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27 April 2016
Massachusetts Man Pleads Guilty to Gun ChargesRead the Press Release
CONCORD, N.H. – John Wachaga, 22, of Lowell, Massachusetts, has entered a guilty plea in the United States District Court for the District of New Hampshire to one count of aiding and abetting the making of a material false statement in connection with the acquisition of a firearm, and one count of possessing a firearm as a convicted felon, announced United States Attorney Emily Gray Rice.
On May 4, 2014, officers from the Lowell, Massachusetts Police Department stopped a vehicle being driven by Wachaga. During the stop, officers seized a handgun from underneath Wachaga’s seat. Upon further investigation, agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) learned that Wachaga had used another individual to purchase the firearm for him in New Hampshire, because a prior felony conviction precluded him from doing so on his own.
The statutory maximum penalty for the charges to which Wachaga pleaded guilty is ten years’ imprisonment and a fine of up to $250,000. Wachaga is scheduled for sentencing in August 2016. The court will sentence Wachaga after it has had the opportunity to review a presentence investigation report prepared by the United States Probation and Pretrial Services Office and considers the federal advisory sentencing guideline for the charges.
This prosecution arose from an investigation conducted by the Bureau of Alcohol, Tobacco, and Firearms (Boston and New Hampshire), in conjunction with the Lowell, Massachusetts Police Department. The case is being prosecuted by Assistant United States Attorney Nick Abramson.
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Marrero Woman Pleads Guilty to Cocaine ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that SABRINA BOURGEOIS of Marrero, age 34, pled guilty today to conspiracy to distribute and possess with intent to distribute 500 grams or more of powder cocaine.
According to court documents, BOURGEOIS was arrested on February 8, 2015, after traveling from Houston to New Orleans, carrying four kilograms of powder cocaine in the back-seat of her truck. As part of her plea agreement, BOURGEOIS admitted that she had made frequent trips between Houston and New Orleans, carrying money and multiple kilograms of cocaine hydrochloride, in furtherance of her drug conspiracy with her codefendant, SHANNON DUPLESSIS.
BOURGEOIS faces a mandatory minimum sentence of five years in prison, a maximum possible sentence of forty years in prison and/or a $5,000,000 fine, and at least four years of supervised release. U.S. District Judge Sarah S. Vance set sentencing for August 10, 2016.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration, the Plaquemines Parish Sheriff’s Office, and the Houston Police Department in investigating this matter. Assistant United States Attorney Brandon S. Long is responsible for the prosecution.
Manager of Clothing Factory Found Guilty of Offering Bribe to Federal Labor Investigator in Exchange for Closing Wage InvestigationRead the Press Release
LOS ANGELES – The general manager of a La Puente garment factory has been found guilty of federal charges of offering to pay bribes to an investigator with the United States Department of Labor in exchange for the investigator closing an investigation into wage violations.
Howard Quoc Trinh, 42, of Arcadia, the manager of Seven-Bros. Enterprises, was convicted late Tuesday by a federal jury. The jury returned guilty verdicts on two counts of bribery after prosecutors presented evidence that Trinh offered to pay $10,000 in bribe, and actually paid $3,000 to a Department of Labor Wage and Hour investigator. As part of the bribery scheme, Trinh promised to pay the balance when the investigation was closed.
“Companies and their managers victimizing their own employees through wage violations cannot perpetuate their conduct through bribes,” said United States Attorney Eileen M. Decker. “This jury verdict strikes a blow against both corruption and the exploitation of workers.”
The Labor Department investigator was investigating Seven-Bros. for violating the Fair Labor Standards Act (FLSA), which sets standards for minimum wage and overtime pay. The Wage and Hour investigator led a team that conducted an unannounced visit to Seven-Bros on March 10, 2015. The investigation into wage violations covered a period from May 2012 through March 10, 2015, and found that Seven-Bros owed approximately $100,000 to compensate employees for FLSA violations over that period. As part of the investigation, the Labor Department issued a “hot goods” Notice to Restrain the Shipment of Goods, which prevented the company from shipping certain inventory until the back wages were paid to employees.
The investigator returned to Seven-Bros on March 18, at which time Trinh said he did not owe his employees any back wages and that he wanted to “take care” of the investigator. In response to Trinh’s statements, the Labor Department’s Office of Investigator General (OIG) initiated an investigation and outfitted the investigator with recording equipment. On the evening of March 18, during a recorded meeting, Trinh offered the investigator $10,000 to close out the investigation without finding any violations and to lift the Hot Goods objection.
The next day, during another recorded meeting, Trinh gave the investigator an initial payment of $3,000 in an unmarked manila envelope. On March 20, Trinh was arrested.
Trinh was convicted late yesterday after the jury deliberated for less than one hour. As a result of today’s convictions, Trinh faces a statutory maximum sentence of 30 years in federal prison. United States District Judge Christina A. Snyder, who presided over the trial, has yet to schedule a sentencing date.
The investigation in this case was conducted by the United States Department of Labor, Office of Investigator General, Office of Labor Racketeering and Fraud Investigations.
“Today’s jury verdict sends a strong message that those who attempt to bribe public officials will be held responsible for their serious crimes,” stated Abel Salinas, Special Agent in Charge of the Los Angeles Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations. “The Office of Inspector General will continue to vigorously pursue those who endeavor to obstruct the Labor Department’s enforcement of worker protection laws by illegal means.”
Ruben Rosales, the Regional Administrator for the Labor Department’s Wage and Hour Division in San Francisco, said: “We will not tolerate this type of behavior from anyone. We are very pleased that the collaboration between the Office of the Inspector General and the Division has resulted in a criminal conviction. Any employer who attempts to bribe any of our labor investigators will face consequences.”
Louisiana Man Charged in $2 Million Nationwide Advertising Scheme to Defraud RealtorsRead the Press Release
PITTSBURGH - A Louisiana resident has been indicted by a federal grand jury in Pittsburgh on charges of mail fraud, United States Attorney David J. Hickton announced today.
The 11-count indictment named Rex Alan Harris, aka Michael Harris, Rex Rogan, Rex Alan, dba “Agents By City,” 40, of Covington, La., as a defendant. The indictment was returned on April 19, and unsealed yesterday following Harris’ arrest in Louisiana. His arraignment is scheduled for May 23, 2016, in U.S. District Court in Western Pennsylvania.
According to the indictment, since 2008, Harris defrauded hundreds of realtors nationwide whom he promised television and internet advertising to generate home sales. Realtors were induced to pay thousands of dollars for advertising on major television networks based upon the realtors’ zip codes. However, the advertising never occurred, and Harris and others spent the money for their personal benefit including purchases of tens of thousands of dollars in merchandise through PayPal, Footlocker and Nike.com, and New Orleans Saints season tickets, totaling in excess of $2 million.
Realtors who paid money to any of the following entities - “Our Family First Realty,” “Better Realty Deals,” “Amazing Realty Deals,” “The Top Agent/Monolith Media Group,” “American Real Estate Idols” or “Agents by City” - may be victims and are encouraged to call the Federal Bureau of Investigation (FBI) hotline at 1-800-CALL-FBI or 1-800-2255-324.
The law provides for a total sentence of 20 years in prison and a fine of $250,000 at each count or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The U.S. Postal Inspection Service and the FBI 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.
Louisiana Man Charged in $2 Million Nationwide Advertising Scheme to Defraud RealtorsRead the Press Release
A Louisiana resident has been indicted by a federal grand jury in Pittsburgh on charges of mail fraud, U.S. Attorney David J. Hickton for the Western District of Pennsylvania announced today.
The 11-count indictment named Rex Alan Harris aka Michael Harris, Rex Rogan, Rex Alan, dba “Agents By City,” 40, of Covington, Louisiana. The indictment was returned on April 19, and unsealed yesterday following Harris’ arrest in Louisiana. His arraignment is scheduled for May 23, in U.S. District Court in Western Pennsylvania.
According to the indictment, since 2008, Harris defrauded hundreds of realtors nationwide whom he promised television and internet advertising to generate home sales. Realtors were induced to pay thousands of dollars for advertising on major television networks based upon the realtors’ zip codes. However, the advertising never occurred and Harris and others spent the money for their personal benefit including purchases of tens of thousands of dollars in merchandise through PayPal, Footlocker and Nike.com and New Orleans Saints season tickets, totaling in excess of $2 million.
Realtors who paid money to any of the following entities - “Our Family First Realty,” “Better Realty Deals,” “Amazing Realty Deals,” “The Top Agent/Monolith Media Group,” “American Real Estate Idols” or “Agents by City” - may be victims and are encouraged to call the Federal Bureau of Investigation’s (FBI) hotline at 1-800-CALL-FBI or 1-800-2255-324.
The law provides for a total sentence of 20 years in prison and a fine of $250,000 at each count or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant U.S. Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.
The U.S. Postal Inspection Service and the FBI 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.
Lame Deer Man Convicted of Assault and StrangulationRead the Press Release
BILLINGS – Leon Seminole, 58, of Lame Deer, was convicted of assault and strangulation for punching and attempting to strangle a female victim. Seminole was convicted yesterday by a Billings jury following a two-day trial. U.S. District Court Judge Susan Watters presided over the trial. Sentencing has been set for August 31, 2016.
In documents filed with the Court, The United States Attorney’s Office outlined the proof presented at trial. On August 17, 2014, Seminole punched, kicked, and attempted to strangle the victim. The victim was able to escape from Seminole. After the assault, one of the victim’s family members attempted to confront Seminole, but Seminole had a gun in his hand and the family member retreated.
Witnesses testified that the victim’s face was red and swollen and she looked like she had been beaten up. Medical evidence presented at trial documented that the victim had suffered multiple contusions to her head and face. Both eyes were swollen and one was swollen shut. The victim had a broken tooth, which she said had been broken as she struggled with Seminole. Photos taken by the BIA officer present when the victim was seen at Indian Health Services showed substantial swelling and various other injuries.
This case was investigated by the Bureau of Indian Affairs and prosecuted by the United States Attorney’s Office.
Justice Department Seeks to Shut Down Alabama Tax Return PreparerRead the Press Release
Preparer Allegedly Fabricates Businesses Losses, Claims Fraudulent Credits In Order to Understate Her Customers’ Tax or Overstate their Refunds
A number of tax return preparation businesses in the Birmingham, Alabama area unlawfully understate their customers’ income tax liabilities and overstate refunds by making deliberate misstatements on the returns, according to a new civil lawsuit filed by the Justice Department today. The suit, filed in federal court in Birmingham, asks the court to permanently bar Jessica Leverett aka Jessica Harris, from preparing tax returns for others. The suit also asks the court to order Leverett to turn over a list of all of the tax returns she has prepared.
According to the complaint, Leverett owns and operates a number of different tax preparation businesses in the area, including Tax Money Now, L.L.C., Dynamic Tax Services, Dynamic Tax Solutions and Express Money Tax. The government’s complaint alleges that Leverett and her associates prepared returns that fabricate self-employment businesses and business losses to offset their customers’ taxable income from other sources and to increase their customers’ Earned Income Tax Credit. When a customer does have a small business, the complaint alleges, Leverett and her associates mischaracterize the business income as household employee wages in order to avoid paying the required self-employment tax. The complaint also alleges that Leverett’s businesses claim education credits that the customers are not entitled to receive.
According to the complaint, the Internal Revenue Service (IRS) has examined 264 returns prepared by Leverett’s businesses and found that 206 understate the tax owed by Leverett’s customers by thousands of dollars on average. The complaint alleges that Leverett’s activities may have caused the United States to lose over $2.5 million in understated taxes and/or fraudulent refunds.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Seeks to Shut Down Alabama Tax Return PreparerRead the Press Release
A number of tax return preparation businesses in the Birmingham, Alabama area unlawfully understate their customers’ income tax liabilities and overstate refunds by making deliberate misstatements on the returns, according to a new civil lawsuit filed by the Justice Department today. The suit, filed in federal court in Birmingham, asks the court to permanently bar Jessica Leverett aka Jessica Harris, from preparing tax returns for others. The suit also asks the court to order Leverett to turn over a list of all of the tax returns she has prepared.
According to the complaint, Leverett owns and operates a number of different tax preparation businesses in the area, including Tax Money Now, L.L.C., Dynamic Tax Services, Dynamic Tax Solutions and Express Money Tax. The government’s complaint alleges that Leverett and her associates prepared returns that fabricate self-employment businesses and business losses to offset their customers’ taxable income from other sources and to increase their customers’ Earned Income Tax Credit. When a customer does have a small business, the complaint alleges, Leverett and her associates mischaracterize the business income as household employee wages in order to avoid paying the required self-employment tax. The complaint also alleges that Leverett’s businesses claim education credits that the customers are not entitled to receive.
According to the complaint, the Internal Revenue Service (IRS) has examined 264 returns prepared by Leverett’s businesses and found that 206 understate the tax owed by Leverett’s customers by thousands of dollars on average. The complaint alleges that Leverett’s activities may have caused the United States to lose over $2.5 million in understated taxes and/or fraudulent refunds.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Reminds Employers of Their Employment Tax ResponsibilitiesRead the Press Release
Civil and Criminal Enforcement Actions Are Taken Against Employers and Individuals Who Violate Employment Tax Laws
With the first quarterly employment tax returns of 2016 due April 30, the Justice Department reminds employers that they have a legal responsibility to collect and pay over to the Internal Revenue Service (IRS) taxes withheld from their employees’ wages. For employers and other responsible persons who fail to withhold, report, and pay employment taxes to the IRS, the Department is committed to enforcing federal employment tax laws through both civil litigation and criminal prosecutions.
Employers Must Comply with Employment Tax Laws
Employers in the United States are required to collect, account for, and pay over to the IRS tax withheld from employee wages, including federal income tax and taxes under the Federal Insurance Contributions Act (FICA), including old-age, survivors, and disability insurance taxes, also known as social security taxes, and the hospital insurance tax, also known as Medicare taxes. Employers also have an independent responsibility to pay their matching portion of social security and Medicare taxes.
Tax withheld from employee wages accounts for approximately 70 percent of annual revenue collected by the IRS. When last measured, underreported and unpaid employment taxes represented approximately $72 billion of the overall tax gap in the United States. As of September 2015, more than $59 billion of tax reported on employment tax returns remained unpaid.
“Employers who comply with our nation’s tax laws are entitled to a level playing field,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Those individuals and entities that fail to withhold employment tax, or withhold and fail to pay employment taxes over to the IRS, not only steal from their employees and the U.S. Treasury, but gain an unfair competitive advantage over businesses down the street and across the country. The Department and its colleagues in the IRS have increased their efforts in this area, and are holding delinquent employers accountable.”
“Fairness in the employment tax arena is an important part of the nation’s tax system,” said IRS Commissioner John Koskinen. “The IRS is committed to working with the Justice Department to protect this important area, and there’s a long list of efforts we’ve taken in both civil and criminal investigation areas when employers try to evade their legal responsibilities and, in the process, gain an advantage over their competitors who are honoring their legal responsibilities. In addition, the IRS is taking new steps to identify and contact employers falling behind on their payments before they file their tax returns, offering to assist them earlier in the process to head off steeper interest and penalty charges. This effort not only provides an important service, it could help prevent the need for future enforcement activity.”
Willful Failure to Comply with Federal Employment Tax Laws is a Crime
An individual’s failure to comply with employment-tax obligations is not simply a civil matter. Employers who view amounts withheld from employee wages as a personal slush fund, treat withheld employment taxes as a loan from the government that can be repaid if and when they see fit, or whose business model is based on a continued failure to pay employment tax, are engaging in criminal conduct and face prosecution, imprisonment, monetary fines and restitution. According to statistics provided by IRS Criminal Investigation, in the 2015 fiscal year, individuals convicted of employment tax crimes were sentenced to an average of 24 months in prison. Recent prosecutions include:
- Employers using employment taxes for personal expenses
In March 2016, Larry C. Thornton, the owner, president, and chief executive of a Tennessee-based check-processing company and a credit-card processing company, pleaded guilty to failing to pay more than $6.8 million in employment taxes. Thornton admitted that he was responsible for collecting, accounting for and paying over to the IRS the employment taxes withheld from the wages of his companies’ employees, but from the second quarter of 2007 until at least the second quarter of 2011, Thornton caused the companies to stop paying over the taxes required to be withheld from the companies’ employees’ paychecks and caused the companies to stop timely filing Employer’s Quarterly Federal Tax Returns (Forms 941) with the IRS. During the years that Thornton failed to comply with his employment tax obligations, he spent over $6.2 million on personal expenses, including house and condominium payments; vehicle, yacht, and motorcycle loan payments; personal travel; and start-up funding for his wife’s beauty boutique. As part of his guilty plea, Thornton admitted that his fraudulent conduct caused a tax loss of more than $8.9 million, and agreed to pay restitution of more than $10 million.
In June 2015, Wilbur Anthony Huff, a Kentucky man who controlled a professional employer organization (PEO) located in Tampa, Florida, was sentenced to 12 years in prison for both committing various tax crimes that caused more than $50 million in losses to the IRS and engaging in a massive fraud scheme. The PEO was paid to manage the payroll and tax and workers’ compensation insurance obligations of its client companies. However, instead of paying the $53 million in taxes that the PEO’s clients paid to the PEO and owed the IRS, Huff stole the money, diverting millions of dollars to fund his investments in unrelated business ventures and paid his family members’ personal expenses, including mortgages on Huff’s homes, rent payments for his children’s apartments, staff and equipment for Huff’s farm, and designer clothing, jewelry, and luxury cars. The court also ordered Huff to pay more than $108 million in restitution.
- Employers using employment taxes to pay other creditors
In July 2015, Maria Elizabeth Townsend, the president and majority shareholder of a Washington-based electrical contractor was sentenced to 40 months in prison and ordered to pay $3.3 million in restitution to the IRS for failing to pay over employment taxes to the IRS. For 16 quarters between 2005 and 2009, Townsend withheld over $3 million in employment taxes but failed to pay those taxes to the IRS. Instead, between April 2007 and September 2009, Townsend authorized the disbursement of over $31 million in company funds to pay the company’s vendors and employees, a large dividend to one of her partners, $300,000 toward payment of her joint personal income tax obligations, more than $260,000 to family members, and personal expenses including constructing a pool at her residence, and buying a boat and personal vehicles.
- Employers paying employees in cash to avoid employment tax
In April 2016, Kyle Archie, the owner of several Reno, Nevada landscaping and rock hauling businesses pleaded guilty to one count of failure to pay over employment taxes. Archie admitted that, although he collected these taxes from his employees’ wages and held them in trust, he failed to pay over the employment taxes to the IRS. In documents filed with the court, the government alleged that Archie paid employees’ overtime wages in cash to avoid employment tax obligations. While failing to pay employment tax due, Archie used available funds to build a house, purchase motor vehicles and personal watercraft, and travel. Linda Archie, Kyle’s mother and the bookkeeper for the businesses, pleaded guilty to one count of willful failure to file a tax return, admitting that between 2003 and 2009, she failed to file Employer’s Quarterly Federal Tax Returns (Forms 941) on behalf of these businesses to account for the taxes that were withheld from the employees’ wages. The Archies stipulated that the tax loss caused by their crimes exceeded $545,000. They are scheduled to be sentenced on August 15.
In July 2015, Eric Anderson, the owner of three New York construction companies, was sentenced to serve 18 months in prison and was ordered to pay more than $1 million in restitution. Anderson used a commercial check cashing service to cash more than $10.5 million in checks paid to his construction companies and used a portion of the cash to pay his employees “under the table,” while failing to collect and pay over employment taxes to the IRS.
- Employers filing false employment tax returns
In October 2015, James Pielsticker, former chief executive officer and president of Arrow Trucking Company, was sentenced to serve 7 ½ years in prison and ordered to pay $21 million in restitution for conspiring to defraud the United States and to commit bank fraud, and for attempting to evade his individual income taxes. Pielsticker, his chief financial officer, James Moore, and others withheld employment tax from Arrow’s employees’ wages but did not report or pay over the tax to the IRS, despite knowing they were required to do so. The conspirators paid Pielsticker’s personal expenses and submitted fraudulent invoices to induce a bank to pay unwarranted funds. After cooperating with the government and testifying against Pielsticker, Moore was sentenced to 35 months in prison.
In July 2015, Happy Asker, the president, founder, and public face of the Happy’s Pizza franchise, a chain based in Farmington Hills, Michigan, was sentenced to 50 months in prison and ordered to pay $2.5 million in restitution to the IRS. Evidence at trial established that from 2004 through 2011, Asker, along with others, executed a systematic and pervasive scheme to defraud the IRS. Gross sales and payroll amounts were substantially underreported on numerous corporate income tax returns and payroll tax returns filed for nearly all 60 Happy’s Pizza franchise locations. From 2008 to 2010, Asker and his co-conspirators diverted for personal use more than $6.1 million in cash gross receipts from approximately 35 different Happy’s Pizza stores in the Detroit area, Illinois and Ohio. In total, Asker and certain employees and franchise owners failed to report to the IRS approximately $3.84 million of gross income and approximately $2.39 million in payroll taxes from the various Happy’s Pizza franchises.
Delinquent Employers also face Civil Litigation and Injunctions
Employers that ignore their employment tax obligations will face civil enforcement efforts, including federal lawsuits to enjoin noncompliance, ensure future compliance, and collect amounts due.
In the last year, federal courts have entered permanent injunctions against delinquent employers across the country, requiring the timely deposit of payroll taxes and filing of employment tax returns, notice to the IRS that the requisite deposits have been made and notice to the IRS if the employer, or someone working at the employer’s behest, begins operating a new business. The injunctions also preclude defendants from assigning property or making payments to other creditors until the employment tax obligations accruing after the date of the injunction are paid. Injunctions have been entered against a Los Angeles County pizza parlor and its owner, a Washington-based dentist, the owner of a Delaware donut shop, a South Carolina trucking company, and a Baltimore-area marble and granite importer, just to name a few. Since Jan. 1, the Department has filed 16 complaints and obtained 10 permanent injunctions against delinquent employers, and additional actions are forthcoming.
When individuals and entities subject to these injunctions knowingly violate the terms of the injunction, the Tax Division stands ready to seek orders of civil or criminal contempt, including incarceration, to bring the defendants into compliance.
Liability Extends to Responsible Individuals
Any individual who is responsible for ensuring that employment taxes are collected, accounted for, and paid over to the IRS, and willfully fails to do so may be subject to a civil penalty equal to the amount of the unpaid withholdings. This civil penalty, referred to as the trust fund recovery penalty, may be imposed even if the individual uses the employment tax to pay other creditors or keep the business afloat. Individuals subject to these penalties include, but are not limited to, bookkeepers, managers, treasurers, and corporate officers. The Department assists the IRS to defend challenges to trust fund recovery penalty assessments, and to ensure that such assessments are collected.
In August 2015, a federal court in Michigan held that Eric Kus and Roger Byrne, the chairman and the president of an automobile interior trim manufacturer, were liable for unpaid employment taxes even though they did not know that the taxes were unpaid. The court found that they “recklessly disregarded known risks” that the employment taxes would not be paid because they relied on the company’s controller, who they knew had previously failed to pay employment taxes when they were due.
In July 2015, the Court of Federal Claims ruled that Douglas Waterhouse, a vice president and partial owner of a California glass design and installation company, was individually liable for unpaid employment tax based on his authority, and therefore responsibility, over the company’s finances, even though he was not involved in day-to-day operations. The court found that Waterhouse acted willfully because, despite knowledge of the outstanding employment tax liabilities, he chose to continue operating the business and sought payments for vendors and employees instead of the IRS.
“The American taxpayer should not be forced to subsidize businesses that refuse to comply with the tax laws,” said Acting Assistant Attorney General Ciraolo. “The Justice Department and the IRS will continue to identify, investigate, and hold accountable those individuals and businesses that willfully evade their employment tax obligations.”
For more information about civil and criminal employment tax enforcement efforts, visit the Tax Division’s website.
Jury Delivers Guilty Verdicts in Fraud Scheme to Secure Bailout FundsRead the Press Release
PHILADELPHIA – A federal jury today returned verdicts of guilty against Brian Hartline, 51, of Collegeville, PA, and Barry Bekkedam, 48, of Hobe Sound, FL, in a fraud conspiracy involving NOVA Bank. Hartline had served as President and Chief Executive Officer of the bank and Bekkedam had served as Board Chairman. Their scheme involved the Troubled Asset Relief Program (TARP) and was devised to defraud the government of more than $13 million. Both defendants were found guilty of conspiracy to defraud the United States, TARP fraud, and two counts of false statements to the federal government. U.S. District Court Judge C. Darnell Jones scheduled a sentencing date for July 21, 2016.
Bekkedam and Hartline, with others, formed NOVA Bank in 2002. Bekkedam also owned and operated a financial advisory company, Ballamor Capital Management, and advised Ballamor clients to invest in NOVA. But in 2008, NOVA faced risk of failure because of bad loans and investments. In October 2008, NOVA Financial Holdings, Inc., of Berwyn, Penn., the parent company of NOVA Bank, applied for approximately $13.5 million through the U.S. Department of the Treasury Troubled Asset Relief Program. In June 2009, NOVA Bank was approved to receive the TARP funds on the condition that the bank raised $15 million in additional, private capital.
Bekkedam and Hartline devised a scheme to make NOVA bank appear more financially sound than it was – that new money was being inevested in the bank. As part of the scheme, the defendants arranged for NOVA Bank to loan money to G.L., a Florida businessman, for G.L. to transfer to NOVA’s parent company so it would appear as though the bank had new capital from an outside investor. In fact, the “new money” investment was the bank’s own money.
On June 30, 2009, NOVA wired $5 million to G.L.’s bank account in Florida and, approximately two hours later, G.L. wired $5 million to an account used for investments in NOVA Financial Holdings, Inc. In October and December 2009, Bekkedam and Hartline convinced two others to make similar “investments” using loans from NOVA, in efforts to make NOVA appear more financially sound than it actually was. The defendants also told and directed employees to tell the U.S. Department of Treasury that NOVA had raised new capital when it had not. The defendants concealed the true purpose of the loan to G.L. and falsely stated the purposes of the other two loans.
The bank ultimately did not receive TARP funds and in October 2012, the bank failed and was closed by state and federal banking regulators.
The case was investigated by the Federal Bureau of Investigation, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Internal Revenue Service Criminal Investigations, the Federal Deposit Insurance Corporation Office of Inspector General, the Office of Inspector General of the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau. It is being prosecuted by Assistant United States Attorneys David Ignall and Jennifer Barry.
Jury Convicts Belleville Man of Producing Child PornographyRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced that late Tuesday morning, a federal jury in East St. Louis found Joseph E. Suggs, 41, of Belleville, Illinois, guilty of two counts of production of child pornography and one count of attempted production of child pornography.
Evidence at trial showed that on June 6, 2014, Suggs approached two juveniles, aged 13 and 16, in Bellevue Park and offered them money in exchange for nude photographs. Defendant was arrested by the Belleville Police Department. During a forensic examination of the camera he possessed at the time of his arrest, photos of the 16 year old juvenile’s genitalia were found. Sentencing has been scheduled for September 8, 2016 in front of the Chief Judge Michael J. Reagan. Suggs faces a minimum sentence of fifteen years in federal prison.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
The investigation into this crime was conducted by the Belleville Police Department and the United States Secret Service Criminal Investigative Division. The case was prosecuted by Assistant United States Attorneys Laura Reppert and Angi Scott.
Johnstown Man Admits Distributing CocaineRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., pleaded guilty in federal court to a charge of distribution of cocaine, United States Attorney David J. Hickton announced today.
Dorian D. Stephens, 29, of Johnstown, Pa., pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that on Nov. 18, 2014, Stephens distributed less than 500 grams of cocaine.
Judge Gibson scheduled sentencing for Aug. 25, 2016, at 10 a.m. The law provides for a total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force conducted the investigation that led to the prosecution of Stephens.
Jacksonville Sex Offender Sentenced to 10 Years in Federal Prison for Possession of Child PornographyRead the Press Release
Jacksonville, Florida – United States District Judge Timothy J. Corrigan has sentenced William Roland Baker (65, Jacksonville) to 10 years in federal prison for possessing child pornography. Baker was also sentenced to a term of 10 years of supervised release and ordered to pay $3,000 in restitution to two victims of his offenses. A federal jury found Baker guilty in November 2015. Baker is a registered child sex offender who was previously convicted of lewd and lascivious conduct with a child on November 22, 1995.
According to evidence presented during trial, in early 2013, an agent with the Florida Department of Law Enforcement was able to download several images and a video of child pornography over the Internet from a computer using an Internet Protocol address that was traced back to Baker’s Jacksonville residence. On May 29, 2013, a federal search warrant was executed at this residence, and law enforcement seized two laptop computers from Baker’s bedroom. A forensic examiner was able to recover images of child pornography from Baker’s computers, even though Baker had used an eraser program on the evening before the search. During an interview, Baker claimed that he did not download child pornography. However, a forensic analysis of his laptop computer showed that he had used particular terms to search for child pornography in a file sharing program. Baker’s computers contained at least 338 images depicting the sexual abuse of young children.
This case was investigated by the Florida Department of Law Enforcement and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
JFK Airport Cargo Handlers Arrested in Scheme to Steal Foreign Currency from Mail Carried on International FlightsRead the Press Release
A criminal complaint was unsealed today in federal court in the Eastern District of New York charging five former employees of Aircraft Service International Group (ASIG) at Terminal One of John F. Kennedy International Airport (JFK Airport), with conspiracy to steal United States Mail. Rickash Gobin, Fitzroy Ragbeer, Franklin Beresford, Pedro Lopez, Jr., and Nick Sadler, also known as “Nickeya Sadler” and “Nicky Sadler,” were arrested earlier today and their initial appearances are scheduled for this afternoon before United States Magistrate Judge Vera M. Scanlon at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Phillip R. Bartlett, Postal Inspector in Charge of the United States Postal Inspection Service’s New York Field Office.
As detailed in the criminal complaint, in a conspiracy spanning over four years, former ASIG cargo handlers Ragbeer, Beresford, Lopez, Jr., and Sadler agreed to steal mail from international flights arriving at and departing from Terminal One of JFK Airport, including Japan Airlines, Austrian Airlines, and LOT Polish Airlines flights. The cargo handlers targeted mail they believed to contain foreign currency, including Japanese Yen and Euros, and then exchanged the foreign currency at currency exchange businesses at JFK Airport, and at other financial institutions.
Gobin, a former manager for ASIG, allegedly not only failed to stop the theft of mail, but actively promoted it by assigning cargo handlers to flights where they could steal mail and demanding kickbacks of stolen currency in exchange.
“As charged, these cargo handlers abused their access to sensitive areas of JFK Airport to steal foreign currency from the mail and were aided by a manager who actively promoted their criminal conduct,” stated United States Attorney Capers. “Today’s arrests will serve as a warning that federal law enforcement authorities are committed to protecting the integrity of the mail and will hold accountable those that steal mail or attempt to profit from the theft of mail.”
“These defendants and their supervisor were entrusted with the security of the mail. They abused that trust when they stole foreign currency from the mail, violating the sanctity of the seal. Postal Inspectors and their law enforcement partners vigorously investigate and bring to justice those who steal US Mail,” stated Postal Inspector in Charge Bartlett.
Previously, on August 18, 2015, postal inspectors arrested six other defendants, including three former ASIG cargo handlers at Terminal One of JFK Airport, on charges that they conspired to steal from the mail and launder foreign currency. The case against those six defendants, captioned United States v. Janvier, et al., Docket No. 15-CR-461 (ARR), is pending before United States District Judge Allyne R. Ross.
The charges in the complaints are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant United States Attorney Ian C. Richardson.
The Defendants:
RICKASH GOBIN
Age: 41
Queens, New YorkFITZROY RAGBEER
Age: 58
Inwood, New YorkFRANKLIN BERESFORD
Age: 26
Brooklyn, New YorkPEDRO LOPEZ, JR.
Age: 34
Brooklyn, New YorkNICK SADLER, also known as “Nickeya Sadler” and “Nicky Sadler”
Age: 35
Rockaway Park, New YorkE.D.N.Y. Docket No. 16-M-392
Honduran National Sentenced for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MARCELO ORDONEZ-RIVAS, age 34, a citizen of Honduras, was sentenced today after previously pleading guilty to a one-count Indictment for illegal reentry of a removed alien.
U.S. District Judge Ivan L.R. Lemelle sentenced ORDONEZ-RIVAS to time served, one year of supervised release, and a $100 special assessment. ORDONEZ-RIVAS will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, ORDONEZ-RIVAS was found in the United States on December 25, 2014, after having been previously deported on May 9, 2009.
U.S. Attorney Polite praised the work of the United States Customs and Border Protection in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Hitachi Chemical Co. Ltd. to Plead Guilty for Fixing Price of Electrolytic CapacitorsRead the Press Release
Second Company to Plead Guilty in Ongoing Investigation
Hitachi Chemical Co. Ltd. will plead guilty for conspiring with competitors between 2002 and 2010 to fix prices for electrolytic capacitors sold to customers in the United States and elsewhere, the Department of Justice announced today.
“Hitachi Chemical subsidiaries and co-conspirators fixed the prices of capacitors, a fundamental component of widely used electronic products,” said Deputy Assistant Attorney General Brent Snyder. “This is the second guilty plea in this investigation, and we will continue to pursue companies and individuals that conspire to undermine competition for technology components of all shapes and sizes.”
“We will not tolerate the behavior of companies or individuals who attempt to profit unfairly from business practices that ultimately hurt our economy and the consumer,” said Acting Special Agent in Charge Bertram Fairries of the FBI’s San Francisco Division. “We will pursue and bring to justice those who commit these types of crimes.”
Electrolytic capacitors store and regulate electrical current in a variety of electronic products, including computers, televisions, car engine and airbag systems, home appliances and office equipment.
The one-count felony charge was filed today in the U.S. District Court of the Northern District of California in San Francisco. In addition to pleading guilty to that charge and paying a criminal fine, Tokyo-based Hitachi Chemical has agreed to cooperate in the department’s ongoing investigation. The plea agreement is subject to court approval.
On Jan. 21, 2016, NEC TOKIN Corp. pleaded guilty to participating in the same worldwide conspiracy from 2002 to 2013 and was sentenced to pay a fine of $13.8 million. On March 12, 2015, a grand jury indicted Takuro Isawa, a former Global Sales General Manager for one of the capacitor manufacturers, for his participation in the conspiracy.
The charge today results from a federal antitrust investigation being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office into price fixing, bid rigging and other anticompetitive conduct in the capacitor industry. Anyone with information related to the focus of this investigation should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at 415-553-7400.
Hartford Man Guilty of Witness Tampering Offenses Related to 2010 Murder, Planning of Second MurderRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that a federal jury in Hartford today found DOMINIQUE MACK, also known as “Lil Sweets,” 26, of Hartford, guilty of conspiring to commit witness tampering by murdering one individual and planning to murder a second individual. The trial before U.S. District Judge Michael P. Shea began on April 11.
“Together with our law state and local enforcement partners, we are committed to using the full weight of federal law to prosecute those individuals most responsible for violence in our inner cities,” stated U.S. Attorney Daly. “In an attempt to prevent his own apprehension, this defendant shot and killed Ian Francis. He then plotted to kill a second individual who he feared might be a witness against him. This was a particularly difficult prosecution that was superbly investigated. I commend the excellent work of our trial team, the FBI, the Northern Connecticut Violent Crimes Task Force, and the Hartford Police Department’s Major Crimes Division.”
According to the evidence at trial, on December 21, 2010, Ian Francis was shot multiple times while sitting in his vehicle on Sigourney Street in Hartford. Francis succumbed to his injuries on January 15, 2011. At the time, MACK, who had been charged as part of a multi-defendant federal drug conspiracy, was hiding out in an attempt to evade arrest. On June 15, 2011, law enforcement arrested MACK at an apartment on Vine Street in Hartford. A search of the apartment revealed a Ruger 9 millimeter semi-automatic pistol, which was subsequently determined to be the firearm that was used to murder Francis.
The investigation revealed that MACK conspired with Keronn Miller and others to murder Francis to prevent Francis from providing information to law enforcement about MACK’s whereabouts. Miller had lured Francis to the location on Sigourney Street knowing that the plan was to murder Francis when he arrived there.
On December 4, 2014, Miller, also known as “Fresh,” 25, of Hartford, pleaded guilty to aiding and abetting in the murder of Francis. He awaits sentencing.
Shortly after Miller’s guilty plea, the government received information about a plot to kill a witness for MACK’s upcoming trial. Tyquan Lucien, also known as “TQ” and “Frogger,” who had been arrested as part of this investigation and was incarcerated with MACK at a detention facility in Rhode Island, had told another inmate about a plan by Lucien and MACK to kill an individual who had been identified as a government witness in the case against Miller. On February 13, 2015, an undercover officer who was posing as someone who might be able to commit the murder met with Lucien in the visiting area of the detention facility. During the meeting, Lucien ordered the killing of the potential government witness and others, making throat-slashing motions to make his intent clear. Three days later, Lucien met with MACK and relayed to him the facts of the visit.
The jury found MACK guilty of two counts of conspiracy to commit witness tampering by committing first degree murder, an offense that carries a mandatory lifetime term of imprisonment. The jury also found MACK guilty of two counts of possession of a firearm by a previously convicted felon, an offense that carries a maximum term of imprisonment of 10 years.
The jury found MACK not guilty of two counts of tampering with a witness.
Judge Shea scheduled sentencing for July 25, 2016.
On August 24, 2015, Lucien pleaded guilty to conspiracy to commit witness tampering by first degree murder. He awaits sentencing.
This matter is being investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes and Gang Task Force and the Hartford Police Department’s Major Crimes Division. The case is being prosecuted by Assistant U.S. Attorneys Brian Leaming and Jennifer Laraia.
Harrisburg Couple Charged in Straw Purchase of FirearmRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal Grand Jury in Scranton has indicted Michael Miller and Janis Tolan with conspiracy to make a false statement in connection with the purchase of a firearm at a gun show in December 2015.
According to United States Attorney Peter Smith, the defendants purchased an AK 47 semi-automatic rifle from a licensed dealer at an event at the Farmshow Complex in Harrisburg. Miller allegedly chose the weapon and Tolan submitted the identification for the vendor and filled out the government form representing her as the purchaser, allegedly acting as a straw purchaser for Miller in violation of federal law.
This matter was investigated by the Pennsylvania State Police and the Federal Bureau of Investigation. Prosecution is assigned to Assistant U.S. Attorneys Christy Fawcett and Chelsea Schinnour.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is ten years, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Glenburn Man Sentenced to Two Years Probation for Theft of VA ShipmentRead the Press Release
Contact: Chris Ruge
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Chad Bitgood, 38, of Glenburn, Maine, was sentenced today in U.S. District Court by Magistrate Judge John C. Nivison to two years of probation for the theft of government property and attempted possession of a controlled substance. He was also ordered to pay a fine of $1000. The defendant pled guilty on January 26, 2016.
According to court records, on April 27, 2015, Bitgood was employed as a delivery truck driver for United Parcel Service (UPS), when he stole a package belonging to the Veterans Administration (VA) that he believed to contain narcotic medications. The package was being monitored by VA investigators. When confronted by investigators, Bitgood admitted he stole the package with the intention of consuming any narcotics inside.
The investigation was conducted by the U.S. Veterans Administration, Office of the Inspector General.
Former Scranton Resident Sentenced to 24 Months Imprisonment for Harboring Illegal AliensRead the Press Release
SCRANTON - The United States Attorney=s Office for the Middle District of Pennsylvania announced that Lihn Lam, age 45, formerly of Scranton, was sentenced today to 24 months imprisonment by U.S. District Court Judge Edwin M. Kosik, in Scranton, for conspiracy related to the harboring and transporting of illegal aliens.
According to United States Attorney Peter Smith, Lam and other individuals operated a business known as “Ready Management Services, Inc.” between 2007 and the present which provided illegal aliens as employees under a temporary labor contract and paid the illegal aliens cash payments “under the table” for work they performed.
Lam was indicted by a grand jury in Scranton in April 2014, as a result of an investigation by the U.S. Immigration and Customs Enforcement & Removal Operations, the Department of Health and Human Services, Office of the Inspector General; the Department of Labor, Office of Inspector General, Office of Racketeering and Fraud Investigations, and the Pennsylvania State Police. The case was prosecuted by Assistant United States Attorney Todd K. Hinkley.
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Former Saline Resident Pleads Guilty to Identity Theft and Wire FraudRead the Press Release
A former Saline man pleaded guilty today to identity theft and wire fraud, United States Attorney Barbara L. McQuade announced today.
United States Attorney McQuade was joined in the announcement by Jarod J. Koopman, Special Agent in Charge, Internal Revenue Service – Criminal Investigation.
Bradley Raymond Laboe, 54, a resident of Onsted, Michigan and previously of Saline, Michigan entered the guilty pleas before U.S. District Judge Victoria A. Roberts.
Laboe pleaded guilty to the charges in an Information that was filed earlier this month. According to the court document, Laboe stole personal information of approximately 77 elderly residents of Northern Ohio and used that stolen personal information to file fraudulent tax returns. Laboe used the personal information to electronically file 85 fraudulent tax returns with the IRS from his residence in Saline, Michigan. The fraudulent tax returns claimed earnings from forms W-2 and various Schedule A deductions and sought refunds of over a half million dollars. However, a majority of the victims were actually retired and receiving Social Security benefits. In furtherance of the scheme, Laboe opened several bank accounts and directed the fraudulent refunds to be electronically deposited into these accounts.
Laboe is scheduled to be sentenced on August 15 at 2:30 p.m. The maximum penalty for the wire fraud charge is 20 years imprisonment and/or a fine of $250,000 and the maximum penalty for the identity theft violation is 15 years imprisonment and/or a $250,000 fine.
“IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority,” said Special Agent in Charge Jarod J. Koopman. “Filing fraudulent tax returns in the names of other individuals not only results in a severe harm to those victims whose identities were stolen, but creates a significant monetary loss to the U.S. Treasury.”
This case was investigated by Special Agents of the Internal Revenue Service – Criminal Investigation and Assistant United States Attorney Ross MacKenzie prosecuted the case.
Former Reynoldsburg Police Officer Agrees to Plead Guilty to Civil Rights Charges, Federal Program TheftRead the Press Release
COLUMBUS, Ohio – Shane M. Mauger, 41, of Columbus, has agreed to plead guilty in U.S. District Court to conspiracy to deprive persons of civil rights and federal program theft.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, John F. Oleskowicz, Special Agent in Charge, U.S. Department of Justice Office of the Inspector General, Chicago Field Office, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA) and Ohio Attorney General Mike DeWine announced the case today.
According to the statement of facts, Mauger was employed as a police officer with the Reynoldsburg Division of Police during the time of his offenses. Since at least November 2006, Mauger conspired with at least one other person to steal money and property in his capacity as a police officer. The money and property he stole came from the execution of search warrants, the execution of consent searches and other police actions. In total, the conspirators stole between $150,000 and $250,000 of money and property.
Mauger and at least one other person also filed false paperwork as part of the conspiracy. Mauger caused search warrant affidavits to be submitted to judges, knowing the affidavits contained false statements. For example, Mauger caused an affidavit to be filed that stated marijuana had been found in a trash pull at a residence, which he knew that in fact no marijuana had been found. He then participated in the execution of a resulting search warrant, which he knew was based on false information. Mauger also conspired with at least one other person to cause police reports to underreport how much money had been found in search warrants. The police reports excluded the amount of money the conspirators unlawfully seized.
By stealing money and property and by causing false statements to be made in affidavits in support of search warrants, Mauger oppressed persons’ Fourth and Fourteenth Amendment right to be free from unreasonable searches and seizures and their Fourteenth Amendment right not to be deprived of property without due process of law.
Each of the crimes carries a potential maximum sentence of 10 years in prison.
An arraignment hearing is yet to be scheduled in U.S. District Court.
Acting U.S. Attorney Glassman commended the investigation of this case by the FBI, Ohio Bureau of Criminal Investigation (BCI), Department of Justice OIG and DEA and Assistant United States Attorneys Peter K. Glenn-Applegate, Salvador A. Dominguez, and Jessica W. Knight, who are representing the United States in this case.
Florida Seafood Company Sentenced in Federal Court for Violating the Lacey Act for Falsely Labeling SalmonRead the Press Release
UpRiver Aquaculture, Inc., a/k/a “MKG Provisions, Inc. (MKG),” a Florida seafood company, located in Miami, Florida, was sentenced by U.S. District Court Judge Federico A. Moreno for falsely labeling salmon, in violation of the Lacey Act.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Tracy Dunn, Assistant Director, National Oceanic and Atmospheric Administration (NOAA), Office of Law Enforcement (OLE), made the announcement.
MKG previously pled guilty to a single count information, which charged the company with violating the Lacey Act by falsely labeling 286 cases of Chilean-imported farmed salmon as a “product of Scotland,” in violation of Title 16, United States Code, Sections 3372(d)(1) and 3373(d)(3)(A). The falsely labeling of fish, and other wildlife, is prohibited under the Lacey Act, 16 U.S.C. § 3372(d)(1). The Lacey Act, in pertinent part, makes it unlawful for a person to falsely identify any fish that has been, or is intended to be, imported, sold, purchased, or received from any foreign country or transported in interstate or foreign commerce. MKG was sentenced to three years of probation and ordered to pay a $50,000 fine. At sentencing, the court advised MKG’s General Manager, who appeared as the representative of the defendant, that the probationary period would also serve to provide oversight of the company’s implementation of a government-required compliance plan to prevent a recurrence of the offense.
According to court documents and information presented during the sentencing hearing in approximately December 2012, MKG received a shipment of approximately 286 cases of salmon at its Miami facility. The shipment was accurately identified in applicable business and importation related records supplied to MKG, as well as records generated internally by MKG, as a product of Chile and originating from Chile. MKG, acting through its employees and in connection with its business relationship with a client, St. James Smokehouse, Inc., processed, smoked, and repackaged the salmon into bags provided to MKG by St. James Smokehouse which identified the salmon as a product of Scotland. The falsely labeled salmon was intended for wholesale distribution and sale by St. James Smokehouse and was eventually sold to consumers through various retailers to which St. James Smokehouse had sold the salmon.
Mr. Ferrer commended the investigative efforts of the NOAA Office of Law Enforcement. This case was prosecuted by Assistant U.S. Attorney Peter Outerbridge.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
Federal Grand Jury Indicts Five Current and Former El Paso Independent School District Employees for Roles in Fraud SchemeRead the Press Release
In El Paso, a federal Grand Jury has indicted five individuals including 50–year-old former El Paso Independent School District (EPISD) Associate Superintendent Damon Murphy, in a scheme to defraud the U.S. Department of Education (DOE) by artificially inflating state and federal student accountability scores announced United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Douglas E. Lindquist, El Paso Division; and, U.S. Department of Education Inspector General Kathleen S. Tighe.
A six-count federal grand jury indictment unsealed today charges Murphy; 52-year-old former Austin High School (AHS) Principal John Tanner; and, 51-year-old former AHS Assistant Principal Mark Phillip Tegmeyer with one count of conspiracy to defraud the United States; one count of conspiracy to commit mail fraud; and, one substantive count of mail fraud. The indictment also charges Tanner, Tegmeyer, 53-year-old former AHS Assistant Principal Diane Thomas, and 48-year-old former AHS Assistant Principal Nancy Love, with one count of conspiracy to retaliate against a witness. The indictment also charges Love with one count of making a false declaration before a Grand Jury.
The indictment alleges a scheme on the part of the defendants between February 2006 to September 2013 to violate the No Child Left Behind (NCLB) portion of the federal Elementary and Secondary Education Act (ESEA) in order to keep EPISD compliant with program requirements.
According to the indictment, federal student performance accountability measure(s) including Federal Adequate Yearly Progress (AYP) standards for accountability are mandated by the ESEA. The indictment alleges that fraudulent misrepresentations regarding EPISD's AYP were submitted to the Texas Education Agency and the DOE in order to make it appear as though EPISD was meeting and exceeding AYP standards. In the 2008/2009 school year, Murphy allegedly gave high school principals, including Tanner, “marching orders” to “put up barriers” to prevent 9th grade Limited English Proficiency (LEP) students and others who they perceived would perform poorly on the TAKS test from going on to the 10th grade. Later, Murphy and others implemented a plan using partial course credits for the 10th grade to reclassify and promote those held-back students to the 11th grade thereby circumventing all mandated testing/accountability procedures including the 10th grade TAKS test.
The indictment also alleges that throughout the 2009-2010 school year, Tanner, assisted by Tegmeyer, directed an AHS administrator to change previously properly marked absences of students to make it appear as if the student were present on days designated by the State to measure attendance rates. Tanner’s action resulted in approximately 11,000 fraudulent entries regarding absences of AHS students. The indictment further alleges that in the 2010/2011 school year, Tegmeyer instructed an AHS employee to withdraw students from the school without the students’ parents’ consent or notification to benefit EPISD’s compliance requirements.
The indictment also alleges that Tanner, Tegmeyer, Thomas and Love conspired with each other to harm the personal and professional reputations of two EPISD teachers for providing truthful information to FBI agents. The alleged purposes of their scheme included the termination of both teachers’ EPISD employment as well as any future employment; and, coaching a former student into falsely pressing criminal charges against one of the instructors. Love is alleged to have made a false statement during a Grand Jury proceeding on September 26, 2013. According to the indictment, Love told the grand jury that the former student sought her out for advice and help with pressing charges against the teacher, when in fact, it was Love who approached a relative of the former student to make contact and convince the student to press charges against the teacher.
“This indictment makes serious allegations that school officials manipulated and falsified crucial information about students to evade and defeat federal education standards. It is of the greatest importance to the community that these officials be called to account in order to maintain public confidence in the education system,” stated United States Attorney Richard L. Durbin, Jr.
All have been released on bond pending trial. The defendants face up to five years in federal prison upon conviction of conspiracy to defraud the Government; up to 20 years in federal prison upon conviction of conspiracy to commit mail fraud; up to 20 years in federal prison upon conviction of mail fraud; up to ten years in federal prison for conspiracy to retaliate against a witness; up to five years in federal prison for false declaration before a Grand Jury; and, up to five years in federal prison for making a false statement to a federal agent.
“These newly charged EPISD administrators engaged in criminal conduct and brazen efforts to manipulate testing populations, graduation rates, and attendance figures. The message should be loud and clear that the FBI, American people, and citizens of El Paso will not tolerate the manipulation and corruption of our public educational system,” stated FBI Special Agent in Charge Douglas E. Lindquist, El Paso Division. “The involved teachers and administrators were trusted with educating and looking out for the best interests of students, as opposed to spending countless hours scheming and devising ways to defraud educational standards.”
“These educators have been indicted for cheating the most innocent of victims - El Paso school children -- as well as America’s taxpayers whose hard earned dollars fund vital education programs,” said Neil Sanchez, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s South Central Regional Office. “As the office responsible for identifying waste, fraud, and abuse involving Department of Education funds and programs, ensuring that those who abuse these funds or game the system for their own selfish purposes are stopped and held accountable for their criminal actions is a big part of our mission.”
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Department of Education Office of Inspector General. Assistant United States Attorneys Debra Kanof and Robert Almonte are prosecuting this case on behalf of the Government.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Eleven Individuals Charged in A Major Cocaine Trafficking Ring in RochesterRead 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 11 individuals were charged in two complaints with conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine and crack cocaine. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life and an $8,000,000 fine.
Named in the complaints are: • Dennis Smith, aka “Fish”
• Darren Smith, aka “Fat Boy”
• Kaleaf Ball, aka “Leaf”
• Reginald Streeter, aka “Street”
• Juan Sampel
• Angel Ocasio
• Jose Quintana
• Luz Morales, aka “Leida”
• Jason Gibson
• Kelly Shanks
• Jose Gonzalez“This represents yet another important success in our continuing efforts to protect the public from the twin dangers of firearms and large scale narcotics trafficking,” said U.S. Attorney Hochul. “As this case demonstrates, law enforcement stands shoulder to shoulder in our commitment to bring to justice, all who engage in such dangerous criminal conduct.”
Assistant U.S. Attorney Jennifer M. Noto, who is handling the case, stated that according to the complaints, from 2015 through April 26, 2016, the defendants operated an ongoing drug trafficking conspiracy in the City of Rochester. Members of this conspiracy were responsible for the importation and distribution of large quantities of cocaine and cocaine base in the Rochester area. During the investigation, law enforcement officers conducted controlled purchases of cocaine, utilized federal wire taps to intercept electronic and wire communications over various cellular telephones utilized by members of the conspiracy, and conducted search warrants on multiple U.S. Priority Mail parcels containing cocaine and cash proceeds from the sale of cocaine.
The lengthy investigation culminated in the arrest of the 11 individuals named in the complaints and the execution of multiple search warrants. During the execution of the search warrants, law enforcement officers seized approximately five kilograms of cocaine and over 100 grams of cocaine base; quantities of heroin and marijuana; more than $200,000 in cash; and several firearms. Five of the individuals named in the complaint have one or more prior drug felony convictions.
The complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Rochester Police Department, under the direction of Chief Michael Ciminelli, the Greater Rochester Area Narcotic Enforcement Team, under the direction of Lt. Dave Gebhardt, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge.
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.El Dorado County Man Found Guilty of Failing to Surrender for Service of SentenceRead the Press Release
SACRAMENTO, Calif. — Cesar Caballero, 46, of Diamond Springs, was found guilty on Tuesday after a two-day jury trial for failing to surrender for service of sentence, United States Attorney Benjamin B. Wagner announced.
According to court documents, on August 30, 2011, Caballero was convicted of obstruction of mail for submitting Official Federal Mail Forwarding Change of Address Order forms to the U.S. Postal Service for the purpose of diverting mail addressed to the Shingle Springs Band of Miwok Indians to himself. After he was sentenced, Caballero appealed, and the Ninth Circuit affirmed his conviction on two of the three counts against him. He was resentenced on June 29, 2015, to a sixty day term of incarceration. He was ordered to surrender to begin serving his sentence by September 8, 2015.
As the evidence at trial demonstrated, Caballero failed to surrender as ordered on September 8, 2015, or any day thereafter. He was subsequently arrested by the El Dorado County Sheriff’s Office on February 28, 2016.
This case is the product of an investigation by the United States Marshals Service, with the assistance of the United States Postal Inspection Service, the Federal Bureau of Prisons, and the El Dorado County Sheriff’s Office. Special Assistant United States Attorneys Elliot Wong and Benjamin Nelson prosecuted the case.
Caballero is scheduled to be sentenced on May 17, 2016, by United States District Judge John A. Mendez. Caballero faces a maximum statutory penalty of one year in prison, a $100,000 fine, and a one-year term of supervised release. The actual sentenced will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Eight Missouri Residents Indicted in $6.6 Million K2 Conspiracy in Callaway CountyRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that six Fulton, Mo., individuals, along with a Columbia, Mo., man, a Jefferson City, Mo, man and five individuals in the Sacramento, Calif., area, have been indicted by a federal grand jury for their roles in a $6.6 million mail fraud conspiracy that distributed synthetic marijuana, also known as K2, at various retail locations in Callaway County, Mo.
Jason Lee Houston, 36, Shawn Michael Browning, 25, Timothy Christopher Sandfort, 30, Brandon Derek Rader, 31, Joshua Adam Sheets, 30, and Dara Leanne Shirley, 30, all of Fulton; Casey Dewayne Miller, 32, of Columbia; Billie L. Bruce, 36, of Jefferson City; Raja Amer Nawaz, also known as “Rex,” 41, a citizen of the Islamic Republic of Pakistan, and his wife, Sheila Marie Nawaz, 39, both of Roseville, Calif.; Michael James Butler, 39, of Sacramento, Calif.; Curtis Whayne Gonzales, 55, of North Highlands, Calif.; and Aleksandr Polyanskiy, 24, of Citrus Heights, Calif.; were charged in a 14-count indictment returned under seal by a federal grand jury in Jefferson City on Wednesday, April 20, 2016.
That indictment was unsealed and made public upon the arrests of Browning, Sandfort, Rader, Sheets and Shirley yesterday. They will have an initial court appearance today. Arrest warrants remain outstanding for Houston, Miller and Bruce. Raja Nawaz, who was arrested on April 13, 2016, remains in federal custody. Sheila Nawaz, Butler, Gonzales and Polyanskiy will self-surrender to authorities in California.
The federal indictment replaces a criminal complaint that was filed against Raja Nawaz on April 12, 2016, and includes additional charges and defendants.
The indictment alleges that all of the defendants participated in a conspiracy to defraud the government and the public from Dec. 18, 2012, to July 16, 2015, by selling synthetic marijuana under various trade names as “incense,” “aroma therapy” or “potpourri” that were “not for human consumption” when, in truth and fact, these products were drugs intended for human consumption as a drug.
According to the indictment, hundreds of shipments of synthetic marijuana were made to Callaway County. Synthetic marijuana was allegedly sold at Inscentives Resale, with one location in Auxvasse, Mo., and two locations in Fulton, and at S&J Smoke Shop in Holts Summit, Mo.
According to the affidavit filed in support of the original criminal complaint, these retail establishments grossed approximately $6,656,843 from the sale of approximately 799 kilograms of synthetic marijuana.
Undercover purchases of synthetic marijuana allegedly were made by law enforcement officers from these retail establishments. On numerous occasions, the affidavit says, law enforcement officers seized synthetic marijuana from individuals who had just left one of these retail establishments. Additionally, law enforcement officers responded to reported overdoses on synthetic marijuana that involved subjects who had purchased these substances from these retail establishments.
Callaway County Businesses
Houston, Sandfort, Rader, Shirley and Miller operated three businesses: Inscentives Resale (with locations in Auxvasse and Fulton), from which they allegedly distributed synthetic marijauna. The federal indictment alleges that at various times Inscentives Resale, Inscentives Auto and First Stop Last Stop Pawn and Aromatherapy purchased synthetic marijuana from Raja Nawaz, Butler, Gonzales, Polyanskiy and others.
Browning, Sheets and Bruce operated Esscentials Buy, Sell and Trade (also known as Esscentials, or Esscentials Resale) and S&J Tobacco (also known as J&L Tobacco), which purchased synthetic marijuana from Raja Nawaz, Polyanskiy and others and sold synthetic marijuana from locations in Holts Summit.
Houston, Sandfort, Rader, Shirley, Miller, Browning, Sheets and Bruce also periodically supplied each other with packages of synthetic marijuana for resale.
According to the indictment, Houston, Sandfort, Rader, Shirley, Browning and Sheets paid at least $2,866,676 to Raja Nawaz, Polyanskiy, Butler, Gonzales and others for synthetic marijuana between Jan. 16, 2013, and April 18, 2015.
Raja Nawaz (assisted by Polyanskiy) allegedly shipped synthetic marijuana from California and Nevada via FedEx and UPS to Houston, Sandfort, Rader, Browning, Sheets, Shirley, Miller, Bruce and others at least 190 times between Sept. 4, 2013, and Dec. 24, 2014.
Butler and Gonzalez allegedly shipped synthetic marijuana from California via UPS to Houston, Sandfort, Rader, Shirley and Miller at least 37 times between June 24, 2014, and April 14, 2015.
Polyanskiy allegedly shipped synthetic marijuana from Nevada via UPS to Houston, Sandfort, Rader, Browning, Sheets, Shirley, Miller and Bruce at least 24 times from Jan. 8 to April 14, 2015.
Additional Drug-Trafficking Counts
The federal indictment also alleges that all of the defendants participated in two additional conspiracies – a conspiracy to distribute controlled substances and a conspiracy to distribute controlled substance analogues.
In addition to the three conspiracy counts, the federal indictment charges Browning, Sheets and Bruce together in one count of aiding and abetting each other and others to distribute controlled substances.
Browning, Sheets and Bruce are also charged together in count of aiding and abetting each other and others to possess controlled substances with the intent to distribute.
Houston, Sandfort, Rader and Miller are also charged together in one count of aiding and abetting each other and others to distribute controlled substances.
Houston, Sandfort, Rader and Miller are also charged together in one count of possessing controlled substances with the intent to distribute.
Houston, Sandfort and Rader are also charged together in three counts of maintaining a place for the purpose of storing and distributing controlled substances at Inscentives Resale, with one location in Auxvasse and two locations in Fulton. Browning and Sheets are also charged together in one count of maintaining a place for the purpose of storing and distributing controlled substances at S&J Smoke Shop in Holts Summit.
Money Laundering Counts
Raja Nawaz, Butler, Gonzales, Houston, Browning, Sandfort, Sheets, Rader and Shirley are also charged together in one count of conspiracy to commit money laundering. They allegedly conspired to conduct financial transactions that involved the proceeds of illegal activity in order to promote the criminal activity and to conceal the nature of the proceeds.
In addition to the money-laundering conspiracy, Raja Nawaz, Houston, Sandfort, Rader and Shirley are charged together in two counts of money laundering.
The indictment alleges that Raja Nawaz engaged in numerous financial transactions through which he transmitted approximately $387,114 in proceeds from the distribution of synthetic marijuana from the United States to the Islamic Republic of Pakistan in order to conceal these proceeds.
California Businesses
The federal indictment alleges that Raja Nawaz utilized his businesses (MOJO Distribution, LLC, Aromatic Novelties, Inc., and Top Notch Novelties, Inc.) to send FedEx packages containing synthetic marijuana to wholesale customers, including Butler and Gonzales.
Polyanskiy allegedly assisted Raja Nawaz in the distribution of synthetic marijuana by fulfilling orders placed by customers in the Western District of Missouri and elsewhere. Polyanskiy also established ANOP, Inc., (in which Raja Nawaz was a silent partner) to send UPS packages containing synthetic marijuana to customers in the Western District of Missouri and various other locations in the United States.
Sheila Nawaz was the president of Ecomm Organix, Inc., which allegedly purchased synthetic marijuana from MOJO Distribution and then distributed it to retail customers throughout the United States, including the Western District of Missouri. Ecomm Organix and MOJO Distribution shared websites and telephone numbers used to market synthetic marijuana. Employees of MOJO Distribution were paid by Ecomm Organix. Ecomm Organix employees worked for MOJO Distribution.
Butler and Gonzalez worked for MOJO Distribution. They also established Butler-Whayne Industries, LLC, which allegedly sent UPS packages containing synthetic marijuana to wholesale customers, including Inscentives Resale in Auxvasse and Fulton, and Esscentials/S&J Tobacco in Holts Summit.
Forfeiture Allegations
The indictment also contains several forfeiture allegations, which would require the defendants to forfeit to the government any property used to commit the alleged offenses or any property derived from the proceeds of the alleged offenses, including a $6,656,843 money judgment, which represents the amount of money involved in the conspiracy to defraud the government and the public, and a $321,585 money judgment, which represents the amount of money involved in the conspiracy to distribute controlled substances. Forfeitures would also include the property of Inscentives Resale at 601 Airway Dr., Fulton, as well as $3,070 seized by law enforcement officers from Inscentives Resale, $9,581 seized by law enforcement officers from S&J Tobacco, $3,028 seized by law enforcement officers from Browning and various bank accounts.
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 Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the DEA Task Force – Jefferson City, DEA Sacramento, Calif., DEA Reno, Nev., IRS-Criminal Investigation, the Missouri State Highway Patrol, the MUSTANG Drug Task Force, the Callaway County, Mo., Sheriff’s Department, the Cole County, Mo., Sheriff’s Department, the Jefferson City, Mo., Police Department, the Fulton, Mo., Police Department and the Holts Summit, Mo., Police Department.
East Alton Man Charged in Making False Bomb Threats to Alton Home Depot StoreRead the Press Release
On April 26, 2016, Jeremy R. Colwell, a thirty-three year old man from East Alton, Illinois, was charged by complaint in federal district court, in East St. Louis, for three counts of Conveying a False Threat, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Colwell faces a potential sentence of up to 5 years’ in prison, and a fine of up to $250,000, not more than 3 years’ of supervised release after his prison term, and a mandatory special assessment of $100 per count.
Court proceedings revealed that on February 16, 2016, April 2, 2016, and April 4, 2016, Colwell is alleged to have faxed messages to the Alton Police Department, local news outlets, Home Depot in Alton, Illinois, as well as the FBI, threatening the detonation of a bomb at Home Depot in Alton, Illinois.
A complaint is a formal charge against a defendant that is comprised of the essential facts constituting the offense charged. Under the law, a defendant is presumed to be innocent of a charge until proven guilty beyond a reasonable doubt to the satisfaction of a jury.
This case is being investigated by the Federal Bureau of Investigation and is assigned to Assistant United States Attorney Daniel T. Kapsak for prosecution.
District Court Enters Permanent Injunction Against San Francisco Rice Noodle Company and Senior Officers to Stop Distribution of Adulterated ProductsRead the Press Release
The U.S. District Court for the Northern District of California entered a consent decree of permanent injunction against Kun Wo Food Products Inc. (Kun Wo) and the firm’s co-owners, Zi Xing Liu and Zi Cheng Liu, to prevent the distribution of adulterated rice noodles, the Department of Justice announced today.
The department filed a complaint in the Northern District of California on April 12, at the request of the U.S. Food and Drug Administration (FDA). The complaint alleged that the defendants have a history of processing rice noodles under insanitary conditions. As detailed in the complaint, the company prepared, processed, manufactured, packed, held and distributed rice noodles to local customers in the San Francisco area. The complaint alleged that Zi Xing Lui has ultimate authority over all of the firm’s operations, including financial expenditures, production processes and employee supervision and that Zi Cheng Liu shares responsibility with Zi Xing Liu for the firm’s production processes and is also responsible for product distribution.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and to be bound by a permanent injunction. As part of the settlement, the defendants represented that they have ceased receiving, preparing, processing, packing, holding, or distributing any type of food at or from any location. Under the permanent injunction, if the defendants seek to resume such activity, they must first inform FDA, take specific steps to improve the firm’s manufacturing practices, and then receive written approval from FDA.
“Kun Wo Food Products was repeatedly informed that the sanitation practices at its facility were deficient,” said Principal Deputy Assistant Attorney Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to aggressively pursue food companies and individuals responsible for the production of food under insanitary conditions in order to protect the American people and make sure America’s food supply is safe.”
According to the complaint, a 2016 inspection by FDA documented that defendants failed to take all necessary precautions to prevent food handlers from contaminating food with microorganisms or foreign material. For example, as alleged in the complaint, an employee used the vat containing rice soaking for the day’s production to rinse her bare hands after handling equipment. In addition, as noted in the complaint, during a 2015 inspection, FDA documented employees using the vat containing soaking rice to rinse their bare hands, rags and buckets after using the rags and buckets to clean the production area with detergent. The complaint also alleged that employees touched dirty equipment and then used their bare, unwashed hands to grab rice noodles for packaging. The complaint further alleged that during the most recent inspection, FDA found that machines used to steam, cool, slice and weigh the rice noodles were covered in grease and grime, causing the first sheet of rice noodles coming off the production machine to contain particulate matter.
According to the complaint, the most recent inspection also found that condensate dripped from a hose suspended from the ceiling into the vat containing soaking rice. Also, as noted in the complaint, condensate dripped from a copper pipe, with a green and black film on its surface, into a grinder containing rice for processing.
Further, the complaint alleged that during the 2015 inspection, FDA swabbed various surfaces in the firm’s production area, including the buckets used during processing and found the presence of bacterial contamination at the facility -- L. mono was identified on the exterior of one bucket and L. seeligeri was found on the exterior of another bucket. The complaint alleged that the firm’s employees routinely submerged these buckets in the water that contained soaking rice.
L.mono is the bacterium that causes the disease listeriosis. The most serious forms of listeriosis can cause meningitis and septicemia. L. seeligeri does not cause disease; however, it is a marker indicating that conditions are favorable for the survival and growth of L. mono.
Under federal law, food processors are required to comply with current good manufacturing practices provided by FDA regulation. Failure to follow such regulations renders food adulterated under the Federal Food, Drug, and Cosmetic Act. In this matter, the complaint alleged that defendants violated the law by causing food to become adulterated while it was held for sale after shipment of one or more of its components in interstate commerce.
The government is represented by trial attorney Kathleen Konopka of the Civil Division’s Consumer Protection Branch, with the assistance of Senior Counsel Claudia Zuckerman of the U.S. Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
Discard Unwanted Drugs: DEA’s Pill Take Back DayRead the Press Release
CEDAR RAPIDS – On Saturday, April 30th, from 10 a.m. to 2 p.m., the Drug Enforcement Administration (DEA) will provide the public the opportunity to prevent pill abuse and theft by ridding their homes of potentially dangerous expired, unused, and unwanted prescription drugs. This is the eleventh opportunity in six years that DEA has offered this free service.
The American Society of Addiction and Medicine reported in a 2016 opioid addiction factsheet that drug overdose is the leading cause of accidental death in the U.S. with 47,055 lethal drug overdoses in 2014. Opioid addiction is driving this epidemic, with 18,893 overdose deaths related to prescription pain relievers, and 10,574 overdose deaths related to heroin in 2014. For opiate-based drugs – both heroin and prescription pain-killers – a high potential for addiction exists no matter the type of drug. Eastern Iowa has experienced a rash of recent heroin overdoses and deaths.
United States Attorney Kevin W. Techau stated, “The Drug Enforcement Administration’s “Pill Take Back Day” has been very successful and offers an anonymous and free opportunity to rid our medicine cabinets of unwanted pills.” Techau went on to add, “The threat of prescription drug abuse leading to more serious drug addictions is real. This Saturday is a day our community should come together to fight the opioid and heroin epidemic crossing our nation and impacting our citizens.”
Last September, Americans turned in 350 tons (over 702,000 pounds) of prescription drugs at more than 5,000 sites operated by the DEA and more than 3,800 of its state and local law enforcement partners. Overall, in its 10 previous Take Back events, DEA and its partners have taken in over 5.5 million pounds—more than 2,750 tons—of pills.
This initiative addresses a vital public safety and public health issue. Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. In addition, Americans are now advised that their usual methods for disposing of unused medicines—flushing them down the toilet or throwing them in the trash—both pose potential safety and health hazards.
DEA’s pill drop off sites available on April 30th can be accessed through the Iowa Governor’s Office on Drug Control Policy website at: http://www.iowa.gov/odcp/. Under the heading “Important Information,” click on Prescription Drug Disposal and link to its site identified under the heading “Take Back Events.” DEA cannot accept liquids or needles or sharps, only pills or patches. The service is free and anonymous, no questions asked.
Those unable to participate next Saturday are offered year around opportunities in Iowa to discard unused, expired and unwanted medications at locations around the state. To find those locations, access the website above and select the same link. Iowa’s year around “Take Back Kiosks” link displays a map of disposal locations.
For more information about the disposal of prescription drugs or about the April 30 Take Back Day event, go to the DEA Diversion website. You may also follow the activities and events of the Eastern Iowa Heroin Initiative on Facebook.
Follow the office on Twitter @USAO_NDIA.
US Attorney Kevin Techau with Assistant USA Pat Reinert and CRPD Officer Al Fear who heads up the Eastern Iowa Heroin Initiative standing by a pill drop box at the Cedar Rapids Police Department.
Department of Justice designates inagural National Reentry WeekRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that the U.S. Attorney’s Office will hold a special event at the Henry House in Anchorage on Wednesday, April 27, as part of National Reentry Week. As part of the Obama Administration’s commitment to strengthening the criminal justice system, the Department of Justice designated the week of April 24-30, 2016, as National Reentry Week.
Housing is a key challenge that returning citizens face when they are released from prison back to their communities in Alaska. Henry House provides safe, alcohol and drug free, transitional housing to reentrants and others in downtown Anchorage. This will be a volunteer project at Henry House to assist with basic maintenance projects to brighten Henry House’s common areas. The U.S. Attorney’s Office has also invited the United States District Court, the United States Probation Office, and the Federal Public Defenders to participate.
Each year, more than 600,000 citizens nationwide return to our neighborhoods after serving time in federal and state prisons. Another 11.4 million individuals cycle through local jails. And nearly one in three Americans of working age have had some sort of encounter with the criminal justice system — mostly for relatively minor, non-violent offenses, and sometimes from decades in the past. In Alaska, there were 12,590 citizens released from state custody and 182 released from federal custody in 2015. The long-term impact of a criminal record prevents many people from obtaining housing, employment, higher education, and credit — and these barriers affect returning individuals even if they have turned their lives around and are unlikely to reoffend.
As part of National Reentry Week, Attorney General Loretta E. Lynch Monday in Philadelphia announced the “Roadmap to Reentry,” the Department’s comprehensive vision to reduce recidivism through reentry reforms at the Federal Bureau of Prisons (BOP). These efforts will help those who have paid their debt to society prepare for substantive opportunities beyond the prison gates, promote family unity, contribute to the health of our economy, advance public safety and sustain the strength of our communities.
The principles outlined in the “Roadmap to Reentry” are aligned with the work of the Federal Interagency Reentry Council which has been working since its creation five years ago to reduce recidivism and improve housing, employment, education, health, and child welfare outcomes.
As part of the national effort to increase awareness about these challenges, the Attorney General also sent a letter to governors with a request to permit citizens returning to their communities to exchange their Bureau of Prisons inmate identification card and authenticated release documentation for state identification, or for these documents to satisfy the primary identification document requirement for state-issued identification. Without government-issued identification, men and women leaving correctional facilities face extreme challenges securing employment and housing, registering for school, opening bank accounts as well as accessing other benefits, such as health care, that are critical to successful reintegration.
“In Alaska, we face similar challenges for our population attempting to return to our communities,” said U.S. Attorney Loeffler. “Housing, access to health care, and jobs are key components to successful reentry. In order to aid in successful transitions with the extra goal of increasing public safety and reducing recidivist crime, we need to step up our public, private partnerships and come up with creative solutions to address some of these needs.”
“Too often, justice-involved individuals who have paid their debt to society confront daunting obstacles to good jobs, decent housing, adequate health care, quality education, and even the right to vote,” said Attorney General Lynch. “National Reentry Week highlights the many ways that the Department of Justice – and the entire Obama Administration – is working to tear down the barriers that stand between returning citizens and a meaningful second chance – leading to brighter futures, stronger communities, and a more just and equal nation for all.”
Leadership from across the Administration will be traveling around the country to make policy announcements in support of National Reentry Week. They will also be encouraging federal partners and grantees to work closely with stakeholders like federal defenders, legal aid providers and other partners across the country to increase the impact of these efforts. National Reentry Week events are being planned in all 50 states, the District of Columbia, Puerto Rico and the Virgin Islands. U.S. Attorney’s Offices alone are hosting over 200 events and BOP facilities are holding over 370 events.
Additional Resources:
National Reentry Week Webpage
DEA’s National Prescription Drug Take-Back Day Is Saturday April 30thRead the Press Release
Boston, MA – During the last and 10th National Prescription Drug Take-Back Day the New England Field Division over the course of four hours collected 67,107 pounds of expired, unused and unwanted prescription drugs at 596 collection sites throughout New England. The U.S. Drug Enforcement Administration (DEA) is continuing its efforts to take back unused, unwanted and expired prescription medications. The DEA invites the public to bring their potentially dangerous, unwanted medicines to one of the hundreds of collection sites all over New England. Many local Police Departments across Massachusetts, Connecticut, Rhode Island, New Hampshire, Maine and Vermont have drop off receptacles or kiosk that is secured in the lobby of their Police Departments so that the public can drop off unused, unneeded, and expired prescription medications 7 days a week throughout the year with no questions asked in an anonymous manner. There will also be numerous collection sites all over New England on April 30, 2016 in some Town Halls, Senior Centers, Community Centers and pharmacies. The public can find a nearby collection site by visiting www.dea.gov clicking on the “Got Drugs” icon, and entering the zip code into the search window, or they can call 800-882-9539.
All across America and especially here in New England we are experiencing an epidemic of addiction, overdose and death due to abuse of prescription drugs, particularly opioid painkillers. 6.5 million Americans abuse prescription drugs, according to the most recent National Survey on Drug Use and Health, which is more than abuse cocaine, heroin, and hallucinogens combined.
"Many Americans are not aware that medicines which languish in home cabinets are highly vulnerable to diversion, misuse, and abuse," said DEA Special Agent in Charge Michael J. Ferguson. "Rates of prescription drug abuse in the U.S. are at alarming levels, as are the number of accidental poisoning and overdoses due to the illegal use of these drugs. Please take the time to clean out your medicine cabinet and make your home safe from drug theft and abuse."
Eric Miller, the United States Attorney for the District of Vermont, added, “It is no secret that for many people, opiate addiction begins with the misuse of prescription pain medication. By properly disposing of unused prescription drugs, every Vermonter can do his or her part in keeping our communities safe.”
Drug overdoses are now the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms. The removal from homes of unwanted prescription pills that can be abused, stolen or resold is an easy way to help fight the epidemic of substance abuse and addiction.
DEA’s National Prescription Drug Take-Back Day Is SaturdayRead the Press Release
SACRAMENTO, Calif. – After collecting and destroying 5.5 million pounds—2,762 tons—of unused prescription drugs in the past five years, the U.S. Drug Enforcement Administration is continuing its efforts to take back unused, unwanted and expired prescription medications. The DEA invites the public to bring their potentially dangerous, unwanted medicines to one of over 5,000 collection sites around the country that are manned by more than 3,800 of DEA’s tribal and local law enforcement partners. This service is free of charge, with no questions asked.
The public can find a nearby collection site by visiting www.dea.gov, clicking on the “Got Drugs?” icon, and entering their zip code into the search window, or they can call 800-882-9539. Only pills and other solids, like patches, will be accepted—the public should not bring liquids, needles or other sharps to take back sites.
America is presently experiencing an epidemic of addiction, overdose and death due to abuse of prescription drugs, particularly opioid painkillers. 6.5 million Americans abuse prescription drugs, according to the most recent National Survey on Drug Use and Health, more than abuse cocaine, heroin, and hallucinogens combined.
“The abuse of prescription drugs is America’s fastest-growing drug problem, and too many people are dying or being seriously injured for the misuse of such drugs,” U.S. Attorney Wagner stated. “Young people are particularly at risk. Since most people who abuse prescription drugs say that they get them from family members or friends, it is imperative that we all take steps to dispose of unwanted drugs.”
“Unused prescription drugs that languish in the home are susceptible to diversion for misuse and abuse,” said DEA Special Agent in Charge John J. Martin. “You can make your home and our community safer by taking advantage of this free and anonymous service.”
Drug overdoses are now the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms. The removal from homes of unwanted prescription pills that can be abused, stolen or resold is an easy way to help fight the epidemic of substance abuse and addiction.
According to the DEA, in the previous 10 take-back events, approximately 302,427 pounds or 151 tons of unused medication were collected from Northern California and Central Valley residents.
DEA Nashville District Office to Hold 11th Prescription Drug Take-Back Day This SaturdayRead the Press Release
The Drug Enforcement Administration’s (DEA) Nashville District Office is partnering with national, state, local and tribal law enforcement officials, as well as community coalition groups, to hold its 11th state-wide Prescription Drug Take-Back Day on Saturday, April 30, 2016, from 10 a.m. to 2 p.m. local time.
This one-day event will make it convenient for the public to rid their homes of potentially dangerous prescription drugs. At the event, Tennesseans will be able to drop off their expired, unused, and unwanted pills at sites across the state free of charge, no questions asked. By doing so, they will help prevent prescription drug abuse and theft.
The public can find a nearby collection site by visiting www.dea.gov, clicking on the “Got Drugs?” icon, and entering their zip code into the search window, or they can call 800-882-9539. Only pills and other solids, like patches, will be accepted. Liquids, needles and other sharp objects will not be accepted.
Tennesseans participating in DEA’s last take back event held on September 26, 2015, yielded 17,427 pounds of unwanted or expired medications for safe and proper disposal at collection sites throughout the state. This was the largest amount collected during the 10 previous take back events.
The National Prescription Drug Take-Back Day addresses vital public safety and health issues. Many Americans are not aware that medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs.
Surveys of opioid drug users show that the majority of them get their drugs free from friends and family, including from the home medicine cabinet. This is a unique opportunity for Americans to make their homes and medicine cabinets safe from theft and abuse.
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division said, “Drug overdoses are the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms. The Prescription Drug Take-Back program will allow Americans to properly and safely dispose of their prescription medication which could otherwise be abused for non-medical purposes. This event is free and anonymous. Simply turn in your unused, unwanted, unneeded medication, no questions asked. This is just one example of how DEA is working hand-in-hand with its law enforcement and community partners in an effort to stem the tide of prescription drug abuse.”
The DEA encourages parents, along with their children, to educate themselves about the dangers of legal and illegal drugs by visiting DEA’s interactive websites at www.justhinktwice.com, www.GetSmartAboutDrugs.com and www.dea.gov.
Covington Man Sentenced for Conspiracy to Commit Bank FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ROY JOSEPH BUSIERE, age 68, of Covington, was sentenced today after previously pleading guilty to conspiracy to commit bank fraud.
U.S. District Judge Kurt D. Engelhardt sentenced BUSIERE to 54 months in prison, to be followed by three years of supervised release. As part of the sentence, the Court ordered BUSIERE to pay $1,540,973.39 in restitution.
According to court documents, BUSIERE, who worked as a comptroller for A & H Armature Works, Inc., embezzled from the company’s bank account at First American Bank. BUSIERE conspired with another to steal from A & H Armature Works, Inc. by using Paypal and American Express accounts to transfer the funds.
U.S. Attorney Polite praised the work of the United States Secret Service, New Orleans Field Division, in investigating this matter. Assistant United States Attorney Loan A. "Mimi" Nguyen was in charge of the prosecution.
Couple Indicted for $20 Million Visa Fraud Involving Indian WorkersRead the Press Release
ALEXANDRIA, Va. – Raju Kosuri, 44, and Smriti Jharia, 45, of Ashburn, as well as four co-conspirators, were indicted by a federal grand jury yesterday on charges of conspiracy to defraud the United States and visa fraud, among other charges.
According to the indictment, Kosuri, his spouse Jharia, and their co-conspirators have fraudulently applied for more than 800 illegal immigration benefits under the H-1B visa program. Since 2008, and at much greater scale since 2011, Kosuri has built a staffing business that amounts to a visa-for-sale system, in violation of federal law.
The indictment alleges that Kosuri has set up a network of shell companies that he presents to immigration authorities as independent businesses in need of Indian workers, but which he in fact owns and controls. The indictment further alleges that Kosuri and his co-conspirators use these entities to file petitions for non-existent job vacancies at Kosuri’s data center in Danville. Kosuri is alleged to require workers to pay their own visa processing fees, in violation of H-1B program rules; and he is alleged to treat the beneficiaries as hourly contractors, again in violation of H-1B visa program rules. The visa fraud scheme involves the forgery of numerous individuals’ signatures on visa petitions and exhibits without their knowledge. The indictment alleges that Kosuri has generated gross proceeds of at least $20 million over the life of the scheme.
Separately, the indictment alleges that Kosuri and Jharia conspired with a consultant named Raimondo Piluso to defraud the Small Business Administration, by submitting fraudulent HUBZone applications. Kosuri, Jharia, and Piluso are alleged to have concealed the true location, ownership, and employees of a business called EcomNets Federal Solutions in order to obtain federal loan and contract preferences, from which they have generated $150,000 in loan proceeds and five contract awards.
Kosuri, Jharia, and Piluso face a maximum penalty of 30 years in prison, if convicted. The other co-conspirators face a maximum penalty of 10 years in prison, if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington; Bill A. Miller, Director of Diplomatic Security Service, U.S. Department of State; and Robin Blake, Special Agent in Charge of the Washington Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, made the announcement after the indictment was unsealed. Special Assistant U.S. Attorneys Paul K. Nitze and Angela Fiorentino-Rios are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-CR-43.
Connecticut U.S. Attorney's Office Participates in National Reentry Week EventsRead the Press Release
New Haven – As part of an ongoing effort to make our criminal justice system fairer, more efficient and more effective at reducing recidivism and helping formerly incarcerated individuals contribute to their communities, the Department of Justice has designated the week of April 24-30, 2016, as National Reentry Week.
“The Justice Department is committed to reducing recidivism and making our communities safer,” stated U.S. Attorney Deirdre M. Daly. “A major part of this commitment is assisting those who have served time in prison transition to being productive and law-abiding members of society. Too often, returning citizens face impregnable barriers as they compete for jobs, seek to attain stable housing and support their families. Successful reentry programs benefit all of us.”
National Reentry Week events are being held in all 50 states, the District of Columbia, Puerto Rico and the Virgin Islands. U.S. Attorney’s Offices alone are sponsoring more than 200 events, and federal Bureau of Prisons facilities are holding more than 370 events.
The U.S. Attorney’s Office for the District of Connecticut is participating in four National Reentry Week events:
- On April 27, members of the U.S. Attorney’s Office, U.S. Probation Office and the Federal Public Defender’s Office are speaking to inmates at FCI Danbury about federal government reentry initiatives.
- On April 28, the City of Hartford is presenting a panel discussion titled “Life After Lockup: Stories of Success,” at the Hartford Public Library, from 5:30 p.m. to 7:00 p.m.
- On April 29, the U.S. Attorney’s Office is hosting “A Brighter Future: Jobs for Returning Citizens,” in New Haven. Panel discussions will include returning citizens who are now employed, employers who have successfully hired individuals with criminal records, and workforce development providers who have implemented programs to prepare these individuals for employment.
- On April 29, the Bridgeport Reentry Collaborative will be hosting its 5th Annual Bridgeport Reentry Awards Ceremony at Housatonic Community College, at 6:00 p.m. The ceremony is a celebration of the collective success of former offenders, advocates, and businesses who have demonstrated their commitment to effective reintegration.
For more information about these programs and the U.S. Attorney’s Office reentry initiative, please contact Holly A. Wasilewski, Reentry & Community Outreach Coordinator, at 203-821-3833 or [email protected].
Chinese Chemical Engineer Sentenced for Conspiracy and Importation of Synthetic Drugs and Controlled SubstancesRead the Press Release
Jacksonville, Florida – United States District Judge Timothy J. Corrigan has sentenced Wei Zhang, a/k/a David Liteng (36, Tianjin, China) to 50 months in federal prison for conspiracy to import controlled substance analogues (synthetic cannabinoids) knowing they were intended for human consumption, and aiding and abetting the importation of controlled substances and cathinones, also known as “bath salts.” He also forfeited $1.5 million that had been seized from a Swiss bank account.
According to court documents, in late 2010, an individual met with Dan and Kevin Louie, the owners and operators of Source1Herbs, in Toronto, Canada. Source1Herbs was a large wholesale business that sold synthetic cannabinoids and cathinones. This individual met with the owners and learned that their Chinese-based supplier was Wei Zhang, a/k/a “David Liteng.” In October 2010, the individual made contact with Zhang and discussed ordering chemicals from him directly. In late February 2011, the individual and his business partner traveled to China and met with the suppliers, including Zhang. During these meetings, the individual and Zhang discussed finding a replacement chemical for 1-pentyl-3-(1-napthoyl)indole JWH-018, which was set to be temporarily listed as a Schedule I controlled substance by DEA on March 1, 2011. As a result of the meeting, the individual obtained a more favorable pricing from Zhang for synthetic chemicals. Zhang, a chemical engineer, explained the best chemical alternatives for JWH-018 that would give the end user a similar high, including stimulant and hallucinogenic effects.
On March 1, 2011, Zhang and others exchanged e-mail communications (including news articles) for specific chemicals banned that day, which included JWH-018. One such e-mail from Zhang states, “Hi we know there will be ban jwh and similar product on 1th (sic) march. Pls let me know what happen tomorrow.” When JWH-018 was placed on the DEA’s banned list, Zhang and others began selling other chemicals, including AM-2201, JWH-081, JWH-122, JWH-203, JWH-210, and JWH-250. Zhang routinely shipped large quantities of those chemicals to customers in the United States, Russia, and Europe, distributing a portion of the synthetic cannabinoids through mailing facilities in the Middle District of Florida. From March 2011 through February 2012, Zhang shipped approximately 798 kilograms of these chemicals to the individual. In addition, he supplied Source1Herbs with large quantities of synthetic cannabinoids and cathinones.
In July 2013, Zhang and the individual had several discussions about synthetic cannabinoids, the latest trends in the worldwide industry, and the controlled status of certain chemicals, including UR-144, 5F-UR-144, and RCS-4. Zhang sent the individual various samples of synthetic chemicals known as 5 Meo Dalt (a synthetic cathinone), A834, 5F-UR-144, JWH-308, and WIN48098. Zhang also discussed emerging synthetic cannabinoids PB-22 and 5F-PB-22, both of which were controlled substance analogues of JWH-018 at the time, and then later designated as Schedule I controlled substances. After receiving a spreadsheet of Zhang’s inventory, the individual negotiated a purchase deal with Zhang for large quantities of UR-144, 5F-UR-144, and RCS-4. The negotiated price for approximately 773 kilograms of chemicals was $265,000, and Zhang agreed to provide the chemicals on consignment. Zhang agreed to ship mislabeled parcels containing 2 or 3 kilograms of those substances per parcel to various mailing facilities within the Middle District of Florida.
From February 3, 2014, through May 16, 2014, Homeland Security Investigations received 48 packages containing 144 kilograms of UR-144, 47 packages containing 106 kilograms of 5F-UR-144 (XLR-11), and 8 packages containing 16 kilograms of RCS-4. During the receipt of those packages, the individual further negotiated to pay Zhang $150,000 for the 266 kilograms of Schedule I controlled substances. In April 2014, Zhang traveled to the United States to retrieve $150,000 in cash for the substances, where he was ultimately arrested.
On May 7, 2014, the United States Treasury Department - Office of Foreign Asset Control used the Kingpin Act to designate Source1Herbs and Dan and Kevin Louie, both Canadian nationals, on the Specially Designated National List. The Kingpin Act permits the imposition of economic sanctions to preclude a variety of worldwide economic transactions.
Zhang’s conviction marks the third Chinese national convicted in the United States for importation of synthetic drugs. Jin Liu was also prosecuted in the Middle District of Florida for conspiracy to import 100 kilograms of PB-22, a synthetic cannabinoid.
"This international investigation brings the first U.S. arrests and convictions of Chinese synthetic drug manufacturers and suppliers," said Susan L. McCormick, special agent in charge of HSI Tampa. "HSI special agents, working with the U.S. Postal Inspection Service, the Jacksonville Sheriff’s Office and the North Florida High Intensity Drug Trafficking Area Task Force, have stopped these dangerous synthetic drugs from entering our communities.”
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The investigation was part of Special Operations Division Project Synergy. The Special Operations Division, along with the Narcotic and Dangerous Drug Section of the Department of Justice, coordinated Project Synergy to investigate and prosecute the leaders in the synthetic drug business both domestically and internationally. This case was prosecuted by Assistant United States Attorney A. Tysen Duva.
Charleston heroin and crack dealer sentenced to Federal prison for drug crimeRead the Press Release
CHARLESTON, W.Va. – A Charleston man was sentenced today to a year and a half in prison for a federal drug crime, announced Acting United States Attorney Carol Casto. Donovan Hardison, 26, previously pleaded guilty in January 2016 to possession with intent to distribute heroin and crack.
Hardison admitted that on May 8, 2015, when he was arrested by agents of the Charleston Police Department’s Special Enforcement Unit, he had heroin and crack that he intended to sell concealed in his sock. Hardison also admitted that on several occasions in 2014 and 2015, he sold heroin and crack in the Charleston area to confidential informants working with the Charleston Police Department’s Special Enforcement Unit and the Metropolitan Drug Enforcement Network Team. Hardison further admitted that he stored heroin, crack, and firearms in his residence on 2nd Avenue in Charleston.
The investigation was conducted by the Charleston Police Department’s Special Enforcement Unit, the Metropolitan Drug Enforcement Network Team, and the West Virginia State Police. Assistant United States Attorney John J. Frail is handling the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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California-Based Z Gallerie LLC Agrees to Pay $15 Million to Settle False Claims Act Suit Alleging Evaded Customs DutiesRead the Press Release
The Department of Justice announced today that Z Gallerie LLC has agreed to pay $15 million to resolve allegations that the company engaged in a scheme to evade customs duties on imports of wooden bedroom furniture from the People’s Republic of China (PRC), in violation of the False Claims Act. Z Gallerie sells upscale furniture and accessories in stores across the United States and through the Internet. The company is headquartered in Los Angeles, California.
“This settlement reflects the Department of Justice’s commitment to ensure that those who import and sell foreign-made goods in the United States comply with the law, including laws meant to protect domestic companies and American workers from unfair competition abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will zealously pursue those who seek an unfair advantage in U.S. markets by evading the duties owed on goods imported into this country.”
The Department of Commerce assesses, and the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) collects, duties to protect U.S. manufacturers from unfair competition abroad by leveling the playing field for domestic products. The particular duties at issue in this case are antidumping duties, which protect domestic manufacturers against foreign companies “dumping” products on U.S. markets at prices below cost. Imports of wooden bedroom furniture manufactured in the PRC have been subject to antidumping duties since 2004.
The settlement announced today resolved allegations that Z Gallerie evaded antidumping duties on wooden bedroom furniture imported from the PRC from 2007 to 2014, by misclassifying, or conspiring with others to misclassify, the imported furniture as pieces intended for non-bedroom use on documents presented to CBP. For example, Z Gallerie allegedly sold certain Bassett Mirror Company products, including a six-drawer dresser and three-drawer chest, as part of a bedroom collection; however, these goods were misidentified on CBP documents, using descriptions such as “grand chests” and “hall chests,” in order to avoid paying antidumping duties on wooden bedroom furniture.
“Savannah is home to one of the fastest growing ports in the country, handling almost 10 percent of all the containerized cargo volume in the United States,” said U.S. Attorney Edward J. Tarver for the Southern District of Georgia. “This U.S. Attorney’s Office will work hard to make sure those using the Port of Savannah play by the rules, and to hold those who try to cheat their way out of paying customs duties accountable.”
“Under the new Trade Facilitation and Trade Enforcement Act, CBP will likely see an increase in these types of settlements as the streamlined processes take effect concerning allegations of duty evasion,” said CBP Commissioner R. Gil Kerlikowske. “The Act reinforces CBP’s existing authorities and tools to collect and investigate public allegations of duty evasion improving the overall effectiveness and enforcement of CBP law enforcement actions concerning illicit trade activity, specifically in the area of antidumping and countervailing duty evasion schemes.”
“Companies that intentionally mislabel shipments or misrepresent the value of goods being imported into the United States to avoid paying the appropriate duties do so in an attempt to create an unfair advantage over businesses that play by the rules,” said Special Agent in Charge Nick S. Annan of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI) in Atlanta. “This type of activity hurts legitimate U.S. businesses and, by extension, our overall national economy. Uncovering these types of schemes will continue to be a major investigative priority for ICE HSI.”
The allegations resolved by the settlement were originally brought by whistleblower Kelly Wells, an e-commerce retailer of furniture, under the qui tam provisions of the False Claims Act. The act permits private parties to sue on behalf of the United States those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct. The act also allows the whistleblower to receive a share of any funds recovered. Wells will receive $2.4 million as her share of the settlement.
The investigation was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Southern District of Georgia, CBP and HSI Atlanta.
The claims resolved by this settlement are allegations only; there has been no determination of liability.
California-Based Z Gallerie LLC Agrees to Pay $15 Million to Settle False Claims Act Suit Alleging Evaded Customs DutiesRead the Press Release
SAVANNAH, GA – U.S. Attorney Edward J. Tarver announced today that Z Gallerie LLC has agreed to pay $15 million to resolve allegations that the company engaged in a scheme to evade customs duties on imports of wooden bedroom furniture from the People’s Republic of China (PRC), in violation of the False Claims Act. Z Gallerie sells upscale furniture and accessories in stores across the United States and through the Internet. The company is headquartered in Los Angeles, California.
“Savannah is home to one of the fastest growing ports in the country, handling almost 10 percent of all the containerized cargo volume in the United States,” said U.S. Attorney Edward Tarver for the Southern District of Georgia. “This U.S. Attorney’s Office will work hard to make sure those using the Port of Savannah play by the rules, and to hold those who try to cheat their way out of paying customs duties accountable.”
“This settlement reflects the Department of Justice’s commitment to ensure that those who import and sell foreign-made goods in the United States comply with the law, including laws meant to protect domestic companies and American workers from unfair competition abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will zealously pursue those who seek an unfair advantage in U.S. markets by evading the duties owed on goods imported into this country.”
The Department of Commerce assesses, and the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) collects, duties to protect U.S. manufacturers from unfair competition abroad by leveling the playing field for domestic products. The particular duties at issue in this case are antidumping duties, which protect domestic manufacturers against foreign companies “dumping” products on U.S. markets at prices below cost. Imports of wooden bedroom furniture manufactured in the PRC have been subject to antidumping duties since 2004. The settlement announced today resolved allegations that Z Gallerie evaded antidumping duties on wooden bedroom furniture imported from the PRC from 2007 to 2014, by misclassifying, or conspiring with others to misclassify, the imported furniture as pieces intended for non-bedroom use on documents presented to CBP.
“Under the new Trade Facilitation and Trade Enforcement Act, CBP will likely see an increase in these types of settlements as the streamlined processes take effect concerning allegations of duty evasion,” said CBP Commissioner R. Gil Kerlikowske. “The Act reinforces CBP’s existing authorities and tools to collect and investigate public allegations of duty evasion improving the overall effectiveness and enforcement of CBP law enforcement actions concerning illicit trade activity, specifically in the area of antidumping and countervailing duty evasion schemes.”
“Companies that intentionally mislabel shipments or misrepresent the value of goods being imported into the United States to avoid paying the appropriate duties do so in an attempt to create an unfair advantage over businesses that play by the rules,” said Special Agent in Charge Nick S. Annan of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI) in Atlanta. “This type of activity hurts legitimate U.S. businesses and, by extension, our overall national economy. Uncovering these types of schemes will continue to be a major investigative priority for ICE HSI.”
The allegations resolved by the settlement were originally brought by whistleblower Kelly Wells, an e-commerce retailer of furniture, under the qui tam provisions of the False Claims Act. The act permits private parties to sue on behalf of the United States those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct. The act also allows the whistleblower to receive a share of any funds recovered. Wells will receive $2.4 million as her share of the settlement. The settlement is the largest False Claims Act recovery in the history of the United States Attorney’s Office for the Southern District of Georgia.
The claims resolved by this settlement are allegations only; there has been no determination of liability.
The investigation was handled by the U.S. Attorney’s Office for the Southern District of Georgia, the Civil Division’s Commercial Litigation Branch, CBP and HIS-Atlanta. Any questions should be directed to First Assistant United States Attorney James D. Durham at (912) 201-2547.
Bus Stop Accessibility in Waterloo ResolvedRead the Press Release
CEDAR RAPIDS, IA – The U.S. Attorney’s Office reached a resolution to ensure access to bus stops in the City of Waterloo during winter conditions under Title II of the Americans with Disabilities Act (“ADA”).
A complaint had alleged that bus stops in the City of Waterloo were not accessible to citizens with disabilities due to the failure to remove snow in a timely fashion that was covering sidewalks, curb cuts, or crosswalks. Persons with disabilities had to operate their wheelchairs in the streets. There are over 100 bus stops located throughout the city.
“The ADA guarantees people with disabilities equal access to transportation services so that they can travel freely and enjoy autonomy,” said Kevin W. Techau, United States Attorney for the Northern District of Iowa. “This agreement is an important step toward fulfilling the promise of the ADA even during adverse weather conditions. We commend the City of Waterloo for entering into the consent decree to ensure equal access during winter weather.”
The settlement calls for the City of Waterloo to submit a plan six months from the signing of the agreement. That plan must list each bus stop and how the city will maintain the accessible features at each. The settlement agreement also calls for the city to submit a report to the United States Attorney’s Office relating to the completion of any construction work pertaining to the bus stops to ensure their accessibility. The city’s plan must include standard operating procedures covering snow removal. The United States Attorney’s office will monitor compliance.
Executive Director for Exceptional Persons, Inc. (EPI), Christopher Sparks, commended the efforts of the U.S. Department of Justice and the City of Waterloo for working together to reach a settlement to ensure bus benches are accessible and safe for all members of our community. Sparks stated, “Many of the people EPI serves rely on public transportation to meet basic needs – such as getting to and from work, medical appointments, grocery shopping, and more. A good number of those people use wheelchairs or other assistive devices for mobility. Accessible bus stops means not having to wait on a busy street for your transportation – it means safety, it means you’re welcome in the community. It’s invaluable.”
The settlement agreement detailing the terms of the agreement is attached to this release.
These matters were handled by Assistant United States Attorney Stephanie Wright and the Disabilities Rights Section of the United States Department of Justice.
The public may access the U.S. Attorney’s website to file an ADA complaint at www.justice.gov/usao/ian. After completing the form, it may be sent by mail, fax, or email. Those wishing for further guidance can telephone the office by dialing 319-363-6333.
You may learn more about the Americans with Disabilities Act by going to the Department of Justice website at www.ada.gov.
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Bucks County Man Indicted on Child Pornography and Obstruction of Justice ChargesRead the Press Release
PHILADELPHIA – Norman Ridgeway, 26, of Croydon, Pennsylvania, was charged by Indictment today with production of child pornography, distribution of child pornography, and possession of child pornography, announced United States Attorney Zane David Memeger.
Additionally, Ridgeway was charged with one count each of obstruction of justice and destruction of evidence. According to the indictment, while law enforcement was in pursuit of Ridgeway, Ridgeway “wiped” his cell phone by resetting it to factory settings in an effort to alter, destroy, and conceal evidence of child pornography. Further, Ridgeway allegedly made a telephone call in which he instructed and commanded another person to locate, obtain, and destroy an SD memory card he kept in his wallet which contained child pornography.
If convicted, the defendant faces a mandatory minimum sentence of 15 years in prison, with a maximum possible sentence of 100 years in prison, a possible fine, three years of supervised release, and a $700 special assessment.
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.
The case was investigated by the FBI and the Washington, D.C. Metropolitan Police Department, with assistance provided by the Bensalem Township Police Department, the Warminster Township Police Department, the Middletown Township Police Department, and the Bristol Township Police Department. It is being prosecuted by Assistant United States Attorney James A. Petkun.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bogalusa Man Sentenced for Oxycodone DistributionRead the Press Release
U.S. Attorney Kenneth A. Polite announced that EDGAR POUNDS, age 66, of Bogalusa, was sentenced today for two counts of selling oxycodone tablets to an undercover Drug Enforcement Administration (DEA) agent. Oxycodone is a prescription-only Schedule II controlled substance and a highly addictive and abused opioid drug.
U.S. District Judge Kurt D. Engelhardt sentenced POUNDS to four years of probation, a $500 fine, a $200 special assessment, and 100 hours of community service.
U.S. Attorney Polite praised the work of the DEA Tactical Diversion Squad in investigating this matter. Assistant United States Attorney Michael B. Redmann was in charge of the prosecution.
Birmingham Man Indicted for Mail Fraud, Wire Fraud and Identity TheftRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Birmingham man for stealing someone’s identifying personal information and using it to fraudulently obtain credit, announced U.S. Attorney Joyce White Vance and U.S. Postal Inspection Service Postal Inspector in Charge Adrian Gonzalez.
A six-count indictment filed in U.S. District Court charges MARKEZ J. MCCONNICO, 34, with two counts each of mail fraud, wire fraud and aggravated identity theft. The indictment charges McConnico with opening two credit cards in the victim’s name, and also changing the victim’s Mobile mailing address to McConnico’s mailing address in Birmingham. McConnico added himself as an authorized user to the credit cards, causing the credit card issuers to mail the credit cards to McConnico at his address in July 2015, according to the indictment.
McConnico also is charged with gaining access to the victim’s Belk charge account using the victim’s Social Security number. McConnico made at least two charges to the victim’s Belk charge account in September and October 2015, according to the indictment.
The maximum penalty for both mail and wire fraud is 20 years in prison and a $250,000 fine. The penalty for aggravated identity theft is two years in prison.
The U.S. Postal Inspection Service investigated the case, which Assistant U.S. Attorney Davis Barlow is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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Bering Straits Technical Services and Parent Company Pay Civil Fines for Alleged Violations of the False Claims ActRead the Press Release
HOUSTON - Bering Straits Technical Services LLC (BSTS) and its parent company, Bering Straits Native Corporation (BSNC), have paid the Southern District of Texas $2 million in damages to resolve numerous alleged violations of the False Claims Act, announced U.S. Attorney Kenneth Magidson. The settlement was finalized April 26, 2016, without an admission of liability.
“Yesterday’s settlement should serve as a reminder to government contractors of their accountability to the public,” said Magidson. “The citizens of this district should be reassured that the Department of Justice (DOJ) and law enforcement are doing all they can to ensure tax payer money is spent appropriately. I encourage those who are knowledgeable about fraudulent practices against the government to come forward and report wrongdoing.”
“Contractors are expected to comply with their statutory obligations and act in good faith when dealing with the U.S. government,” said Special Agent in Charge Janice M. Flores of the Defense Criminal Investigative Service (DCIS), Southwest Field Office. “The DCIS is committed to working with its partner agencies, such as DOJ, Defense Contract Audit Agency (DCAA) and the U.S. Army Criminal Investigation Command (CID) to ensure integrity of the Defense Department’s procurement process. This settlement demonstrates that combatting fraud, waste and abuse within Department of Defense (DOD) contracting remains a top priority.”
The settlement is the result of a whistleblower suit filed under seal in Houston federal court on Feb. 3, 2012. The suit alleged that BSTS and BSNC caused false claims to be submitted to DOD and/or the Defense Logistics Agency (DLA) for maintenance facility services provided at the Red River Army Depot located near Texarkana. BSTS and BSNC entered contracts with DOD for maintenance and repair of the DLA facilities located at the Red River Army Depot.
Specifically, the whistleblower alleged that beginning in September 2010, BSTS and BSNC submitted false preventative maintenance reports for maintenance that was not performed and false repair work orders, thereby overcharging the government. The complaint also claimed that BSTS and BSNC employees were directed to repair equipment that no longer existed or was no longer in service and compelled to claim maintenance hours and supply costs for work that was not performed. Employees were also allegedly coerced to “pencil whip.” That is, make up hours after the fact with no relation to time actually spent on the maintenance. Invoices were based on the fraudulent documents and presented to the U.S. for payment.
BSTS is a limited liability company organized in the State of Alaska with its principal place of business in Anchorage, conducts business in several states, including Texas, and contracts with numerous government facilities. BSTS contracted with the U.S. Army Corps of Engineers to provide services at the Red River Army Depot in Texarkana pursuant to two contracts which were terminated Feb. 28, 2013, and Aug. 31, 2014, respectively. BSTS ceased providing services at the Red River Army Depot Aug. 31, 2014.
BSNC is the parent corporation of BSTS and is headquartered in Nome, Alaska. Its regional operations include real estate management, development, tourism, construction, mining services and sales of rock and aggregate. BSNC also has an office in Anchorage, which oversees government contract work under SBA 8(a), HubZone, and small business programs. The Anchorage operations also include construction, support services and shareholder services.
Under the federal False Claims Act, a whistleblower, known as the relator, is entitled to share in the government’s monetary recovery under certain conditions.
The settlement was a result of joint investigation by DCIS, DCAA, U.S. Army CID and DOJ. Assistant U.S. Attorney Jill Venezia handled the matter for the United States.
Bering Straits Technical Services and Parent Company Pay Civil Fines for Alleged Violations of the False Claims ActRead the Press Release
HOUSTON - Bering Straits Technical Services LLC (BSTS) and its parent company, Bering Straits Native Corporation (BSNC), have paid the Southern District of Texas $2 million in damages to resolve numerous alleged violations of the False Claims Act, announced U.S. Attorney Kenneth Magidson. The settlement was finalized April 26, 2016, without an admission of liability.
“Yesterday’s settlement should serve as a reminder to government contractors of their accountability to the public,” said Magidson. “The citizens of this district should be reassured that the Department of Justice (DOJ) and law enforcement are doing all they can to ensure tax payer money is spent appropriately. I encourage those who are knowledgeable about fraudulent practices against the government to come forward and report wrongdoing.”
“Contractors are expected to comply with their statutory obligations and act in good faith when dealing with the U.S. government,” said Special Agent in Charge Janice M. Flores of the Defense Criminal Investigative Service (DCIS), Southwest Field Office. “The DCIS is committed to working with its partner agencies, such as DOJ, Defense Contract Audit Agency (DCAA) and the U.S. Army Criminal Investigation Command (CID) to ensure integrity of the Defense Department’s procurement process. This settlement demonstrates that combatting fraud, waste and abuse within Department of Defense (DOD) contracting remains a top priority.”
The settlement is the result of a whistleblower suit filed under seal in Houston federal court on Feb. 3, 2012. The suit alleged that BSTS and BSNC caused false claims to be submitted to DOD and/or the Defense Logistics Agency (DLA) for maintenance facility services provided at the Red River Army Depot located near Texarkana. BSTS and BSNC entered contracts with DOD for maintenance and repair of the DLA facilities located at the Red River Army Depot.
Specifically, the whistleblower alleged that beginning in September 2010, BSTS and BSNC submitted false preventative maintenance reports for maintenance that was not performed and false repair work orders, thereby overcharging the government. The complaint also claimed that BSTS and BSNC employees were directed to repair equipment that no longer existed or was no longer in service and compelled to claim maintenance hours and supply costs for work that was not performed. Employees were also allegedly coerced to “pencil whip.” That is, make up hours after the fact with no relation to time actually spent on the maintenance. Invoices were based on the fraudulent documents and presented to the U.S. for payment.
BSTS is a limited liability company organized in the State of Alaska with its principal place of business in Anchorage, conducts business in several states, including Texas, and contracts with numerous government facilities. BSTS contracted with the U.S. Army Corps of Engineers to provide services at the Red River Army Depot in Texarkana pursuant to two contracts which were terminated Feb. 28, 2013, and Aug. 31, 2014, respectively. BSTS ceased providing services at the Red River Army Depot Aug. 31, 2014.
BSNC is the parent corporation of BSTS and is headquartered in Nome, Alaska. Its regional operations include real estate management, development, tourism, construction, mining services and sales of rock and aggregate. BSNC also has an office in Anchorage, which oversees government contract work under SBA 8(a), HubZone, and small business programs. The Anchorage operations also include construction, support services and shareholder services.
Under the federal False Claims Act, a whistleblower, known as the relator, is entitled to share in the government’s monetary recovery under certain conditions.
The settlement was a result of joint investigation by DCIS, DCAA, U.S. Army CID and DOJ. Assistant U.S. Attorney Jill Venezia handled the matter for the United States.
Beckley doctor sentenced to eight years in prison for Federal drug crime and health care fraudRead the Press Release
BECKLEY, W.Va. - Acting United States Attorney Carol Casto announced today that Jose Jorge Abbud Gordinho, M.D., of Beckley, was sentenced to eight years in prison, a $15,000 fine, and ordered to pay over $48,000 in restitution to Medicare and Medicaid for a federal drug crime and health care fraud. Dr. Gordinho previously pleaded guilty in January 2016 to illegally prescribing the pain medication hydrocodone and defrauding Medicare and Medicaid by submitting materially false claims for services that were not medically necessary.
Dr. Gordinho admitted that he routinely prescribed pain pills for illegitimate purposes and in a manner that was outside the bounds of medical practice. Dr. Gordinho further admitted that he defrauded Medicare and Medicaid when he sought and received payment for office visits, services, and prescriptions related to his illegal prescribing practices.
Additionally, as part of the plea agreement, Dr. Gordinho will permanently surrender his DEA Certificate of Registration, ensuring that he will no longer be permitted to prescribe controlled substances.
This case was investigated by the West Virginia State Police, the Federal Bureau of Investigation, and the Office of Inspector General, U.S. Department of Health and Human Services. United States District Judge Irene C. Berger imposed the sentence.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
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Ball Woman Sentenced for Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that EZOLA ISAAC, age 70, of Ball, Louisiana, was sentenced today after previously pleading guilty to theft of government funds.
U.S. District Judge Ivan L.R. Lemelle sentenced ISAAC to three years probation and ordered her to pay restitution to the Social Security Administration in the amount of $165,878.80
According to court documents, ISAAC received Social Security Title II Benefit payments to which she knew she was not entitled.
U.S. Attorney Polite praised the work for the United States Social Security Administration- Office of Inspector General in investigating this matter. Assistant United States Attorney Loan "Mimi" Nguyen was in charge of the prosecution.
14 Charged in Seven County Cocaine and Methamphetamine Trafficking ConspiracyRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal Grand Jury in Scranton has indicted 14 Central Pennsylvania men charging them with conspiracy to distribute and possess with intent to distribute cocaine and methamphetamine. Thirteen of the 14 defendants were taken into custody today.
According to United States Attorney Peter Smith, a coordinated investigation by the Pennsylvania State Police and the Federal Bureau of Investigation led to the indictment on April 26, 2016, which was made public today after the arrests of the defendants. According to the indictment, the conspiracy extended over 14 months from December 2014 to April 2016. The drug activity allegedly took place in Cumberland, Dauphin, York, Snyder, Northumberland, Berks and Perry Counties.
The names, ages, and residences of the defendants are listed below:
Phillip Bennett, age 43, Elizabethtown;
Michael Finsterbush, age 50, Lemoyne;
Marcie Herman, age 47, Harrisburg;
Michael Herman, age 49, Harrisburg;
Arthur Houze, age 49, Harrisburg;
Douglas Lesniak, age 46, Steelton;
John Nace, age 41, York;
Joseph Newton, age 47, Selinsgrove;
Scott Ohler, age 50, Harrisburg;
Juan Salcido, age 33, Reading;
Michael Sanders, age 43, Selinsgrove;
Justin Spiegle, age 41, Liverpool;
Timothy Watson, age 42, Lemoyne; and
Eric West, age 29, Shermans Dale.
The indictment also seeks forfeiture of approximately $156,574 from defendant Scott Ohler.
Prosecution has been assigned to Assistant U.S. Attorneys Christy Fawcett and Chelsea Schinnour.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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