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Wednesday 9 March 2016
Indictment Unsealed in Methamphetamine-Trafficking ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced today’s unsealing of an indictment charging seven defendants in a methamphetamine-trafficking conspiracy. The indicted defendants are TYLER CONNER, age 25, of Austin, Texas, MELVIN STEEN, aka “Skeet,” age 34, of Slidell, Louisiana, ALLEN GAUTREAUX, age 35, of Lockport, Louisiana, AARON SHEEHAN, age 29, of Brooklyn, Mississippi, RYAN ELLENDER, age 39, of New Orleans, Louisiana, JOSEPH MISALE, aka “Potter,” age 31, of New Orleans, and JEREME VAUGHN, age 36, of New Orleans.
According to the one-count Indictment, defendants CONNER and VAUGHN are charged with conspiring to distribute and possess with intent to distribute 50 grams or more of a mixture and substance containing methamphetamine. If found guilty of this charge, CONNER and VAUGHN face a mandatory minimum of 5 years of imprisonment, a maximum 40 years of imprisonment, a $5,000,000 fine, and at least 4 years of supervised release.
Defendants STEEN, GAUTREAUX, SHEEHAN, ELLENDER, and MISALE are charged with conspiring to distribute and possess with intent to distribute a quantity of a mixture and substance containing methamphetamine. If found guilty of this charge, STEEN, GAUTREAUX, SHEEHAN, ELLENDER and MISALE face a maximum 20 years of imprisonment, a $1,000,000 fine, and at least 3 years of supervised release.
U. S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration (“DEA”) and the Louisiana State Police (“LSP”) in investigating this matter. Assistant United States Attorney Brandon S. Long is in charge of the prosecution.
Iberia Parish, Louisiana, Sheriff and Lieutenant Colonel Charged in Conspiracy to Assault InmatesRead the Press Release
Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Stephanie A. Finley of the Western District of Louisiana announced today that Iberia Parish, Louisiana, Sheriff Louis Ackal and Lieutenant Colonel Gerald Savoy were charged with civil rights violations arising out of the beatings of five pre-trial detainees at the Iberia Parish Jail (IPJ) on April 29, 2011. Ackal is charged with one count of conspiracy against rights and two counts of deprivation of rights under color of law, and Savoy is charged with one count of conspiracy against rights and one count of deprivation of rights under color of law.
The indictment alleges that Ackal and Savoy conspired with each other and with other officers to assault five inmates, identified by the initials C.O., S.S., A.T., A.D. and H.G., and that members of the conspiracy failed to intervene and stop the assaults.
Eight former Iberia Parish Sheriff Office employees previously entered guilty pleas in related cases before U.S. District Judge Patricia Minaldi of the Western District of Louisiana. The eight officers are former IPJ Warden Wesley Hayes, former IPJ Assistant Warden Jesse Hayes, former Lieutenant Bret Broussard of the Narcotics Unit, former narcotics agent Wade Bergeron, former narcotics agent Jason Comeaux, former narcotics agent David Hines, former narcotics agent Byron Benjamin Lassalle and former K-9 handler Robert Burns.
An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty. If convicted, Ackal and Savoy each face a maximum sentence of 10 years in prison for each of the civil rights violations, as well as a potential $250,000 fine for each count.
The case is being investigated by the FBI’s Lafayette Resident Agency. The case is being prosecuted by Assistant U.S. Attorney Joseph G. Jarzabek of the Western District of Louisiana, Special Litigation Counsel Mark Blumberg and Trial Attorney Tona Boyd of the Civil Rights Division’s Criminal Section.
Ackal and Savoy Indictment
Houston Woman Heads to Federal Prison for Defrauding Former EmployerRead the Press Release
HOUSTON – A former employee of United Transport Tankcontainers Inc. (UTT) has been ordered to federal prison following her conviction of wire fraud, announced U.S. Attorney Kenneth Magidson. Marcella Jones aka Marcella Jones-Hatch, 45, of Houston, pleaded guilty Oct.6, 2015, admitting she caused a loss of nearly $1.8 million to her former employer.
Today, U.S. District Judge David Hittner, who accepted the guilty plea, handed Hatch a 78-month sentence to be immediately followed by three years of supervised release. She was further ordered to pay $1,796,945.67 in restitution. In handing down the sentence, Judge Hittner noted the defendant’s prior criminal history.
Hatch was hired in the accounting department at UTT in 2007. As part of her plea, she admitted that between July 2008 and August 2014, she executed a scheme to defraud her former employer. As part of her scheme, she created fraudulent payment requests and submitted them to UTT. As a result, the company then sent the payments to her personal bank account which she used for her own personal benefit. The estimated total losses to UTT as a result of the scheme was $1,796,945.67.
Hatch will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of an investigation by the Secret Service. Assistant U.S. Attorney John Braddock is prosecuting the case.
Houston Woman Heads to Federal Prison for Defrauding Former EmployerRead the Press Release
HOUSTON – A former employee of United Transport Tankcontainers Inc. (UTT) has been ordered to federal prison following her conviction of wire fraud, announced U.S. Attorney Kenneth Magidson. Marcella Jones aka Marcella Jones-Hatch, 45, of Houston, pleaded guilty Oct.6, 2015, admitting she caused a loss of nearly $1.8 million to her former employer.
Today, U.S. District Judge David Hittner, who accepted the guilty plea, handed Hatch a 78-month sentence to be immediately followed by three years of supervised release. She was further ordered to pay $1,796,945.67 in restitution. In handing down the sentence, Judge Hittner noted the defendant’s prior criminal history.
Hatch was hired in the accounting department at UTT in 2007. As part of her plea, she admitted that between July 2008 and August 2014, she executed a scheme to defraud her former employer. As part of her scheme, she created fraudulent payment requests and submitted them to UTT. As a result, the company then sent the payments to her personal bank account which she used for her own personal benefit. The estimated total losses to UTT as a result of the scheme was $1,796,945.67.
Hatch will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges are the result of an investigation by the Secret Service. Assistant U.S. Attorney John Braddock is prosecuting the case.
Honduran Man Pleads Guilty to Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that HECTOR ORLANDO RECATE REYES, age 30, a citizen of Honduras, pled guilty today to a one-count Indictment that charged him with illegal reentry of a removed alien.
According to court documents, RECATE-REYES reentered the United States after having been previously deported on August 8, 2012.
RECATE-REYES faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment. U.S. District Judge Ivan L.R. Lemelle set sentencing for May 25, 2016.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Henrico County Man Sentenced to 37 Years for Gun and Drug CrimesRead the Press Release
RICHMOND, Va. – Nelson Watts Broadie, Jr., 21, of Henrico County, was sentenced today to 447 months in prison for six separate offenses, including, possession of a firearm and ammunition by a previously convicted felon, possession and distribution of crack cocaine, and possession and brandishing of a firearm in furtherance of a drug trafficking crime.
Broadie, Jr., was found guilty by a federal jury on Dec. 3, 2015. According to court documents, on June 27, 2015, Broadie participated in an armed robbery of a person at his home and discharged his 9mm firearm during that robbery attempt. Evidence presented also confirmed that between July 15 and July 24, 2015, Broadie possessed the same loaded 9mm semiautomatic pistol. On July 15, 20, and 21, 2015, Broadie sold crack cocaine to a confidential informant while under surveillance, and during the July 20, and 21, 2015 sales, Broadie sold the crack cocaine to the confidential informant while under surveillance, and while unlawfully possessing and brandishing the same firearm identified above, in order to intimidate that drug customer.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; and Douglas A. Middleton, Chief of Police for the Henrico County Police Division, made the announcement after sentencing by U.S. District Judge Henry E. Hudson.
This case was investigated by officers and detectives with the Henrico County Police Division in conjunction with the FBI’s Central Virginia Violent Crime Task Force. Assistant U.S. Attorney S. David Schiller prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-137.
Greenwood Home Builder Indicted for Mortgage FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Greenwood, Mo., home builder has been indicted by a federal grand jury for a multi-million dollar mortgage fraud scheme.
Gary Bryan Penrod, 52, of Greenwood, was charged in a 22-count indictment returned by a federal grand jury in Kansas City, Mo., on Tuesday, March 8, 2016.
The federal indictment alleges that Penrod, doing business as Penrod Homes, Inc., engaged in a scheme to defraud mortgage lenders from May 2005 to June 2007. Penrod and others allegedly recruited buyers to apply for mortgage loans to purchase dozens of homes in Greenwood and Peculiar, Mo.
According to the indictment, almost all of the loans funded as part of the scheme defaulted and the properties were foreclosed upon, causing millions of dollars in loss. During the scheme, the indictment says, approximately 61 properties built and sold by Penrod went into foreclosure. Of these, illegal kickbacks allegedly were paid on 57 of the homes sold; the amount of the kickbacks totaled approximately $1.5 million and the losses to banks and/or mortgage companies associated with the 61 foreclosures was approximately $4.5 million dollars. However, a majority of these loans were not made by FDIC-insured financial institutions.
Penrod allegedly told prospective buyers that they would receive money back that could be used for closing costs, down payments, or mortgage payments. According to the indictment, this was concealed from the mortgage lenders, who were instead told that the buyers were using their own money. With the participation and aid of real estate or mortgage brokers, the indictment says, buyers caused false sales agreements, false loan applications, false supporting documents, and false settlement and closing documents to be submitted to the mortgage lenders. In many cases, the applications falsely overstated buyers’ incomes, assets and intent to actually live in the home. Penrod allegedly also caused settlement and closing documents to be submitted that falsely represented the terms of the proposed transactions, including the true purchase prices of the properties and the concealed kickback payments that were to be made.
Shortly after the sales, the indictment says, Penrod kicked back to the home buyer monies not reported on the sales or loan documents, which he called “builder rebates” or “share of profits.” Penrod delivered the checks himself, the indictment says, or he would have others deliver them, or have the buyer pick up the check from his office. The memo lines for these checks allegedly contained notations with phrases such as “consultation fee,” “fee,” “reimb.,” “Reimb Material,” “Materials” and “closing.” No consulting services were performed nor were materials cost paid or reimbursed, according to the indictment.
In addition to the kickbacks, Penrod allegedly made payments outside of the closing of commissions for the sales of the properties and finders-fees to individuals who brought in home buyers, which were not reported to the lender.
The federal indictment charges Penrod with 16 counts of wire fraud and six counts of mail fraud.
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 Senior Litigation Counsel Gregg R. Coonrod. It was investigated by the FBI.
Gloucester County, New Jersey, Man Admits Role in 2015 South Jersey Bank Robbery SpreeRead the Press Release
CAMDEN, N.J. – A Deptford, New Jersey, man today admitted robbing five New Jersey banks and one Pennsylvania bank between June 2015 and September 2015, U.S. Attorney Paul J. Fishman announced.
Michael A. Fanelli, a/k/a Michael Carducci, 36, pleaded guilty before U.S. District Judge Reneé Marie Bumb in Camden federal court to an information charging him with six counts of bank robbery.
According to documents filed in this case and statements made in court, Fanelli robbed the following banks on the dates set forth below:
Bank
Location
Date
Cornerstone Bank
West Deptford, New Jersey
June 2, 2015
Fulton Bank
Mullica Hill, New Jersey
June 5, 2015
Malvern Federal Savings Bank
Concordville, Pennsylvania
July 22, 2015
Susquehanna Bank
Mullica Hill, New Jersey
July 28, 2015
Susquehanna Bank
Mullica Hill, New Jersey
Aug. 21, 2015
National Penn Bank
Florence, New Jersey
Sept. 24, 2015
Fanelli typically robbed each bank by approaching a teller, displaying what appeared to be a firearm, and demanding money.
Fanelli robbed the same Susquehanna Bank on July 28, 2015 and August 21, 2015. Immediately following his robbery of National Penn Bank on Sept. 24, 2015, Fanelli was followed by law enforcement officers to his residence, where he was taken into custody.
Each bank robbery count carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is set for June 17, 2016.
U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge William F. Sweeney in Philadelphia, with the investigation leading to today’s plea. He also thanked the West Deptford, Harrison Township, and Florence Township police departments, as well as the Gloucester County Prosecutor’s Office and the Pennsylvania State Police for their assistance.
The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Lisa Lewis Esq., Assistant Federal Public Defender
Fraud Charges Filed Against Erie Storeowner following USDA and Erie Police InvestigationRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of theft of government property and food stamp fraud, United States Attorney David J. Hickton announced today.
The four-count indictment named Jasmin Omanovic, 35, of Erie, Pennsylvania, as the sole defendant.
According to the indictment presented to the court, from October 2011 to February 2015, Omanovic, who is the owner and operator of International Market in Erie, committed food stamp fraud by exchanging food stamps for cash at fifty percent of face value and ineligible items. He also allowed customers to pay off store debt with food stamps and he took customers’ EBT cards and used them at Walmart to restock his shelves.
The law provides for a maximum total sentence of 25 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The United States Department of Agriculture, Office of Inspector General and the Erie Bureau of Police 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.
Four Individuals Charged in $7 Million Car Loan Scheme Involving Dealerships Throughout the New York City AreaRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a complaint charging JULIO ALVAREZ, CHRISTOPHER CAMPOS, MARCO BLASIO, and GEURIS RAMOS with bank and wire fraud charges for perpetrating a scheme to fraudulently obtain millions of dollars in car loans. The defendants used at least 20 straw buyers to obtain more than 200 new automobiles based on false representations that, among other things, the straw buyers would use the cars for their personal use when, in fact, the defendants obtained the vehicles in order to lease them to livery cab drivers. ALVAREZ, CAMPOS, BLASIO, and RAMOS were arrested this morning and will be presented later today before Magistrate Judge Kevin Nathaniel Fox.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, the defendants carried out a scheme to obtain millions of dollars in loans under false pretenses at the expense of financial institutions who were deceived into funding the purchase of more than 200 new vehicles. Thanks to the efforts of our partners at the FBI, these defendants will now be held to account for their criminal misconduct.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “The charges announced today describe a scheme in which the defendants allegedly benefitted from fraudulently obtained car loans. The funding was used by the defendants and their co-conspirators to finance the purchase of more than 200 new automobiles. The cost of these loans, which ultimately went into default, will eventually be transferred to ordinary citizens seeking financial assistance. We take these crimes very seriously as we continue to seek out those who exploit the lending industry.”
According to the allegations contained in the Complaint[1] unsealed today in Manhattan federal court:
Between approximately October 2012 and September 2013, ALVAREZ, CAMPOS – who was a practicing attorney, BLASIO, and RAMOS orchestrated a scheme to fraudulently obtain new automobiles that ALVAREZ, CAMPOS, and RAMOS, among others, intended to lease to livery cab drivers. In order to secure financing in connection with the purchase of these new cars without having to pay the higher interest rates typically charged for commercial vehicles or borrow the cost of the vehicles based on their own ability to pay, ALVAREZ and CAMPOS enlisted and aided individuals with good credit histories (“straw buyers”) to submit fraudulent car loan applications to numerous lenders. In order to obtain the new vehicles, the defendants sent straw buyers, including RAMOS, to several car dealerships located throughout the New York City area, where dealership employees, including BLASIO, helped straw buyers submit fraudulent loan applications.
The auto loan applications submitted by the straw buyers falsely represented that the vehicles would be used for the buyers’ personal use, rather than as part of the defendants’ leasing business. In addition, in many cases, the car loan applications misrepresented personal information about the straw buyers, including their incomes and assets. ALVAREZ, CAMPOS, BLASIO, and RAMOS also caused financing applications to be sent to multiple financial institutions at the same time so that the lenders would not know that the straw buyers were incurring obligations to other lenders in connection with the purchase of multiple new automobiles.
In total, the scheme carried out by ALVAREZ, CAMPOS, BLASIO, and RAMOS, among others, involved at least approximately 20 straw purchasers, the purchase of more than approximately 200 new vehicles, and more than $7,000,000 in fraudulently obtained loans from a variety of financial institutions. Most of the loans ultimately went into default.
* * *
ALVAREZ, 47, of Fort Lee, New Jersey, CAMPOS, 39, of Fort Lee, New Jersey, BLASIO, 52, of Commack, New York, and RAMOS, 38, of Bronx, New York, are each charged with one count of conspiracy to commit bank and wire fraud, which carries a maximum sentence of 30 years in prison, one count of bank fraud, which carries a maximum sentence of 30 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI, and noted that the investigation remains ongoing.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to:
http://www.usdoj.gov/usao/nys/victimwitness.html
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Niketh Velamoor and Sidhardha Kamaraju are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former vice president of health care company charged with fraud scheme worth over $7.5 millionRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that DAVID MICHAEL PITTS, age 41, has been charged in a Bill of Information with wire fraud in connection with an alleged scheme to defraud Amedisys, Incorporated, a home health and hospice care company with a substantial presence in Baton Rouge, Louisiana. PITTS is accused of stealing $7,641,528 from Amedisys, which annually furnishes home health services to approximately 380,000 patients in 37 states, the District of Columbia, and Puerto Rico.
According to the Bill of Information, PITTS was the Vice President of Tax for Amedisys for the period January 2005 through July 2014. In this role, PITTS was responsible for all corporate tax matters, including the preparation of state and federal tax returns and the payment of state income taxes in the various states where Amedisys operated its business. The Bill of Information alleges that PITTS had the authority and ability to purchase tax credits for the purpose of executing his duty of reducing and paying state income taxes in the various states where Amedisys did business.
The Bill of Information alleges that PITTS engaged in a scheme to defraud Amedisys from October 2006 through May 2014 through an elaborate scheme involving shell entities and fictitious film tax credits. According to the Bill of Information, as part of the scheme, PITTS created a counterfeit company named “Stonehenge Entertainment” for the purpose of selling false and fictitious “Tax Credit Transfer Agreements” to Amedisys. PITTS allegedly used this company name because it closely resembled the name of a legitimate company with which Amedisys did business. PITTS also allegedly created an entity known as “Evergreen Incentives” for the purpose of selling false and fictitious “Tax Credit Transfer Agreements” to Amedisys.
In order to carry out his scheme, PITTS allegedly opened and maintained a bank account at Capital One Bank, N.A. for Stonehenge Entertainment and a separate account at Regions Bank for Evergreen Incentives. PITTS allegedly created false and fictitious “Tax Credit Transfer Agreements” and used his position as Vice President of Tax to present the false and fictitious Tax Credit Transfer Agreements to his corporate supervisors for approval, falsely representing them to be valid tax credits. Once approved, PITTS then allegedly purchased the false and fictitious Tax Credit Transfer Agreements on behalf of Amedisys.
According to the Bill of Information, in order to personally benefit from the sale of false and fictitious tax credits to Amedisys, PITTS caused electronic banking transfers to divert funds from an Amedisys account at JPMorgan Chase Bank to his accounts at Capital One Bank and Regions Bank for his personal enrichment. During the period October 3, 2006 through May 16, 2014, PITTS allegedly caused Amedisys to make 21 wire transfers totaling $7,641,528 to accounts which he controlled, and for his personal enrichment.
This matter is being handled by the United States Attorney’s Office for the Middle District of Louisiana. The investigation has been conducted by the Baton Rouge Resident Office of the Federal Bureau of Investigation, with substantial assistance provided by the victim, Amedisys, Inc. The matter is being prosecuted by Assistant United States Attorney René Salomon.
NOTE: A Bill of Information is an accusation made by the United States Attorney. The defendant is presumed innocent until and unless adjudicated guilty through a guilty plea or trial.
Former Mexican Mayor Sentenced to over 21 Years in Prison for Operating an Arizona Based Drug Trafficking OrganizationRead the Press Release
PHOENIX – On March 7, 2016, Arturo Reyes Trujillo, 43, of Agua Prieta, Sonora, Mexico, was sentenced to 262 months in prison by U.S. District Judge Neil V. Wake. Trujillo was elected municipal president (mayor) in Fronteras, Sonora, Mexico in 2012. He was arrested on Sept. 6, 2012, and previously pleaded guilty to conspiracy to possess with intent to distribute cocaine and conspiracy to commit money laundering. In total, Trujillo was involved in sending approximately 1,000 kilograms of cocaine throughout the United States and laundered approximately $20 million.
According to the plea agreement, from about Jan. 1, 2003, to July 28, 2007, the defendant (who was then living in Tucson) was the head of the drug trafficking organization that hired a network of individuals to deliver multi-hundred kilogram shipments of cocaine, using passenger cars and tractor-trailer trucks, throughout the United States. The organization also brought back to Arizona millions of dollars in proceeds from cocaine sales. Law enforcement authorities seized over 77 kilograms of cocaine and over $490,000 in drug proceeds.
“The lengthy sentence in this case reflects our office’s commitment to aggressively prosecute cross-border drug trafficking,” stated Acting U.S. Attorney Elizabeth Strange. “The underlying investigation also exemplifies the fine work that is routinely done by our law enforcement partners on the Organized Crime Drug Enforcement Task Force.”
“Arturo Reyes Trujillo preyed upon the addiction of American citizens to enrich himself and his friends by selling cocaine and laundering the illegal proceeds gained from these crimes,” said DEA Special Agent in Charge Doug Coleman. “His lengthy sentence shows that DEA and our partners will never relent in our mission to protect the American people from the scourge of drug trafficking and abuse, and bring those responsible to face justice in United States court rooms.”
“The defendant operated a transnational organized criminal group that was responsible for the laundering of millions of dollars in drug proceeds. IRS-CI is proud to work with the DEA and our other law enforcement partners to dismantle these drug organizations by tracing, disrupting, and seizing the flow of their money,” stated IRS-Criminal Investigation Special Agent in Charge Ismael Nevarez Jr.
The investigation in this case was conducted by agencies participating in the Organized Crime Drug Enforcement Task Force. The lead agencies were the U.S. Drug Enforcement Administration and Internal Revenue Service-Criminal Investigation. Additionally, we would like to recognize the Government of Mexico for their assistance with the extradition and the Office of International Affairs for their assistance in this case. The prosecution was handled by Keith Vercauteren and Krissa Lanham, Assistant U.S. Attorneys, District of Arizona, Phoenix.
NUMBER: CR-18-0001-PHX-NVW
RELEASE NUMBER: 2016-019_Trujillo
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Former Greenwich Resident Sentenced to 6 Years in Federal Prison for Sex Trafficking of MinorsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that SHEENA DUME, 23, formerly of Greenwich, was sentenced yesterday by U.S. District Judge Janet Bond Arterton in New Haven to 72 months of imprisonment, followed by 10 years of supervised release, for sex trafficking of minors.
According to court documents and statements made in court, DUME assisted a sex trafficking enterprise headed by Wellington Brown, also known as “Jamal.” As part of the sex trafficking enterprise, Brown and DUME used various manipulative tactics to recruit five different minor victims to engage in prostitution. Brown drove expensive vehicles and displayed jewelry and cash to his victims, and lured them with the prospect of making significant amounts of money. Brown recruited some victims with the fictitious prospect of a modeling career.
Brown took pictures of the minor victims and used them to advertise prostitution services on websites such as backpage.com. Brown and DUME covered the expenses of the prostitution operation, such as renting hotel rooms, providing transportation and condoms, and buying food for the victims. At times, Brown also provided marijuana to the minor victims.
The investigation revealed that the victims engaged in prostitution at various hotels in Stratford and Milford. The victims provided Brown with tens of thousands of dollars they earned through prostitution and received only a small portion of the money they made.
Brown and DUME were arrested in Maryland on July 30, 2014. On February 18, 2015, DUME pleaded guilty to one count of conspiracy to commit sex trafficking of a minor, and five counts of sex trafficking of a minor. She has been detained since her arrest.
On March 26, 2015, Brown pleaded guilty to the same six offenses. On February 11, 2016, he was sentenced to 126 months of imprisonment.
This matter was investigated by the Federal Bureau of Investigation, aided by the Milford Police Department, the Stratford Police Department and the Connecticut State Police. U.S. Attorney Daly also recognized the significant assistance provided by the Connecticut Department of Children and Families, particularly its Human Anti-Trafficking Response Team (“HART”).
This case was prosecuted by Assistant U.S. Attorneys David Novick and Marc Silverman.
U.S. Attorney Daly encouraged trafficking victims, and anyone who comes in contact with potential victims of trafficking, to call the National Human Trafficking Resource Center Hotline at 888-373-7888. The hotline is run by the Polaris Project under a federal grant. Hotline operators are trained to identify potential trafficking situations, and will immediately refer tips to law enforcement. Individuals also can send an email to [email protected].
Trafficking victims also are encouraged to send a text message to “BEFREE” to receive an immediate response and help from the National Human Trafficking Resource Center.
Former Employee of Timeshare Consulting Firm Sentenced to 15 Months in Prison for Conspiring to Defraud Timeshare OwnersRead the Press Release
CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC was sentenced today to 15 months in prison for his role in conspiring to defraud owners of timeshare properties by offering phony consulting services, U.S. Attorney Paul J. Fishman announced.
Steven Cox, a/k/a “Steve Coluzzi,” 52, of Ventnor, N.J., pleaded guilty on May 7, 2013, before U.S. District Judge Noel Hillman to a superseding information charging him with one count of conspiracy to commit mail and wire fraud. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in these cases and statements made in court:
The Vacation Ownership Group, a/k/a VO Group LLC, had offices in Mays Landing and Egg Harbor Township, New Jersey, and claimed to offer consulting services to owners of timeshares, including cancelling, purchasing and upgrading the timeshares.
In 2010, Cox and several co-defendants started working at the VO Group and were trained by VO Group managers to call customers using prepared scripts. The defendants gave the customers the false impression that they were working for a bank or lending institution. After hearing defendants’ false representations, some customers sent checks to the VO Group. Cox told one victim that the victim could settle his timeshare debt for a large discount by mailing a $26,585 check to the VO Group. Cox admitted causing more than $200,000 in losses.
In addition to the prison term, Judge Hillman sentenced Cox to three years of supervised release. Restitution will be determined at a future hearing.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident
Agency, under the direction of Acting Special Agent in Charge Andrew Campi in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region, for their roles in the investigation leading to the guilty pleas. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.
The government is represented by Assistant U.S. Attorney R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Jeffrey M. Miller Esq., Philadelphia
Former Economic Development Employee Sentenced for Receiving Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former employee of the South Central Ozarks Council of Governments was sentenced in federal court today for receiving child pornography on his worksite computer.
Steven Gregary Reed, 37, of West Plains, Mo., was sentenced by U.S. District Judge M. Douglas Harpool to six years and six months in federal prison without parole.
Reed, who pleaded guilty on Sept. 8, 2015, was employed at the time of the offense as the coordinator of solid waste management with the South Central Ozarks Council of Governments, an economic development organization for seven counties in the south central region of Missouri (Douglas, Howell, Oregon, Ozark, Shannon, Texas, and Wright Counties), which is headquartered in Pomona, Mo.
A law enforcement officer with the Southwest Missouri Cyber Crime Task Force was investigating unlawful Internet usage and noticed that a certain computer had over 100 files of suspected child pornography. The officer continued to monitor the computer for several months and noticed the computer to be on a peer-to-peer file-sharing network on a regular basis, searching for child pornography. The computer was assigned to the South Central Ozarks Council of Governments.
On Oct. 29, 2014, law enforcement officers executed a search warrant at the office and determined that the desktop computer used by Reed was the computer identified in their investigation. Reed admitted to officers that he had watched child pornography the night before the execution of the search warrant. Reed viewed child pornography on a regular basis at work and home. Reed stated that he never downloaded child pornography at home but he did at work. He admitted to placing downloaded child pornography on a flash drive that he kept in his car. He added that he looked at child pornography on his work computer and often downloaded child pornography on his work computer.
Reed had approximately 131 movies and 126 graphic images of child pornography on his work computer.
This case was prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the Southwest Missouri Cyber Crimes Task Force, the FBI, the Missouri State Highway Patrol and the Howell County, Mo., Sheriff’s Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Deputy U.S. Marshal Sentenced to 10 Years in Prison for Yuba City Armed Robbery of Marijuana DealersRead the Press Release
SACRAMENTO, Calif. — Clorenzo Griffin, 38, of Fort Lauderdale, Florida, was sentenced today to 10 years in prison for planning and participating in the robbery of marijuana from drug dealers in Yuba City, United States Attorney Benjamin B. Wagner announced.
In sentencing Griffin, United States District Judge Kimberly J. Mueller noted that the defendant was very lucky that nothing worse happened on the day of his arrest. Judge Mueller had earlier sentenced Griffin’s co-conspirators, Andre Jamison, 40, of Miami, Florida, to seven years and three months in prison and crew member Rodney Rackley, 24, of Miami, Florida, to six years in prison.
According to court documents, on October 11, 2014, a CHP officer in Sutter County attempted to stop a speeding Jeep Patriot. Griffin, with his co-conspirators as passengers, was the driver of the rented Jeep and drove evasively. As the pursuing CHP officer drew closer, Griffin drew his firearm. This caused a Sutter County Sheriff’s deputy to fire at Griffin in order to halt his aggression toward the pursuing CHP officer. The three defendants eventually abandoned the vehicle in a parking lot on Starr Drive and fled on foot. The defendants were subsequently taken into custody with the assistance of the Sutter County Sheriff’s deputies. At the time of his arrest, Griffin possessed a loaded .40-caliber firearm. Further investigation revealed that Griffin was a deputy U.S. Marshal from South Florida.
Court documents further indicate that before fleeing from the CHP, Griffin, Rackley and Jamison, wearing police ballistic vests, had brandished firearms and robbed three individuals at gunpoint of approximately 24 pounds of marijuana. The robbery took place in the parking lot of a hotel off State Route 99 in Yuba City.
“Violence relating to marijuana trafficking is a serious problem in this region, but it is particularly deplorable when the conduct involves a rogue member of federal law enforcement,” said U.S. Attorney Wagner. “Mr. Griffin not only endangered the public by his conduct, but he abused the public trust placed in federal law enforcement by using his service firearm to commit the crime.”
This case was the product of an investigation by the Drug Enforcement Administration, the California Highway Patrol, the Sutter County Sheriff’s Office, the Yuba City Police Department, and the Sutter County District Attorney’s Office. Assistant United States Attorney Jason Hitt prosecuted the case.
Florida Investor Who Made More Than $250,000 from Insider Trading Scheme Pleads GuiltyRead the Press Release
TRENTON, N.J. - A Florida man today admitted trading on material, nonpublic information concerning Gilead Sciences Inc.’s $11 billion acquisition of New Jersey-based Pharmasset Inc., U.S. Attorney Paul J. Fishman announced.
Jay Fung, 42, of Delray Beach, Florida, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with conspiracy to commit securities fraud.
According to documents filed in this case and statements made in court:
In November 2011, a conspirator who worked at a global wealth management firm learned that Pharmasset was going to be sold for a significant profit per share. On Nov. 18, 2011, the conspirator passed the inside information to Fung, who then purchased call options and shares of Pharmasset.
On Nov. 21, 2011, Gilead publicly announced that it had entered into an agreement to acquire Pharmasset for approximately $11 billion, or $137 per share in cash. The purchase price represented an approximately 89 percent premium over Pharmasset’s closing price of $72.67 on Nov. 18, 2011.
Following the public announcement of Gilead’s acquisition of Pharmasset, Fung sold the Pharmasset shares and options he had purchased on Nov. 18, 2011, for total illegal profits of more than $250,000.
Fung faces a maximum penalty of five years in prison and a $250,000 fine, or twice the profits from the offense. Per his plea agreement, Fung must also consent to the entry of a forfeiture money judgment in the amount of $345,245. Sentencing is set for June 20, 2016.
The U.S. Securities and Exchange Commission (SEC) filed a civil complaint against Fung today.
U .S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, with the investigation leading to today’s plea. He also thanked the SEC for the assistance provided by its Market Abuse Unit, under the direction of Joseph Sansone and Robert Cohen, and its Philadelphia Regional Office, under the direction of Sharon Binger.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit.
Today’s plea is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov
Defense counsel: Jeffrey L. Cox, Boca Raton, Florida
First of Three Co-Defendants Sentenced in Gun Trafficking CaseRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that today in federal court, Senior United States District Judge James C. Fox sentenced AHKEEM DONTE PRATT, 24, to 188 months imprisonment, followed by 3 years of supervised release.
AHKEEM DONTE PRATT and two co-defendants were named in a seventeen count Indictment filed on March 24, 2015, charging him with conspiracy, theft of firearms from Federal Firearms Licensees, possession of stolen firearms, possession of a firearm by a convicted felon, interstate transportation of stolen firearms, and dealing in firearms without a license. On November 30, 2015, PRATT pled guilty to conspiracy, theft of firearms from a Federal Firearms Licensee, possession of a firearm by a convicted felon, and interstate transportation of stolen firearms.
According to the investigation, beginning in August, 2014, and continuing until December 5, 2014, PRATT and two co-defendants broke into numerous Federal Firearm Licensees around Eastern and Central North Carolina, stealing almost 200 firearms. PRATT and his co-defendants used various tools, including bolt cutters and hammers, to gain entry into such businesses to steal the firearms. Most of these incidents were captured on store surveillance video. Agents were able to obtain DNA from one of the tools left behind at the scene of a robbery and it matched a co-defendant. On two occasions PRATT and others drove to New Jersey and sold the stolen firearms to a third party. The stolen firearms were ultimately recovered from crime scenes in North Carolina, Pennsylvania, Maryland, and New Jersey, among other places. The crimes to which the recovered firearms were linked included various violent crimes, including rape, a robbery, and a murder.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Carrie Randa represented the government. The two remaining co-defendants will be sentenced at later dates.
Financial Management Company Owner Sentenced to 48 Months for Defrauding ClientsRead the Press Release
COLUMBUS, Ohio – Douglas E. Cowgill, 60, of Westerville, Ohio, was sentenced today in U.S. District Court to 48 months in prison, three years of supervised release and ordered to pay approximately $841,000 in restitution for wire fraud, theft or embezzlement from employee benefit plans, and perjury.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, James Vanderberg, Special Agent in Charge, the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and Joseph Rivers, Cincinnati Office Director of the U.S. Department of Labor - Employee Benefits Security Administration, announced the sentence handed down today by U.S. District Judge Michael H. Watson.
From July 2013 through August 2014, Cowgill was president and sole owner of Professional Investment Management (PIM), Inc. in Columbus, where he had been employed since July 1981.Cowgill used his positions at PIM to defraud investors and use their funds for his own use. From March 2008 through October 2013, he misappropriated approximately $840,575. He manually altered account balances in company software and wired the misappropriated funds to an account for his own use. Cowgill paid various personal obligations with the money, depositing the money into his bank accounts, bank accounts of his wife, and bank accounts of the Northwest Swim Club, a non-profit swim club in Columbus for which he served as the treasurer.
PIM had the funds of approximately 300 individual clients under management, and Cowgill’s fraudulent scheme harmed at least 125 victims.
Most of the victims had their money in one of approximately 15 retirement plans. Each of the retirement plans was a qualified employee pension benefit plan under the Employee Retirement Income Security Act of 1974, and Cowgill pleaded guilty to theft or embezzlement from employee benefit plans.
On January 23, 2014, Cowgill lied under oath before officers of the Securities and Exchange Commission (SEC) while the SEC was conducting an investigation to determine whether there had been violations of federal securities laws in connection with PIM.
In January 2014, in Columbus, Ohio, Cowgill gave a deposition in connection with the SEC’s investigation. As part of the deposition, Cowgill took an oath that he would testify truthfully and that all materials prepared by him in anticipation of his testimony were accurate and complete.
In connection with the deposition, Cowgill prepared responses to a background questionnaire that, in part, asked him to list all accounts in his name, in which he had any beneficial interest, or over which he had any control. In response, Cowgill failed to disclose his control of over five bank accounts associated with the Northwest Swim Club for which he was an authorized signatory. During his sworn deposition, Cowgill affirmed that his answers to the questionnaire were accurate, and again failed to disclose the five Northwest Swim Club accounts to the officers of the SEC. At the time of the deposition, Cowgill knew that the Northwest Swim Club had been a recipient of a substantial portion of the funds misappropriated by him. In doing so, Cowgill attempted to conceal his misappropriation of client funds from investigators.
Cowgill pleaded guilty to wire fraud, theft or embezzlement from employee benefit plans, and perjury in November 2015.
U.S. Attorney Stewart commended the cooperative investigation by the FBI and the U.S. Department of Labor - Office of the Inspector General and U.S. Department of Labor - Employee Benefits Security Administration, as well as Assistant United States Attorney Peter Glenn-Applegate, who is representing the United States in this case. U.S. Attorney Stewart also commended the SEC for its work on the related civil matter, prior to the initiation of this criminal case.
Ferris TX Man Pleads Guilty to Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that HARVEY LEE STONE, age 52, of Ferris, Texas, pled guilty to FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2).
The charge arose from an investigation by the Choctaw Nation Tribal Police, the Durant Police Department and the Federal Bureau of Investigation.
The Indictment alleges that on or about January 23, 2016, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, firearms, which had been shipped and transported in interstate commerce.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is not more than 10 years imprisonment, up to a $250,000.00 fine or both.
Assistant United States Attorney Dean Burris represented the United States.
Federal Jury Finds Man Guilty of Conspiracy and Theft of Brass Shell Casings from Marine Corps Base Camp PendletonRead the Press Release
Assistant U.S. Attorney Janet Cabral (619) 546-8715 and Michelle Pettit (619) 546-7972
NEWS RELEASE SUMMARY – March 9, 2016
SAN DIEGO - A federal jury has found John Vescuso guilty of theft of government property and conspiracy to sell and dispose of more than $500,000 of brass shell casings from Marine Corps Base Camp Pendleton from April 2010 to June 2012.
According to testimony and evidence presented at trial, Vescuso conspired with a former civilian employee on board Camp Pendleton, Cecil Garr, to remove the brass shell casings and other types of scrap metal from the School of Infantry’s hazardous materials lot, and to sell those materials for $555,640 over the two-year time period. The jury returned its verdict on Monday.
Vescuso, who was engaged in the business of recycling scrap metal, paid Garr cash to remove expended brass shell casings from the hazardous materials lot using his personal vehicles. Subsequently, he made arrangements directly with an Orange County, California, scrap metal company to place roll-off containers in the lot to collect the brass shell casings and other scrap metal. Once those containers were full, Vescuso contacted the scrap metal company to retrieve the containers from Camp Pendleton. Vescuso then collected payment directly from the scrap metal company and shared those proceeds with Garr, resulting in a substantial loss to the United States Marine Corps.
Prior to the trial against Vescuso, Garr pleaded guilty to conspiring with Vescuso to steal the more than $500,000 in brass shell casings from Camp Pendleton.
The investigation of the theft was a joint effort between the Naval Criminal Investigative Service (NCIS) and Defense Criminal Investigative Service (DCIS).
“It is unfortunate that anyone would try to take advantage of the military resources that are so important to our community and to our national security,” said U.S. Attorney Laura Duffy. “We will continue to do our part to ensure the military bases in our community are safe and secure from those who want to cause harm to the mission of the Armed Forces.”
Chris Hendrickson, DCIS Special Agent in Charge for the Western Field Office, said, “America's warfighters deserve the very best to perform their jobs and the taxpayers expect nothing less. Theft of USMC resources takes away precious dollars necessary for the dedicated American warfighter. This guilty verdict should serve as a warning for those intent on defrauding the U.S. military and American public that the Defense Criminal Investigative Service (DCIS) and our law enforcement partners will pursue these crimes relentlessly.”
“The Department of Defense has strict policies and procedures in place to ensure that all property and scrap materials generated during military training are recycled or reused for the benefit of our Armed Forces,” said Charles Warmuth, NCIS Special Agent in Charge for the Marine Corps West Field office. “In this case, the Marine Corps at Camp Pendleton and the taxpayers saw a loss of over a half a million dollars on board Marine Corps Base Camp Pendleton due to the greed of two individuals. NCIS, in partnership with DCIS, worked tirelessly to ensure these individuals were brought to justice. Theft of government property will not be tolerated, and NCIS will continue to investigate and aggressively prosecute all individuals who attempt to engage in this type of criminal activity.”
The defendant is scheduled to appear for sentencing before U.S. District Judge Thomas J. Whelan on June 13, 2016.
DEFENDANT Criminal Case No. 14CR2863-W
John Vescuso Age: 40 Wildomar, California
SUMMARY OF CHARGE
Count 1: Title 18, United States Code, Section 371: Conspiracy to Commit the Offense of Theft of Government Property.
Counts 2-4: Title 18, United States Code, Section 641: Theft of Government Property.
Maximum penalties: 10 years’ prison and a $250,000 fine.
INVESTIGATING AGENCIES
Naval Criminal Investigative Service
Defense Criminal Investigative Service
Fairmont, WV man sentenced to more than seven years for cocaine traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Ratique Wilson, also known as “Montana,” 25, of Fairmont, West Virginia, was sentenced today to 87 months in prison for cocaine trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Wilson sold cocaine base in January 2015 in Marion County, West Virginia. He pled guilty in November 2015 to one count of “Distribution of Cocaine Base.”
In another matter, Rholan D. Pryor, 26, of Pittsburgh, Pennsylvania, was sentenced today to six months in prison for selling heroin in April 2014 in Harrison County, West Virginia. He pled guilty in October 2015 to one count of “Distribution of Heroin – Aiding and Abetting.”
Assistant U.S. Attorney Andrew Cogar prosecuted Pryor and Assistant U.S. Attorney Zelda Wesley prosecuted Wilson on behalf of the government. The West Virginia State Police investigated both defendants. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, also investigated Pryor.
U.S. District Judge Irene M. Keeley presided.
Erie Felon Charged with Illegally Possessing FirearmRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, has been indicted by a federal grand jury in Erie on a charge of violating federal firearm laws, United States Attorney David J. Hickton announced today.
The one-count indictment named Otemeo Dupree Williams, 32, as the sole defendant.
According to the indictment presented to the court, Williams unlawfully possessed a firearm while being prohibited from firearm possession because he is a convicted felon.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
This case was prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.
The Erie Bureau of Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives 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.
Erie Convenience Store Owner Charged with FraudRead the Press Release
ERIE, Pa. - A resident of Erie, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of theft of government property and WIC fraud, United States Attorney David J. Hickton announced today.
The two-count indictment named James Hunter, Jr., 37, of Erie, Pennsylvania, as the sole defendant.
According to the indictment presented to the court, from July 2012 to June 2015, Hunter, who is the owner and operator of Melo’s Stop N Shops in Erie, committed WIC fraud by accepting food stamps and WIC checks for cash or ineligible items such as cigarettes.
The law provides for a maximum total sentence of 15 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The United States Department of Agriculture, Office of Inspector General and the Erie Bureau of Police 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.
Dracut Pharmacy Settles Improper Dispensing and Recordkeeping AllegationsRead the Press Release
BOSTON – The U.S. Attorney’s Office reached a $42,500 civil settlement today with Alexander’s Pharmacy in Dracut, Mass., and its owner and operator, George Kontos, in connection with the improper dispensing of controlled substances and the failure to keep proper records and maintain effective controls against diversion.
“Ensuring the proper dispensing and handling of prescription drugs is a critical part of our ongoing efforts to protect patient safety and prevent drug diversion,” said United States Attorney Carmen M. Ortiz. “We will continue to monitor and investigate those handling controlled substances, whether they are large pharmacy chains or small, independently owned pharmacies, to ensure they adhere to the DEA’s regulations.”
“DEA registrants are responsible for dispensing and handling controlled substances and ensuring that complete and accurate records are properly kept in compliance with the Controlled Substance Act,” said DEA Special Agent in Charge Michael J. Ferguson. “Our obligation is to improve public safety and public health, and we are committed to working with our law enforcement and regulatory partners to ensure that these rules and regulations are followed.”
According to the settlement, Alexander’s Pharmacy, without physician authorization, improperly filled prescriptions with larger dosage pills than prescribed because it had exhausted its inventory of the prescribed dosage. In addition, Alexander’s records did not account for hundreds of pills in the pharmacy’s inventory, including medications at high risk of diversion, such as oxycodone and alprazolam. Furthermore, Alexander’s failed to maintain invoices, document substituted medications, and account for medications that customers did not pick up.
Kontos and Alexander’s Pharmacy cooperated with the DEA’s investigation and implemented new recordkeeping and security measures. Kontos and Alexander’s Pharmacy also agreed to permit the DEA to perform inspections of the pharmacy during the next three-and-a-half years without a warrant.
U.S. Attorney Ortiz and DEA Special Agent in Charge Ferguson made the announcement today. The case was handled by Assistant U.S. Attorney Brian LaMacchia of Ortiz’s Civil Division.
Dorchester Man Sentenced for Sex Trafficking Two Teenage RunawaysRead the Press Release
BOSTON –A Dorchester man was sentenced today in U.S. District Court in Boston for transporting two 14 year-old girls from Massachusetts to Rhode Island for the purpose of prostituting them.
Derek Miranda, a/k/a Dub, 21, was sentenced by U.S. District Court Chief Judge Patti B. Saris to 57 months in prison and five years of supervised release. In December 2015, Miranda pleaded guilty to transporting the two girls from Massachusetts to Providence, R.I. on or about Jan. 15, 2015 with the intent for them to engage in prostitution.
On Jan. 14, 2015, Miranda met two 14 year-old girls who had run away from their homes in Lowell and brought them to a hotel in Brockton where he provided them with different clothes and told them that he “had guys coming over.” One of the girls texted a friend for help who then notified the police and a search was initiated. The girls left the hotel and temporarily stayed with a friend in Brockton. However, as runaways with no place to go, they contacted Miranda who arranged to have them picked up by an Uber driver. Miranda then had them driven to a house in Providence where he intended to have the girls provide sex for a fee. One of the girls texted a friend to notify local law enforcement authorities who then rescued them and arrested Miranda.
United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of the Homeland Security Investigations in Boston, made the announcement today. The case was investigated with the assistance of the Massachusetts State Police assigned to Attorney General Maura Healey’s Office, the Providence, Lowell and Brockton Police Departments, and the Rhode Island Attorney General’s Office. The case is being prosecuted by Assistant U.S. Attorney S. Theodore Merritt of Ortiz’s Civil Rights Enforcement Team and Special Assistant U.S. Attorney Deborah Bercovitch, Chief of AG Healey’s Human Trafficking Division.
Director of Lisle-Based Hospice Company Convicted in Scheme to Fraudulently Bill Medicare for Medically Unnecessary ServicesRead the Press Release
CHICAGO — A federal jury has convicted the director of nursing assistants at Passages Hospice for participating in a scheme to bill Medicare and Medicaid for unnecessary hospice services.
ANGELA ARMENTA, 35, of Wheeling, was convicted Tuesday night on three counts of health care fraud. Each count is punishable by up to ten years in prison.
Armenta is the seventh defendant to be convicted as part of the federal investigation into Passages Hospice LLC. The prior convictions include former co-owner SETH GILLMAN and the company itself.
Gillman, 47, of Lincolnwood, pleaded guilty last month to one count of health care fraud. In his plea agreement, Gillman admitted that Passages regularly billed Medicare and Medicaid for a high level of hospice service called “general inpatient,” even though he knew that many of these services were not medically necessary. Gillman further admitted that he implemented a bonus system to incentivize nursing directors and nursing-assistant directors, including Armenta, to place patients on general inpatient services when the patients did not need such services.
Evidence at Armenta’s seven-day trial revealed that from 2009 to 2012, Armenta was paid more than $300,000 in bonuses based on the number of patients who were placed on the higher level of services in the region Armenta and others supervised. Witnesses at her trial testified that Armenta told nurses to disregard proper training about general inpatient services.
U.S. District Judge Thomas M. Durkin did not immediately schedule Armenta’s sentencing hearing. A status hearing was set for July 19, 2016, at 9:00 a.m., at which time her sentencing date will be set.
In addition to Armenta, Gillman, and Passages Hospice, the four other defendants convicted in the investigation are:
GWEN HILSABECK, 49, of Pontiac, Passages’ former administrator.
CARMEN VELEZ, 36, of Palatine, Passages’ former director of clinical services.
JULIE PARKER, 56, of Shorewood, Passages’ former compliance officer.
LEROY MOORE, 49, of Shorewood, Passages’ former head of marketing.
In his plea agreement, Moore admitted that he and others at Passages offered gifts to staff members of various nursing homes to induce them to refer patients to Passages. The gifts included tickets to events, electronic music players, televisions, and gift cards.
Gillman, Passages, Hilsabeck, Velez, Parker and Moore are scheduled to appear for a status hearing before Judge Durkin on March 16, 2016, at 9:00 a.m., at which time their sentencing dates will be set.
The conviction of Armenta was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the U.S. Justice Department and the U.S. Department of Health and Human Services to prevent fraud and to enforce anti-fraud laws around the country. Dozens of defendants have been charged in numerous fraud cases since the strike force began operating in Chicago in 2011.
The government is represented by Assistant U.S. Attorneys Stephen Chahn Lee, Abigail Peluso and James Durkin.
Davenport Man Sentenced to Prison for Distributing Crack CocaineRead the Press Release
DAVENPORT, IA – On March 3, 2016, Brandon Jermaine Sykes, 33, of Davenport, Iowa, was sentenced by Senior United States District Court Judge James E. Gritzner to 360 months in prison for conspiracy to distribute cocaine base ("crack"), announced Acting United States Attorney Kevin E. VanderSchel. Sykes was ordered to serve five years of supervised release following his prison term and to pay $100 towards the Crime Victims’ Fund.
Sykes pleaded guilty to conspiracy to distribute at least 280 grams of cocaine base on December 15, 2015. According to the plea agreement, from April 2013 to about April 2, 2015, Sykes obtained powder cocaine from individuals in Chicago, Illinois, and then would convert it to "crack" cocaine and sell it to individuals living in Davenport. Sykes had 15 different customers in the Davenport area. On four different occasions, law enforcement utilized a confidential source to purchase "crack" cocaine from Sykes at his Davenport residence.
This matter was investigated by the Davenport Police Department’s Tactical Operations Bureau, the Davenport Police Department, and the Iowa Division of Narcotics Enforcement. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Conspirator Admits to Fraudulently Obtaining Vehicle LoansRead the Press Release
Greenbelt, Maryland – Derrick Kwan Byas, Jr., age 27, of Baltimore, pleaded guilty today to conspiring to commit bank fraud and aggravated identity theft arising from a bank fraud scheme.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief Hank Stawinski of the Prince George’s County Police Department.
According to his plea agreement, from January 2009 to April 29, 2015, Byas and others applied for vehicle loans with financial institutions and lenders using false information as to employment history, addresses, dates of birth and social security numbers. They created and submitted fake documents, such as lien releases, utility bills, paystubs, letters of recommendation and a police report.
When applying for the loans, Byas had no intention of actually purchasing a vehicle and instead knew that any loan proceeds would be split between himself and others. Byas and his co-conspirators often applied for vehicle loans on the same vehicle with different lenders. They deposited the loan funds into bank accounts and cashed loan checks at liquor stores. They failed to pay the vehicle loans, which often resulted in the vehicles being repossessed by the lenders.
Byas and his co-conspirators also nominally agreed to sell the vehicles, obtained money from the sales and then did not provide the vehicles to the buyers.
In February 2014, Byas obtained a credit card using a false social security number, resulting in a loss to the bank issuing the card. From May to November 2014, Byas attempted to obtain six car loans, three personal loans and a credit card.
The intended loss resulting from Byas’s fraudulent conduct was at least $220,603.
Byas faces a maximum sentence of 30 years in prison for conspiring to commit bank fraud and a mandatory minimum of two years in prison for aggravated identity theft, consecutive to any other sentence. U.S. District Judge Deborah K. Chasanow scheduled sentencing for July 11, 2016 at 2:00 p.m.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and the Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Thomas P. Windom and Joseph R. Baldwin, who are prosecuting the case.
Chula Vista Woman Admits Stealing More Than $164,000 from IRSRead the Press Release
Assistant U.S. Attorney Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – March 9, 2016
SAN DIEGO – Cecilia Hernandez pleaded guilty Tuesday to stealing more than $164,000 from the Internal Revenue Service – despite owing the agency for back taxes that she had failed to pay.
Hernandez admitted that she sent the IRS more than a half million dollars in worthless checks written on closed accounts. The checks were ostensibly intended to pay off a tax debt which Hernandez owed from previous years. The checks (written in 2011 and 2013) were for amounts far greater than the tax debt and triggered a series of fraudulent refunds. In all, Hernandez wrote more than $525,000 in bad checks to the IRS, which resulted in her obtaining over $164,000 in the form of fraudulent refunds. Among other things, Hernandez spent her illicit proceeds on a $33,000 Chrysler 300 and an extravagant Quinceañera for her daughter costing more than $40,000.
As part of her plea, Hernandez agreed to restitution of the funds stolen from the IRS. Hernandez will appear for sentencing on June 14, 2016 at 9:00 a.m. before U.S. District Judge Anthony J. Battaglia.
DEFENDANT: Case Number 16CR247-AJB
Cecilia Hernandez Age: 46 Chula Vista, CA
SUMMARY OF CHARGES
Title 18, United States Code, Section 641-Theft of United States’ Money
AGENCIES
Internal Revenue Service
California Women Plead Guilty to Smuggling Threatened North American Wood Turtles out of the United StatesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that SO YI CHAN, age 29, and her aunt, SUI FAN CHIU, age 50, both from California, pled guilty today to a Superseding Bill of Information charging CHAN with smuggling turtles out of the United States and CHIU with misprision of the turtle smuggling.
CHAN and CHIU were part of a group of individuals involved in capturing the threatened species of North American Wood turtles from the wild in Pennsylvania, shipping the turtles by mail though the United States, first to Louisiana and then on to California, and then illegally exporting the turtles to Hong Kong. According to court documents, CHAN and CHIU’s homes served as the drop locations where the turtles were sent in California. CHAN also admitted that she had packaged the turtles and mailed them to Hong Kong, falsely declaring that the boxes contained legos and magazines.
CHAN faces a maximum term of ten years imprisonment, a fine of $250,000, and up to 3 years of supervised release following any term of imprisonment. CHIU faces a maximum term of three years imprisonment, a fine of $250,000, and up to one year of supervised release following any term of imprisonment U.S. District Judge Ivan L.R. Lemelle set sentencing for June 15, 2016.
U.S. Attorney Polite praised the work of the Agents of the U.S. Fish and Wildlife Service, Homeland Security Investigations, and the United States Postal Inspection Service in investigating this matter. Assistant United States Attorney David Haller is in charge of the prosecution.
Buffalo Man Pleads Guilty to Crack Cocaine ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Morrell Buster, 43, of Buffalo, NY, pleaded guilty before Senior U.S. District Judge William M. Skretny, to possession with intent to distribute, and distribution of crack cocaine. The charge carries a maximum penalty of 30 years in prison and a $2,000,000 fine.Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that between June 2013 and February 25, 2014, the defendant purchased and then distributed crack cocaine. On January 17, 2014, Buster was found in possession of three grams of crack cocaine while at the Niagara Outlet Mall in Niagara County, NY.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen and the Lackawanna Police Department, under the direction of Chief James Michel.
Sentencing is scheduled for June 22, 2016 at 11:00 a.m. before Judge Skretny.
Bard College to Pay $4 Million to Resolve False Claims Act AllegationsRead the Press Release
SACRAMENTO, Calif. — Bard College has agreed to pay $4 million to resolve allegations that it violated the False Claims Act in connection with a federal grant and with regard to the receipt and disbursement of Title IV federal student aid funds, United States Attorney Benjamin B. Wagner announced today.
The settlement announced today stems from a whistleblower complaint filed by two former students of Bard’s Master of Arts in Teaching Program at Paramount Bard Academy in Delano, California (Kern County) pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the United States and to share in the proceeds of the suit. The act permits the United States to intervene and take over the lawsuit, as it did in this case as to some of the students’ claims. The students will receive a percentage share of the settlement in an amount to be determined.
Bard College, a nonprofit institution with its main campus in Annandale-on-Hudson, New York, received funds under the Department of Education’s Teacher Quality Partnership Grant Program. The settlement resolves allegations that Bard received funds under the Teacher Quality Partnership Grant Program despite failing to comply with the conditions of the grant.
The settlement also resolves allegations that Bard awarded, disbursed, and received Title IV student loan funds at campus locations before such locations were accredited or before providing notice of such locations to the Department of Education, in violation of applicable regulations and Bard’s Title IV Program Participation Agreements with the Department of Education.
“When institutions of higher education opt to participate in loan and grant programs administered by teh Department of Education, their participation comes with conditions designed to protect the institution’s students and the integrity of the Department of Education’s programs,” said United States Attorney Benjamin B. Wagner. “Today’s resolution demonstrates the Department of Justice’s continuing commitment to ensuring that such institutions meet those conditions and fulfill their promises.”
“Throughout this Administration, the Department of Education has aggressively enforced accountability and compliance laws for institutions of higher education to protect students, families, and taxpayers. Today’s agreement illustrates our commitment to these enforcement efforts,” said U.S. Education Under Secretary Ted Mitchell. “Bard’s resolution through this agreement indicates a willingness to take responsibility, and a commitment to more effectively meet the requirements for implementing grants and distributing federal student aid and loans. As with all institutions, the Department will continuously monitor Bard to ensure that students, families and taxpayers are protected. ”
“I’m proud of the work of OIG special agents and staff and our colleagues in the U.S. Attorney’s Office whose work brought about today’s fair and reasonable settlement,” said Natalie Forbort, Special Agent in Charge of the Office of Inspector General’s Western Regional Office. “We will continue to work together to protect and maintain the integrity of the Department of Education’s programs. America’s taxpayers and students deserve nothing less.”
The settlement was the result of a coordinated effort among the Eastern District of California’s U.S. Attorney’s Office, the U.S. Department of Education and the U.S. Department of Education, Office of Inspector General. Assistant United States Attorney Vincente A. Tennerelli represented the United States in this matter.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
Armed Career Criminal from Knott County Sentenced to 320 Months for Illegal Possession of FirearmsRead the Press Release
LONDON, Ky. – A Knott County man, with a significant criminal history, has been sentenced to 320 months in federal prison for unlawfully possessing firearms.
On March 3, U.S. District Judge Danny C. Reeves sentenced Roy Dean Pratt, Jr., 50, for being a felon in possession of firearms. Pratt’s sentence was enhanced because his criminal history classified him as an armed career criminal, which means he had previously been convicted of three or more violent felonies or serious drug offenses. Under federal law, Pratt must serve at least 85 percent of his prison sentence.
In December, 2015, a jury convicted Pratt of the offense. Testimony at trial established that, in April 2015, Kentucky State Police conducted a search of Pratt’s home and located numerous firearms. Pratt’s prior felony convictions prohibited from possessing the firearms. Pratt has a significant criminal record dating back to 1995.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; John R. Cooper, Special Agent in Charge, ATF, Louisville Field Division; and Rodney Brewer, Commissioner of the Kentucky State Police, jointly announced the sentence.
Assistant U.S. Attorney Todd Bradbury prosecuted this case on behalf of the federal government.
Amherst Company Fined for Criminal ContemptRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Acquest Transit, LLC, based in Amherst, NY, which was convicted of criminal contempt, was fined $250,000 and sentenced to two years probation by Senior U.S. District Judge William M. Skretny.Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that Acquest Transit, LLC, was established to purchase an approximately 97-acre piece of property at 10880 Transit Road in Amherst. William L. Huntress served as the sole member and manager of Acquest Transit, LLC. On January 20, 2006, the defendant purchased the site for $425,000.
In 2009, the Department of Justice instituted a civil proceeding alleging that the site purchased by Acquest contained federally protected wetlands. The civil action further alleged that the company was engaging in prohibited filling of the wetlands.
On July 15, 2009, Judge Skretny issued a preliminary injunction ordering the defendant not to place additional fill or perform any additional earthmoving work at the site. On May 25, 2010, a farmer, acting on behalf of the defendant, performed mechanized activities on the site with agricultural equipment. These actions were a violation of Judge Skretny’s order, and the defendant acted willfully in violating the order.
The sentencing is the culmination of an investigation by the Environmental Protection Agency under the direction of Special Agent in Charge, Vernesa Jones-Allen.
Ambulance Company Employee Sentenced to 37 Months in Prison for FraudRead the Press Release
PHILADELPHIA – Fritzroy Brown, 39, of Philadelphia, PA, was sentenced today to 37 months in prison for a healthcare fraud scheme centering on Brotherly Love Ambulance, Inc. In addition to the prison term, U.S. District Court Judge Gerald J. Pappert ordered three years of supervised release, restitution in the amount of $2,015,712.52 to Medicare, restitution of $14,150 to the Commonwealth of Pennsylvania, and a $300 special assessment.
Brown was a certified Emergency Medical Technician (EMT) with Brotherly Love. While employed by Brotherly Love, Brown transported patients who were able to walk and could travel safely by means other than ambulance and who, therefore, were not eligible for ambulance transportation under Medicare requirements. Brown and other conspirators falsified reports to make it appear that the patients needed to be transported by ambulance when he knew that the patients could be safely transported by other means and, in fact, many of them could walk. In addition, Brown and other conspirators paid kickbacks to patients to ensure that they would use Brotherly Love Ambulance for services which were not medically necessary. The company also transmitted bills for ambulance services for patients who were not transported by ambulance, but whom Brown and others drove in personal vehicles. Brown and others completed documentation of these transports that made it appear that the individuals had been transported in an ambulance when they had not, and that misrepresented the medical care provided to and safety precautions taken for these patients.
As a result of the fraudulent scheme at Brotherly Love, the Medicare program paid more than $2 million for fraudulent claims from Brotherly Love. In addition, Brown submitted false requests to the Commonwealth of Pennsylvania for unemployment compensation when he was, in fact, working full time for Brotherly Love. The Commonwealth of Pennsylvania paid over $14,000 in unemployment compensation to Brown induced by this fraud.
The case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Labor Office of the Inspector General. It is being prosecuted by Assistant United States Attorneys Mary E. Crawley and Paul W. Kaufman.
Alamogordo Resident Pleads Guilty to Federal Methamphetamine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Robin Lee Lovelace, 56, of Alamogordo, N.M., pleaded guilty today in federal court in Las Cruces, N.M., to methamphetamine trafficking charges. Under the terms of the plea agreement, Lovelace will be sentenced to 12 years in federal prison followed by a term of supervised release to be determined by the court.
Lovelace was one of 34 individuals charged with federal and tribal drug offenses as the result of an 18-month multi-agency investigation led by the DEA and BIA into methamphetamine trafficking on the Mescalero Apache Reservation. Eighteen defendants, including five members of the Mescalero Apache Tribe and 13 non-Natives were charged in six federal indictments and a federal criminal complaint. Sixteen other members of the Mescalero Apache Tribe were charged in tribal criminal complaints approved by the Mescalero Apache Tribal Court.
The investigation leading to the federal and tribal charges was initiated in May 2014, in response to an increase in violent crime on the Mescalero Apache Reservation perpetrated by methamphetamine users. The investigation initially targeted a drug trafficking organization that was allegedly distributing methamphetamine within the Reservation, and later expanded to include two other drug trafficking organizations in southeastern New Mexico that allegedly served as sources of supply for the methamphetamine distributed within the Reservation. In Aug. 2014, the investigation was designated as part of the Justice Department’s Organized Crime Drug Enforcement Task Force (OCDETF) program, which combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations. The investigation is one of the first OCDETF investigations to utilize electronic surveillance (wiretaps) in Indian Country. More than ten kilograms of methamphetamine were seized during the course of the investigation.
Lovelace was arrested on Nov. 20, 2015, on an indictment charging her and seven other non-Natives with methamphetamine trafficking and money laundering offenses. The indictment charged Lovelace with participation in a methamphetamine trafficking conspiracy, distribution of methamphetamine, possession of methamphetamine with intent to distribute, and use of a communication device to facilitate a drug trafficking crime.
During today’s proceedings, Lovelace pled guilty to the methamphetamine trafficking conspiracy, distribution of methamphetamine and possession of methamphetamine with intent to distribute and admitted that between April 9, 2015 and Oct. 16, 2015, she and a co-defendant conspired to sell methamphetamine to another individual who unbeknownst to them was an undercover law enforcement agent. During that same time period, she also sold methamphetamine to other individuals who then distributed methamphetamine to their customers.
Lovelace also admitted selling the following quantities of methamphetamine to an undercover agent as follows:
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27.4 grams on April 9, 2015, in Bent, N.M.
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56 grams on April 17, 2015, in Mescalero
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84 grams on May 8, 2015, in Mescalero
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112 grams on May 15, 2015, in Mescalero
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112 grams on June 8, 2015, in Mescalero
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140 grams on July 1, 2015, in Mescalero
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580 grams on July 24, 2015, in Socorro,
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140 grams on Aug. 6, 2015, in Mescalero,
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140 grams on Sept. 3, 2015, in Tularosa, N.M.
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212 grams on Oct. 9, 2015, in Alamogordo, N.M.
Lovelace also admitted that on Oct. 15, 2015, she facilitated the sale of 364.2 grams of methamphetamine to an undercover law enforcement agent.
Lovelace remains in custody pending a sentencing hearing which has yet to be scheduled
Lovelace is the fourth of the 18 federal defendants to enter a guilty plea. On March 3, 2016, Tandee Sheree Bettag, 38, of Alamogordo, pled guilty and admitted that from Aug. 2015 through Sept. 2015, a codefendant provided her with methamphetamine which she distributed; she repaid her supplier with proceeds she obtained from selling the drugs. Bettag further admitted that on Aug. 15, 2015, she used text messaging to arrange the delivery of money to a codefendant to cover a drug debt and pick up additional methamphetamine, and on Aug. 17, 2015, she used text messaging to discuss, money for a drug transaction. At sentencing, Bettag faces a maximum of 20 years in federal prison. She remains in custody pending a sentencing hearing which has yet to be scheduled.
On Feb. 17, 2016, Jerilyn Lee Munoz, 27, of Artesia, N.M., pled guilty to a money laundering conspiracy charge. In entering the guilty plea, Munoz admitted that between April 2015 and Oct. 2015, she maintained a bank account that was used by another person to deposit the proceeds of drug trafficking crimes in order to conceal the proceeds. Munoz admitted that the other person deposited approximately $25,000.00 into her bank account during that period. At sentencing, Munoz faces a statutory maximum penalty of 20 years in prison followed by not more than three years of supervised release. Her sentencing hearing has yet to be scheduled.
Wallace Rice, 23, an enrolled member of the Mescalero Apache Nation who resides in Mescalero, N.M., pled guilty to a methamphetamine distribution charge on Feb. 5, 2016. At sentencing, Rice faces a statutory maximum penalty of 20 years in federal prison followed by not less than three years of supervised release.
The remaining 14 federal defendants have entered not guilty pleas to the charges against them. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The federal and tribal cases were investigated by the Las Cruces office of the DEA, District IV of the BIA’s Office of Justice Services (Mescalero Agency), BIA’s Division of Drug Enforcement, Mescalero Tribal Police Department, Hatch Police Department, FBI and Lea County Drug Task Force. Assistant U.S. Attorney Terri J. Abernathy of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the federal cases, and Mescalero Tribal Prosecutor Alta Braham is prosecuting the tribal cases.
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Alabama Couple Pleads Guilty to Bank FraudRead the Press Release
Douglas W. Scott, 46, and Azar Ardestani, 33, both of New Market, Alabama, pleaded guilty on March 3, 2016, to Bank Fraud and Conspiracy to Commit Bank Fraud, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.
At the plea hearing, Scott and Ardestani admitted using their respective used car businesses in a criminal scheme to defraud multiple vehicle finance lenders, including federally insured financial institutions, automotive finance lenders, and federally insured credit unions. As part of their scheme, they would secure a loan to purchase a vehicle and thereafter seek subsequent, secured automotive loans on the same vehicle from other financial institutions.
The defendants were able to secure additional loans on the same vehicle by agreeing to provide as collateral a “clean” or “clear” title of a vehicle that they had fraudulently obtained. Often, they provided subsequent lenders with copies of false title applications, unfiled tax returns, and other qualifying information, knowing that the lenders expected to receive title to the vehicle to perfect the lien, and knowing that the lender would not have funded the loan as an unsecured loan. Scott and Ardestani guaranteed subsequent lenders that they would be in first secured position and promised to provide the subsequent lenders with the original title to perfect their liens. Instead, they would submit fraudulent information to the Alabama Department of Revenue to “erase” the lien or falsely show that the lien had been paid off.
Because both defendants were authorized dealers in Alabama, they had the authorization to apply for replacement of lost titles, which they did in order to fraudulently release liens and to secure replacement titles that showed no liens on the vehicles, effectively “washing” the vehicle title. In some instances, they would delay submission to the lender of the promised “clean” title in order to collateralize another loan. They also sold lien-encumbered vehicles “out of trust” after obtaining “washed” titles. As an example, the couple obtained nine loans for a single vehicle, each time, falsely assuring the new lender that the vehicle was free of liens. When a financial institution put sufficient pressure on the defendants about getting the promised titles, the defendants would pay off the loans, usually by obtaining additional loans.
Between May 19, 2010 and January 10, 2015, Scott and Ardestani perpetrated this scheme with well over a hundred vehicles and over 65 victim financial institutions, with a total anticipated loss of approximately $5,900,000.
The sentencing hearings are set for June 16, 2016. Pursuant to the plea agreement, Scott and Ardestani face potential sentences of up to 30 years in prison, restitution in the amount of at least $3,800,000 to victims of the crime and a fine to be determined by the Court.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Carrie Daughtrey is prosecuting the case.
Accounting manager sentenced in embezzlement schemeRead the Press Release
Indianapolis –United States Attorney Josh J. Minkler announced today that a former accounting manager at Carrier Corporation (Carrier), a subsidiary of United Technologies Carrier (UTC), was sentenced for his role in an insider embezzlement scheme. Ryan King, 44, Indianapolis, was sentenced to 12 months in federal prison by U. S. District Judge Sarah Evans Barker.
“White collar criminals steal through position and influence but are thieves just the same,” said Minkler. “Those who choose to commit this type of crime will be held accountable through the partnership of government and private industry to root out crime in whatever form.”
King was employed by Carrier as an accounting manager from June 2103 through April 2014. He was entrusted to oversee Carrier’s financial transactions including cost accounting, hourly payroll and preparation of financial statements among other duties.
In June 2013, King opened a personal checking account in the name of “Carrier Services.” He then instructed various vendors to make payments owed in the form of checks made out to Carrier Services. When King received the checks he diverted the money by depositing the checks into his personal account. Further, King sent inflated invoices to several vendors by facsimile transmissions. He then instructed the vendors to wire the over payment to his personal account. In total, $1,095,201 was diverted to his personal account.
Pre-charge, the government recovered over $500,000 from various savings and investment accounts and assets owned by King. These monies and assets will be applied toward the $1,233,343.80 in restitution ordered by the Court.
This case was investigated by the Federal Bureau of Investigation.
According to Assistant United States Attorney Cynthia J. Ridgeway who prosecuted this case for the government, King was also sentenced to 6 months of home detention during his two years of supervised release that will commence upon his release from the Bureau of Prisons.
Tuesday 8 March 2016
Wesleyan Football Player Pleads Guilty to Distributing Synthetic Drug That Caused OverdoseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration for New England, today announced that RYAN WELCH, 22, of Salem, Mass., waived his right to indictment and pleaded guilty today before U.S. District Judge Victor A. Bolden in Bridgeport to distributing a synthetic hallucinogenic drug at Wesleyan University.
“Federal law enforcement once again finds itself on a university campus, investigating the broad distribution of a synthetic hallucinogen that nearly caused the fatal overdose of a college student,” said U.S. Attorney Daly. “The U.S. Attorney’s Office continues to work closely with DEA and our state and local partners to actively investigate drug overdoses across Connecticut. It is our collective priority to identify the source and makeup of the drugs that cause overdoses, to remove these drugs from the streets and out of the hands of vulnerable users, and to prosecute those responsible for their illegal distribution. Too many young people believe synthetic drugs are harmless party drugs when, as this case makes abundantly clear, they are highly dangerous.”
According to court documents and statements made in court, on October 31, 2015, the Wesleyan University Department of Public Safety responded to an emergency call from a campus dorm room and found a male student in severe medical distress. The victim was convulsing and struggling to breathe, and his body temperature was significantly elevated. The victim was transported by ambulance to the hospital where he spent several days recovering.
The investigation revealed that the victim had ingested “2C-B,” and that WELCH was the source of the 2C-B that the victim ingested.
The investigation further revealed that that WELCH, a member of Wesleyan’s football team, had distributed 2C-B to between 15 and 20 other members of the team during the 2015 season. Initially, he distributed the drug in liquid form, mixing it in a water bottle with a non-alcoholic drink. Later, he distributed it in powder form, in clear capsules. Some teammates referred to the 2C-B distributed by WELCH as “Welchie’s drug” or “Welchie’s special.” Certain players paid WELCH approximately $10 for each single-dose capsule.
The investigation further revealed that WELCH purchased the synthetic drug on the Dark Web using Bitcoin.
WELCH was arrested on a federal criminal complaint on January 21, 2016.
WELCH pleaded guilty to one count of possession with intent to distribute, and distribution of, 2C-E and 2C-B, Schedule I controlled substances (hallucinogens). The offense carries a maximum term of imprisonment of 20 years and a fine of up to $1 million.
Judge Bolden scheduled sentencing for May 20, 2016.
WELCH is released on a $100,000 bond.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Tactical Diversion Squad, which includes participants from the New Haven, Hamden, Greenwich, Shelton, Bristol, Vernon and Wilton Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Robert M. Spector and Senior Assistant State’s Attorney Eugene Calistro of the Middlesex State’s Attorney’s Office, who has been cross-designated as a Special Assistant U.S. Attorney in this matter.
United States Settles False Claims Act Allegations Against 21st Century Oncology for $34.7 MillionRead the Press Release
21st Century Oncology Inc., the nation’s largest physician led integrated cancer care provider and its wholly owned subsidiary South Florida Radiation Oncology LLC, have agreed to settle allegations that they performed and billed for procedures that were not medically necessary, the Department of Justice announced today. 21st Century is headquartered in Fort Myers, Florida, and has offices in 16 states.
The settlement relates to defendants use of a medical procedure – called the Gamma function – to measure the exit dose of radiation from a patient after receiving radiation treatment. The United States alleged that the defendants knowingly and improperly billed for this procedure under circumstances where the procedure served no medically appropriate purpose. For example, the government alleged that the procedure was performed by physicians and physicists at 21st Century Oncology locations who were not properly trained to interpret and utilize the Gamma function results. The government also alleged that the defendants billed for this procedure when no physician reviewed the Gamma function results until seven or more days after the last day patients received radiation treatment therapy. Finally, the government alleged that the defendants billed for the procedure when no Gamma result was available due to technical failures in the imaging equipment.
“Today’s settlement demonstrates our unwavering commitment to protect the Medicare trust fund against unscrupulous providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Providers who waste taxpayer dollars by billing for unnecessary services, including services that are not used or improperly performed, will face serious consequences.”
“The U.S. Attorney’s Office is committed to taking the steps necessary to protect Medicare, TRICARE, and other federal health care programs from fraud,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida. “Healthcare providers may bill for new technologies only when they have been proven to be useful and when individual physicians and staff have been trained to use them properly.”
This lawsuit was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Joseph Ting, a former physicist at South Florida Radiation Oncology. Under those provisions, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. Ting will receive more than $7 million.
“The waste of health care program dollars will not be tolerated,” said Special Agent in Charge Shimon R. Richmond for the Health and Human Services (HHS) Office of the Inspector General. “Providers at 21st Century Oncology have agreed to settle claims that in some instances they performed tests that were not only medically unnecessary, but that no one had been trained to properly interpret, thereby allegedly causing the taxpayers to pay for useless tests.”
This past December, 21st Century Oncology LLC, a wholly owned subsidiary of 21st Century Oncology Inc., paid $19.75 million to settle allegations that it violated the False Claims Act by billing for medically unnecessary laboratory urine tests and for encouraging physicians to order these tests by offering bonuses based in part on the number of tests the physicians referred to its laboratory.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.
“This settlement highlights the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of TRICARE, the Department of Defense health care program that serves our warfighters, their family members, and military retirees,” said Special Agent in Charge John F. Khin of DCIS Southeast Field Office. “With DoD’s limited resources and budgets, DCIS must continue to aggressively investigate fraud, waste and abuse to preserve and recover precious taxpayer dollars for our most vulnerable programs.”
This matter was handled by the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the Civil Division’s Commercial Litigation Branch, the Department of Health and Human Services Office of Inspector General (HHS/OIG) and the Defense Criminal Investigative Service (DCIS).
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The lawsuit against the defendants was filed in the U.S. District Court for the Middle District of Florida and is captioned United States ex rel. Ting v. 21st Century Oncology and South Florida Radiation Oncology.
United States Settles False Claims Act Allegations Against 21st Century Oncology for Nearly $34.7 MillionRead the Press Release
United States Attorney A. Lee Bentley, III announces that the government has formally settled a lawsuit brought by a whistle-blower alleging that one of the nation’s largest radiation oncology providers, 21st Century Oncology, has agreed to settle allegations that they performed and billed for procedures that were not medically necessary. Pursuant to the settlement agreement, 21st Century shall pay the United States $34,695,243 to resolve these allegations. Headquartered in Fort Myers, 21st Century has offices in 16 states.
The settlement relates to the defendants use of a medical procedure – called the Gamma function – used to measure the exit dose radiating from a patient after the patient receives radiation treatment. The United States alleged that defendants knowingly and improperly billed for this procedure under circumstances where the procedure served no medically appropriate purpose. For example, the government alleged that the procedure was performed by physicians and physicists at 21st Century Oncology locations who were not properly trained to interpret and utilize the Gamma function results.
The government also alleged that defendants billed for this procedure when no physician reviewed the Gamma function results until seven or more days after the last day patients received radiation treatment therapy. Finally, the government alleged that defendants billed for the procedure when no Gamma result was available due to technical failures in the imaging equipment.
“The United States Attorney’s Office is committed to taking the steps necessary to protect Medicare, TRICARE, and other federal health care programs from fraud,” said U.S. Attorney A. Lee Bentley, III. “Healthcare providers may bill for new technologies only when they have been proven to be useful and when individual physicians and staff have been trained to use them properly.”
“Today’s settlement demonstrates our unwavering commitment to protect the Medicare trust fund against unscrupulous providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Providers who waste taxpayer dollars by billing for unnecessary services, including services that are not used or improperly performed, will face serious consequences.”
This lawsuit was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Joseph Ting, a former physicist at South Florida Radiation Oncology. Under those provisions, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. Ting will receive more than $7 million.
“The waste of health care program dollars will not be tolerated,” said Shimon R. Richmond, Special Agent in Charge for the HHS Office of the Inspector General. “Providers at 21st Century Oncology have agreed to settle claims that in some instances they performed tests that were not only medically unnecessary, but that no one had been trained to properly interpret, thereby allegedly causing the taxpayers to pay for useless tests.”
"This settlement highlights the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of TRICARE, the Department of Defense health care program that serves our Warfighters, their family members, and military retirees," said Special Agent in Charge John F. Khin, Southeast Field Office. "With DoD's limited resources and budgets, DCIS must continue to aggressively investigate fraud, waste, and abuse to preserve and recover precious taxpayer dollars for our most vulnerable programs."
This past December, 21st Century paid $19.75 million to settle allegations that it violated the False Claims Act by billing for medically unnecessary laboratory urine tests, and for encouraging physicians to order these tests by offering bonuses based in part on the number of tests the physicians referred to its laboratory.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was handled by Assistant United States Attorney Jason Mehta from the Middle District of Florida, with assistance from the Department of Justice’s Civil Division, the Department of Health and Human Services Office of Inspector General (HHS/OIG) and the Defense Criminal Investigative Service (DCIS).
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The lawsuit against the defendants was filed in the U.S. District Court for the Middle District of Florida and is captioned United States ex rel. Ting v. 21st Century Oncology and South Florida Radiation Oncology.
U.S. Attorney’s Office Closes Investigation into the Death of Ramarley GrahamRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that there is insufficient evidence to pursue federal criminal charges in connection with the fatal shooting of Ramarley Graham. Mr. Graham was killed during an encounter with police officers from the New York City Police Department (“NYPD”) on February 2, 2012. Mr. Graham was 18 years old at the time. The U.S. Attorney met today with Mr. Graham’s family and their representatives to inform them of this decision.
After conducting a thorough and independent investigation, the U.S. Attorney’s Office has determined that there is insufficient evidence to meet the high burden of proof required for a federal criminal civil rights prosecution. To prove a violation of the federal criminal civil rights statute, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right, meaning that the officer acted with the deliberate and specific intent to do something the law forbids. This is the highest standard of intent imposed by law, and is different from and higher than the intent standard under the relevant state statutes. Neither accident, mistake, fear, negligence nor bad judgment is sufficient to establish a federal criminal civil rights violation.
The evidence from the investigation reveals the following: At approximately 2:00 p.m. on February 2, 2012, two members of a team of NYPD police officers from the Street Narcotics Enforcement Unit (“SNEU”) began conducting surveillance of a bodega on White Plains Road in the Wakefield section of the Bronx. At approximately 2:45 p.m., the NYPD officers observed Ramarley Graham and two other individuals open the door to that bodega, walk in, and then immediately walk out. Video evidence from a nearby business shows Mr. Graham adjusting the front of his pants as he walked northbound on White Plains Road near the bodega. The two police officers conducting surveillance informed investigators that, after observing these actions, they transmitted over the police radio a description of Mr. Graham and his companions to the other members of the SNEU team, and further informed the SNEU team that Mr. Graham possibly had a firearm. The police officers then followed Mr. Graham and his companions as they continued walking north on White Plains Road, and then turned east on East 229th Street. One of the NYPD officers conducting surveillance reported that, when Mr. Graham reached with his hands to pull at his belt, the officer observed the slide of a firearm tucked into the waistband of Mr. Graham’s pants. According to the officers, his partner then transmitted over a non-recorded police channel that Mr. Graham had a firearm. Upon hearing this transmission, the other members of the SNEU team, including NYPD Officer Richard Haste (who had not previously observed Mr. Graham and had not had any prior direct interaction with him), moved to intercept Mr. Graham as he walked eastbound on East 229th Street.
Video evidence shows that Mr. Graham walked to 749 East 229th Street, which officers later learned to be Graham’s residence. As Mr. Graham opened the front door, an unmarked police vehicle quickly pulled up and stopped near the front of the house. As Officer Haste and another officer exited the vehicle, Mr. Graham looked in the direction of the officers and then quickly stepped inside the house and closed the front door. Approximately five seconds later, Officer Haste ran up to the front door and found it locked. He then unsuccessfully attempted to kick the door open. Video evidence shows that Officer Haste proceeded to the back of the house in an attempt to gain entry and entered the house through the back. Another officer followed him inside a few seconds later. Video evidence shows that Officer Haste then opened the front door of the building from the inside of the house and let in two additional officers. Officer Haste and another officer then climbed the stairs up to the second floor apartment.
Inside that apartment were Mr. Graham, Mr. Graham’s grandmother, and Mr. Graham’s six-year-old brother. One of the NYPD officers kicked open the door to Mr. Graham’s apartment. The door to the apartment opened onto a hallway, leading to a living room at the end of the hallway. The evidence establishes that Officer Haste advanced into the hallway of the apartment with his firearm drawn, where he encountered Mr. Graham. According to Officer Haste, he gave commands to Mr. Graham to the effect of, “Police, show me your hands.” Mr. Graham instead moved into an adjacent bathroom. Officer Haste then advanced down the hallway to the doorway of the bathroom.
At this critical moment in time, no other witness present in the apartment, including Mr. Graham’s grandmother, had a view of Mr. Graham. According to Officer Haste, when he looked in the bathroom, he saw Mr. Graham facing him, with his hand in his waistband. Also according to Officer Haste, Mr. Graham then made a motion as if he were pulling something out of his pants. Officer Haste stated that he believed that Mr. Graham was reaching for the weapon that had been described in the earlier radio transmission, and that he fired one round from his weapon in response to a perceived deadly threat. The bullet struck Mr. Graham, causing his death. No gun was found at the scene. A bag of marijuana was found in the toilet bowl next to where Mr. Graham was standing.
In the context of this case, to establish a violation of federal law, the Department of Justice would have to establish beyond a reasonable doubt that, at the time of the shooting, Officer Haste lacked probable cause to believe that Mr. Graham posed a significant threat of death or serious physical injury to the officer or to others, and that he willfully deprived Mr. Graham of his right to be free from excessive force. The weight of the evidence indicates that, at the time the shooting took place, Officer Haste believed Mr. Graham to be in possession of a firearm that was tucked into the waistband of his pants, for which Officer Haste believed Mr. Graham was reaching. Although Officer Haste ultimately was proven to be mistaken in his belief, the determination as to the willfulness of his actions must be assessed in light of his knowledge at the time of the shooting.
The investigation revealed no evidence to refute Officer Haste’s claim that he shot Mr. Graham in response to his mistaken belief that Mr. Graham was reaching for a gun. The evidence that, before Officer Haste began to chase Mr. Graham, other officers reported over the police radio that Mr. Graham had a gun is unrefuted. There are no witness accounts or physical evidence that materially contradict Officer Haste’s statement that Mr. Graham appeared to be pulling something from his waistband at the time of the shooting. Nor is there any video of the shooting itself. Accordingly, the Department of Justice could not conclude or prove beyond a reasonable doubt that there was a federal criminal civil rights violation.
This Office analyzed these issues under the standard applicable to criminal cases, which is proof beyond a reasonable doubt. The Office expresses no view regarding any claims made against any party under the standard applicable to civil cases, which is proof by a preponderance of the evidence.
Accordingly, this Office’s investigation into Mr. Graham’s death has been closed.
Mr. Bharara expressed his deep sympathy to the family of Mr. Graham for their tragic loss.
U.S. Attorney Billy J. Williams Statement Department of Justice Inspector General's InvestigationRead the Press Release
PORTLAND, Ore. - The Office of the Inspector General for the U.S. Department of Justice, in consultation with the United State Attorney’s Office for the District of Oregon, is conducting an investigation regarding the actions of the FBI Hostage Rescue Team (HRT) in connection with the events on January 26, 2016. Because the investigation is ongoing, there will be no further comment until the investigation is fully concluded.
Please see link to U.S. Department of Justice, Office of the Inspector General: https://www.oig.justice.gov/press/2016/2016-03-08.pdf
Two men sentenced in Federal court in BluefieldRead the Press Release
BLUEFIELD, W.Va. – Two men were sentenced today in federal court in Bluefield, announced Acting United States Attorney Carol Casto.
Tyrell Saunders, 22, was sentenced to a year and nine months for possession of a weapon by an inmate of a federal prison. Saunders previously pleaded guilty to the federal crime in January 2016. He admitted that on May 11, 2015, he possessed a handcrafted knife while he was serving time in the Federal Correctional Institution at McDowell. The handcrafted metal weapon, commonly referred to as a “shank,” was sharpened to a point and had fabric around the other end to serve as a handle. The new term of incarceration will run consecutive to the sentence of 15 years Saunders has been serving for several 2013 federal drug convictions in the Western District of Virginia.
In a separate prosecution, Albert Delorso, 49, of Bluewell, was sentenced to two years in federal prison for distributing pain pills. Delorso previously pleaded guilty in November 2015 to distribution of hydromorphone. He admitted that on June 30, 2015, he distributed hydromorphone pills near Bluewell to a confidential informant working with law enforcement.
The case against Saunders was investigated by the Federal Bureau of Prisons. The Southern Regional Drug and Violent Crime Task Force investigated the Delorso case. Assistant United States Attorney John File handled the prosecutions. Senior United States District Judge David A. Faber imposed the sentences.
The federal drug prosecution was brought 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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Two Men Indicted for Conspiring to Defraud Government Program That Assists Minority BusinessesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. – U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned an indictment charging David Pfeiffer, 64, of Killbuck, NY, and Thomas Colton, 53, of Salamanca, NY, with conspiracy to commit mail fraud and mail fraud. Pfeiffer was also charged with making a false statement to a financial institution. The charges carry a maximum sentence of 30 years in prison and a $1,000,000 fine. Assistant U.S. Attorney Russell T. Ippolito, Jr., who is handling the prosecution, stated that according to the indictment, Pfeiffer and Colton conspired to defraud government agencies and the Disadvantaged Business Enterprise (DBE) Program. A business can be designated a DBE if at least 51% of the business is owned and controlled by socially and economically disadvantaged individuals. Since 1980, the U.S. the Department of Transportation has utilized the DBE Program in an effort to increase the number of minority and economically disadvantaged individuals who participate in construction projects that receive federal funding.
As set forth in the indictment, between May 2009 and 2013, Pfeiffer and Colton are accused of defrauding among others:
• the U.S. Department of Transportation;
• the New York State Department of Transportation;
• the City of Niagara Falls, NY;
• the Buffalo Urban Development Corporation (BUDC); and
• the Niagara Frontier Transportation Authority (NFTA).
Pfeiffer and Colton used Colton’s business, Sue-Perior Concrete and Paving, Inc., as a subcontractor on federal government contracts. Sue-Perior was used to allow Pfeiffer’s construction company Man O’ Trees to obtain government contracts that it would have otherwise been unable to obtain. Sue-Perior was qualified as a DBE by the NFTA based upon a fraudulent application submitted by Pfeiffer and Colton. As a result of the alleged fraud, Pfeiffer and Colton illegally obtained government construction contracts involving at least three projects:
• the New York State Route 104 Project;
• the Union Ship Canal Project; and
• the Gallagher Beach Project.
In total, the value of the three projects was approximately $15,500,000. General contractors are only permitted to count funds paid to DBE’s that performed a “commercially useful function.” The indictment alleges that Sue-Perior did not serve a commercially useful function in relation to these construction projects. In addition, the indictment alleges that Pfeiffer also submitted false personal financial statements to Five Star bank to obtain credit extensions for his businesses. The defendants were arraigned this afternoon before U.S. Magistrate Judge Michael J. Roemer and released on bond.
The indictment is the culmination of an investigation conducted by the Department of Transportation, Office of Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Jonathan Mellone, New York Regional Office, and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen. 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.
Two Area Men Convicted of Heroin Conspiracy ChargesRead the Press Release
St Louis, MO – Timothy Anderson and Oscar Mims were convicted of charges involving a conspiracy to distribute large quantities of heroin in the St. Louis area. The five-day trial was held before United States District Judge Rodney W. Sippel.
According to court documents and testimony presented at trial, Timothy Anderson was the leader of a drug conspiracy that transported large amounts of heroin from Illinois to the St. Louis area for distribution. Oscar Mims was convicted as part of the conspiracy. Eight other co-defendants have previously pled guilty and have been sentenced.
Anderson was convicted of one felony count of conspiracy to possess with the intent to distribute in excess of one kilogram of heroin and Mims was convicted of one felony count of conspiracy to possess with the intent to distribute in excess of 100 grams of heroin. Anderson was also convicted of one felony count of possession with intent to distribute heroin. Sentencing for both defendants has been set for June 17, 2016.
Conspiracy to possess with the intent to distribute in excess of one kilogram of heroin carries a penalty range of 10 years to life in prison. Conspiracy to possess with the intent to distribute in excess of 100 grams of heroin carries a penalty range of 5 years to 40 years in prison. Possession with intent to distribute heroin carries a maximum of 20 years in prison. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Drug Enforcement Administration and the St Louis Metropolitan Police Department.
Tuscola Businessman Sentenced for Income Tax Evasion to More Than Two Years in Prison and to Pay $1.1 Million to IRSRead the Press Release
Springfield, Ill. – A Tuscola, Ill., businessman, Lorenzo Shane Stewart, owner of Ten Acres Excavating, has been ordered to serve 30 months (2 ½ years) in prison for failure to pay income tax. Upon release from prison, Stewart was ordered to serve the first six months of his three-year term of supervised release under home confinement. Stewart was also ordered to pay $1,122,074 in restitution to the IRS.
Stewart, 49, appeared today in federal court in Springfield before U.S. District Judge Sue E. Myerscough. Stewart was ordered to report on May 8, 2016, to the federal Bureau of Prisons to begin serving his prison sentence.
Stewart pled guilty on Aug. 21, 2015, to two counts of income tax evasion. During court proceedings and according to court documents, Stewart admitted that he failed to pay more than $1.12 million in income tax for the 2008 and 2009 tax years. In 2006, Stewart began conducting his excavation and construction business under the name Ten Acre Excavating. Stewart put the business under the name of one of his employees. Although Stewart operated the business and received the income generated from the business, Stewart did not claim income generated by Ten Acre Excavating on his own tax returns.
In approximately July 2008, Stewart was awarded contracts to perform excavating and construction work on several natural gas pipeline substations that were being built in the Tuscola area. Stewart and his employees performed work on these substations and received checks related to this pipeline work totaling approximately $1.7 million in 2008 and $5.9 million in 2009. Stewart claimed his adjusted gross income for 2008 was approximately $74,199, when in fact, his adjusted gross income for 2008 was approximately $279,803. For 2009, Stewart claimed his adjusted gross income was approximately $257,361, when in fact, his adjusted gross income was approximately $3,044,980.
Supervisory Assistant U.S. Attorney Eugene L. Miller prosecuted the case. The charges were investigated by the Internal Revenue Service, Criminal Investigation Division.
Roanoke Man Pleads Guilty to Heroin ChargeRead the Press Release
ROANOKE, VIRGINIA – United States Attorney John P. Fishwick Jr. announced today the guilty plea of a man to a federal heroin distribution charge.
Michael Anthony Kemp II, 35, of Roanoke, Va., pled guilty today in the United States District Court for the Western District of Virginia in Roanoke to one count of conspiring to distribute heroin.
“Heroin is ruining lives and destroying communities all across Western Virginia,” United States Attorney John P. Fishwick Jr. said today. “We will continue to do all we can to prosecute those who deal in this highly addictive and deadly drug and provide support and treatment to those who are suffering from addiction.”
The investigation of the case was conducted by the Drug Enforcement Administration, the Roanoke City Police Department and the Bedford County Sheriff’s Office. Assistant United States Attorney Andrew Bassford prosecuted the case for the United States.
River Ridge Man Sentenced for Fraud in Security System ContractsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that WAYNE WILLIAMS, age 38, of River Ridge, was sentenced today after previously pleading guilty to two counts of wire fraud.
U.S. District Judge Jay C. Zainey sentenced WILLIAMS to 24 months in prison, followed by 3 years of supervised release. WILLIAMS was also ordered to pay $502,353.99 in restitution to victims of his crimes.
According to court records, WILLIAMS was responsible for selling security systems and services, and also for negotiating and signing customer contracts on behalf of ADT Security and Protection One. WILLIAMS was compensated by his employers through commissions received on contracts he negotiated.
WILLIAMS forged a customer’s signature on a $466,046.18 ADT Security equipment and installation services contract. Without ADT Security’s knowledge, WILLIAMS secretly executed a separate contract with the customer in which only $109,148.93 was charged. The defendant received approximately $73,576.72 in commissions from ADT Security as a result of the fraudulent contract.
With regard to Protection One, WILLIAMS forged a purported customer’s signature on an $80,240.48 Protection One equipment and installation services contract. The defendant received approximately $2,353.99 in commissions from Protection One as a result of this fraudulent contract.
U.S. Attorney Polite praised the work of the Special Agents of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney G. Dall Kammer was in charge of the prosecution.