the Lancaster County Sheriff’s Department received a call for an ongoing burglary. The caller gave the police a description of the burglars. The caller also gave the description of the vehicle they were driving as a white pickup truck with a dealer’s tag. As officers arrived, the owner of the car dealership arrived on the scene and gave the officers the name of the person whom he had allowed to test drive that vehicle earlier that morning. He told the officers that the person had not returned the vehicle nor returned telephone calls.
As the officers searched the area for the vehicle, they saw a black Lexus driven by McIlwain’s co-defendant Reco Cauthen and 3 other persons in the car. Officers were familiar with these individuals and knew they had been mentioned as receivers of stolen items. When the officers began to follow the car, the rear driver’s side door opened and McIlwain jumped out of the car with a book bag and began to run. The officers gave chase on foot. They later caught McIlwain and smelled marijuana coming from the book bag. They opened the book bag and found 88 grams of marijuana in three individually wrapped packages, a mason jar containing approximately 11 grams of marijuana, 3 digital scales, a cellphone and a Taurus Model PT24/7 Pro, 9mm pistol. The firearm had been reported stolen. McIlwain also had 2 grams of marijuana in his pocket. McIlwain was arrested.
The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives and Lancaster County Sheriff's Department. Assistant United States Attorney William K. Witherspoon of the Columbia office prosecuted the case.
This case was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases.
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Lancaster County Man Pleads Guilty to Possession of a FirearmRead the Press Release
Contact Person: William Witherspoon (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Reco Valarie Cauthen, age 42, of Lancaster County, South Carolina has entered a guilty plea in federal court in Columbia, South Carolina to possession of a firearm by convicted felon, a violation of 18 U.S.C. § 922(g)(1). United States District Judge Joseph F. Anderson, Jr. of Columbia accepted the guilty plea and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that the Lancaster County Sheriff’s Department received a call for an ongoing burglary. The caller gave the police a description of the burglars. The caller also gave the description of the vehicle they were driving as a white pickup truck with a dealer’s tag. As officers arrived, the owner of the car dealership arrived on the scene and gave the officers the name of the person whom he had allowed to test drive that vehicle earlier that morning. He told the officers that the person had not returned the vehicle nor returned telephone calls.
As the officers searched the area for the vehicle, they saw a black Lexus driven by Reco Cauthen and 3 other persons in the car. Officers were familiar with these individuals and knew they had been mentioned as receivers of stolen items. When the officers began to follow the car, the rear driver’s side door opened and Martiquos Javon McIlwain jumped out of the car with a book bag and began to run. The officers gave chase on foot.
As some officers chased McIlwain on foot, other officers located the black Lexus nearby. Cauthen was driving the car. The officers knew that Cauthen did not have a driver’s license and stopped the car. They found Cauthen and two (2) other persons in the car. Cauthen was asked for his driver’s license and admitted that he did not have one. He was arrested. The car was searched and the officers found a Ruger model P95, 9mm pistol in a closed compartment under the driver’s seat. While this was ongoing, another officer reported that he had seen Cauthen’s car and the white truck used in the burglary at Cauthen’s house earlier in the day. The white truck had been found abandoned near Cauthen’s home. Based upon all of this information, the officers obtained a search warrant for Cauthen’s home. In the house, they found an AMT Government model .45 caliber pistol located in a vent in a bathroom, 34 rounds of 9mm ammunition, six 30 round magazines for an AK-47 type rifle, a Jimenez .380 caliber pistol box and one 7.62x39 caliber round of ammunition. Cauthen is prohibited from possessing a firearm based upon a prior felony conviction.Mr. Nettles stated the maximum penalty Cauthen could receive is life imprisonment and/or a fine of $250,000.
The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the State Law Enforcement Division, and the Lancaster County Sheriff's Department. Assistant United States Attorney William K. Witherspoon of the Columbia is prosecuting the case.
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Justice Department Reaches Settlement with Columbia, South Carolina, Police Department to Ensure Communication Access for Persons with Hearing DisabilitiesRead the Press Release
The Justice Department announced today a settlement with the Columbia, South Carolina, Police Department (CPD) to ensure that persons who are deaf or hard of hearing receive sign language interpreters and other services necessary for effective communication when interacting with CPD police officers, whether on the road or at a precinct.
Title II of the Americans with Disabilities Act (ADA) requires public entities such as police officers, firefighters and correctional officers to ensure that their communications with people with hearing disabilities are as effective as their communications with people without disabilities.
CPD, under the leadership of Chief W.H. “Skip” Holbrook, serves the largest city in the state of South Carolina with more than 133,000 residents. After the department completed an investigation that found that CPD was not providing the required services to allow for effective communication with persons who are deaf or hard of hearing, CPD worked cooperatively to reach an agreement to ensure effective communication with individuals with disabilities. Under the settlement agreement, CPD will:
- Provide auxiliary aids and services free of charge, including sign language interpreters, to people who are deaf or hard of hearing, within proscribed time frames;
- Modify handcuffing policies to handcuff deaf individuals in front, safety permitting, to enable the person to communicate using sign language or writing;
- Designate an ADA coordinator for law enforcement;
- Develop and utilize a communication card to communicate with persons who are deaf or hard of hearing during routine interactions in the field;
- Develop a communication assessment form to assess, in consultation with an arrestee, what auxiliary aids or services are necessary, and the timing, duration and frequency with which they will be provided;
- Provide at least one TTY and one videophone at each CPD station and sub-station;
- Conduct annual ADA training for CPD personnel and;
- Adopt and publish grievance procedures providing for prompt and equitable resolution of complaints against CPD alleging any action that would be prohibited by Title II or the agreement.
“Our first responders play a critical role in protecting the safety of our communities, and we must ensure they can communicate effectively with all people, including those with hearing disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This settlement will ensure that the Columbia Police Department complies with federal law, protects the civil rights of all its residents and more effectively advances public safety.”
The Justice Department has a number of publications available to assist entities to comply with the ADA, including Effective Communication, which provides guidance on the department’s regulations relating to communicating effectively with people who have vision, hearing or speech disabilities. For more information on the ADA and to access these publications, visit www.ada.gov. Those interested in learning more about this settlement or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected].
CPD Settlement Agreement
Justice Department Reaches Settlement with Columbia, South Carolina, Police Department to Ensure Communication Access for Persons with Hearing DisabilitiesRead the Press Release
Contact person: Office of Public Affairs (202) 514-2007
WASHINGTON – The Justice Department announced today a settlement with the Columbia, South Carolina, Police Department (CPD) to ensure that persons who are deaf or hard of hearing receive sign language interpreters and other services necessary for effective communication when interacting with CPD police officers, whether on the road or at a precinct.
Title II of the Americans with Disabilities Act (ADA) requires public entities such as police officers, firefighters and correctional officers to ensure that their communications with people with hearing disabilities are as effective as their communications with people without disabilities.
CPD, under the leadership of Chief W.H. “Skip” Holbrook, serves the largest city in the state of South Carolina with more than 133,000 residents. After the department completed an investigation that found that CPD was not providing the required services to allow for effective communication with persons who are deaf or hard of hearing, CPD worked cooperatively to reach an agreement to ensure effective communication with individuals with disabilities. Under the settlement agreement, CPD will:
• Provide auxiliary aids and services free of charge, including sign language interpreters, to people who are deaf or hard of hearing, within proscribed time frames; • Modify handcuffing policies to handcuff deaf individuals in front, safety permitting, to enable the person to communicate using sign language or writing; • Designate an ADA coordinator for law enforcement; • Develop and utilize a communication card to communicate with persons who are deaf or hard of hearing during routine interactions in the field; • Develop a communication assessment form to assess, in consultation with an arrestee, what auxiliary aids or services are necessary, and the timing, duration and frequency with which they will be provided; • Provide at least one TTY and one videophone at each CPD station and sub-station; • Conduct annual ADA training for CPD personnel and; • Adopt and publish grievance procedures providing for prompt and equitable resolution of complaints against CPD alleging any action that would be prohibited by Title II or the agreement.
“Our first responders play a critical role in protecting the safety of our communities, and we must ensure they can communicate effectively with all people, including those with hearing disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This settlement will ensure that the Columbia Police Department complies with federal law, protects the civil rights of all its residents and more effectively advances public safety.”
The Justice Department has a number of publications available to assist entities to comply with the ADA, including Effective Communication, which provides guidance on the department’s regulations relating to communicating effectively with people who have vision, hearing or speech disabilities. For more information on the ADA and to access these publications, visit www.ada.gov. Those interested in learning more about this settlement or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected].
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DO NOT REPLY TO THIS MESSAGE. IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE OFFICE OF PUBLIC AFFAIRS AT 202-514-2007.
Jury Convicts Jereb of Assault on a Federal Officer, Possession of Methamphetamine, HeroinRead the Press Release
SALT LAKE CITY -- Sentencing is set for June 30, 2016, for Arron B. Jereb, age 34, of Wyoming, convicted of assault on a federal officer, possession of methamphetamine and heroin, and possession of drug paraphernalia by a federal jury following a four-day trial in federal court last week. The jury made a specific finding as a part of its verdict on the assault count that Jereb forcibly opposed the officer, subjecting him to a potential 20-year prison sentence. He was acquitted of harming a law enforcement animal and possession of marijuana.
U.S. Attorney John W. Huber said the conduct in this case is something federal prosecutors take very seriously. “Our law enforcement officers put themselves in harm’s way every day to ensure the safety and security of our communities. We will do everything we can to protect them, including the aggressive prosecution of those individuals who put officers’ lives at risk.” Huber said.
The convictions stem from an Oct, 15, 2015, incident on U.S. Forest Service land in the Uinta-Wasatch-Cache National Forest in Salt Lake County. Just after 9 p.m., a Forest Service law enforcement officer initiated contact with two individuals in a red 1994 Chevrolet Blazer parked in a pull off area in Lambs Canyon. Jereb was a passenger in the car driven by Amber Haanpaa. Following an investigation that turned up methamphetamine, heroin, marijuana and drug paraphernalia in the car, the officer issued them mandatory appearance citations to appear in federal court.
After the suspects were released and the officer jump-started the defendant’s car battery, a series of events put the officer in fear for his safety. He called for backup officers over his radio. The defendant told the officer they would not get there in time. The officer commanded Jereb to back up and then remotely deployed his police service dog, Livo, from his patrol vehicle.
During the next several minutes, the defendant assaulted the Forest Service officer resulting in bodily injury to the officer. Livo was also injured during the incident. After continuing to fight and resist the officer, the defendant eventually escaped over the ledge of a steep embankment by the road. He was later found by responding officers who arrived on the scene to assist the Forest Service officer.
The potential maximum penalty for assault on a federal officer with a specific verdict of forcibly opposed is 20 years in prison. Possession of methamphetamine and possession of heroin have a potential one-year jail sentence for each count. The maximum penalty for possession of drug paraphernalia is six months in jail. Jereb is in custody pending sentencing.
Jury Convicts Columbia Man of Heroin ConspiracyRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Mo., man was convicted in federal court today of his role in a conspiracy to distribute heroin in Columbia.
Nalenzer Lee Edwards, 47, of Columbia, was found guilty of participating in a conspiracy to distribute heroin from March 17 to June 17, 2015, and of possessing heroin with the intent to distribute.
Law enforcement officers, acting upon information from a confidential informant, followed Edwards from Columbia to a known drug house in Jefferson City, Mo., on June 10, 2015. According to the confidential informant, Edwards was traveling to drop off money to his heroin supplier. After 30-45 minutes inside the residence, Edwards returned to a hotel in Columbia. Later that night offices conducted a trash pull at the Jefferson City residence and discovered numerous items associated with drug trafficking.
On June 17, 2015, law enforcement officers again followed Edwards from Columbia to the Jefferson City residence. After he left the Jefferson City residence, police officers conducted a traffic stop. Officers searched his car and found approximately 19.8 grams of heroin hidden inside the dash. At the same time, a SWAT team executed a search warrant at the residence and seized heroin and crack cocaine.
Edwards told law enforcement officers that he had been obtaining heroin from his Jefferson City supplier on a weekly basis for the past three or four months. Edwards admitted that he packaged the heroin into smaller amounts for sale to customers in Columbia.
Following the presentation of evidence, the jury in the U.S. District Court in Jefferson City, Mo., deliberated for more than an hour before returning the guilty verdicts to U.S. District Judge Brian C. Wimes, ending a trial that began Monday, May 2, 2016.
Under federal statutes, Edwards is subject to a sentence of up to 40 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 Jim Lynn. It was investigated by the Drug Enforcement Administration, the Columbia, Mo., Police Department, MUSTANG (the Mid-Missouri Unified Strike Team and Narcotics Group) and the Jefferson City, Mo., Police Department.
Joplin Man Indicted for Armed Robbery of Jewelry StoreRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., man was indicted by a federal grand jury today for the armed robbery of a local jewelry store.
Paul Lloyd, 33, of Joplin, was charged in a four-count indictment returned by a federal grand jury in Springfield, Mo.
Today’s indictment alleges that Lloyd stole cash and jewelry from Select Jewelry, 3120 S. Main St., Joplin, at gunpoint on March 17, 2016.
Lloyd is also charged with discharging a firearm during a crime of violence and with being a felon in possession of a firearm and ammunition. The indictment also charges Lloyd with transporting a stolen vehicle, a 2002 Ford Mustang, across state lines from Missouri to Oklahoma.
Lloyd, after driving the stolen Mustang into Oklahoma, was arrested by Cherokee County, Okla., sheriff’s deputies following a pursuit. A loaded SCCY 9mm firearm was recovered next to the driver’s side door of the Mustang.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by the Joplin, Mo., Police Department, the Cherokee County, Mo., Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Immigration Attorney Sentenced to Probation for Assisting Alien in Immigation Fraud SchemeRead the Press Release
ATLANTA - Bonnie Monique Youn has been sentenced to two years on probation for her role in submitting a false application to adjust status on behalf of a Korean citizen to the Citizenship and Immigration Services.
“Youn is an immigration attorney and has a thorough familiarity with immigration rules yet she advised an alien to fraudulently file an application with immigration services claiming to be employed by an entity she controlled,” said U. S. Attorney John Horn. “Her sentence and prohibition to practice law for two years are appropriate punishment for submitting false information to United States Immigration authorities.”
“Immigration fraud presents a serious threat to the national security of our country,” said Special Agent in Charge of ICE Homeland Security Investigations Atlanta Nick S. Annan. “Illegal schemes like this not only undermine the integrity of our nation's legal immigration system, but they create potential security vulnerabilities while also cheating deserving immigrants of benefits they rightfully deserve."
According to U.S. Attorney Horn, the charges and other information presented in court: Youn filed an application to adjust status based upon employment on behalf of her client, C.O.M.P. The application stated that C.O.M.P. worked for the Asian American Educational Foundation of Georgia (AAEFG) as an accountant in 2006-07 and again in 2010. The application included wage and tax and payroll records that would appear to support the representation that C.O.M.P. had worked for AAEFG.
In September 2011, federal agents interviewed C.O.M.P. at the hair products business that she and her husband ran near Baton Rouge, Louisiana. C.O.M.P. initially told the agents that she worked for AAEFG in 2006-07 and 2010. As the interview progressed, however, the agents noticed that C.O.M.P., who was standing behind a counter, appeared to be looking down at something before she would answer their questions. When confronted, C.O.M.P. admitted that she was referring to notes that Youn and Youn’s paralegal helped her prepare in the event that she was interviewed by federal agents about her alleged employment at AAEFG. C.O.M.P. admitted that she never worked for AAEFG and that she never lived in Georgia.
She also admitted that she would send money to AAEFG and that AAEFG would in turn send her payroll checks. The false payroll scheme involving C.O.M.P. began when AAEFG was controlled by Youn.
Youn instructed C.O.M.P. to obtain a Georgia driver’s license to use as proof of her residency in the state during the time that she allegedly worked for AAEFG. Although C.O.M.P. never lived in Georgia, she obtained the state driver’s license with the intent to use it to prove that she lived in Georgia and worked at AAEFG in the event she was ever questioned about her alleged employment at AAEFG.
Bonnie Monique Youn, 46, of Tucker, Georgia, was sentenced to two years on probation by U.S. District Judge Amy Totenberg, and was ordered to pay a $5,245 fine. Pursuant to her plea agreement with the United States, Youn closed her law office on March 31, 2016. As part of her sentence, Youn is prohibited from practicing law until April 1, 2018. Youn pleaded guilty on Jan. 20, 2016, to a negotiated plea.
This case was investigated by Special Agents with Homeland Security Investigations and the Office of the Inspector General for the United States Department of Labor.
Assistant United States Attorneys William L. McKinnon, Jr. and Lynsey Barron prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Houston Man Sentenced in Conspiracy to Traffic over 13 Kilograms of CocaineRead the Press Release
U.S. Attorney Kenneth Polite announced that MICHAEL MENDEZ of Houston, Texas, age 52, was sentenced today after having previously pled guilty to one count of conspiring to distribute and to possess with intent to distribute five kilograms or more of cocaine hydrochloride (“powder cocaine”).
U.S. District Judge Jay C. Zainey sentenced MENDEZ to 60 months in prison, to be followed by 5 years of supervised release.
According to court records, on June 10, 2015, Louisiana State Police conducted a traffic stop of MENDEZ as he was driving east on Interstate 12 in Tangipahoa Parish. During the stop, police discovered over thirteen kilograms of cocaine hydrochloride hidden inside of a “trap” compartment underneath the body of the car and a loaded 9 millimeter Glock pistol on the front-passenger seat.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration and the Louisiana State Police in investigating this matter. Assistant United States Attorney Brandon S. Long is responsible for the prosecution.
High-Level Member of Large-Scale, $5 Million ATM Skimming Scheme Sentenced to More Than Seven Years in PrisonRead the Press Release
NEWARK, N.J. – A Chicago man was sentenced today to 89 months in prison for his role in a large-scale, long-running, and lucrative scheme to steal bank customer account information – commonly referred to as “ATM skimming” – by installing hidden card-reading devices on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere, U.S. Attorney Paul J. Fishman announced.
Dinu Horvat, 29, was previously convicted on four counts of a superseding indictment – conspiracy to commit bank fraud, aggravated identity theft, conspiracy to possess 15 or more counterfeit access devices, and conspiracy to possess access device-making equipment – following a one-week trial before U.S. District Judge William J. Martini. Judge Martini imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
Horvat was a high-level member of an extensive ATM skimming scheme organized by Marius Vintila, 33, who previously pleaded guilty to bank fraud conspiracy and aggravated identity theft charges. The scheme defrauded Citibank, TD Bank, Wells Fargo, and multiple other financial institutions out of at least $5 million and affected thousands of bank customers.
Vintila and defendant Bogdan Radu, 33, designed and constructed sophisticated card-reader devices and pinhole camera panels capable of reading and storing customers’ bank account information and personal identification numbers. Horvat and his partners then secretly installed the card-reader devices and the pinhole cameras panels onto bank ATMs and removed them a few days later after they had recorded customer bank account information as customers performed routine bank transactions at ATMs.
The stolen data was used to create thousands of false and fraudulent ATM cards, which Horvat and others used to withdraw millions of dollars from customers’ bank accounts. Horvat also recruited others to participate in the scheme.
In addition to the prison term, Judge Martini sentenced Horvat to five years of supervised release and ordered him to pay restitution of $7.4 million.
The ATM skimming operation in which Horvat participated is one of the largest ever uncovered by law enforcement. To date, 13 of the 16 individuals charged in connection with the scheme, including Vintila and Radu, have pleaded guilty.
U.S. Attorney Fishman praised special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Jeffrey Wood; special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) in Newark, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation. He also thanked the Barnegat Township Police Department and the Brick Township Police Department for their participation in the case.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and David M. Eskew of the U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: E. Alexander Jardines Esq., West New York, New Jersey
Guilty Plea in Scheme to Steal & Use Personal Identifying Information from ATMsRead the Press Release
PROVIDENCE, R.I. – Moises Morales Cano, 31, of Astoria, N.Y., pleaded guilty in federal court in Providence, R.I., today to conspiracy to commit bank fraud and aggravated identity theft, admitting to his role in a scheme to manipulate bank ATM machines. The scheme resulted in the theft of personal information skimmed from debit cards belonging to more than 1,300 individuals and the loss of more than $709,000.
Appearing before U.S. District Court Judge John J. McConnell, Jr., Moises Morales Cano admitted to the court that between January 1 and April 4, 2015, he conspired with another individual to attach skimming devices on ATMs at banks in several communities in Rhode Island and Connecticut. According to information presented to the court, approximately 1,329 individuals had their debit cards compromised resulting in a total loss of approximately $709,597.50.
An ATM skimming device is a technology that directly attaches to an ATM in order to intercept unknowing customers’ debit card information from the magnetic strip on ATM cards. The stolen information and PINs are downloaded and re-encoded onto counterfeit debit cards. The counterfeit debit cards are used to make fraudulent transactions from the accounts of unknowing victims.
Cano’s guilty plea is announced by United States Attorney Peter F. Neronha, Ted A. Arruda, Resident Agent in Charge of the Providence office of the U.S. Secret Service, and Warwick Police Chief Colonel Stephen M. McCartney.
Cano has been detained in federal custody since his arrest in Queens, N.Y., on September 9, 2015. He is scheduled to be sentenced on July 20, 2016.
The case is being prosecuted by Assistant U.S. Attorney Lee H. Vilker.
The matter was investigated by the United States Attorney’s Office, the U.S. Secret Service, and the Warwick Police Department, with the assistance of the Smithfield, East Providence, Cranston, and Johnston Police Departments.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Greensburg Man Charged with Using Cell Phone to Coerce a Minor to Have SexRead the Press Release
PITTSBURGH - A resident of Westmoreland County has been indicted by a federal grand jury in Pittsburgh on a charge of attempted coercion and enticement of a minor to engage in illegal sexual activity, United States Attorney David J. Hickton announced today.
The one-count indictment named Robert Franzino, 60, of Greensburg, Pennsylvania, as the sole defendant.
According to the indictment, from Sept. 9, 2015 and continuing thereafter until March 13, 2016, Franzino used facilities and means of interstate and foreign commerce, specifically an Android cellular phone to knowingly attempt to persuade, induce, entice, and coerce a minor to engage in sexual activity.
The law provides for a maximum total sentence of life in prison, a fine of $750,000.00, 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.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Greensburg Police Department 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.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Gang Member Sentenced to 35 Years in Prison for RICO ConspiracyRead the Press Release
NEWPORT NEWS, Va. – Robbie Bowles, 30, of Newport News, was sentenced today to 300 months in prison for various violent crime and drug offenses. Bowles’ sentence will run consecutive to a 120 month sentence on an earlier federal firearms conviction.
Bowles pleaded guilty on Nov. 16, 2015. According to court documents, Bowles was a member of the Newport News street gang Thug Relations, which engaged in the distribution of marijuana and crack cocaine. The gang established dominance over the drug trade in its territory through violence and intimidation, which included physical assaults, home invasions, and numerous shootings, some of which resulted in murders. In particular, Bowles admitted threatening victim Aaron Sumler because Sumler and a friend had allegedly been selling cocaine in the area of Aqueduct Apartments, which was part of Thug Relations territory. When those threats went unheeded, Bowles was involved in Sumler’s murder. In addition, Bowles participated in a home invasion robbery of a rival drug dealer, during which one of the victims was struck in the head with a firearm. Bowles also participated in three separate shootings of rival gang members, causing each victim serious bodily injury.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorneys Howard J. Zlotnick, Lisa R. McKeel, Brian Samuels, and Trial Attorney Yvonne L. Garcia of the Criminal Division’s Organized Crime and Gang Section prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:14-cr-59.
Gainesville Physician Convicted of 162 Counts of Health Care FraudRead the Press Release
GAINESVILLE, FLORIDA – At the conclusion of a five-week jury trial, Ona M. Colasante, 59, a physician from Gainesville, Florida, was convicted yesterday of 162 counts of health care fraud. The verdict was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
Colasante owned and operated medical businesses known as the Hawthorne Medical Center in Hawthorne, Florida, between 1998 and March 2009, and the Colasante Clinic in Gainesville, Florida, between January 2010 and January 2013. Through these businesses, Colasante defrauded Medicare, Medicaid, and Blue Cross Blue Shield of Florida through a series of false billing schemes. At trial, the government presented evidence that Colasante, and employees acting at her direction, ordered non-FDA approved drugs at a drastically reduced price, administered them to unsuspecting patients, and then fraudulently billed insurance companies for the cost of FDA-approved drugs. The evidence showed that Colasante also billed insurance companies for medically unnecessary tests and submitted false diagnosis codes in support of her fraudulent claims for reimbursement.
In addition, Colasante billed insurance companies for counseling, treatment, and training that was never performed. Her businesses repeatedly submitted fraudulent billings for smoking-cessation treatment purportedly administered to patients who were non-smokers.
Colasante faces up to 10 years’ imprisonment on each of the counts of conviction. Sentencing is scheduled for July 25, 2016, at 10:00 a.m. at the United States Courthouse in Gainesville, Florida.
United States Attorney Canova praised the work of the Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, the Florida Attorney General’s Medicaid Fraud Control Unit, and the United States Food and Drug Administration, whose joint investigation led to the convictions in this case.
The case was prosecuted by Assistant United States Attorneys Tiffany H. Eggers and Ryan J. Love.
“Health care programs and patients depend on ethical practices from medical providers,” said United States Attorney Canova. “I commend the diligent investigators and prosecutors who uphold our federal laws and bring to justice those who abuse their positions of trust.”
“The Medicare system relies on doctors to diagnose and treat beneficiaries,” stated Shimon Richmond, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General. “When doctors intentionally misdiagnose patients, perform unnecessary tests and procedures, and use non-FDA approved drugs and devices on patients for personal gain, they betray the trust of the Medicare system and the patients themselves.”
“This case is the result of coordination between multiple federal and state law enforcement agencies, working together to protect the American health care system. Crimes committed through fraudulent and excessive claims are not victimless; Americans everywhere absorb the costs of those schemes through higher insurance costs and medical bills. The FBI and their law enforcement partners will vigilantly identify those engaging in similar conduct and advocate for their prosecution,” said Michelle S. Klimt, Special Agent in Charge, FBI Jacksonville Division.
"The FDA's requirements for approving new drug applications are designed to ensure the safety, efficacy and quality of drugs distributed to American consumers," said Robert J. West, Special Agent in Charge of the FDA’s Office of Criminal Investigations’ Miami Field Office. "The FDA will continue to aggressively pursue those who place the public health at risk by distributing foreign unapproved prescription drugs of unknown origin and ingredients instead of FDA-approved drugs."
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Former Postal Worker Sentenced to Prison for Workers’ Comp FraudRead the Press Release
NORFOLK, Va. – Ronald Henderson, 58, of Lewiston, North Carolina, was sentenced today to 13 months in prison for Federal Employees’ Compensation Fraud. He was also ordered to pay $163,956.23 in restitution to the Department of Labor.
Henderson pleaded guilty on Dec. 2, 2015. According to court documents, on June 11, 2011, Henderson falsely claimed to have injured his shoulder while performing his duties as a mail carrier in Suffolk. The injury had actually occurred previously while off-duty. In addition to receiving compensation as a result of the false disability claim, Henderson filed hundreds of false travel claims seeking reimbursement for expenses related to obtaining medical treatment. He also failed to notify the Department of Labor after he returned to work and was able to unlawfully
“double-dip” by receiving workers’ compensation payments and his normal paycheck at the same time.Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, made the announcement after sentencing by Chief U.S. District Judge Rebecca Beach Smith. Assistant U.S. Attorney Randy Stoker prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-120.
Former New York State Assembly Speaker Sheldon Silver Sentenced in Manhattan Federal Court to 12 Years in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that former New York State Assembly Speaker SHELDON SILVER was sentenced this afternoon to 12 years in prison after having been found guilty by a federal jury of using his official position to obtain nearly $4 million in bribes and kickbacks in exchange for his official acts and obtaining another $1 million through laundering the proceeds of his crimes. SILVER was sentenced in Manhattan federal court by U.S. District Judge Valerie E. Caproni who also presided over the five-week jury trial.
U.S. Attorney Preet Bharara said: “Today’s stiff sentence is a just and fitting end to Sheldon Silver’s long career of corruption.”
According to the evidence introduced at trial, court filings, and statements made in Manhattan federal court:
For more than two decades, SHELDON SILVER served as Speaker of the New York State Assembly, a position that gave him significant power over the operation of state government. SILVER used this immense power – including, in particular, his power over the real estate industry and his control over certain health care funding – to unlawfully and corruptly enrich himself. Among other things, he unlawfully solicited and obtained client referrals worth millions of dollars in exchange for SILVER’s official acts, and attempting to disguise this money as legitimate outside income earned from his work as a private lawyer. In particular, SILVER claimed on financial disclosure forms required to be filed with New York State and in public statements that the millions of dollars he received in outside income while also serving as Speaker of the Assembly came from a Manhattan-based law firm, Weitz & Luxenberg P.C., where SILVER claimed to work representing individual clients in personal injury actions. These claims were materially false and misleading – and made to cover up unlawful payments SILVER received solely due to his official power and influence as an elected legislator and the Speaker of the Assembly.
The scheme provided SILVER with two different streams of unlawful income: (i) approximately $700,000 in kickbacks SILVER received by steering two real estate developers with business before the state legislature to a law firm with which he was associated, and (ii) more than $3 million in asbestos client referral fees SILVER received by, among other official acts, awarding $500,000 in state grants to a university research center of a physician who referred patients made ill by asbestos to SILVER at Weitz & Luxenberg.
Unlawful Income From the Real Estate Law Firm
SILVER entered into a corrupt relationship with Goldberg & Iryami, which specialized in making applications to New York City to reduce taxes assessed on properties. Beginning in at least 2000, SILVER approached two prominent developers of properties in Manhattan, Glenwood Management Corp. and The Witkoff Group, Inc., and asked them to hire Goldberg & Iryami. The developers – both of whom lobbied SILVER on real estate issues because their businesses depended heavily on favorable state legislation – agreed to use Goldberg & Iryami as SILVER had requested. Over the years, Witkoff and Glenwood Management, in particular, paid millions of dollars in legal fees to Goldberg & Iryami. SILVER received a cut from the legal fees amounting to nearly $700,000. SILVER had no public affiliation with Goldberg & Iryami and performed no legal work at all to earn those fees, which were simply payments for SILVER having arranged the business through his official power and influence.
While continuing to receive the fees and in furtherance of the scheme, SILVER took official action beneficial to Glenwood Management and Witkoff. For example, while SILVER was publicly associated with advocating for tenants, a proposal that benefitted Glenwood Management was in substantial part enacted in real estate legislation in 2011 with SILVER’s support.
Unlawful Income From Asbestos Client Referrals
SILVER also entered into a corrupt arrangement with Dr. Robert Taub, who was a leading physician specializing in the treatment of asbestos-related diseases, through which SILVER issued state grants and otherwise used his official position to provide favors to Dr. Taub so that Dr. Taub would refer and continue to refer his patients to SILVER at Weitz & Luxenberg, a firm with which SILVER was affiliated as counsel. Specifically, SILVER arranged for New York State to fund two grants – each for $250,000, and paid out of a secret and un-itemized pool of funds controlled entirely by SILVER – for a research center Dr. Taub had established. SILVER used his official position to provide Dr. Taub with other benefits as well, including helping to direct $25,000 in state funds to a not-for-profit organization for which one of Dr. Taub’s family members served on the board, and asking the CEO of a second not-for-profit to hire a second family member of Dr. Taub’s.
From 2002 to the present, SILVER received more than $3 million from legal fees Weitz & Luxenberg received from patients Dr. Taub had referred to SILVER at the firm while SILVER was taking official actions to benefit Dr. Taub. SILVER did no legal work whatsoever on these asbestos cases, his sole role having been to use his official position and access to state funds to induce Dr. Taub to provide him with these lucrative referrals.
Silver’s Efforts to Cover Up the Scheme
SILVER took various efforts to disguise his unlawful outside income and prevent the detection of his criminal scheme. SILVER listed on his official public disclosure forms that his outside income consisted of “limited practice of law in the principal subject area of personal injury claims on behalf of individual clients,” which was false and misleading. Beginning in 2010, SILVER’s disclosures changed to state that the source of his legal income was a “Law Practice” that “includ[ed]” being of counsel to Weitz & Luxenberg. SILVER never disclosed his relationship with Goldberg & Iryami or any work beyond what he claimed was a “personal injury” practice.
SILVER also repeatedly made false statements about his outside income in his public statements, including the following:
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SILVER claimed he performed legal work consisting of spending several hours each week evaluating legal matters brought to him by potential clients and then referring cases that appeared to have merit to lawyers at Weitz & Luxenberg.In fact, SILVER did no such work on the asbestos cases and obtained those referrals to Weitz & Luxenberg based on his corrupt arrangement with Dr. Taub.
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SILVER claimed his law practice involved the representation of “plain, ordinary simple people.”In fact, SILVER represented some of the largest real estate developers in the state, for whom favorable state legislation was critical to their business interests.
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SILVER claimed through his spokesperson that SILVER found clients by virtue of his having been a “lawyer for more than 40 years,” in a manner that was “not unlike any other attorney in this state, anywhere.” In fact, SILVER found his lucrative asbestos and real estate developer clients solely by virtue of his official position.
- SILVER stated through his spokesperson that “[n]one of his clients have any business before the state.” In fact, SILVER’s outside income included millions of dollars of fees obtained through Glenwood and Witkoff, both of which had significant business before the state, and Dr. Taub, to whose benefit SILVER provided state funding and other benefits related to SILVER’s official position.
In addition, SILVER thwarted the Moreland Commission to Investigate Public Corruption so that it would not learn of his illegal outside income, first by filing legal motions on behalf of the Assembly and taking other action to block the Moreland Commission’s investigation into legislators’ outside income.
Finally, SILVER laundered part of crime proceeds through private investment vehicles that yielded him another $1 million in ill-gotten gains.
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In addition to the prison sentence, Judge Caproni ordered SHELDON SILVER, 72, of New York, New York, to pay a $1.75 million fine, forfeit $5.3 million, and pay a $700 special assessment fee. SILVER also was sentenced to two years of supervised release. The Government had sought a fine above the Sentencing Guidelines level in light of the taxpayer-funded pension that Silver will received for the rest of his life, despite having been convicted of federal corruption offenses. In imposing the fine, Judge Caproni took into account Silver’s pension.
SILVER was found guilty by a unanimous jury on November 30, 2015, of two counts of honest services wire fraud, two counts of honest services mail fraud, two counts of extortion under color of official right, and one count of engaging in illegal monetary transactions.
U.S. Attorney Bharara praised the work of the Criminal Investigators of the United States Attorney’s Office and the Federal Bureau of Investigation, who jointly conducted this investigation.
This case was prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Carrie H. Cohen, Howard S. Master, Andrew D. Goldstein, and James McDonald are in charge of the prosecution.
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Former Mayor of Clinchco Pleads Guilty to Federal Fraud ChargesRead the Press Release
ABINGDON, VIRGINIA – The former mayor of Clinchco, Virginia in Dickenson County, pled guilty today in Federal Court to fraud charges stemming from her use of town funds used to make improvements and repairs to her personal home while she was Mayor, United States Attorney John P. Fishwick Jr. announced.
Peggy Sue Stanley Mickens, 50, of Clinchco, Virginia, pled guilty today to one count of theft concerning programs receiving Federal funds, one count of mail fraud and one count of wire fraud.
“This defendant misused her position of public trust for her own personal benefit,” United States Attorney John P. Fishwick Jr. said today. “We will continue to look into all manners of public corruption and prosecute those who misuse public money for their own benefit.”
According to evidence presented at previous hearings by Russell County Commonwealth’s Attorney and Special Assistant United States Attorney Brian Patton, Mickens was elected Mayor of Clinchco in May 2012, at which time she gained access to, and possession of the town’s banking instrument, credit cards, invoices and banking statements.
In 2013, Clinchco received approximately $20,000 from the Department of Housing and Urban Development [HUD] via a Community Development Block Grant, to be used to rehabilitate homes and/or construct new homes in the town.
Mickens admitted today that, without any type of procurement formalities or approval she hired a contractor to remodel her home and paid for it from the town’s BB&T bank account via a checks signed by Peggy Sue Stanley Mickens.
The defendant took these actions without the knowledge or consent of town officials.
Mickens also admitted today to using a Lowe’s credit card maintained by the Town of Clinchco on August 26, 2013. The defendant admitted to using the town’s credit card, without the knowledge or consent of town officials, to charge $662 from the Lowe’s store in Wise, Virginia to obtain materials for her personal home.
The investigation of the case was conducted by Federal Bureau of Investigation and the Virginia State Police. Russell County Commonwealth’s Attorney and Special Assistant United States Attorney Brian Patton prosecuted the case for the United States.
Former Letter Carrier Pleads Guilty in Scheme to Steal and Cash Hundreds of Postal Money OrdersRead the Press Release
NEWARK, N.J. – A Little Egg Harbor, New Jersey, man today admitted his role in a scheme to steal and convert hundreds of blank U.S. Postal Service money orders, resulting in nearly $200,000 in losses, U.S. Attorney Paul J. Fishman announced.
Jonel Normil, 26, pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of conspiring to embezzle, convert to his use and the use of others U.S. Postal Service money orders.
According to the documents filed in this case, other cases, and statements made in court:
Normil was employed as a letter carrier with the U.S. Postal Service in Cape May Court House, New Jersey. He also picked up and dropped off mail at the U.S. Post Office in Stone Harbor, New Jersey.
Normil admitted that he used his position as a letter carrier to steal hundreds of U.S. Postal Service money orders from the Stone Harbor and Cape May Court House post offices. Normil gave the stolen money orders to other conspirators, who made them look legitimate and imprinted them with dollar values of $900 or $1,000 before depositing them into bank accounts or cashing them at post offices in New Jersey, New York, and Georgia.
The charge for conspiring to embezzle, steal, and convert blank U.S. Postal Service money orders carries a maximum penalty of five years in prison and $250,000 fine. As part of his plea agreement, Normil agreed to the entry of a forfeiture order against him in the amount of approximately $181,000, which represents the approximate losses to financial institutions and the U.S. Postal Service resulting from the scheme. His sentencing is scheduled for Aug. 16, 2016.
U.S. Attorney Fishman credited special agents of the U.S. Postal Service, Office of the Inspector General, under the direction of Executive Special Agent in Charge Monica Weyler of the Eastern Area Field Office, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge David W. Bosch, Philadelphia Division, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: H. Robert Boney Esq., Mays Landing, New Jersey
Former Enterprise Used Car Sales Manager in San Antonio Sentenced to Federal Prison in Fraud SchemeRead the Press Release
In San Antonio today, 37-year-old Jamie Dawn McCord of Universal City, TX, was sentenced to one year and one day in federal prison for embezzling over $200,000 from her former employer, Enterprise Holdings, announced United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Xavier Rodriguez ordered that McCord pay $209,041.08 restitution to Enterprise Holdings and be placed on supervised release for a period of three years after completing her prison term.
On October 6, 2015, McCord, former San Antonio Area Sales Manager over used car sales for Enterprise, pleaded guilty to two counts of wire fraud. By pleading guilty, McCord admitted that between January 2007 and September 2014, she manipulated company records and provided false information to Enterprise officials in Texas and Missouri to hide the fact that she embezzled cash down payments from customers purchasing Enterprise vehicles in San Antonio.
This investigation was conducted by the FBI. Assistant United States Attorney Greg Surovic prosecuted this case on behalf of the Government.
Former DEA Agent Pleads Guilty to Tax Evasion and Witness TamperingRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Samuel Murad (62, Clearwater) has pleaded guilty to tax evasion and witness tampering. He faces a maximum penalty of 5 years’ imprisonment for the tax evasion count and up to 20 years in federal prison for the witness tampering count. His sentencing hearing has been set for August 4, 2016.
According to the plea agreement, in the mid-1990’s, while working as a DEA Special Agent, Murad served as the case agent in an investigation of a marijuana importation conspiracy. One of the participants in that conspiracy, J.P., was convicted and sentenced to 30 years in prison.
Around 2009, after Murad had retired from the DEA, J.P.’s attorney hired Murad to assist with their effort to obtain a reduction in J.P.’s prison sentence. Because Murad was the former case agent in this investigation, he was prohibited by federal law from being physically present in any formal or informal setting on behalf of J.P., to include meeting with an employee of DEA, or appearing on behalf of J.P. before a judge. DEA’s Office of Professional Responsibility also advised Murad that he could not communicate with the government on behalf of J.P. with the intent to influence the government.
Around this time, J.P.’s attorney met with DEA Special Agent Robert Joseph Quinn about plans to initiate an effort to obtain a sentence reduction for J.P. During their meeting, J.P.’s attorney informed Agent Quinn that Murad — a friend and former colleague of Quinn — was involved in the effort to reduce J.P.’s prison sentence. After this meeting, Agent Quinn contacted Murad about the sentence reduction effort. During their conversation, Murad asked Agent Quinn to handle, on the DEA end, the effort to obtain a sentence reduction for J.P. Agent Quinn then communicated with representatives from the U.S. Attorney’s Office to explore the possibility of obtaining the sentence reduction.
In June 2012, once arrests had been made related to J.P.’s cooperation efforts, Murad became frustrated at the prospect of not getting paid for his involvement in the J.P. matter. Murad sent a series of emails to J.P.’s brother demanding large sums of money to stay involved. In one email, Murad asked for $700,000 and said, “if we can’t come [to] some kind of understanding, then you guys get to keep your money and [J.P.] stays in jail because good luck getting him out without my testimony.” In a subsequent meeting with J.P.’s brother, Murad demanded $750,000 to stay involved in the matter. Ultimately, J.P.’s brother agreed to pay Murad $500,000 in cash.
On Friday, August 17, 2012, J.P.’s brother handed Murad a shopping bag containing $223,000 in cash. During this meeting, Murad asked J.P.’s brother how much money he had in his wallet. J.P.’s brother showed Murad that he had $800 in his wallet; Murad took that money and added it to the shopping bag full of cash. Murad also told J.P.’s brother to tell J.P. to “shut up” on the prison telephone. Although Murad did not tell J.P.’s brother why he gave this instruction, Murad knew that J.P.’s jail calls were being monitored by law enforcement.
After this meeting, Murad told Agent Quinn that he had received over $200,000 in cash from J.P.’s brother and had put it in a safe deposit box. Murad laughed that he had to get a larger safe deposit box because there was so much cash. Murad never paid taxes on the $223,800 he received from J.P.’s brother.
The FBI then began investigating the effort to obtain a sentence reduction for J.P. In an interview on November 22, 2013, Agent Quinn lied about Murad not receiving any money, other than expenses, for his work on the J.P. matter. After his interview with the FBI, Murad met with Agent Quinn and directed Quinn not to talk to the FBI. Murad attempted to corruptly persuade Agent Quinn not to provide the FBI with information about the $223,800 cash payment and Murad’s concealment of those funds in the safe deposit box.
On February 13, 2014, the FBI executed a search warrant on Murad’s safe deposit box and seized $73,420. Pursuant to a seizure warrant, the FBI also seized $60,139.03 from Murad’s checking account. The day after the search, Murad met with Quinn (who had retired from the DEA) and accused him of saying too much to the FBI, which Quinn denied. Murad, again, instructed Quinn not to talk to the FBI any further. Two months later, in his second interview with the FBI, Quinn lied again about Murad not getting paid by J.P.’s family. After being confronted by the FBI, Quinn ultimately told the truth.
Quinn previously pleaded guilty for his role in this case. His sentencing hearing has been set for May 11, 2016.
This case was investigated by Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Simon Gaugush and Josephine Thomas.
Former CEO of Pharmacy Dispensing Service Admits to Federal Tax ChargeRead the Press Release
NEWARK, N.J. – The former chief executive officer of a company that provided pharmacy dispensing services today admitted to filing a false federal income tax return, U.S. Attorney Paul J. Fishman announced.
Gary J. Sekulski, 68, of Flanders, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden to Count 3 of an indictment charging him with filing a false federal income tax return for tax year 2009.
According to documents filed in this case and statements made in court:
Sekulski was the CEO and President of Healthcare Corporation of America (HCA), a New Jersey company that controlled a pharmacy dispensing service to public and non-profit entities. Sekulski admitted that for tax year 2009, received approximately $172,000 from HCA that he willfully failed to report on his federal income tax return. Sekulski admitted that he prepared this return himself, signed it under penalty of perjury, and caused it to be filed with the IRS knowing that it falsely reported his income. He admitted that he intentionally filed materially false federal income tax returns with the IRS for the 2007 and 2008 tax years. In all, Sekulski failed to report approximately $353,000 in taxable income.
The tax count to which Sekulski pleaded guilty carries a maximum potential penalty of three years in prison and a fine of $250,000 or twice the amount of pecuniary gain or loss from the offense. Sentencing is scheduled for Sept. 8, 2016.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Lee M. Cortes Jr. and Shirley U. Emehelu, of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: William C. Cagney Esq., New Brunswick, New Jersey
Foreign Lottery Scams Continue to Target Idaho ResidentsRead the Press Release
BOISE – The United States Attorney’s Office and US Postal Inspectors have seen a recent uptick of sweepstakes fraud victims in Southeastern Idaho, to include the Pocatello, Montpelier and Preston areas. Inspectors’ last trip through the area to speak to victims discovered losses of over $70,000 due to foreign lottery scams.
Who Are Postal Inspectors?
The US Postal Inspection Service (USPIS) is the law enforcement, crime prevention and security arm of the US Postal Service (USPS), and is responsible for enforcing more than 200 federal laws in investigations of crimes that may adversely affect or fraudulently use the US Mail, the postal system or postal employees. Postal Inspectors are federal law enforcement agents who conduct investigations of postal-related crime, such as mail fraud and theft, violent crimes against postal employees, revenue fraud, dangerous mail, illegal drugs in the mail, and child exploitation conducted via the mail.
Foreign Lotteries Are Illegal!
Federal law (18 USC 1302) prohibits mailing any ticket, share or chance in a foreign lottery. If you respond to a solicitation, your name will be forwarded to a mailing list used by scammers. You will continue to receive solicitations.
What is a Foreign Lottery Scam and How Does it Typically Work?
Typically, this is how the sweepstakes scheme begins: You receive an offer by mail to enter a sweepstakes, claiming you could win a car, computer, a vacation or lots of money. You fill out the questionnaire and include your contact information, and mail it back to the address provided. Soon thereafter, you receive a phone call, email or mail stating you’ve won a cash sweepstakes/lottery and perhaps even a car.
However, in order to claim the prize, you need to send payment for taxes, processing, legal or customs fees. The payment is usually requested to be mailed to another US address, Jamaica/foreign country or wired to another person in the US or to another country.
The fraudsters gain victims’ trust through frequent phone conversations. Many victims tend to be older Americans, who are generally polite and trusting. Some are lonely, and enjoy the personal contact with someone they believe to be a “friend.” They have a hard time believing they’ve fallen for a scam, but these crooks are relentless and demanding. They may even threaten, coerce and use psychological intimidation to make victims give up their money.
How Can You Recognize an Illegal Foreign Lottery?
● Scammers mail letters to confirm victims’ winnings. Victims may be solicited via the mail.
● Victims are solicited by phone through heavy-handed marketing tactics and incessant calls.
● Victims are asked to pay fees, duties or taxes before they can collect their winnings.
● Once a victim responds to a solicitation, the scammer continues to contact them, asking for additional payments and promising even greater winnings.
● Scammers from other countries, such as Jamaica, Nigeria, Holland, Canada and the Philippines, target US victims.
● Scammers from overseas use Voice over Internet Protocol (VoIP) devices allowing them to disguise their international number and make it appear as if it were a domestic call coming from a US area code.
● Victims are typically asked to mail cash or wire money via Western Union or MoneyGram overseas.
● Recipients of cash payments are either co-conspirators, foreign nationals residing in the US or other victims who have become unknowing participants.
Improve Your Odds
Older Americans are often targeted by scammers. Speak with your older loved ones about the consequences of foreign lottery scams. A few protective- measures taken with their consent, and a simple conversation about avoiding scams could be the key to preserving their financial well-being.
● Confirm frequent unknown domestic or international calls
● Monitor all accounts for unusual activity
● Identify unknown and recurring payments
● Discuss repeated wire-transfer patterns of checks made out to cash
● Take notice of stacks of sweepstakes offers or prize notification letters around the home
● Talk about changes in living conditions-living beneath one’s means, past-due bills, etc.
● Do not answer the phone. It may be best to change your phone number.
You can report fraud online at postalinspectors.uspis.gov or get a copy of Form 8165, Mail Fraud Report, at your local Post Office. You can also file a complaint by calling 877-876-2455 (option 4).
Florida Man Pleads Guilty to Federal False Statements and Aggravated Identity Theft Charges in New MexicoRead the Press Release
ALBUQUERQUE – Clinton William Yetter, 50, of Gainesville, Fla., pleaded guilty yesterday in Albuquerque, N.M, federal court to false statements and aggravated identity theft charges.
Yetter was charged in a four-count indictment filed on May 29, 2013, with two counts of making false statements and two counts of identity fraud. The indictment alleged that Yetter made the false statements on Oct. 4, 2011 and May 2, 2012, in Bernalillo County, N.M., when applying for U.S. passports. It also alleged that Yetter used the name of another person in making the applications.
During yesterday’s change of plea hearing, Yetter pled guilty to the indictment without the benefit of a plea agreement. Yetter is in federal custody and will remain detained pending his sentencing hearing, which has yet to be scheduled.
At sentencing, Yetter faces a statutory maximum penalty of five years in prison on each of the false statements charges. He faces a mandatory two-year prison sentence on the identity theft charges, which must be served consecutive to any prison sentence imposed on the false statements charges.
This case was investigated by the U.S. Department of State, Diplomatic Security Service and is being prosecuted by Assistant U.S. Attorney Paul Mysliwiec.
Federal Jury Convicts Final Conspirator in $278 Million Investment Fraud SchemeRead the Press Release
Baltimore, Maryland – A federal jury convicted Richard Shusterman, age 53, of Highland Beach, Florida late on May 2, 2016, of conspiring to commit wire fraud and nine counts of wire fraud in connection with a complex scheme to defraud investors and lenders of $278 million by selling fraudulent investment portfolios of debts purportedly owed by hospital patients. U.S. District Judge James K. Bredar detained Shusterman pending a detention hearing scheduled for today at 11:00 a.m. Shusterman is the fourth and final conspirator to be convicted in the scheme.
The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
“Richard Shusterman and his co-conspirators perpetrated a brazen and complex Ponzi scheme that defrauded investors of more than $278 million,” said U.S. Attorney Rod J. Rosenstein. “The conspirators pretended that they were repaying investors with revenue earned by collecting debts, but they were really using the money of new victims to repay previous investors.”
According to trial evidence, Shusterman was a shareholder and president of International Portfolio, Inc. (IPI), located in Pennsylvania. Co-conspirator Robert Feldman was part owner of IPI, and president of United Consulting, Inc. Shusterman and Feldman represented that IPI had experience in the purchase, valuation, collection and resale of medical accounts receivable, comprising of past due patient accounts which the hospitals and other entities selling the accounts had been unsuccessful in collecting. Beginning on June 21, 2006, Shusterman and Feldman, through United Consulting and IPI, bought and sold consumer debt, including medical debt portfolios. From December 2006 through June 2008, IPI paid more than $25 million to purchase over $4.1 billion in medical accounts receivable, comprising more than 3,872,514 past due patient accounts.
Jonathan Rosenberg and Douglas Kuber operated Account Receivable Services, LLC (ARS) in New York, New York. They agreed to promote the sale of IPI debt portfolio. Pursuant to their agreement, Shusterman, through IPI, bundled the past due patient accounts from IPI’s inventory into investment portfolios, and then sold the portfolios to ARS at a discounted rate. ARS’s purchases of the medical debt portfolios from IPI came from investors who agreed to lend money to ARS on a fixed-term basis in return for a high, fixed interest rate. Shusterman and IPI agreed to manage the collection activity for each debt portfolio that IPI sold. Any funds collected by IPI were to be forwarded to escrow accounts opened and maintained by ARS, which, in turn, would use the funds to cover the periodic interest payments and outstanding balances owed to the investors.
Fraudulent Inflation of Purchase Prices for IPI Debt Portfolios to Obtain Larger Investor Loans
Rosenberg and Kuber misrepresented to investors that a loan secured by IPI debt portfolios would not be used to pay up-front fees and commissions associated with the investment offering. In fact, however, ARS and IPI devised an elaborate process involving the use of multiple escrow accounts and independent accountants to feign a transparent tracking of the deposit of the loan proceeds, the revenue from collection activity, the repayment of interest, and the sale of portfolios. Funds to pay a 5% to 10% fee would come from the investor’s loan proceeds. Pursuant to this undisclosed fee arrangement, ARS and IPI would agree to a concealed purchase price for a debt portfolio. Then they would tell the investor that the portfolio price was 5% to 10% higher than the concealed price.
Shusterman agreed to kickback the loan proceeds in excess of the true purchase prices to Rosenberg and Kuber. The kickbacks were characterized as a refund or a rebate. In so doing, ARS and IPI avoided the intricate escrow arrangement they had created to convince investors to finance the joint venture. From June 2007 to March 2009, Shusterman paid Kuber and Rosenberg kickbacks totaling in excess of $8 million.
In reliance on those misrepresentations, investors provided loans to ARS of approximately $145 million to purchase IPI debt portfolios, which IPI managed. Other investors purchased approximately $122,500,000 worth of IPI debt portfolios, which IPI also managed.
Fraudulent Inflation of Collection Results
In order to induce existing investors to maintain and increase their participation in the investment scheme and to persuade new investors to join, ARS and IPI falsely represented the amount of income being generated from the collection activity for the medical debt portfolios. It became apparent almost from the start that collections were significantly inadequate, not only in their failure to cover periodic interest payments that ARS owed its investors, but also to repay the investors’ principal.
Shusterman and Rosenberg agreed that IPI would advance ARS the money needed to make ARS’s periodic interest payments to the investors. From July 2008 to December 2009, and without the investors’ knowledge, Shusterman and his conspirators wired approximately 209 advances from IPI into the bank accounts of the ARS debt portfolios, which were subsequently used to pay periodic interest payments due to an investor and/or inflate the collection history of the respective investor debt portfolios. Misleading collection reports were created to deceive the investors.
After their plan to subsidize ARS with monthly advances was implemented, an investor was induced to fund the purchase of 12 more portfolios between July and November 2008, totaling approximately $65 million in new investments. Another investor representative living in West River, Maryland was induced to fund the purchase of a portfolio on November 8, 2008 for $10 million, and another portfolio on May 26, 2009 for $5 million.
To conceal poor collection results and artificial resale prices for IPI debt portfolios, and to assure a continuing flow of new funding into the investment scheme, Shusterman and his conspirators continued to solicit existing and prospective investors to purchase or finance IPI debt portfolios. In so doing, they fraudulently used new investor funds to make interest and resale payments in order to meet the investment benchmarks of prior investors.
As a result of the scheme, the loss to investors was $278 million.
Shusterman faces a maximum sentence of 20 years in prison. Judge Bredar scheduled his sentencing for October 11, 2016, at 11:00 a.m.
New Jersey residents Robert Feldman, age 68, of Beach Haven; Jonathan E. Rosenberg, age 47, of West Orange; and Douglas A. Kuber, age 55, of Livingston, previously pleaded guilty to their participation in the conspiracy and face a maximum sentence of 20 years in prison. Feldman, Rosenberg and Kuber are scheduled to be sentenced on June 2, 14 and 30, 2016, respectively.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein thanked the FBI and HSI Baltimore for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Martin J. Clarke and Leo J. Wise, who are prosecuting the case.
Elk Grove Man Sentenced to Two and a Half Years in Prison for National Guard Recruiting FraudRead the Press Release
SACRAMENTO, Calif. — Richard C. Sihner, 54, of Elk Grove, was sentenced today to two years and six months in prison for a scheme to fraudulently obtain bonuses in a recruitment program for the California National Guard, Acting United States Attorney Phillip A. Talbert announced.
On January 22, 2016, after a seven-day trial, a jury found Sihner guilty of 18 counts of wire fraud relating to his scheme to receive unearned recruiting bonuses relating to California National Guard enlistees. The jury also convicted Sihner of one count of making false statements to a federal agent.
In sentencing Sihner, United States District Judge John A. Mendez rejected the suggestion that any blame for the crime rested with others involved in the process. “You, and you alone, are responsible,” said Judge Mendez.
“Integrity is a California National Guard core value, and we're committed to holding our soldiers and airmen accountable if they elect to commit fraud,” said Maj. Gen. David S. Baldwin, Adjutant General for the California National Guard. “These cooperative efforts by the U.S. Attorney's Office continue to help us ensure we remain not only a capable force, but also an ethical force worthy of the people's trust.”
Sihner is a retired member of the California National Guard and participated in the Guard Recruiter Assistant Program (G-RAP). The United States Army contracted with Document and Packaging Broker Inc. (DOCUPAK) to administer G-RAP. Under G-RAP, members of the California National Guard served as recruiting assistants (RA). If an RA referred a potential Guard member to a recruiting office and that person ultimately enlisted, the RA was eligible to receive monetary compensation disbursed by DOCUPAK. RAs would typically receive a $1,000 payment when a nominee enlisted and a second $1,000 payment when the nominee left for boot camp. Ultimately, the G-RAP program was discontinued following the discovery of widespread fraud. Recruits who walked into recruiting offices entirely on their own initiative and were not referred by an RA, were claimed by corrupt RAs in DOCUPAK’s system, often with the assistance of corrupt recruiters.
According to evidence produced at trial, from December 27, 2007 to April 16, 2010, Sihner was an RA in the G-RAP program. A recruiter gave him information about new recruits so that Sihner could falsely claim to have referred them. Sihner made false claims and wrote elaborate falsehoods in the notes section of the DOCUPAK online portal indicating that he had referred the recruits. In fact, the recruits had made contact with the Guard to discuss potential enlistment for reasons entirely unrelated to Sihner. Sihner was paid $95,000 in compensation for purportedly referring 51 soldiers to enlist. Of the 39 recruits federal agents contacted prior to indictment, none had been referred to the Guard by Sihner. When confronted, Sihner lied to federal law enforcement agents investigating the fraud by repeatedly claiming that he had personally referred all of the new soldiers and that he had taken them to the recruiting office to introduce them.
This case was the product of an ongoing investigation by the Army Criminal Investigative Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorneys Matthew G. Morris and Katherine T. Lydon prosecuted the case.
Other National Guard members and recruiters have been charged in similar recruiting‑fraud schemes in the Eastern District of California. The following defendants have pleaded guilty and await sentencing.
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2:14-cr-153 TLN — Brian Kaps, 42, of Chico, pleaded guilty on November 21, 2014, to one count of wire fraud. Sentencing is set for August 18, 2016.
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2:14-cr-152 TLN — Sarah Nattress, 28, of Paradise, pleaded guilty on October 23, 2014, to one count of wire fraud. Sentencing is set for May 26, 2016.
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1:14-cr-108-LJO — Nicholas Huerta, 33, of Fresno, pleaded guilty on September 14, 2015, to one count of wire fraud. Sentencing is set for November 14, 2016.
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1:14-cr-106 DAD — Joaquin Cuenca, 38, of San Diego, was a recruiter. On February 2, 2016, a jury found him guilty of three counts of wire fraud for fraudulent bonuses. He is scheduled for sentencing on July 18, 2016.
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