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22 April 2016
Child Molester Sentenced to 20 Years in Prison for Online Child Pornography OffenseRead the Press Release
Ocala, Florida – Senior U.S. District Judge Wm. Terrell Hodges yesterday sentenced Robert Toole (51, Ocala) to 20 years in federal prison for the online receipt of child pornography. Toole pleaded guilty on November 6, 2015.
According to court documents, in 2014, a Marion County Sheriff’s Office investigation into online child pornography resulted in the execution of a search warrant at Toole’s house in Ocala. There, deputies discovered computer equipment that contained more than 10,000 images of child pornography, many involving prepubescent children under the age of 12. In addition, Toole had many images of child pornography that he had taken of himself violating his daughter when she was a child. In powerful testimony during the sentencing hearing, Toole’s daughter described how her father’s conduct had begun when she was as young as three years old, and continued through her teenage years.
“This prosecution lent a voice to one of the many victims of child pornography, and gave closure to a young woman who has carried these wounds for many years,” said U.S. Attorney A. Lee Bentley, III.
“This criminal has committed one of the most heinous crimes imaginable,” said Susan L. McCormick, special agent in charge of HSI Tampa. “Because of the hard work of our HSI special agents, the Marion County Sheriff’s Office and the U.S. Attorney’s Office, this predator will spend the next 20 years in federal prison contemplating his crimes.”
This case was investigated by the Marion County Sheriff’s Office and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Daniel C. Irick.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
California Man Sentenced for Marijuana and Money Laundering ConspiraciesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that James Parish, 31, of Carlsbad, California, who was convicted of conspiracy to distribute 100 kilograms or more of marijuana and money laundering conspiracy, was sentenced to 120 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Frank T. Pimentel, who handled the case, stated that between January and September 2014 the defendant sent packages of marijuana from the Carlsbad, California area to Western New York. The marijuana was then distributed and more than $800,000 in proceeds shipped back from Western New York to the defendant in California.
The investigation featured numerous successful law enforcement interceptions and discoveries. For example, On August 21, 2014, the Drug Enforcement Administration seized a package that a person was attempting to ship at a local shipping company. The package contained $66,705 in United States currency. On that same date, the DEA seized a second package containing $77,000 in United States currency that was shipped to a shipping company in Carlsbad, California. On September 26, 2014, DEA agents executed a search warrant at co-conspirator Benjamin Golembiewski’s Buffalo residence and seized $224,123 in United States currency.
Regarding seizures of drugs, on September 18, 2014, Parish dropped off two large boxes at the shipping company in Carlsbad to be shipped to the Buffalo area. These boxes were seized by the DEA and found to contain a total of 30 pounds of marijuana.
The investigation concluded on September 30, 2014, when the defendant traveled from California to Buffalo to collect approximately $600,000 in payments for the shipped marijuana. Parish, who was arrested at the Buffalo Niagara International Airport, was planning to stay at a hotel on Genesee St. in Cheektowaga. The investigation determined that Parish shipped a box to the hotel in his name, and upon locating the box, discovered that it contained an AirSoft Gun, a taser, a bullet proof vest, a knife, handcuffs, a flashlight, a tourniquet strap, a bandage kit and a GPS tracking device.
Defendant Golembiewski was sentenced to 37 months in prison.
Today’s sentencing is the result of an investigation on the part of the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent in Charge, New York Field Division, and the Niagara Frontier Transportation Authority Police, under the direction of Chief George W. Gast.
Businessman Indicted for Fraud and Money Laundering Involving Charter School ConstructionRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that a federal grand jury has returned an indictment against NATHIAN D. HOSSLEY, age 50, of Baton Rouge, Louisiana. The indictment charges the defendant with five counts of wire fraud, in violation of Title 18, United States Code, Section 1343, one count of mail fraud, in violation of Title 18, United States Code, Section 1341, and one count of engaging in monetary transactions in property derived from specified unlawful activity, in violation of Title 18, United States Code, Section 1957. The indictment also includes a forfeiture allegation which requires the defendant to forfeit the proceeds of his fraud if convicted.
The Indictment alleges that the defendant engaged in a scheme to defraud Bouma Construction ("Bouma"), a full-service construction company headquartered in Grand Rapids, Michigan, from March 2014 through December 2014. According to the Indictment, Bouma hired a company owned by the defendant, First Millennium Construction ("FMC"), to serve as a subcontractor in the construction of the Impact Charter School in Baker, Louisiana.
The Indictment further alleges that, unbeknownst to Bouma, the defendant provided false information in a "Qualification Statement" submitted to Bouma in connection with FMC’s bid for the Impact Charter School project. Additional allegations in the Indictment state that, without knowledge of the defendant’s history of federal convictions, Bouma hired FMC and agreed to pay over $1.2 million for its work on the project.
The Indictment further alleges that, after being hired, the defendant submitted, or caused to be submitted through FMC employees, multiple applications for disbursements of payments by Bouma to FMC in accordance with their contractual agreement. These applications for payments allegedly made false representations related to the amount of work that had been completed by FMC and the amount of money that FMC had paid and still owed to certain subcontractors. It also allegedly omitted the names of numerous subcontractors to which the defendant owed money for work on the project.
The defendant also allegedly forged and caused to be forged signatures of certain FMC subcontractors on joint check agreements and lien waivers for the purpose of obtaining $96,125 in joint checks from Bouma. According to the Indictment, the defendant then forged or caused to be forged the subcontractors’ endorsements on these checks, which were then deposited into the FMC’s bank account. This money was allegedly intended for the four subcontractors, not FMC. Finally, the Indictment alleges that the defendant arranged for another individual to submit a false affidavit claiming responsibility for the forged signatures, which was then sent to the District Attorney for the 19th Judicial District.
The Indictment alleges further that Bouma ultimately paid over $948,000 to FMC, less than half of which was paid to subcontractors to which the defendant owed money for work on the Impact Charter School project and that, during the relevant time period, the defendant diverted tens of thousands of dollars from FMC’s bank account to sources which benefitted him personally.
United States Attorney Green stated: "My office is committed to rooting out and aggressively pursuing dishonest businesspeople who seek to advance themselves through fraud. We look forward to continuing to work closely with the FBI and our other federal, state, and local partners to appropriately address any such criminality."
This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Ryan Crosswell and Rene Salomon.
NOTE: An indictment is an accusation by the Grand Jury. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
Baltimore Man Pleads Guilty to Conspiring to Commit Sex Trafficking of a MinorRead the Press Release
Baltimore, Maryland – Derrel Pitts, a/k/a “Foolish,” age 27, of Baltimore, pleaded guilty today to conspiracy to commit sex trafficking in connection with his prostituting of a minor female.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Chief James W. Johnson of the Baltimore County Police Department; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Baltimore County State’s Attorney Scott Shellenberger.
According to court documents and statements at today’s plea hearing, from November 2014 through February 19, 2015, Pitts conspired with his “bottom” girl, a prostitute who also worked for Pitts, and others to commit sex trafficking of a 17 year old minor. Specifically, Pitts admitted that he instructed the minor victim on pricing for different sexual activities and that he received a portion of the money the victim received from sex customers for performing commercial sex acts.
On February 18 through February 19, 2015, Pitts transported and arranged for the transportation of the minor victim to a motel on Joppa Road in Towson, Maryland, where he directed the victim to engage in commercial sex acts with customers. Pitts rented the motel room and used, or allowed the victim to use, his cell phone to post photographs of the minor victim on an online website advertising her for prostitution and providing a telephone number where the victim could be reached for a “date,” or a commercial sex act.
On February 19, 2015, members of the Maryland Child Exploitation Task Force (MCETF), which included officers/agents from the Baltimore County Police and the Maryland State Police (MSP), rescued the victim at the motel in Towson after undercover officers made a “date” for prostitution with the victim, who directed them to her location. Prior to entering the motel room, law enforcement observed Pitts walking away from the room and towards the front of the motel.
As a result of his guilty plea, Pitts will be required register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Pitts and the government have agreed that if the Court accepts the plea agreement Pitts will be sentenced to between 78 and 96 months in prison followed by up to a lifetime of supervised release. U.S. District Judge George L. Russell III has scheduled sentencing for August 18, 2016 at 9:30 a.m.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force, created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department, Maryland State Police and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Ayn B. Ducao, who is prosecuting the case.
Attorney General, White House Champion of Change Coming to Alabama for National Reentry WeekRead the Press Release
BIRMINGHAM – U.S. Attorney General Loretta E. Lynch and Daryl Atkinson, a White House Champion of Change and the Department of Justice’s first Second Chance Fellow, will be in north Alabama next week to participate in National Reentry Week events that will focus attention on the importance of helping ex-offenders build successful lives when they come out of prison, announced U.S. Attorney Joyce White Vance.
The attorney general will visit the Federal Correctional Institution in Talladega on Friday to highlight reentry programs in the prison.
Atkinson, an Alabama native, served three and a half years in an Alabama prison after pleading guilty in 1996 to a first-time, non-violent drug crime. He is now an attorney at the Southern Coalition for Social Justice in North Carolina, where he focuses on criminal justice reform issues, particularly removing the legal barriers triggered by contact with the criminal justice system.
The Justice Department designated April 24-30 as National Reentry Week to encourage and highlight work being done across the country to make the nation’s criminal justice system more fair, efficient and effective at reducing recidivism, and to help ex-offenders build fruitful lives and contribute to their communities. The U.S. Attorney’s Office for the Northern District of Alabama has organized events throughout the week across the district, including a reentry simulation, a roundtable discussion with former inmates, and reentry programs for inmates nearing the end of their sentences at both Talladega FCI and the women’s Federal Correctional Institution in Aliceville.
“As Alabama struggles to reform its prison system, we should use proven methods to support people returning to the community from prison find employment and lead law-abiding lives,” Vance said. “Our events this week are designed to educate the community about barriers to successful reentry and the benefits to society when we help overcome those barriers, including reduced crime, lower prison costs and an expanded work force.”
Atkinson will speak at the beginning of the reentry simulation on Tuesday, from 2 p.m. to 4 p.m., at the National Alumni House on the University of Alabama at Birmingham Campus. He is a living example of someone who served his sentence, faced many obstacles when he left prison, but overcame them and now works to shape reentry policy and practice at the federal level.
The reentry simulation is a role-playing exercise designed to give participants an understanding of the often overwhelming day-to-day barriers that someone coming out of prison faces in seeking a job, a driver’s license, housing, or transportation.
Another key event during the week is a reentry and employment roundtable at The Dannon Project from 2 p.m. to 4 p.m. on Thursday. The Dannon Project is a non-profit organization that provides services, including counseling and job training, to people coming out of prison. Dannon also works with employers to find appropriate job placements and provides support to both employer and employee to encourage success on the job.
The roundtable will serve as a listening session for local businesses and civic leaders to hear from Dannon’s clients about the importance of having job opportunities so that they can support themselves and their families and become positive role models in their communities.
Other events throughout the week will include two law enforcement crime intervention call-ins and a dinner gathering for recently released individuals and their families at the new state day reporting center in Birmingham to discuss the importance of family support to successful reentry.
The call-in as part of the Birmingham Violence Reduction Initiative will be held on Wednesday. This call-in of people identified as high-risk for committing or becoming a victim of violent crime will be the fourth call-in for the Birmingham VRI. Law enforcement will offer the opportunity for participants, who already are under probation or parole supervision, to connect with community resources, but also will deliver a strong message of hard consequences for individuals or the members of any group they associate with if the call-in participants engage in violent crime, particularly gun crime.
The Jefferson County call-in is scheduled for Monday. Participants called in for that meeting with law enforcement will be recently released state and federal offenders who are returning to Jefferson County. They will be provided information about community service providers that can help them successfully reintegrate into society.
Atlantic County, New Jersey, Man Sentenced to 18 Years in Prison for $3 Million Time-Share Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Absecon, New Jersey, man was sentenced today to 18 years in prison for his role in a $3 million conspiracy to scam customers by offering phony consulting services to owners of timeshares through the New Jersey-based Vacation Ownership Group LLC, U.S. Attorney Paul J. Fishman announced.
Ian Resnick, 41, was previously convicted in September 2013 of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. He was convicted following a seven-week trial before U.S. District Judge Noel L. Hillman, who imposed the sentence today in Camden federal court.
According to documents filed in this case and the evidence presented at trial:
Resnick and his codefendants schemed to defraud hundreds of timeshare owners by offering fraudulent consulting services through their company, the Vacation Ownership Group (now VO Financial). Adam Lacerda, 32, of Egg Harbor Township, New Jersey, the company founder, president and chief executive officer, devised the company’s fraudulent sales pitches. He directed his sales force to tell numerous lies to VO customers, including that VO worked with the banks holding the customers’ loans, would use money sent by customers to pay off the customers’ loans on their timeshares, and could cancel customers’ timeshares with money back.
His wife, Ashley Lacerda, 36, the company vice president and chief operating officer, sent fraudulent contracts to customers and managed the office. Resnick, a convicted bank robber, started as a salesman giving the fraudulent sales pitch but became Adam Lacerda’s enforcer, with the title “director of compliance.” Genevieve Manzoni, 50, of Lake Worth, Florida, was a top VO sales representative who falsely told one victim she worked with a bank, another victim that she worked with a timeshare developer.
All four defendants were convicted at the same trial. The 14 victims who testified – including business executives, veterans, senior citizens, a lawyer and a professor – were defrauded out of tens of thousands of dollars by the defendants’ sophisticated scheme.
In addition to the prison term, Judge Hillman sentenced Resnick to three years of supervised release. Restitution will be determined at a later date.
Adam Lacerda was sentenced to 27 years in prison on June 25, 2015. Ashley Lacerda is scheduled to be sentenced June 3, 2016; Manzoni was sentenced in December 2015 to 42 months in prison.
U.S. Attorney Fishman credited special agents of FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Jonathan Mellone, New York Region, for the investigation. He also thanked the N.J. Department of Labor and Workforce Development 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:
Ian Resnick: Michael E. Reilly Esq., Philadelphia
Adam Lacerda: Mark E. Cedrone Esq., Philadelphia
Ashley Lacerda: Charles Nugent Esq., Marlton, New Jersey
Genevieve Manzoni: Ralph A. Jacobs Esq., Philadelphia
April Grand JuryRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned 19 indictments charging 23 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Raul Arce-Flores, age 34, of Omaha, is charged with illegal reentry into the United States on or about March 26, 2016, following deportation. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Estevan Armstrong, of Omaha, is charged with felon in possession of a firearm on or about March 14, 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Joel Beltran is charged in a three-count Indictment. Count I charges Beltran with false representation of a social security number on or about March 15, 2016. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II charges the defendant with false representation of U.S. Citizenship on or about March 15, 2016. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count III charges that on or about March 15, 2016, Beltran used a State of Nebraska Identification Card and Social Security card knowing said documents were not issued lawfully for the use of the defendant. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Baltazar Cabrera-Reyes, age 33, is charged with illegal reentry into the United States on or about April 8, 2016, following deportation. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Carlos Alonso Carrazco-Peralta, age 27, Jose Martinez-Pena, age 39, of York, Nebraska, and Naysa Bermudez-Ulloa, age 22 are charged with conspiracy to distribute and possess with intent to distribute 500 grams or more of a mixture containing methamphetamine between on or about March 1, 2016, and continuing to in or about April 2016. The maximum possible penalty if convicted is Life imprisonment, a $10,000,000 fine, a 5 year term of supervised release, and a $100 special assessment.
* Carrie Case, age 41, of Omaha, is charged with obtaining in an unauthorized manner, individually identifiable health information under false pretenses on or about February 11, 2015. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Demetrio Cortez-Jacinto, a/k/a Demetrio Cortes, age 42, of Omaha, is charged in a two-count Indictment. Count I charges Cortez-Jacinto with false representation of a social security number on or about December 18, 2012. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II charges the defendant with false representation of U.S. Citizenship on or about December 18, 2012. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Mark Hannan , age 19, of South Sioux City, Nebraska is charged with theft by an officer or employee of a gaming establishment owned and operated by the Winnebago Indian Tribe of Nebraska beginning on or about November 1, 2015, and continuing to on or about February 15, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 5 year term of supervised release, and a $100 special assessment.
* Kathy Hansen, age 35, of Ralston, is charged with theft of government funds on or about, during and between February 12, 2014 an March 26, 2014. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Maria Luisa Jiminez-Beza, age 48, is charged with illegal reentry into the United States on or about March 16, 2016, following deportation after a felony conviction. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Amanda M. Karstens, age 32, of Avoca, Nebraska, Stanley D. Adkins, age 38 of Nehawaka, Nebraska, and Paul A. Hraben, age 33, of Avoca, are charged in a four-count Indictment. Count I of the Indictment charges the defendants with conspiracy to distribute and possess with intent to distribute a mixture containing methamphetamine between on or about December, 2013, and continuing to in or about April, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Karstens with distribution of a mixture containing methamphetamine on or about May 23, 2015.
The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count III of the Indictment charges Hraben with distribution of a mixture containing methamphetamine on or about January 8, 2015. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count IV of the Indictment charges Adkins with distribution of a mixture containing methamphetamine on or about May 3, 2015. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Fidel Martinez, a/k/a Hector Vaga, age 38, of Greeley, Colorado is charged with possession with intent to distribute 50 grams or more of a mixture of methamphetamine on or about March 11, 2016. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment.
* Ruben Mendoza, age 44, is charged with conspiracy to distribute and possess with intent to distribute 50 grams or more of a mixture containing methamphetamine beginning on or about April 27, 2015, and continuing to on or about February, 2016. The maximum possible penalty if convicted is 40 years imprisonment, a $5,000,000 fine, a 4 year term of supervised release, and a $100 special assessment.
* Arcadio Olivar-Rodriguez, age 34, of Omaha, is charged in a two-count Indictment. Count I charges the Olivar-Rodriguez with false representation of a social security number on or about July 12, 2013. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II charges the defendant with false representation of U.S. Citizenship to unlawfully obtain employment in the United States on or about July 12, 2013. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Carey Dean Phillips, Jr., age 22, of Sioux City, Iowa, is charged with failure to register as a sex offender from on or about March 10, 2016, and continuing to on or about March 27, 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, 5 years to life supervised release, and a $100 special assessment.
* William H. Rich , age 46, of Stromsburg, Nebraska is charged in a four-count Indictment. Count I of the Indictment charges the defendant with use of a facility and means of interstate commerce to attempt to persuade, induce, and entice a minor to engage in sexual activity between on or about October 8, 2015 up to and including December 4, 2015. The maximum possible penalty if convicted is Life imprisonment, a $250,000 fine, supervised release for Life, and a $100 special assessment. Count II of the Indictment charges Rich with production of child pornography between on or about October 8, 2015 up to and including December 4, 2015. The maximum possible penalty if convicted is no less than 15 years imprisonment, a $250,000 fine, supervised release for Life, and a $100 special assessment. Count III of the Indictment charges the defendant with possession of child pornography on and between August 2015, and December 4, 2015. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, supervised release for Life, and a $100 special assessment. Count IV of the Indictment charges Rich with production of child pornography between on or about October 8, 2015 up to and including December 4, 2015. The maximum possible penalty if convicted is 30 years imprisonment, a $250,000 fine, supervised release for Life, and a $100 special assessment.
* Julio L.Rivera, age 33, of Lincoln, is charged with conspiracy to distribute 500 grams or more of a mixture of methamphetamine between on or about July 3, 2014 and on or about November 11, 2015. The maximum possible penalty if convicted is Life imprisonment, a $10,000,000 fine, a 5 year term of supervised release, and a $100 special assessment.
* Leonardo Rodriguez Palomino, age 60, is charged with illegal reentry into the United States on or about April 14, 2016, following deportation after a felony conviction. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Brian Wyatt, age 40, is charged in a three-count Indictment. Counts I and II of the Indictment charge the defendant with distribution of a mixture containing methamphetamine on or about March 30, 2016 and April 5, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment for each count. Count III of the Indictment charges Wyatt with felon in possession of a firearm on or about April 13, 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
21 April 2016
Woodbridge Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
ALEXANDRIA, Va. – Christopher Craft, 41, of Woodbridge, pleaded guilty today to receipt of child pornography.
In a statement of facts filed with the plea agreement, from July 25, 2014, through Oct. 8, 2014, Craft used a peer-to-peer file sharing program to receive and collect child pornography videos and images, including videos of children as young as 5 years-old being sexually abused. In total, Craft’s child pornography collection included 480 images and 111 videos of children being sexually exploited, including images and videos depicting sadistic or masochistic conduct.
Craft faces a mandatory minimum penalty of five years in prison, and a maximum penalty of 20 years in prison when sentenced on July 8. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge T.S. Ellis, III. Assistant U.S. Attorney Kellen S. Dwyer and Special Assistant U.S. Attorney Scott Claffee are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-47.
Virginia man pleads guilty to failing to update sex offender registrationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Convicted sex offender Milton Stuart Kendall, Jr., 35, of Roanoke, Virginia, pled guilty in federal court in Martinsburg to failing to update his registration status, United States Attorney William J. Ihlenfeld, II, announced.
Kendall was previously convicted of “Sexual Battery” in the Circuit Court of the City of Staunton, Virginia. As a result of that conviction, Kendall is required to register as a sex offender. In late 2014 or early 2105, Kendall moved from West Virginia to Virginia and failed to update his sex offender registration.
Kendall pled guilty to one count of “Failure to Register as a Sex Offender.” He faces up to 10 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Anna Krasinski and Paul Camilletti prosecuted the case on behalf of the government. The United States Marshals Service investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Violent Harvey Hustlers Gang Members Sentenced to Lengthy Prison SentencesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that three members of the Harvey Hustlers organization were sentenced today for their participation in four murders, multiple shootings, and extensive drug distribution on the Westbank of Jefferson Parish. ISAAC SMITH, age 22, FRANKIE HOOKFIN, age 25, and TERRENCE KELLEY, age 29, all of Waggaman, received sentences of life, 35 years, and 40 years in prison, respectively.
SMITH pled guilty to being a drug distributor and gunman for the organization, and admitted to his role in four murders, including a vicious double murder of a couple whose children, were unharmed while in the backseat of their vehicle when the shooting occurred, and a 74 year old woman whose grandson was the target of the attack. During the sentencing hearing today, family members of the victims had the opportunity to address SMITH about the pain that the loss of the victims had caused to them and their families. After hearing the testimony, Judge Africk sentenced SMITH to serve the rest of his life in federal prison, emphasizing that in the federal system there is no parole. SMITH was also ordered to pay restitution to the victims’ families.
HOOKFIN also admitted to his participation in two murders, including the killing of a 74 year-old woman, and two other non-fatal shootings, as well as extensive drug dealing. Judge Africk sentenced HOOKFIN to serve 35 years in federal prison. HOOKFIN also has pending charges in Jefferson Parish related to his participation in shooting that left five people injured.
KELLEY admitted to participating in the murder of a 58 year-old man, two other non-fatal shootings, as well as dealing over a kilogram of heroin on the streets of Jefferson Parish. Judge Africk sentenced KELLEY to serve 40 years in federal prison.
This case is a product of an ongoing investigation into the violent acts in furtherance of the drug trafficking by the Harvey Hustler gang and its various offshoots on the West Bank. It represents the continued coordinated effort of the federal and state law enforcement authorities, including the United States Attorney’s Office, the Jefferson Parish District Attorney’s Office, Special Agents of the Federal Bureau of Investigation’s New Orleans Gang Task Force, and officers of the Jefferson Parish Sheriff’s Office.
Assistant United States Attorneys Greg Kennedy, David Haller, and Myles Ranier and Special Assistant United States Attorney Collin Sims, who is a former Assistant United States Attorney and the Criminal Chief at the St. Tammany Parish District Attorney’s Office, are in charge of the prosecution.
Vallejo Business Owner Arrested for Alleged Foreclosure-Rescue Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Sergio Roman Barrientos, 62, of Poway, was arrested on Wednesday in San Diego. On Thursday, April 14, a federal grand jury returned a six-count superseding indictment against Barrientos that added co-defendant Zalathiel Aguila, 42, of Fairfield, to the indictment originally brought on March 3, 2016, United States Attorney Benjamin B. Wagner announced.
According to the indictment, Barrientos, Aguila, and Omar Anabo, 53, of Vallejo, engaged in a foreclosure rescue fraud scheme that began in September 2004 and continued to February 2008. Barrientos and Aguila are charged with conspiracy to commit and the commission of wire fraud affecting a financial institution, bank fraud, and conspiracy to make and making false statements on loan applications. On January 15, 2016, Anobo pleaded guilty to conspiring to make false statements on loan applications (case number 2:16-cr-001 GEB). He is scheduled for sentencing on November 4, 2016.
According to court documents, Barrientos owned Capital Access LLC, in Vallejo, and along with Aguila and Anabo, preyed on homeowners nearing foreclosure. The defendants’ “Keep Your Home” program purported to be a temporary rescue plan whereby “qualified investors” took over the mortgages while the homeowners paid rent and worked on rebuilding their credit. It is alleged that he defendants convinced homeowners to sign over title to their homes, which were then sold to straw buyers. The straw buyers obtained loans under fraudulent pretenses by claiming on loan applications that, for example, they intended to occupy the homes as primary residences and that no part of the down payment for the purchase was borrowed. In fact, it is alleged that Capital Access provided the down payment amounts, and the straw buyers never intended to live in the properties. The defendants stripped the equity from the homes and used it to pay the operational expenses of the scheme and personal expenses. Vulnerable homeowners across California lost their homes as a result of the alleged scheme, and lenders lost an estimated $10.47 million from the fraud.
This case is the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant U.S. Attorney Matthew M. Yelovich is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of 30 years in prison and a $1 million fine for each count of wire fraud, bank fraud, and false statement, as well as for the conspiracy to commit wire and bank fraud count. If convicted of conspiracy to make false statements on loan applications, they face a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Utah Man Arrested and Charged in Manhattan Federal Court with Commodities FraudRead 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 Field Office of the Federal Bureau of Investigation (“FBI”), announced today that SCOTT A. BEATTY was arrested this morning on commodities fraud and wire fraud charges stemming from his scheme to defraud more than 49 investors of more than $825,000 through a fraud scheme in which BEATTY solicited investments for off-exchange foreign currency contracts known as “forex.” BEATTY was arrested this morning in Roy, Utah, and will be presented at 4:30 EST today in federal court in Salt Lake City, Utah.
U.S. Attorney Preet Bharara said: “As alleged, Scott Beatty perpetrated one of the oldest financial crimes in the book – lying to investors about his plans for their money and instead, spending it on himself and to pay other investors. Through alleged misleading representations on his website, Beatty lured close to 50 investors interested in foreign exchange trading and defrauded them out of close to a million dollars. I thank the FBI and Commodity Futures Trading Commission for their work in this case.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “When investors look for help finding wise and lucrative investments, they put trust in experts who should have their best interests in mind. Beatty allegedly abused that trust and spent his clients’ money on himself. Investors should have a healthy skepticism when investing in high yield investments, and ask questions about how their money is being invested. If the answers don't add up, call the FBI.”
According to the Complaint unsealed today in Manhattan federal court[1]:
From January 2011 through June 2014, BEATTY, through his investment companies Peak Capital Management Group, Inc., and Peak Capital Group, Inc., engaged in a fraudulent scheme to obtain investments from individual investors purportedly for the purpose of trading in forex. In connection with the scheme, BEATTY made a series of false and misleading representations to investors, on the website www.peakforex.com (the “Website”) and through email, including: (a) that BEATTY was using investors’ funds to conduct forex trading when in, in fact, BEATTY used just $125,000 of the $825,000 in investor funds for trading; (b); that BEATTY’s forex trading was generating consistently positive annualized returns as high as 43.9 percent when, in fact, his limited trading was consistently unsuccessful; and (c) that BEATTY had created individual accounts for each investor on whose behalf BEATTY purported to execute forex trading, when in fact, BEATTY failed to create such individualized accounts. In addition to false and misleading representations made on the Website and over email, BEATTY generated wholly fictitious account statements that he provided to his clients through a client portal on the Website.
As a result of these misrepresentations, BEATTY obtained more than $825,000 in investments from more than 49 investors, the majority of whom were Japanese citizens who, under the Commodity Exchange Act, were not authorized to trade leveraged, margined, or financed forex in individually managed accounts. BEATTY routinely converted investor funds to his own use in the form of cash withdrawals and debit card purchases, including at least $517,000 for, among other things, BEATTY’s personal expenses such as restaurant bills and retail purchases. In addition, to hide his trading losses and continue to fund his personal lifestyle, BEATTY used new investor funds to pay back other investors in a Ponzi-like fashion. In total, BEATTY distributed approximately $184,000 back to investors.
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BEATTY, 40, of Roy, Utah, is charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison and a maximum fine of $1 million, or twice the gross gain or loss from the offense; and one count of wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the FBI and the Commodity Futures Trading Commission. He added that the investigation is continuing.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Andrea M. Griswold is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
USNCB Strengthens State Access to International SystemsRead the Press Release
For almost a decade, INTERPOL Washington, the United States National Central Bureau (USNCB), has empowered the nation’s law enforcement to utilize both national and INTERPOL criminal indices. The process of linking states together to use INTERPOL systems, known as federation, will assist officers across the country in making determinations about persons or items they encounter in the field: suspected fugitives, victims, stolen vehicles, stolen travel documents, etc.
The national goal of federation is to streamline law enforcement queries into single requests, accessible via an officer’s vehicle or handheld device. Those queries would be routed through various national systems, such as the International Justice and Public Safety Network (Nlets) and National Criminal Information Center (NCIC). Such systems provide information such as a suspect’s name, charges, and threat level. That information enhances the effectiveness of all police action, from an officer’s safety during a traffic stop to informational support for an investigation.
To date, 12 states and the District of Columbia have become consistent users of these services. Their combined 67 million queries for people, vehicles, firearms, and/or travel documents have allowed for the dissemination of information about dangerous criminals, who may be moving within or outside the United States. As more states utilize this service, the likelihood of successfully identifying a suspect increases. Since 2006, the total number of queries made by states has grown exponentially, a growth assisted by the cost to federate being minimal: personnel training, administration, and other ‘soft’ costs. As the program grows, it may be used to increase U.S. law enforcement’s situational awareness in the period following terrorist attacks.
Following the San Bernardino attack in 2015, the USNCB is discussing a federation pilot with the Community Oriented Policing Services (COPS). The component’s close relationship with state and local law enforcement will allow it and the USNCB to identify grants and/or funding streams for federating states.
U.S. Customs and Border Protection Officers Arrest Georgia Man Attempting to Smuggle Marijuana to the Virgin IslandsRead the Press Release
St. Thomas, USVI – Keenan Powell-Ryder, 20, of Gainesville, Georgia, made his initial appearance April 20, 2016, before U.S. Magistrate Judge Ruth Miller after being charged in a complaint with possession with intent to distribute marijuana, United States Attorney Ronald W. Sharpe announced. At a preliminary hearing held today, probable cause was found to arrest Powell-Ryder, who was subsequently released on an appearance bond with numerous conditions of release.
According to the complaint, on April 19, 2016, Powell-Ryder arrived at the Cyril E. King International Airport, St. Thomas, Virgin Islands, on board a Delta Airlines flight from Atlanta, Georgia. U.S. Customs and Border Protection officers approached Powell-Ryder and asked him if he had any checked luggage, which he denied. He was taken to secondary inspection where CBP officers matched luggage containing 14.99 kilograms of marijuana to Powell-Ryder.Under federal law if convicted of possession with intent to distribute 14.99 kilograms of marijuana, Powell-Ryder faces a maximum of five years in prison and a $250,000 fine. This case is being investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and is being prosecuted by Assistant United States Attorney David White.
United States Attorney Sharpe reminds the public that a complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
U.S. Attorney’s Office for the Southern District of New York Recovers Nearly $12 Billion in Forfeitures and Civil Actions During Two-Year Period from January 1, 2014, Through December 31, 2015Read the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the Office obtained recoveries of more than $8.6 billion in forfeiture actions, more than $3 billion in civil actions, and more than $1.3 billion from restitution, criminal fines, and special assessments, between January 1, 2014, and December 31, 2015. The amounts collected include criminal and civil forfeitures of nearly $3.44 billion for calendar year 2014 and more than $5.24 billion for 2015.
Manhattan U.S. Attorney Preet Bharara said: “Our Office’s more than $12 billion in forfeitures, penalties, and fines for the calendar years 2014 and 2015 includes more than $8.6 billion in forfeitures, the most that this Office or any U.S. Attorney’s Office has forfeited in a two-year period. These recoveries demonstrate that those who break the law or commit civil offenses, whether institutions or individuals, are not free to profit from their misconduct. These recoveries not only serve to deter bad conduct. These recoveries not only serve to deter bad conduct, but also a significant portion of the money recovered will go toward compensating victims of crime or other misconduct who suffered real financial loss.”
Forfeitures
Forfeited funds are generally deposited into the Department of Justice Assets Forfeiture Fund (the “Assets Forfeiture Fund”) and the Department of Treasury Forfeiture Fund. The forfeited funds are used to restore money to crime victims and for a variety of law enforcement purposes.
BNP Paribas
$8.8336 billion forfeiture order; $3.8388 billion collected; total financial penalties collected $8.9736 billion
In July 2014, BNP Paribas S.A. (“BNPP”) pled guilty to conspiring to violate the International Emergency Economic Powers Act and the Trading with the Enemy Act by knowingly and willfully moving more than $8.8 billion through the U.S. financial system on behalf of Sudanese, Iranian, and Cuban entities subject to U.S. economic sanctions. In May 2015, BNPP was sentenced to forfeit $8.8336 billion, with penalties paid to the Federal Reserve Bank, New York State Department of Financial Services, and the New York County District Attorney to be credited against that forfeiture money judgment. After crediting those penalties, $3.8 billion was forfeited to the United States in connection with the case in 2015. Pursuant to recently enacted legislation, a substantial portion of these funds will be placed in a Congressionally-created terror victim compensation fund.
JPMorgan Chase
$1.7 billion forfeited
On January 7, 2014, as part of a deferred prosecution agreement, JPMorgan Chase agreed to pay a non-tax deductible penalty of $1.7 billion, in the form of a civil forfeiture for its violations of the Bank Secrecy Act committed in connection with the Bernard Madoff multibillion-dollar Ponzi scheme. The full amount was forfeited to the United States in 2014.
Toyota Motor Corporation
$1.2 billion forfeited
In March 2014, the Toyota Motor Corporation entered into a deferred prosecution agreement with this Office based on charges that Toyota misled U.S. consumers by concealing and making deceptive statements regarding two safety issues affecting its vehicles, each of which caused a type of unintended acceleration. Pursuant to the agreement, Toyota, among other things, agreed to a $1.2 billion penalty in the form of a civil forfeiture, constituting the largest criminal penalty ever imposed by the Department of Justice on an automotive company. This amount was forfeited to the United States in 2014.
General Motors
$900 million forfeited
In September 2015, the General Motors Company (“GM”) entered into a deferred prosecution agreement with this Office based on charges that GM concealed a potentially deadly safety defect from its U.S. regulator, the National Highway Traffic Safety Administration, and, in the process, misled consumers concerning the safety of certain of GM’s cars. Pursuant to the deferred prosecution agreement, GM, among other things, agreed to the forfeiture of $900 million to the United States, which was completed in 2015.
Commerzbank
$300 million forfeited
In March 2015, Commerzbank entered into a deferred prosecution agreement with this Office and other components of the Department of Justice, including the Department’s Asset Forfeiture and Money Laundering Section, based in part on this Office’s charges that Commerzbank violated the Bank Secrecy Act (“BSA”) by willfully failing to have an effective anti-money laundering program, willfully failing to conduct due diligence on its foreign correspondent accounts, and willfully failing to file suspicious activity reports, which allowed the perpetrators of a major accounting fraud involving the Olympus Corporation to transfer more than $1.6 billion through Commerzbank in furtherance of the fraud. Pursuant to the deferred prosecution agreement, Commerzbank, among other things, agreed to the forfeiture of $300 million to the United States based on the BSA charges, which was completed in 2015.
SAC Capital Advisors, L.P.
$284 million forfeited
In July 2013, this Office filed a civil money laundering and forfeiture action seeking the forfeiture of all of the assets of the SAC Companies (“SAC”) on the basis that SAC engaged in money laundering by commingling the illegal profits from insider trading with other assets, using the profits to promote additional insider trading, and transferring the profits with the assistance of financial institutions. In November 2013, this Office entered into an agreement with SAC in which SAC, among other things, agreed to forfeit $900 million to the United States, including the $616 million payment to the Securities and Exchange Commission (“SEC”). The agreement also involved a criminal fine of another $900 million, resulting in a total penalty of approximately $1.2 billion, on top of the $616 million SEC fine. The Stipulation and Order of Settlement in connection with the civil case was entered on November 6, 2013, and the Judgment in a Criminal Case was entered on April 11, 2014. $284 million was forfeited to the United States in 2014.
PokerStars and Related Cases
$213,047,848 forfeited
In July 2012, the United States reached an agreement with the two largest online poker companies in the United States, Full Tilt Poker and PokerStars. The United States had brought a civil forfeiture and money laundering action against these companies and their assets. Under the terms of the settlement, Full Tilt forfeited essentially all of its assets to the United States. PokerStars agreed to forfeit $547 Million, to be paid in several installments, and to reimburse the approximately $184 million owed by Full Tilt to foreign players. The settlement further provides that PokerStars will acquire the Forfeited Full Tilt Assets from the Government. In 2014 and 2015, $197 million was forfeited to the United States by PokerStars and more than $16 million was forfeited by other parties in related actions. To date, in excess of $1.2 billion has been forfeited in the PokerStars civil forfeiture action and related cases.
US v. Tokhtakhounov, et al.
$39,455,928 forfeited
In April 2013, this Office brought charges against more than 30 alleged members and associates of two related Russian-American organized crime enterprises, including a Russian “Vor,” for a range of offenses including the operation of at least two international bookmaking organizations – or “sportsbooks” – that catered to multimillionaires and billionaires in the U.S., Russia, and Ukraine – and the laundering of tens of millions of dollars from Russia and Ukraine through Cyprus and into the U.S. Thirty-one of the defendants have since been convicted and sentenced to up to five years in prison and forfeiture of the proceeds of the offenses and all property involved in the money laundering operation. In 2014 and 2015, the United States forfeited nearly $40 million in connection with the case.
US v. Robert C. Trosten
$30,742,072 forfeited
On February 20, 2008, Robert C. Trosten, the former Chief Financial Officer of Refco, pled guilty to five counts charged in a superseding indictment to a $2.4 billion fraud. Pursuant to the plea agreement, Trosten agreed to forfeit $2.4 billion, along with other funds and property, to the United States. Trosten was sentenced on June 5, 2014. $30,742,072 was forfeited to the United States in 2014. To date, in excess of $680 million has been forfeited to the United States.
Silk Road
$18,742,916 forfeited
On September 30, 2013, the United States filed a civil action against the assets of Silk Road, the subject of a criminal prosecution, including its domain name and approximately 173,991 Bitcoins. The civil complaint alleges that Silk Road was a global illegal cyber business designed to broker criminal transactions. On January 14, 2014, a forfeiture order was entered forfeiting 29,655 Bitcoins to the United States. The remaining 144,336 Bitcoins are restrained pending the conclusion of the criminal appeal in United States v. Ross William Ulbricht. Since the entry of the forfeiture order, a portion of the Bitcoins have been auctioned and sold for a total of $18,742,916.
Civil Actions and Restitution, Criminal Fines, and Special Assessments
From January 1, 2014, through December 31, 2015, the Office also has recovered more than $1.3 billion in restitution, criminal fines, and special assessments, and more than $3 billion from civil actions.
The $3 billion collected in civil actions came from a combination of cases in which the Office recouped government money lost due to fraud or other misconduct, collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws, or recovered funds owed to the Internal Revenue Service.
Below are summaries of some of the civil actions in which the Office has obtained significant recoveries:
Tronox bankruptcy; United States and Tronox v. Anadarko Petroleum Corp., et al.
More than $5.15 billion in total recovery, with more than $1.8 billion paid directly to the United States
This Office and a litigation trust created in the bankruptcy of Tronox, Inc., obtained a $5.15 billion settlement of a fraudulent conveyance lawsuit. The United States and the litigation trust alleged that Tronox’s predecessor, the Kerr-McGee Corporation, had transferred billions of dollars of assets to companies that became subsidiaries of Anadarko Petroleum Corp., and that as a result of these transfers, Tronox was left insolvent and unable to clean up contaminated sites around the country for which it was liable. After a lengthy bench trial, the bankruptcy court found Anadarko’s subsidiaries liable. Thereafter, a settlement was reached. On January 23, 2015, defendants paid $5.15 billion (plus interest since April 3, 2014) to the litigation trust, which then distributed the funds to the United States, certain states, and four environmental response trusts created in the Tronox bankruptcy to clean up contaminated sites. The total distribution to the United States was more than $1.8 billion.
Bank of America and Countrywide
More than $1 billion paid to the United States
The Office conducted investigations into the origination of defective residential mortgage loans by Countrywide’s Consumer Markets Division and Bank of America’s Retail Lending Division, as well as the fraudulent sale of such loans to the government-sponsored enterprises Fannie Mae and Freddie Mac. The Office’s investigation into these practices, as well as three private whistleblower lawsuits filed under seal in the Southern District of New York pursuant to the False Claims Act, were resolved in connection with a broad settlement with Bank of America announced by the Department of Justice in Washington in August 2014. As part of the settlement, Countrywide and Bank of America paid $1 billion to resolve their liability under the False Claims Act in the SDNY cases. Bank of America also paid a total penalty of $5 billion to settle the Department of Justice’s claims under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”).
JPMorgan Chase Bank
$614 million paid to the United States
In February 2014, the Office filed, and simultaneously settled, a civil fraud lawsuit against JPMorgan Chase for improperly approving thousands of residential home mortgage loans for government insurance and refinancing. In the settlement, JPMorgan Chase admitted, acknowledged, and accepted responsibility for, among other things, submitting false certifications to the U.S. Department of Housing and Urban Development (“HUD”), the U.S. Department of Veterans Affairs (“VA”), and the Federal Housing Administration (“FHA”) that induced HUD-FHA and the VA to accept for government insurance and refinancing thousands of loans that were not eligible for such insurance or refinancing, and ultimately resulted in substantial losses to the Government when the loans defaulted. JPMorgan Chase also admitted to failing to self-report to HUD-FHA hundreds of loans that it had identified as fraudulent or otherwise deficient, and to submitting loan data to HUD-FHA that lacked integrity. To resolve the claims against it, the bank agreed to pay $614 million to the United States under the False Claims Act and to implement an enhanced quality control program to address the misconduct concerning the integrity of loan data submitted to HUD-FHA.
Bank of New York Mellon
$167.5 million paid to the United States
In March 2015, the Office settled civil fraud charges filed in 2011 against Bank of New York Mellon (“BNYM”) and David Nichols, one of its former executives, as part of a $714 million global settlement with private litigants and other regulators concerning BNYM’s foreign exchange practices. In October 2011, this Office filed a civil fraud action against BNYM seeking civil penalties under FIRREA and alleging that BNYM had defrauded clients using one of its foreign exchange products. In April 2014, the district court issued a landmark ruling affirming the novel FIRREA theory that a bank could be “affected” by its own fraudulent conduct. The case was coordinated with a multi-district litigation involving class actions brought by BNYM customers and a lawsuit filed by the New York State Attorney General (“NYAG”). Under the settlement, BNYM paid $167.5 million to this Office as a FIRREA penalty. BNYM also paid $167.5 million to the NYAG and $335 million to customer classes, as well as $30 million to the SEC and $14 million to the Department of Labor, which had ongoing investigations. As part of the settlement, BNYM and Nichols admitted and accepted responsibility for conduct alleged in this Office’s complaint, including that, contrary to statements to clients that BNYM offered “best rates” and “best execution,” it actually assigned clients the worst interbank rates available during the trading day or session. BNYM was also required to reform its business practices and terminate employment relationships with responsible individuals, including Nichols. The settlement proceeds were held in escrow pending approvals by the court and disbursed in October 2015.
Fifth Third Bankcorp.
$84.9 million paid to the United States
In October 2015, this Office filed and simultaneously settled a civil fraud lawsuit against Fifth Third Bancorp and its subsidiaries (“FTB”) for misconduct in connection with FTB’s origination of residential mortgage loans insured by FHA. FTB made a voluntary disclosure to this Office and HUD of approximately 1,400 mortgage loans that the bank had certified as eligible for FHA insurance, later determined were materially defective and thus ineligible for FHA insurance, but never self-reported to HUD, resulting in millions of dollars in HUD losses. As part of the settlement, FTB paid $84,911,018 to cover federal losses on approximately 500 of the loans that defaulted and for which HUD paid insurance claims, and agreed to indemnify HUD for all losses HUD may incur on the other approximately 900 defective loans that had not yet defaulted. FTB admitted and accepted responsibility for failing to self-report mortgage loans it knew to be defective, contrary to HUD requirements. FTB also reformed its business practices and terminated the employment of responsible employees.
Accredo
$45 million paid to the United States
In April 2015, the Office settled civil fraud claims against Accredo Healthcare Group, Inc. (“Accredo”) relating to Accredo’s participation in an alleged kickback scheme with Novartis in connection with Accredo’s distribution of the blood chelation drug Exjade. In the settlement, Accredo admitted and accepted responsibility for participating in a patient referral allocation system created by Novartis under which, in order to get more patient referrals and related benefits from Novartis, Accredo assigned a nurse to call Exjade patients and tell them that it was extremely important to continue taking Exjade, but without advising patients about the less common and more severe adverse reactions associated with Exjade. Accredo also paid $45.06 million to resolve its liability to the United States for this conduct.
L-3/EOTech
$25.6 million paid to the United States
In November 2015, the Office filed and simultaneously settled a civil fraud lawsuit against L-3 Communications EOTech, Inc. (“EOTech”), L-3 Communications Corporation (“L-3”), and EOTech president Paul Mangano for selling defective holographic weapon sights to the U.S. Department of Defense (“DOD”), the U.S. Department of Homeland Security, and the Federal Bureau of Investigation. The sights were designed to allow users to quickly acquire targets, return fire, and hit targets, in a range of extreme environmental conditions. In the settlement, L-3 and EOTech admitted that EOTech knew the sights failed in extreme temperatures and humid environments, but delayed disclosure of these defects to the Government for years, despite EOTech’s representations to DOD that the sights performed in hot, cold, and humid conditions, and despite EOTech’s contractual obligation to disclose to DOD performance-related data affecting the reliability of the sights. Mangano also admitted knowing that the sights experienced failures in cold temperatures or humid environments. EOTech and L-3 agreed to pay $25.6 million to resolve their liability to the United States under the False Claims Act.
Qualitest
$22.4 million paid to the United States
In December 2015, the Office settled civil fraud claims against Endo Pharmaceuticals, Inc., and subsidiaries of Endo that, doing business as Qualitest Pharmaceuticals (collectively, the “Qualitest entities”), manufactured and sold chewable fluoride tablets that contained less than half of the amount of fluoride ion indicated by the product labeling. In the settlement, the Qualitest entities admitted and accepted responsibility for their manufacturing and labeling practices that caused children, including children covered by Medicaid, to receive only approximately 44% of the fluoride ion as recommended by guidelines issued by the American Dental Association and the American Academy of Pediatrics. The Qualitest entities also paid $22.44 million to the United States, as well as $16.56 million to plaintiff states, to resolve their liability for this conduct.
Lyondell
$18.8 million paid to the United States
In 2014, the Office recovered more than $18 million pursuant to a previously approved bankruptcy settlement agreement between federal and state environmental regulators and Lyondell Chemical Company and its subsidiaries. Pursuant to the 2010 settlement, Lyondell paid approximately $162 million to the United States and an environmental response trust on account of federal and state environmental claims at certain sites and provided the government an unsecured bankruptcy claim for clean-up costs at other sites. The 2014 recovery of $18.8 million was a partial payment by Lyondell, through a stock distribution, on the bankruptcy claim. Prior to its bankruptcy, Lyondell had been one of the largest chemical manufacturers in the United States and was liable for contamination at numerous sites around the country.
HSBC
$10 million paid to the United States
In June 2014, the Office settled civil fraud claims against HSBC Bank USA and other HSBC entities (collectively “HSBC”) relating to HSBC’s failure to oversee the reasonableness of foreclosure-related charges HSBC submitted for reimbursement to FHA and Fannie Mae, contrary to program requirements and HSBC’s certifications that it had done so. In the settlement, HSBC accepted responsibility for failing to create or maintain systems to review fees and charges submitted by outside counsel and other third-party providers to HSBC during 2009 and 2010, fees and charges which HSBC then submitted to FHA and Fannie Mae for reimbursement without the requisite oversight and review. HSBC also paid $10 million to resolve its liability to the United States for this conduct.
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The Criminal Division’s Money Laundering and Asset Forfeiture Unit is led by Chief Jason Cowley and Deputy Chief Alexander Wilson and handles all criminal and civil forfeiture actions for the Office. Civil recoveries are handled by the Office’s Civil Division, which is led by Sara L. Shudofsky. Criminal and civil collections are handled by the Civil Division’s Financial Litigation Unit, which is led by Kathleen Zebrowski.
For further information, the United States Attorneys’ Annual Statistical Reports can be found online at http://www.justice.gov/usao/reading_room/foiamanuals.html.
Two Individuals Plead Guilty in Conspiracy to Defraud over Ten Federal AgenciesRead the Press Release
Brian J. Garrahan, 42, and Kelly A. Spillman 34, both of Delray Beach, Florida, pled guilty today for their participation in a conspiracy to defraud over ten federal agencies by issuing fraudulent bonds to insure government contracts.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Jerry Polk, Special Agent in Charge, United States Environmental Protection Agency, Office of the Inspector General (EPA-OIG), Atlanta Field Office, made the announcement.
Garrahan and Spillman each pled guilty, before U.S. District Judge Kenneth L. Ryskamp, to one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 371. The defendants are scheduled to be sentenced by U.S. District Judge Ryskamp on June 29, 2016 at 1:30 p.m. in West Palm Beach.
According to court documents, from approximately June 2008 through June 2013, Garrahan and Spillman conspired with each other and others to obtain payments from government contractors for issuing fraudulent bonds, that is, insurance, for large government contracts. The fraudulent bonds were individual surety bonds, usually signed by Garrahan and two other co-conspirators, a relative of Garrahan, and an individual who had prior experience with government bonds.
Individual surety bonds require collateral. The collateral used was land or cash or cash equivalent assets held in bank accounts. However, Garrahan and Spillman knew that the claims of ownership of land and the claims of possessing funds were false. In addition, the supporting documents related to these assets were fraudulent.
Garrahan and Spillman also knew that a co-conspirator, who was directing them, had a prior fraud conviction. They also knew that this was the reason his name was not included in any of the paperwork.
Garrahan, Spillman and their co-conspirators issued a large number of bonds dealing with over 100 contractors and at least 15 federal agencies, and other entities. Often contracts had “modifications,” that is, contract expansions, that led to more bonds being issued.
Over ten federal agencies reimbursed contractors over $4.3 million in bond fees for the fraudulent bonds issued by Garrahan, Spillman and their co-conspirators. The federal agencies included, among others:
a. The United States Army;
b. The United States Department of Energy;
c. The United States Environmental Protection Agency;
d. The United States Department of Housing and Urban Development;
e. The United States Department of State; and
f. The United States Department of Veterans Affairs.
Mr. Ferrer commended the investigative efforts of EPA-OIG and the U.S. Department of Veterans Affairs-OIG, together with the Criminal Investigation Command of the U.S. Army; U.S. Department of Defense-OIG, Defense Criminal Investigative Services; U.S. Department of Energy-OIG; General Services Administration-OIG; U.S. Department of Housing and Urban Development-OIG; and U.S. Department of State-OIG;. This case is being prosecuted by Assistant U.S. Attorney Ana Maria Martinez.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Individuals Charged in Superseding Indictment with Conspiring to Commit Acts of Terrorism Transcending National BoundariesRead the Press Release
Today, David Daoud Wright, aka Dawud Sharif Abdul Khaliq, aka Dawud Sharif Abdul Khaliq, 26, of Everett, Massachusetts, and Nicholas Alexander Rovinski, aka Nuh Amriki, aka Nuh Andalusi, 25, of Warwick, Rhode Island, were charged in a superseding indictment with conspiracy to commit acts of terrorism transcending national boundaries.
The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division.
This charge, as well as additional conspiracy allegations, were included in a new superseding indictment against Wright and Rovinski today. A grand jury in June 2015, charged them with conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL). The indictment also charged Wright with conspiracy to obstruct justice and obstruction of justice.
Wright and Rovinski are charged with conspiring with each other, known and unknown conspirators, and Usaamah Abdullah Rahim, 26, Wright’s uncle, to provide material support to ISIL and commit acts of terrorism that transcended national boundaries. On June 2, 2015, Rahim was shot and killed after he attacked law enforcement officers in a Roslindale, Massachusetts, parking lot.
The superseding indictment alleges that, beginning in at least February 2015, Wright began discussing ISIL’s call to kill non-believers in the United States with Rahim and Rovinski and they began plotting and recruiting members for their “martyrdom” operation. In March 2015, Wright drafted organizational documents for a “Martyrdom Operations Cell” and conducted Internet search queries about firearms, the effectiveness of tranquilizers on human subjects and the establishment of secret militias in the United States. Simultaneously, Rahim was communicating with ISIL members overseas, including Junaid Hussain. On Aug. 24, 2015, Hussain was killed in an airstrike in Raqqah, Syria.
As alleged in the indictment, beginning in or about May 2015, Hussain allegedly communicated directly with Rahim. Rahim in turn communicated Hussain’s instructions to Wright, with regard to the murder of an individual residing in New York. Wright, Rovinski and Rahim each allegedly conspired to commit attacks and kill persons inside the United States on behalf of ISIL. In preparation for their attack, Rovinski conducted research on weapons that could be used to behead their victims. Since being arrested, Rovinski has sought to continue their planned attacks and has written letters to Wright from prison discussing ways to take down the U.S. government and decapitate non-believers.
The charge of conspiracy to provide material support provides a maximum sentence of 20 years in prison, a lifetime term of supervised release and a $250,000 fine; conspiracy to obstruct justice provides a maximum sentence of five years in prison, three years of supervised release and a $250,000 fine; obstruction of justice provides a maximum sentence of 20 years in prison, three years of supervised release and a $250,000 fine; conspiracy to commit acts of terrorism transcending national boundaries provides a maximum sentence of life in prison, lifetime supervised release and a $250,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
This investigation is being conducted by the Boston Joint Terrorism Task Force (JTTF) and the Rhode Island JTTF with critical assistance from the Boston Police Department; Boston Regional Intelligence Center; Massachusetts State Police; Commonwealth Fusion Center; Everett Police Department; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Rhode Island State Police; Warwick, Rhode Island, Police Department; Rhode Island Fusion Center; Naval Criminal Investigative Service; and member agencies of the JTTF.
The case is being prosecuted by Assistant U.S. Attorney B. Stephanie Siegmann of the District of Massachusetts’s National Security Unit and Trial Attorney Greg R. Gonzalez of the National Security Division’s Counterterrorism Section.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Wright Indictment
Two Former Houston Medical Clinic Owners Convicted of Defrauding Medicare of $5.4 MillionRead the Press Release
HOUSTON – Two former owners of medical clinics in Houston have entered pleas of guilty to defrauding Medicare of $5.4 million, announced U.S. Attorney Kenneth Magidson.
Zaven Pogosyan, 37, and Edvard Shakhbazyan, 40, were the former owners of medical clinics located at 2110 Jefferson, 2112 Pease and 6892 Southwest Freeway, Suite 2A, in Houston. They pleaded guilty yesterday to multiple counts related to the fraud scheme. Two others charged in the case - Seryan Mirzakhanyan, 31, and Frank Montgomery, 66, of Houston, previously entered pleas of guilty.
Pogosyan and Shakhbazyan admitted they opened the three clinics with the intention to defraud Medicare. They admitted that the majority of the diagnostic tests allegedly done at the three clinics were either not done or not medically necessary and that the medical equipment, patient files and doctors were all there only to make it appear legitimate. They further admitted hiring doctors for that purpose and that they paid marketers to bring patients to the fraudulent clinics.
There was allegedly only one doctor working at the three different medical clinics in Houston which Pogosyan managed. Pogosyan also admitted he hired two other doctors to travel to Houston once a month to review patient files at the clinic located on Pease Street.
Mirzakhanyan, Pogosyan and Shakhbazyan paid recruiters/marketers like Montgomery who brought the patients to the clinics.
U.S. District Judge Lynn N. Hughes has set sentencing for Pogosyan and Shakhbazyan on July 25, 2016. At that time, both men each face a maximum penalty of 10 years in a federal prison and a $250,000 fine for each of the 42 health care fraud convictions as well as the conspiracy. In addition, they face a maximum of five years for the conspiracy to pay and receive kickbacks.
Montgomery and Mirzakhanyan will be sentenced Oct. 11, 2016.
The criminal charges are the result of a joint investigation conducted by agents of the FBI, Internal Revenue Service - Criminal Investigation, U.S. Department of Health and Human Services - Office of the Inspector General and the Medicaid Fraud Control Unit of the Texas Attorney General's Office. Assistant U.S. Attorney (AUSA) Al Balboni and Special AUSA Rodolfo Ramirez are prosecuting the case.
Two Charged in Superseding Indictment with Conspiring to Commit Acts of Terrorism Transcending National BoundariesRead the Press Release
Boston – Today, David Daoud Wright, aka Dawud Sharif Abdul Khaliq, aka Dawud Sharif Abdul Khaliq, 26, of Everett, Massachusetts, and Nicholas Alexander Rovinski, aka Nuh Amriki, aka Nuh Andalusi, 25, of Warwick, Rhode Island, were charged in a superseding indictment with conspiracy to commit acts of terrorism transcending national boundaries.
This charge, as well as additional conspiracy allegations, were included in a new superseding indictment against Wright and Rovinski today. A grand jury in June 2015, charged them with conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL). The indictment also charged Wright with conspiracy to obstruct justice and obstruction of justice.
Wright and Rovinski are charged with conspiring with each other, known and unknown conspirators, and Usaamah Abdullah Rahim, 26, Wright’s uncle, to provide material support to ISIL and commit acts of terrorism that transcended national boundaries. On June 2, 2015, Rahim was shot and killed after he attacked law enforcement officers in a Roslindale, Massachusetts, parking lot.
The superseding indictment alleges that, beginning in at least February 2015, Wright began discussing ISIL’s call to kill non-believers in the United States with Rahim and Rovinski and they began plotting and recruiting members for their “martyrdom” operation. In March 2015, Wright drafted organizational documents for a “Martyrdom Operations Cell” and conducted Internet search queries about firearms, the effectiveness of tranquilizers on human subjects and the establishment of secret militias in the United States. Simultaneously, Rahim was communicating with ISIL members overseas, including Junaid Hussain. On Aug. 24, 2015, Hussain was killed in an airstrike in Raqqah, Syria.As alleged in the indictment, beginning in or about May 2015, Hussain allegedly communicated directly with Rahim. Rahim in turn communicated Hussain’s instructions to Wright, with regard to the murder of an individual residing in New York. Wright, Rovinski and Rahim each allegedly conspired to commit attacks and kill persons inside the United States on behalf of ISIL. In preparation for their attack, Rovinski conducted research on weapons that could be used to behead their victims. Since being arrested, Rovinski has sought to continue their planned attacks and has written letters to Wright from prison discussing ways to take down the U.S. government and decapitate non-believers.
The charge of conspiracy to provide material support provides a maximum sentence of 20 years in prison, a lifetime term of supervised release and a $250,000 fine; conspiracy to obstruct justice provides a maximum sentence of five years in prison, three years of supervised release and a $250,000 fine; obstruction of justice provides a maximum sentence of 20 years in prison, three years of supervised release and a $250,000 fine; conspiracy to commit acts of terrorism transcending national boundaries provides a maximum sentence of life in prison, lifetime supervised release and a $250,000 fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.The announcement was made by U.S. Attorney Carmen M. Ortiz of the District of Massachusetts, Assistant Attorney General for National Security John P. Carlin and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division.
This investigation is being conducted by the Boston Joint Terrorism Task Force (JTTF) and the Rhode Island JTTF with critical assistance from the Boston Police Department; Boston Regional Intelligence Center; Massachusetts State Police; Commonwealth Fusion Center; Everett Police Department; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Rhode Island State Police; Warwick, Rhode Island, Police Department; Rhode Island Fusion Center; Naval Criminal Investigative Service; and member agencies of the JTTF.
The case is being prosecuted by Assistant U.S. Attorney B. Stephanie Siegmann of the District of Massachusetts’s National Security Unit and Trial Attorney Greg R. Gonzalez of the National Security Division’s Counterterrorism Section.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Three Return Preparers Indicted for Preparing False Tax Returns for ClientsRead the Press Release
Three tax return preparers were charged in a 31-count indictment for unlawfully enriching themselves by submitting false federal income tax returns to the Internal Revenue Service (IRS) on behalf of their clients.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Devonne Herrington, her son, Lorenzo Wright, and Joyce Walker, were each charged with one count of conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371. Herrington was also charged with nine counts of assisting in the preparation of false tax returns, in violation of Title 26, United States Code, Section 7206(2), and two counts of failure to file personal tax returns, in violation of Title 26, United States Code, Section 7203. Wright was also charged with fifteen counts of assisting in the preparation of false tax returns. Walker was also charged with two counts of assisting in the preparation of false tax returns, and two counts of filing false personal tax returns, in violation of Title 26, United States Code, Section 7206(1).
According to the indictment, Herrington established and operated a tax preparation business in Delray Beach, Florida, that was initially known as Devonne's LLC and later known as Wright's & Family LLC. Herrington hired tax preparers, including her son, Wright, and co-defendant Walker, to assist her with preparing tax returns for her clients. Herrington, Wright and Walker met with clients in person at the tax preparation office in order to conduct a cursory interview and collect required tax forms.
Although the clients did not claim to be eligible for, or provide documents in support of, certain tax credits or income deductions, the defendants prepared tax returns which falsely stated that the clients were eligible for such credits and deductions. The tax credits falsely claimed by the defendants included credits for first time home purchasers and education expenses. The income deductions falsely claimed by the defendants included deductions for business expenses and for being the head of household. These false and fraudulent credits and deductions reduced the clients' tax liability and increased their tax refunds.
The defendants claimed the false tax credits and deductions on IRS schedules and forms which were included in the clients' tax returns. Herrington, Wright, and Walker charged the clients extra fees for these additional fraudulent schedules. In most instances, the defendants did not review the returns with the clients prior to filing them with the IRS and did not provide copies of the returns to the clients.
The indictment also states that Herrington did not file her personal income tax returns for calendar years 2010 and 2011. In addition, Walker filed her personal income tax returns for calendar years 2010 and 2011 containing false claims for the Education Expense Credit.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Ellen L. Cohen.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Texas Artist Pleads Guilty to Failure to File Income Tax ReturnRead the Press Release
A San Antonio, Texas, artist pleaded guilty today in the U.S. District Court for the Western District of Texas in San Antonio to one count of failure to file a tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to court documents, Carlos Cortes is an artist who works in the medium of “Faux Bois,” an artistic imitation of wood or wood grains in various media. Cortes’ work has been commissioned by the City of San Antonio along with several San Antonio businesses. According to Internal Revenue Service (IRS) records, Cortes did not file individual income tax returns for 2006, 2007, 2008 and 2009 despite earning gross income well in excess of the filing requirements. Cortes admitted that he had gross income of $62,043 in 2006, $66,138 for 2007, $457,192 for 2008 and $781,847 for 2009.
Cortes will be sentenced on June 21. He faces a statutory maximum sentence of one year in prison and a $100,000 fine. As part of his plea agreement, Cortes agreed to pay restitution to the IRS in the amount of $404,433 to cover the tax due and owing for the years 2006 to 2009.
Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Robert Kemins of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Superseding Indictment Charges Fourteen Individuals with Conspiracy to Commit $30 Million in Healthcare FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced the return of a 31-count Superseding Indictment against fourteen individuals charging approximately $30,252,906 in Medicare fraud.
Specifically, HENRY EVANS, age 71; MICHAEL JONES, age 46; PAULA JONES, age 45; SHELTON BARNES, age 62; GREGORY MOLDEN, age 60, SUPRENIA WASHINGTON, age 59; ERICA EDWARDS, age 31; ZELLISHA DEJEAN, age 37, LARRY TAYLOR, age 69; CAREN BATTAGLIA, age 49; SHEILA HOPKINS, age 62; and VERINESE SUTTON, age 63, all of New Orleans; and JONATHON NORA, age 28, of River Ridge; and JEFFREY KOON, age 43, of Lockport, were indicted for conspiracy to commit health care fraud, conspiracy to defraud the United States and to receive and pay health care kickbacks, and health care fraud. BARNES was also charged with obstruction of a federal audit.
The Indictment is the second one involving many of the same parties who were originally indicted in March of 2015. Ten individuals and/or companies have already pleaded guilty to charges associated with the original Indictment and a related Bill of Information involving RHONDA MABERRY. In this Superseding Indictment, three new defendants were added including LARRY TAYLOR, DR. GREGORY MOLDEN, and JEFF KOON. TAYLOR is charged only in Count 2, the kickback conspiracy along with MOLDEN, who also is charged with the health care conspiracy and two individual counts of health care fraud. KOON is charged in the health care conspiracy and four individual counts of fraud. MICHAEL JONES and BARNES were also charged with nine and two additional counts of health care fraud, respectively. Additionally, BARNES was also charged with one count of obstructing a federal audit.
This Superseding Indictment is related to the Indictment returned in March 2015, charging LISA CRINEL and others, some of whom have entered guilty pleas. According to the Superseding Indictment, the defendants participated in a criminal organization for the purpose of fraudulently billing Medicare for medically unnecessary home health services for patients who were not homebound. DRS. BARNES, BARNES, EVANS, MOLDEN and MICHAEL JONES, known as “House Doctors,” ordered home health services for Medicare beneficiaries who had no legitimate medical necessity. The House Doctors falsely signed home health orders regardless of the beneficiary’s needs, homebound status, or diagnoses. In return, DRS. BARNES, EVANS, and MOLDEN received monthly payments fraudulently characterized as medical consultant or director fees for which they provided no services other than fraudulently certifying Medicare beneficiaries for unnecessary home health services. Instead of receiving monthly payments from the home health agency, Abide hired PAULA JONES, DR. MICHAEL JONES’ wife and, thereafter, inflated salary payments to PAULA JONES represented MICHAEL JONES’ fees for fraudulently certifying home health for ineligible Medicare beneficiaries. Abide also paid LARRY TAYLOR, MICHAEL JONES’ patient recruiter/driver and, in return, MICHAEL JONES agreed to send Abide Medicare patients for home health.
Marketers contacted JONATHAN NORA and others to confirm that the person fraudulently referred for home health was a Medicare beneficiary. Once NORA determined the referred individual was a Medicare beneficiary, NORA scheduled a physician visit, usually with an Abide House Doctor, well knowing that the individual referral to Abide was by a Marketer, instead of the beneficiary’s own health care professional.
Registered nurses, including EDWARDS, WASHINGTON, DEJEAN, HOPKINS and KOON were assigned to go to the homes of Medicare beneficiaries to complete assessments that determined the necessary level of care required for the beneficiary and the reimbursement rate for the claims made by Abide. When EDWARDS, WASHINGTON, DEJEAN, HOPKINS, and KOON completed these assessments, they routinely and fraudulently included a group of diagnoses that were unrelated to the needs of the beneficiaries and included items suggesting the need for assistance with different activities of daily living in order to falsely inflate the reimbursement rates paid by Medicare to Abide. EDWARDS, WASHINGTON, HOPKINS, DEJEAN and KOON also fraudulently included other items in the assessment to falsely document the beneficiary’s homebound status.
After assessments were completed, Abide generated plans of care reflecting the falsely created assessments. The plans of care were given to DRS. BARNES, EVANS, MOLDEN and MICHAEL JONES to falsely certify and recertify medically unnecessary episodes of home health. Licensed practical nurses (LPNs) assigned to beneficiaries, including BATTAGLIA, performed skilled nursing visits usually once a week and BATTAGLIA routinely falsified documentation of visits to support the ongoing fraudulent billing by PAULA JONES, on behalf of Abide, of medically unnecessary home health services.
The Superseding Indictment also charges SHELTON BARNES with obstruction of a federal audit in connection with his billing to Medicare Part B of services related to the medically unnecessary home health services.
If convicted, VERINESE SUTTON and LARRY TAYLOR, face a possible maximum sentence of 5 years imprisonment; JONATHAN NORA and PAULA JONES face a possible maximum sentence of 15 years imprisonment; ERICA EDWARDS and SUPRENIA WASHINGTON face a possible maximum sentence of 20 years imprisonment; CAREN BATTAGLIA and ZELLISHA DEJEAN face a possible maximum sentence of 30 years imprisonment; DRS. HENRY EVANS and GREGORY MOLDEN face a possible maximum sentence of 35 years imprisonment; JEFFREY KOON face a possible maximum sentence of 50 years imprisonment; SHEILA HOPKINS faces a possible maximum sentence of 70 years imprisonment; DR. SHELTON BARNES faces a possible maximum sentence of 110 years imprisonment; and DR. MICHAEL JONES face a possible maximum sentence of 125 years imprisonment. For each count for which any defendant is convicted, they are subject to a $250,000 fine.
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 Special Agents of the Federal Bureau of Investigation in the ongoing investigation. Assistant U.S. Attorneys Patrice Harris Sullivan, Sharan Lieberman and Andre Lagarde are in charge of the prosecution.
Sumter County Convicted Felon Sentenced to More Than Six Years in Prison on Federal Drug and Firearm OffensesRead the Press Release
Ocala, Florida – Senior United States District Judge Wm. Terrell Hodges today sentenced Thomas Franklin Dinkins, Jr. (27, Lake Panasoffkee) to six years and nine months in federal prison for possession with intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime. He was also ordered to forfeit a handgun and 31 rounds of ammunition as a part of his sentence. Dinkins pleaded guilty to the charges on February 2, 2016.
According to the plea agreement, deputies from the Sumter County Sheriff’s Office stopped Dinkins for an expired tag on December 16, 2014. When a narcotics canine subsequently alerted on Dinkins’s car, deputies searched it and found a locked, portable safe in the trunk. The key to the safe was in Dinkins’s jacket. Inside the safe, deputies found methamphetamine, two digital scales, numerous plastic baggies, and a loaded .22 caliber handgun with an obliterated serial number. A nearby backpack held additional plastic bags and ammunition. A criminal history check showed Dinkins to be a multi-convicted felon who is prohibited from possessing firearms and ammunition under federal law. Dinkins ultimately admitted that the firearm was “probably stolen” and that he had it to protect himself while distributing drugs.
On March 21, 2015, a discarded cellular telephone was discovered by a citizen and turned over to authorities. Deputies examined the phone and determined that it belonged to Dinkins. An examination of the phone revealed multiple pictures and text messages linking Dinkins to the recovered handgun, another shotgun, and numerous drug sales.
This case was investigated by the Sumter County Sheriff’s Office and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
South Carolina Man Pleads Guilty to Sexual Exploitation of Kansas GirlRead the Press Release
WICHITA, KAN. - A South Carolina man pleaded guilty Thursday to federal charges of sexually exploiting a Kansas girl, Acting U.S. Attorney Tom Beall said today.
Robert Pitya Dickson, 48, Fort Mill, S.C., pleaded guilty to two counts of producing child pornography. In his plea, he admitted he communicated over the Internet with a 13-year-old Kansas girl. Dickson persuaded the girl to send him send him sexual images of herself. In March 2014 he traveled to meet the girl and engaged in sex acts with her that he recorded and transported back to South Carolina.
Sentencing is set for July 11. Both parties have agreed to recommend a sentence of 300 months in federal prison. Beall commended the FBI and Assistant U.S. Attorney Jason Hart for their work on the case.
Smash and Grab Robbers Sentenced to 20 Years in PrisonRead the Press Release
PHILADELPHIA - Darrell Williams, 45, and David Story, 47, both of Philadelphia, were each sentenced today to 240 months in prison for their roles in a robbery conspiracy that targeted jewelry stores. In addition to the prison terms, U.S. District Court Judge Lawrence F. Stengel ordered five years of supervised release, a $1,100 special assessment for Story, and a $900 special assessment for Williams. In addition to the conspiracy, Williams and Story were charged with using and carrying a firearm during a crime of violence. Both pleaded guilty – Williams on April 9, 2015; Story on April 20, 2015. The Court imposed restitution in the amount $5,219,205.84 on Story and Williams.
On three separate occasions - July 13, 2011, April 13, 2012 and August 22, 2012 - Story committed an armed robbery of the Tourneau store in King of Prussia, Pennsylvania. Williams participated in the robberies on July 13, 2011 and April 13, 2012. On January 9, 2012, the pair, along with co-conspirators Rufus Lawson, Anthony Lockwood, and Kenneth L. Williams, committed a robbery of Govberg Jewelers, located at 292 Montgomery Avenue in Ardmore, Pennsylvania. On February 22, 2012, Williams and Story, along with Rufus Lawson and Kenneth L. Williams, robbed the Bernie Robbins Jewelers, located at 595 E. Lancaster Avenue in Saint Davids, Pennsylvania. Earlier, on November 1, 2011, Williams and Story, along with Rufus Lawson, Jackie Howard and Willie Hawkins Smith, robbed the Kingston Jewelers located at 2010 Pennsylvania Avenue in Wilmington, Delaware.
This case has been investigated by the Federal Bureau of Investigation, Radnor Township Police Department, the Lower Merion Township Police Department, the Upper Merion Township Police Department, the Limerick Township Police Department, the Lower Pottsgrove Township Police Department, the Upper Providence Township Police Department, the Royersford Police Department, Evesham Township (New Jersey) Police Department, the Lawrence Township (New Jersey) Police Department, the Pennsylvania State Police, the Wilmington Police Department (Delaware), the Delaware State Police and the Philadelphia Police Department. The case is being prosecuted by Assistant United States Attorney Thomas M. Zaleski and Assistant United States Attorney Jamie M. McCall, from the U.S. Attorney’s Office in Delaware.
Siskiyou County Woman Pleads Guilty to Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — Stacy Miranda Phillips, 29, of Montague, pleaded guilty today to aggravated ID theft related to her participation in a bank fraud and identity theft scheme, United States Attorney Benjamin B. Wagner announced.
According to court documents, between September and December of 2015, Phillips worked with others in Siskiyou County to execute a scheme to steal from banks and merchants in the Siskiyou County. Phillips admitted that as part of her scheme she stole U.S. Mail and other personal property of local residents. Phillips and her associates targeted certain victims, postal customers, and mail receptacles utilized by those victims. Phillips used the checks, credit or debit cards, account numbers, names, PINs, and signatures found in the stolen mail to obtain cash and purchase items. Phillips also attempted to open a line of credit in the name of a Weed, California victim. Phillips stole mail from the following Siskiyou County Post Offices: Hornbrook, Grenada, and Montague.
This case is the product of an investigation by the United States Postal Inspection Service, the Siskiyou County Sheriff's Department, and the Yreka Police Department. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.
Phillips is scheduled for sentencing on July 28, 2016, before U.S. District Judge Troy L. Nunley. Phillips faces a mandatory minimum sentence of two years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Sentencings for April 15 - April 21, 2016Read the Press Release
Three individuals were sentenced April 21, 2016, by Chief Federal District Court Judge Nancy D. Freudenthal for their roles in a methamphetamine conspiracy.
Brittany Dawn Wright, 31, of Wheatland, Wyoming, was sentenced for possession with intent to distribute methamphetamine and aiding and abetting. Wright was arrested in Wheatland, Wyoming. She received 34 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and restitution in the amount of $200.00.
Edward Anthony Prusik, 52, of Wheatland, Wyoming, was sentenced for conspiracy to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Prusik was arrested in Wheatland, Wyoming. He received 100 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $100.00 special assessment and restitution in the amount of $500.00.
Allen Ray Plunkett, 46, of Carr, Colorado, was sentenced for conspiracy to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Plunkett was arrested in Wheatland, Wyoming. He received 108 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $100.00 special assessment and restitution in the amount of $400.00.
This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. The principal mission of the Organized Crime Drug Enforcement Task Forces (OCDETF) program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Filberto Pelayo-Torres, 34, of Mexico, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on April 20, 2016, for illegal re-entry of a previously deported alien into the United States. Pelayo-Torres was arrested in Gillette, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Abel Najera-Cruz, aka Mariano Najera-Pena, aka Abel Najera-Pena, 30, of Guatemala, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on April 20, 2016, for illegal re-entry of a previously deported alien into the United States. Najera-Cruz was arrested in Riverton, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Irving Felipe Miranda-Saenz, 28, of Mexico, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on April 20, 2016, for illegal re-entry of a previously deported alien into the United States. Miranda-Saenz was arrested in Cheyenne, Wyoming. He received time served, plus ten days, was ordered to pay a $100.00 special assessment and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Gwenellyn Jackson, 57, of Cheyenne, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on April 19, 2016, for conspiracy to launder money. Jackson was arrested in Birmingham, Alabama. She received 30 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and a $200.00 fine. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation, the Internal Revenue Service and the U.S. Drug Enforcement Administration. The principal mission of the Organized Crime Drug Enforcement Task Forces (OCDETF) program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Scott Wyman Burgan, 59, of Sheridan, Wyoming, was sentenced by Federal District court Judge Alan B. Johnson on April 19, 2016, for possession of child pornography. Burgan was arrested in Cheyenne, Wyoming. He received 41 months imprisonment, to be followed by ten years of supervised release, and was ordered to pay a $100.00 special assessment, a $3,000.00 fine and restitution in the amount of $12,000.00. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Mary Elaine Whitney, aka Mary Ellen Whitney, 62, of Casper, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on April 19, 2016, for wrongful conversion of social security payments. Whitney served as a representative payee for her son who was a beneficiary of Supplemental Security Income (SSI) benefits and resident of Circle C Resources Living Facility in Casper. SSI is a cash assistance program provided by the Social Security Administration which assures a minimum level of income to persons who are aged, blind, or disabled and who have limited income and resources. SSI benefits may be paid to a representative payee who is then required to use all of the money for the beneficiary’s care. During a representative payee review audit at the Circle C Resources, it was discovered that
Whitney had not been providing SSI payments to the living facility. Between January 2005 and February 2015, Whitney received over $65,000 in SSI benefits on behalf of her son but then wrongly used the money for her own expenses rather than paying for her son’s needs. Whitney received a sentence of six months in prison to be followed by three years of supervised release. Whitney was also ordered to pay $65,082.44 in restitution. This case was investigated by the Social Security Administration, Office of Inspector General.
Brian James Fenske, 48, of Paynesville, Minnesota, was sentenced April 19, 2016 by Federal District Court Judge Alan B. Johnson on April 19, 2016, for possession with intent to distribute 50 grams or more of mixture or substance containing a detectable amount of methamphetamine. Fenske was arrested in Casper, Wyoming. He received 46 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and restitution in the amount of $250.00. This case was investigated by the Casper Police Department and the Wyoming Division of Criminal Investigation.
Ronald H. Stallings, 49, of Rapid City, South Dakota, was sentenced by Federal District Court Judge Scott W. Skavdahl on April 15, 2016, for conspiracy to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Stallings was arrested in Gillette, Wyoming. He received 78 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Sentences Imposed in Township 37 Marijuana Grow CaseRead the Press Release
Contact: Joel Casey
F. Todd Lowell
Assistant United States Attorneys
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Malcolm French, 54, of Enfield; Rodney Russell, 52, of South Thomaston; and Kendall Chase, 59, of Bradford; were sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. for offenses arising out of the September 22, 2009 seizure of 2,943 marijuana plants in Township 37, Washington County.
French was sentenced to 175 months in prison, five years of supervised release and a fine of $100,000 for conspiracy to manufacture over 1000 marijuana plants, managing and controlling property used to manufacture marijuana and harboring illegal aliens. Russell was sentenced to 151 months in prison and five years of supervised release for conspiracy to manufacture over 1000 marijuana plants, managing and controlling property used to manufacture marijuana and harboring illegal aliens. Chase was sentenced to five years in prison, three years of supervised release and a fine of $17,500 for conspiracy to manufacture over 1000 marijuana plants.
In imposing sentence, Judge Woodcock said the defendants “attempt to make profits turned into a series of losses,” that he was “profoundly offended by the perjurious testimony of French and Russell” and that the defendants had the “bad fortune to run into an extremely professional prosecutorial and investigative team whose diligence was the hallmark of the case.”
On February 10, 2016, Haynes Timberland, Inc. was sentenced to pay a $100,000 fine for managing and controlling property used to manufacture marijuana. Haynes Timberland and French were also ordered to forfeit $1,550,000, a warehouse compound in Township 31, and a hunting camp in LaGrange that facilitated drug trafficking.
The Director of the Maine Drug Enforcement Agency (“MDEA”), Roy McKinney said, “This case was and remains the largest and most sophisticated marijuana growing operations in Maine history.”
“I commend the dedicated investigators and members of the prosecution team who have worked tirelessly on this case for many years,” said Joel Garland, Internal Revenue Service (“IRS”) Special Agent in Charge of the Boston Field Office. “IRS-Criminal Investigation provides the financial expertise needed to trace drug trafficking proceeds which, as shown in this large-scale marijuana operation, can lead to the forfeiture of significant assets.”
“U.S. Department of Homeland Security, Office of Homeland Security Investigations (“HSI’s”) unique law enforcement authorities bring to the table, not only the experience and expertise to handle the criminal investigation of this grow operation, but also the ability to appropriately investigate their dealings with undocumented aliens,” said Matthew Etre, Special Agent in Charge of HSI Boston. “Our partnerships with local, state and federal law enforcement agencies helps ensure that these criminal drug organizations are completely dismantled, making communities safer.”
The case was investigated by the MDEA, IRS-Criminal Investigation and HSI, with assistance from the U.S. Drug Enforcement Administration, the Maine State Police, the Washington and Penobscot County Sheriff’s Offices, the Maine Warden Service, the Maine Forest Service and U.S. Customs and Border Protection. This investigation is part of the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Santa Fe Man Sentenced to Ten Years for Conviction on Federal Heroin Trafficking and Firearms ChargesRead the Press Release
ALBUQUERQUE – Phillip Lovato, 30, of Santa Fe, N.M., was sentenced today in federal court in Albuquerque, N.M., to ten years in federal prison followed by four years of supervised release for his conviction on heroin trafficking and firearms charges. Lovato also was ordered to forfeit to the United States $49,242 in drug proceeds and two firearms that were seized during the investigation leading to his conviction.
Lovato’s sentence was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division, and New Mexico State Police Lt. Scott McFaul, the Commander of the HIDTA Region III Drug Task Force.
Lovato was arrested by the FBI on Feb. 10, 2015, on a criminal complaint charging him with heroin trafficking and firearms charges. On Feb. 25, 2015, a federal grand jury returned a seven-count indictment against Lovato charging him with two counts of distributing heroin, two counts of possession of heroin with intent to distribute, two counts of being a felon in possession of firearms and ammunition, and one count of using and carrying a firearm in furtherance of a drug trafficking crimes. According to the indictment, Lovato committed these crimes in Santa Fe County.
Lovato entered guilty pleas on Feb. 16, 2016, to two counts of possession of heroin with intent to distribute, one count of using a firearm in furtherance of a drug trafficking crime, and one count of being a felon in possession of a firearm. In his plea agreement, Lovato admitted selling heroin from a residence on Alta Vista Street in Santa Fe on Nov. 17, 2014. On that day, Lovato was carrying a black backpack containing heroin and a semi-automatic pistol that he used to protect the drugs he was carrying and the proceeds from his drug sales. After completing several drug transactions at the Alta Vista Street residence, Lovato got into a pickup truck to go to another location where he intended to continue selling heroin. When the truck was stopped by law enforcement officers, Lovato admitted that he had heroin in the truck, and the officers seized 40 grams of heroin and the semi-automatic pistol from Lovato’s backpack.
In his plea agreement, Lovato also acknowledged that he subsequently acquired another firearm and additional heroin and resumed selling heroin in and around Santa Fe, storing his heroin and cash proceeds in a storage facility in Santa Fe. On Feb. 6, 2015, law enforcement officers executed a search warrant on the storage facility where they seized 665 grams of heroin and $49,242 in proceeds from Lovato’s heroin deals.
Lovato was arrested on Feb. 10, 2015, outside a residence in Santa Fe. Before his arrest, Lovato left a semi-automatic handgun inside the residence. Following Lovato’s arrest, law enforcement officers seized the handgun when they executed a consensual search of the residence. Lovato acknowledged knowing that he was prohibited from possessing firearms or ammunition because of his status as a convicted felon.
This case was investigated by the Santa Fe office of the FBI and the HIDTA Region III Drug Task Force, and was prosecuted by Assistant U.S. Attorney Timothy S. Vasquez.
The HIDTA – High Intensity Drug Trafficking Area – Program is a program of the White House Office National Drug Control Policy (ONDCP) that facilitates cooperation among federal, state, local and tribal law enforcement to foster intelligence sharing and to support the execution of effective enforcement operations aimed at dismantling drug trafficking organization in critical drug trafficking regions of the United States. The HIDTA Region III Narcotics Task Force is comprised of the New Mexico State Police, the Santa Fe County Sheriff’s Office and the Santa Fe Police Department.
Lovato, who has two prior drug trafficking convictions and an aggravated assault conviction, was prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Santa Fe County, under this initiative.
The case also was prosecuted as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with Bernalillo County, DEA, Healing Addiction in our Community (HAC) and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
San Antonio Woman Pleads Guilty to Federal Wire Fraud Charges in Connection with Immigration Document Fraud SchemeRead the Press Release
In San Antonio, 41-year-old Yvette Marie Rodriguez (aka “Anna DeHoyos”) pleaded guilty to a fraudulent scheme whereby she professed to be an Immigration official who could provide immigration documents to undocumented aliens announced United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.
Appearing in federal court today, Rodriguez pleaded guilty to eight counts of wire fraud. By pleading guilty, Rodriguez admitted that from January 2011 to December 2013, she solicited and received over $30,000 from undocumented immigrants interested in paying for special assistance in obtaining Permanent Residency and United States Citizenship papers. According to court documents, Rodriguez would charge clients up to $6,000 for her processing services. However, she never provided the requested immigration documents because she was never in a position to obtain said documents.
Rodriguez remains on bond pending sentencing scheduled for August 3, 2016, before United States District Judge Xavier Rodriguez. Each wire fraud charge calls for up to 20 years in federal prison.
This case was investigated by the FBI and U.S. Immigration and Customs Enforcement Office of Professional Responsibility. Assistant United States Attorney Greg Surovic is prosecuting this case on behalf of the Government.
Sentenciada Una Residente De Roseville Por Estafa De Modificaciones De Préstamos Y Rescates De Embargos Inmobiliarios Orientada a LA Comunidad De Habla HispanaRead the Press Release
SACRAMENTO, California – Ligia Sandoval Spafford (Sandoval), 48 años de edad, y residente de Roseville, fue condenada el jueves por el Juez del Distrito de los Estados Unidos Troy L. Nunley a dos años y tres meses de prisión por una trama que se dirigía a propietarios de viviendas que se encontraban en dificultades económicas, anunció el Procurador de los Estados Unidos Benjamín B. Wagner. Se le ordenó a Sandoval a que se entregara el 9 de junio de 2016.
Sandoval pagó $115,065.00 de dólares en indemnizaciones, la cantidad total de restitución ordenada por el tribunal, para compensar a las víctimas por las pérdidas en que incurrieron como resultado de esta trama fraudulenta. En febrero de 2015, Sandoval y su marido de entonces, Martin Wayne Flanders, 51 años de edad, y residente de Roseville, se declararon culpables de fraudes de correo para llevar a cabo la trama fraudulenta. El 29 de octubre de 2015, Flanders fue condenado a seis años y cinco meses de prisión.
En la declaración de la sentencia, el Juez Nunley dijo: “Ella sabía lo que estaba ocurriendo e incitó a estas personas a que formaran parte en esta trama. Ellos confiaban en ella. … Ella arruinó las vidas de algunas personas. El que ella pagara una indemnización no quita la ansiedad y el miedo que ellos (las víctimas) mantuvieron mientras ocurría esto. Estas víctimas estaban devastadas.”
Según documentos del tribunal, entre los años 2008 y 2010, Flanders cobró tarifas por adelantado a sus clientes por un número de servicios financieros que incluían modificaciones de préstamos, revisiones de préstamos hipotecarios, recuperación de crédito, liberación de deuda, peticiones de bancarrota y un programa para vender casas a “inversionistas” que las alquilaban con la opción a compra. Sandoval y Flanders comerciaban con estos servicios con propietarios de viviendas que se encontraban en dificultades económicas y ponían un énfasis particular en personas de habla hispana. Sandoval, siendo hispano-hablante, promovía los servicios que ella y Flanders, quien no dominaba el español, ofrecían durante un programa de radio que se emitía dos veces a la semana en la zona del “Bay Area” por Radio Luz, una emisora de radio Cristiana en español. Sandoval, una agente de bienes y raíces autorizada, además asistía a Flanders en la trama fraudulenta manteniendo relación con y explicando los servicios a clientes de habla-hispana. Los servicios ofrecidos por Flanders y Sandoval también se anunciaban en Univisión, un canal de televisión en español, y en revistas en español. Cerca de un 98 por ciento de los clientes de los demandados eran de descendencia hispana; algunos hablaban poco o nada de inglés.
Sandoval y Flanders dieron numerosos testimonios falsos a los inversores sobre el éxito de los programas que se ofrecían o, en el caso, de las devoluciones que estaban disponibles si los programas no prosperaban. En intentos de retrasar los procesos de embargo de las viviendas, Sandoval y Flanders también se servían de ofertas ficticias llamadas “ofertas fantasma” para comprar las viviendas de las víctimas a precio reducido en un proceso llamado “short sale,” como también de fingidas peticiones de bancarrota llamadas “bancarrotas de esqueleto” que eran rápidamente desestimadas por el tribunal de bancarrotas. Al menos, entre 25 a 30 individuos pagaron por los servicios que nunca recibieron o no recibieron las devoluciones cuando los programas dejaron de cumplir con lo prometido. Como mínimo, las pérdidas totales de las víctimas fueron de $115,000 dólares. Algunos de los propietarios que no pudieron recibir subsidios fueron embargados por sus entidades de crédito.
Este caso ha sido el producto de una investigación llevada a cabo por la Oficina Federal de Investigaciones (FBI). Los Procuradores Auxiliares de los Estados Unidos Todd A. Pickles y Shelley Weger han procesado el caso.
Roswell Felon Facing Federal Firearms ChargesRead the Press Release
ALBUQUERQUE – This morning a U.S. Magistrate Judge sitting in Las Cruces, N.M., found probable cause to support a criminal complaint charging Nathaniel Eddie Madrid, 49, of Roswell, N.M., with violating the federal firearms laws. The Magistrate Judge ordered Madrid detained pending trial.
Madrid was arrested on April 15, 2016, on a criminal complaint charging him with being a felon in possession of a firearm and ammunition and possessing an unregistered firearm. The criminal complaint alleges that Madrid committed the crimes on Oct. 26, 2015, in Lincoln County, N.M.
According to the criminal complaint, New Mexico State Police (NMSP) officers came upon Madrid when responding to the scene of a traffic accident on Oct. 26, 2015. Madrid allegedly had crashed the stolen vehicle he was driving and allegedly was observed throwing a handgun into a nearby ditch by a witness who stopped to render aid to Madrid. The NMSP allegedly retrieved the handgun and found two more firearms in the vehicle.
After identifying Madrid, the NMSP learned that Madrid had an outstanding arrest warrant for violating the conditions of a supervised release term he was serving as a result of a previous federal conviction for unlawfully possessing a firearm. Madrid was arrested on the federal warrant; he has been in federal custody since that time.
The criminal complaint alleges that Madrid was prohibited from possessing either firearms or ammunition on Oct. 26, 2015, because he previously had been convicted of several felony offenses in the state courts of New Mexico in addition to his federal conviction for being a felon in possession of a firearm.
If convicted of the crimes charged in the criminal complaint, Madrid faces a statutory maximum sentence of ten years in prison. Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the NMSP, and is being prosecuted by Assistant U.S. Attorney Alfred J. Perez of the U.S. Attorney’s Las Cruces Branch Office.
Madrid is being prosecuted the case under a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rate, on a per capita basis, is one of the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates under this initiative.
Restaurateur and Squirrel Hill Eatery Indicted on Labor-Related ChargesRead the Press Release
PITTSBURGH – A Pittsburgh woman and the local restaurant she owns have been indicted by a federal grand jury in Pittsburgh, United States Attorney David J. Hickton announced today.
The three-count indictment, returned on April 19 and unsealed today, charges Hsiao Yen Wu, aka Sophia Wu, age 40, of Pittsburgh, Pa, with falsifying, concealing, or covering up by trick, scheme, or device a material fact, and charges Sun Penang, Inc., located at 5829 Forbes Avenue, in Squirrel Hill with willfully violating the Fair Labor Standards Act.
“All employees working in Western Pennsylvania deserve to be treated fairly under the law,” said U.S. Attorney Hickton. “Prosecutions like these demonstrate our commitment to stopping wage and hour abuses in the workforce.”
“An important mission of the Office of Inspector General is to investigate the alleged undermining of the enforcement responsibilities of Department of Labor agencies. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated John Spratley, Special Agent-in-Charge of the Philadelphia Regional Office of the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
According to the indictment presented to the court, after Sun Penang had agreed to pay back wage payments, Wu represented that Sun Penang had issued all back wage payments checks and provided faxed copies of these checks to the Department of Labor’s Wage and Hour Office in Pittsburgh. However, Wu knew that the employees were not paid back wage payments because these employees were required either to deposit the checks into Wu's personal bank account or to work without pay until Sun Penang recouped the wages. The indictment also alleges that Sun Penang failed to pay minimum wages and overtime pay to their employees from Jan. 1, 2013 to Dec. 31, 2013.
With respect to Wu, the law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. With respect to Sun Penang, the law provides for a maximum fine of $20,000. 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 defendants.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The Department of Labor’s Wage and Hour Division and Office of Inspector General jointly 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.
Restaurant Owner Indicted for Cocaine Conspiracy, Illegal FirearmsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the owner of Danny’s Big Easy Cajun restaurant was indicted by a federal grand jury today on additional drug-trafficking and firearms charges.
Paul Danny Gosserand, 57, of Kansas City, Kan., was charged in a three-count superseding indictment returned by a federal grand jury in Kansas City, Mo. Today’s superseding indictment replaces a Dec. 17, 2014 federal indictment and includes additional charges. Gosserand is the owner of Danny’s Big Easy Cajun at E. 18th and Vine in Kansas City, Mo.
Today’s indictment retains the original charge of conspiracy to distribute five kilograms or more of powder cocaine in May 2011. Gosserand is also charged with possessing cocaine with the intent to distribute and with possessing firearms in furtherance of a drug-trafficking crime. Gosserand allegedly was in possession of a Sears Roebuck & Company 16-gauge bolt action shotgun with no serial number and a North American Arms .22-caliber long rifle revolver on May 18, 2011.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Stefan C. Hughes. It was investigated by the Drug Enforcement Administration.
Portland Man Sentenced to Seven Years for Crack Cocaine DistributionRead the Press Release
Contact: Julia M. Lipez
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that William Weston, 36, of Portland, Maine was sentenced today in U.S. District Court by Judge George Z. Singal to seven years in prison and three years of supervised release for conspiring to distribute cocaine base, often referred to as crack cocaine. Weston entered a guilty plea to the charge in October 2015.
Court records reveal that between December 2013 and January 2015, Weston conspired with others to sell crack cocaine in Portland. Members of the conspiracy arranged for the acquisition of drugs out of state. Once the drugs were transported to Maine, they were provided to retail distributors who would sell the drugs in the Portland area. During the course of the investigation, law enforcement officers conducted controlled purchases of crack cocaine from Weston and other members of the conspiracy.
This case was investigated by the Southern Maine Gang Task Force, which is comprised of investigators from the Federal Bureau of Investigation; the Portland, South Portland, Biddeford, and Lewiston Police Departments; the Department of Homeland Security, Homeland Security Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the U.S. Drug Enforcement Administration. The Maine Drug Enforcement Agency and the Maine State Police also assisted with the investigation. The case also results from the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Political Consultant and Former Easton City Councilman Admits to Bribing Allentown and Reading OfficialsRead the Press Release
PHILADELPHIA – Michael Fleck, 40, formerly of Allentown, PA, pleaded guilty today to one count of conspiracy to commit extortion and bribery offenses and one count of tax evasion, announced United States Attorney Zane David Memeger. Fleck is a former member of Easton’s City Council. U.S. District Court Judge Juan R. Sanchez scheduled a sentencing hearing for July 25, 2016.
According to court documents, Fleck was a principal and co-owner of an Allentown-based consulting company that a) conducted fundraising and other campaign-related services for certain elected officials in Pennsylvania (“the political clients”) and b) lobbied these same political clients on behalf of individuals and companies who sought contracts and other favorable treatment from local governments (“the business clients”). Public Official #1 of Reading and Public Official #3 and Mary Ellen Koval of Allentown were each elected officials in their respective cities as well as political clients of Fleck’s. Public Official #1 and Koval sought re-election to the offices that they held, while Public Official #3 aspired to win higher office through statewide election. Each of these three elected officials attempted to leverage their respective public offices – which gave them actual and perceived authority over the awarding of municipal contracts – for items of value, including campaign contributions.
Ramzi Haddad, charged separately, and the parties identified as Donor #1, Donor #2, Donor #3, Donor #4, Law Firm #4, Donor #5, and “the Partnership” all sought city contracts and/or other favorable treatment from local governments in the Eastern District of Pennsylvania, including Allentown and/or Reading. Public Official #1, Public Official #3, and Koval each exploited their official positions in order to obtain thousands of dollars’ worth of campaign contributions from one or more of these individuals and organizations. According to court documents, in each of instances, a public official and/or a donor reached or attempted to reach an explicit exchange of campaign contributions and official action. Fleck admitted that as part of his “consulting” services, he helped facilitate such quid pro quo solicitations, offers, and agreements and obtained tens of thousands of dollars of campaign contributions through the use of extortion, bribery, and/or fraud.
In Allentown, for example, once the Partnership began making large campaign contributions for Public Official #3, Fleck helped manipulate a purportedly fair and confidential contract award process to the Partnership’s advantage. Once Public Official #3 communicated his wishes to them, Fleck and Finance Director Gary Strathearn, with the help of Assistant City Solicitor Dale Wiles, both charged separately, sabotaged the award process to ensure that the Partnership prevailed over its competitors. Similarly, City Controller Mary Ellen Koval agreed to help Public Official #3 and Fleck by attempting to steer Allentown city contracts to certain of Public Official #3’s donors, including Donor #1. In Reading, Fleck, Reading public official Eron Lloyd, and others helped Public Official #1 obtain campaign contributions from companies that relied heavily on government contracts, such as the companies represented by Donor #2 and Donor #3, as consideration for Public Official #1’s efforts to steer Reading city contracts to them.
Public Official #1 and Public Official # 3 allegedly limited their direct interactions with certain donors. When donors and officials in Allentown and Reading raised concerns about having to interact with Fleck and/or his employees in connection with official city business, Public Official #1 and Public Official #3 rebuffed their concerns and insisted that they interact with Fleck and/or his employees.
To conceal and continue the conspiracy, Public Official #1, Eron Lloyd, Public Official #3, Mary Ellen Koval, Garret Strathearn, Dale Wiles, and Fleck employed counter-surveillance maneuvers and obstructed justice by, among other things, making false statements to FBI agents conducting a federal criminal investigation. For example, on March 11, 2015, Fleck falsely stated to FBI agents that he had not told anyone that the agents had confronted him earlier that day when, in fact, as Fleck well knew, he had disclosed the encounter to several others with the intention of warning Public Official #3 about the FBI’s investigation into a bribery, kickback, and extortion scheme.
Fleck also filed false and fraudulent joint U.S. individual income tax returns for tax years 2011, 2012, and 2013, in which he concealed income from his consulting company of approximately $130,897.41, overstated certain deductions, and failed to remit approximately $43,467 in payroll taxes, causing a tax loss of approximately $77,738.
Fleck faces a maximum possible sentence of 10 years in prison, a possible fine, supervised release, and a $200 assessment. Koval, Strathearn, Wiles, Haddad and Lloyd have pleaded guilty and are awaiting sentencing. (Wiles: June 6, 2016; Lloyd: June 7, 2016; Koval: July 26, 2016; Strathearn: July 27, 2016; Haddad: July 28, 2016.)
This case is being investigated by the Federal Bureau of Investigation-Allentown Resident Agency, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police. It is being prosecuted by Assistant United States Attorneys Joe Khan and Anthony Wzorek.
Pennsylvania Man Charged in Alleged $35 Million Fraud Against Veterans’ Education GI BillRead the Press Release
NEWARK, N.J. – A Harrisburg, Pennsylvania, man will appear in federal court today to face charges that he conspired to defraud millions from the Post 9/11 GI Bill, a federal education benefits program designed to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001, U.S. Attorney Paul J. Fishman announced.
David Alvey, 49, is charged by complaint with one count of conspiracy to commit wire fraud. Special agents with the U.S. Department of Veterans Affairs, Office of Inspector General, the FBI, and the U.S. Department of Education, Office of Inspector General, arrested Alvey this morning in Maryland. He will appear this afternoon before U.S. Magistrate Judge Stephanie A. Gallagher in Maryland federal court.
“The Post 9/11 GI Bill was designed to provide educational opportunities to a generation of men and women who served in the U.S. Armed Forces following the attacks on 9/11,” U.S. Attorney Fishman said. “Alvey and others allegedly sought to pillage those well-earned benefits as part of a complex $35 million scam that targeted veterans and enrolled them in unapproved online courses without their knowledge. Rooting out fraud against the government is always a priority of this office, especially when the conduct exploits those who serve our country with such courage.”
“The allegations of fraud committed by David Alvey are extremely serious because not only did his scheme potentially harm the Department of Veterans Affairs, it also victimized our nations deserving veterans and their families,” Jeffrey G. Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General’s Northeast Field Office, said. “The VA’s education benefit program is meant to help our veterans who have selflessly made great sacrifices for our country and now are in need of VA assistance. Any fraud against this program directly impacts our nation’s heroes.”
According to the complaint unsealed today:
From November 2009 through August 2013, Alvey and others engaged in a conspiracy to defraud the United States by obtaining tuition assistance and other education-related benefits under the Post 9/11 Education Assistance Act, more commonly known as the Post 9/11 GI Bill.
The Post 9/11 GI Bill provides educational assistance to eligible veterans of the United States Armed Forces by paying for veterans’ tuition, housing costs, and other educational costs and fees as long as the courses of study meet certain criteria. Due to the fact that the tuition benefits under the Post 9/11 GI Bill are paid by the United States directly to the school, all entities involved in developing and administering the courses must be fully disclosed to the United States in order for the government to properly assess the courses for approval.
Over the course of the conspiracy, Alvey, operating largely through his own company, ED4MIL LLC (“ED4MIL”), partnered with a New Jersey university (the “University”), to obtain approval from the United States to receive tuition and other education benefits under the Post 9/11 GI Bill for several online non-credit training and certification courses. These courses were purportedly developed, taught, and administered by the faculty of the University, but were, in fact, actually developed, taught, and administered by undisclosed and unapproved sub-contractors of ED4MIL, including an online correspondence school located in Pennsylvania.
Alvey and others at ED4MIL developed marketing materials and a script to be used by ED4MIL salespersons at various military bases around the United States in order to market to and enroll thousands of veterans in the courses. These “field representatives” employed by ED4MIL traveled across the United States pitching the fraudulent courses to veterans using the marketing materials and script developed by Alvey and others at ED4MIL. Field representatives were instructed to identify themselves to veterans as employees of the University, and were specifically told not to mention ED4MIL or the online correspondence school in which the veterans were actually enrolled. The marketing materials were emblazoned with the University’s insignia, and the field representatives wore t-shirts and handed out pens bearing the University’s name. The field representatives, and several other employees at ED4MIL, were also given University email addresses with which to communicate with the veterans.
Alvey and others then nominally enrolled the veterans in the University while simultaneously enrolling them in the unapproved online correspondence courses. Due to the fact that Alvey and others concealed the true source of the courses and the contract relationships between the University and ED4MIL, the veterans were unaware that the courses they were taking were actually being taught and administered by the online correspondence school.
Even though the University contributed no content or value to the courses whatsoever, the University charged the Post 9/11 GI Bill between ten and thirty times the prices charged by the online correspondence school for the same courses. While most courses at the correspondence school cost between approximately $600 and $1,000 in tuition, the University charged between approximately $5,000 and $26,000 per course. Over the course of the conspiracy, Alvey and others caused the United States to pay out over approximately $35 million in total benefits.
“The FBI’s stance on corruption and fraud is that of zero tolerance and therefore one of our highest priorities,” said Special Agent in Charge Timothy Gallagher. “Our job is to protect victims, especially our veterans who are on the front lines keeping our country safe, and these charges reflect our commitment to that goal.”
“Scams like this steal money from hardworking taxpayers and legitimate students – and in this case, our veterans – and that is completely unacceptable," Brian Hickey, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General's Northeastern Regional Office, said. "OIG is committed to fighting student financial aid fraud and we will continue to aggressively pursue those that participate in these types of crimes."
The wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast field office, under the direction of Special Agent in Charge Jeffrey G. Hughes in Newark; the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Brian Hickey of the Northeastern Region, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney David M. Eskew of the Economic Crimes Unit, Assistant U.S. Attorneys Jane Yoon and Lucy Muzzy of the Health Care and Government Fraud Unit, and Assistant U.S. Attorney Jafer Aftab of the Asset Forfeiture and Money Laundering Unit.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense Counsel: Judith Germano Esq., Montclair
Peekskill Man Pleads Guilty in White Plains Federal Court to Heroin Conspiracy and Admits Distributing Heroin and Fentanyl That Resulted in DeathRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that LAKUAN RHYNE pled guilty to conspiring to distribute more than a kilogram of heroin in and around Westchester County during 2014. RHYNE admitted that in the course of the conspiracy, on January 26, 2014, in Peekskill, New York, he sold heroin and fentanyl that resulted in the overdose death of an individual. RHYNE pled guilty to a felony Information today in White Plains federal court before U.S. District Judge Nelson S. Román.
U.S. Attorney Bharara stated: “Overdose deaths from heroin and fentanyl have become tragically too frequent in many of our communities. As he admitted today, Lakuan Rhyne sold fentanyl-laced heroin that resulted in the overdose death of a 23-year old man. Rhyne’s guilty plea today serves as a reminder of the destruction that follows the heroin and fentanyl trade.”
According to the allegations in the Information and other information in the public record:
LAKUAN RHYNE, a/k/a “Rico,” was a leader of a drug trafficking ring centered in Westchester County, New York. From early 2014 through the fall of 2014, RHYNE and his associates conspired to distribute significant quantities of heroin, as well as crack cocaine and powder cocaine, in and around Westchester County. RHYNE and his associates sold their drugs out of cars, residences, and on the streets. At least some of the heroin distributed by RHYNE was laced with fentanyl, a synthetic opioid that is significantly stronger than both ordinary heroin and morphine.
On the evening of January 26, 2014, in the parking lot of a restaurant in Peekskill, New York, RHYNE supplied a mixture containing heroin and fentanyl to an associate for the purpose of selling that mixture to a customer. That customer was Thomas Coogan, a 23-year-old from Buchanan, New York. Later that night, Coogan used the fentanyl-laced heroin supplied by RHYNE, and died as a result.
* * *
RHYNE, 24, of Peekskill, New York, pled guilty to one count of conspiring to distribute at least one kilogram of heroin, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
RHYNE is scheduled to be sentenced on July 21, 2016.
Mr. Bharara praised the outstanding work of the FBI, the Westchester County Northern Narcotics Initiative, which includes the Westchester County Department of Public Safety and the police departments of Peekskill, Croton-on-Hudson, Buchanan, Bedford, Yorktown, Mount Kisco, and Ossining, as well as the FBI Violent Crimes Task Force. Mr. Bharara also thanked the Westchester County District Attorney’s Office for its assistance.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys George Turner and Michael Gerber are in charge of the prosecution.
Orlando Woman Charged with Multiple Crimes, Including Acting as an Illegal Agent of A Foreign Government and ConspiracyRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an 18-count superseding indictment charging Amin Yu (53, Orlando) with acting in the United States as an illegal agent of a foreign government without prior notification to the Attorney General, conspiring to defraud the United States and to commit offenses against the United States, committing unlawful export information activities, smuggling goods from the United States, conspiring to and committing international money laundering, and making false statements to the United States Citizenship and Immigration Services. If convicted, she faces a maximum penalty of 20 years in federal prison on each of the money laundering counts, 10 years’ imprisonment for acting as an illegal agent and the smuggling offenses, and 5 years in prison for the remaining charges. The indictment also notifies Yu that the United States intends to forfeit approximately $2,668,648.92, the alleged traceable proceeds of the offenses.
According to the superseding indictment, from at least 2002 until approximately February 2014, at the direction of co-conspirators working for Harbin Engineering University (HEU, a PRC-controlled entity) in the People’s Republic of China (PRC), Yu obtained systems and components for marine submersible vehicles from companies in the United States. She then illegally exported those items to the PRC for use by her co-conspirators in the development of marine submersible vehicles – unmanned underwater vehicles (UUVs), remotely operated vehicles (ROVs), and autonomous underwater vehicles (AUVs) for HEU and other state-controlled entities. It is alleged that Yu illegally exported items by failing to file Electronic Export Information as required by U.S. law and by also filing false Electronic Export Information. In particular, Yu completed and caused the completion of export-related documents in which she significantly undervalued the items that she had exported and also provided false end-user information for those items.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Internal Revenue Service-Criminal Investigation, and the Naval Criminal Investigative Service. It will be prosecuted by Assistant United States Attorney Daniel C. Irick, and Trial Attorneys David C. Recker and Thea D. R. Kendler of the Department of Justice, National Security Division, Counterintelligence and Export Control Section.
Ontario Oregon Felon Sentenced to 60 Months for Possessing a FirearmRead the Press Release
EUGENE, Ore. – On April 19, 2016, Clemente Pineda, 28, of Ontario, Oregon, was sentenced by U.S. District Judge Ann Aiken to 60 months in federal prison for unlawful possession of a firearm. Upon his release from prison, Pineda will be on supervised release for three years.
On May 5, 2015, at an apartment complex in Ontario, Oregon, Pineda pulled out a firearm and pointed it at a man who was harassing a woman. Police officers responded to the disturbance and eventually located Pineda’s .357 caliber revolver submerged in a bathroom toilet in one of the apartments. Officers determined that Pineda was a felon and that the firearm had previously been stolen. Pineda has a history of gang association and has been convicted of robbery and burglary in the second degree.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Ontario Police Department, and was prosecuted by Assistant U.S. Attorney Nathan J. Lichvarcik.
New York Attorney Sentenced to Six Months in Prison in Manhattan Federal Court for Fraud in Connection with A Scheme to Purchase Maxim MagazineRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that HARVEY NEWKIRK, formerly counsel at a law firm in Manhattan, was sentenced today to a prison term of six months for wire fraud in connection with his participation in a scheme to fraudulently induce lenders to provide tens of millions of dollars toward the purchase of Maxim Magazine and related assets (“Maxim”). A jury convicted NEWKIRK of one count of wire fraud on December 14, 2015, after a five-week trial. He was found not guilty of one count of conspiracy to commit wire fraud, and not guilty of one count of aggravated identity theft. Today’s sentence was imposed by U.S. District Judge Jed S. Rakoff.
Manhattan U.S. Attorney Preet Bharara said: “Harvey Newkirk, an attorney with a major law firm with an obligation and responsibility to practice law in good faith, instead violated the law by lying and defrauding lenders out of millions of dollars in an attempt to help his client purchase Maxim Magazine. His conviction by a jury and now his sentence to imprisonment marks the close of Newkirk’s unfortunate journey from lawyer to felon.”
As established by the evidence at the trial:
In connection with the potential purchase of Maxim by a company (the “Company”) controlled by Calvin Ramarro Darden (“Darden Junior”), from in or about August 2013 to on or about February 11, 2014, NEWKIRK told a series of lies to lenders to induce the lenders to provide tens of millions of dollars in capital toward the purchase of Maxim. In order to mislead the lenders into believing that they would receive sufficient collateral for their loans, NEWKIRK falsely promised them that Calvin Darden (“Darden Senior”), the former Senior Vice President of U.S. Operations of UPS, and a member of the Board of Directors of Coca-Cola Enterprises, Target Corporation, and Cardinal Health, Inc., would pledge his personal stock holdings in the latter three companies as collateral for the loans. In addition to knowingly making this false promise, NEWKIRK concealed from lenders that, as NEWKIRK knew, the stock owned by Darden Senior was subject to restrictions, and could not be pledged as collateral for any loans. NEWKIRK further falsely promised at least six lenders that each would have a first and sole priority interest in the purported collateral when, as NEWKIRK well knew, only one lender could have any such interest.
NEWKIRK, who represented the Company in the attempted Maxim acquisition in his capacity as an attorney at Bryan Cave LLC, engaged in the fraud in part because NEWKIRK secretly owned part of the Company’s parent company (the “Parent Company”), and would share in any of the Parent Company’s profits resulting from the acquisition. NEWKIRK hid his partial ownership of the Parent Company from Bryan Cave and others. NEWKIRK further lied to Bryan Cave about his relationship with Darden Senior, falsely claiming that Darden Senior had been NEWKIRK’s client for many years when, in truth and in fact, and as NEWKIRK well knew, NEWKIRK had never represented Darden Senior.
In the course of the fraud, NEWKIRK provided lenders with account statements that purported to show Darden Senior’s stock holdings. In truth, however, the account statements were fake documents, and Darden Senior was not providing any financial support for the purchase of Maxim. Also in the course of the fraud, NEWKIRK went to great lengths to hide from Darden Senior, and from Bryan Cave, the existence of a lawsuit filed by one lender in which that lender sought to obtain the collateral of Darden Senior that NEWKIRK had fraudulently pledged to the lender. NEWKIRK deliberately caused a default judgment to be entered against Darden Senior in that lawsuit, knowing that he had concealed the existence of the lawsuit from both Darden Senior and Bryan Cave.
Furthermore, after one of the lenders placed approximately $5.5 million in escrow at Bryan Cave, Darden Junior arranged for a fraudulent email to be sent to NEWKIRK that purported to have been authored by the lender. In response to that fraudulent email, and with knowledge that the email was in fact fraudulent, NEWKIRK released approximately $4.9 million of the lender’s money from the escrow account to fund the purchase of Maxim. Moreover, in an effort to close the deal, NEWKIRK also falsely represented to another individual that approximately $12 million, consisting of funds supposedly provided by, or secured by the personal assets of, Darden Senior, had been placed in escrow at Bryan Cave. In truth and in fact, no funds were ever held in escrow at Bryan Cave in connection with the purchase of Maxim, other than the $5.5 million placed in escrow by the lender described above, which was subsequently misappropriated by NEWKIRK. Lenders lost a total of $8 million in connection with the fraud.
* * *
In addition to his prison term, NEWKIRK, 40, of New Rochelle, New York, was sentenced to three years of supervised release and was ordered to pay restitution in the amount of $3.1 million.
Mr. Bharara praised the investigative work of the United States Secret Service and the Federal Bureau of Investigation.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit.Assistant U.S. Attorneys Andrew C. Adams and Sarah E. Paul are in charge of the prosecution.
National Reentry Week- Tribal Reentry ProgramRead the Press Release
FARGO - United States Attorney Christopher C. Myers for the District of North Dakota, and Randolph J. Seiler, United States Attorney for the District of South Dakota, announced that on April 22, 2016, the Standing Rock Sioux Tribe (SRST) Reentry Week Mentorship Program Launch will take place at the council chambers in the SRST government building located in Fort Yates, ND, at 12:30 p.m., and is open to the public as well as the media.
The United States Attorney’s Offices for both the Districts of North and South Dakota have been collaborating with the tribe since approximately December of 2014 to organize a Tribal Reentry Program that would address the growing issue of recidivist activity being committed by returning members. A Memorandum of Understanding (MOU) was signed by the U. S. Attorneys for the District of North and South Dakota in a ceremony that took place at the SRST Council Chambers in Fort Yates, ND, on July 7, 2015.
The MOU has led to the creation of a charter and plan of action in instituting a reentry program that will revolve around spiritual and cultural mentors who have successfully reintegrated back into the community. These mentors will, in turn, help the returning offenders become "reacclimated" to the reservation community and provide spiritual and cultural guidance on how to avoid the common pitfalls of reentry. At the April 22nd event, the Tribe will officially assign 3 to 5 members returning to the community to the first two fully-qualified mentors in the program, with an additional 6 to 8 mentors being assigned over the next 36 months.
"The launching of the Mentorship Program is an extraordinary step in a positive direction," said Troy Morley, a reentry services team member, Assistant U.S Attorney, and Tribal Liaison for the District of South Dakota. "The MOU we have in place has provided an incredible opportunity for the Standing Rock Sioux Tribe, and all of the state and federal partners, to work jointly towards the goal of reducing recidivism and increasing public safety for all tribal members. We are excited about this reentry program, which will allow mentors to help others successfully integrate themselves back into their communities."
The MOU that set the program into motion was signed by the South Dakota U.S. Attorney’s Office, North Dakota U.S. Attorney’s Office, Standing Rock Sioux Tribe, Bureau of Indian Affairs Office of Justice Services - Standing Rock Agency, South Dakota Department of Corrections, North Dakota Department of Corrections and Rehabilitation, South Dakota Unified Judicial System, North Dakota U.S. Probation and Pretrial Services, South Dakota U.S. Probation and Pretrial Services, South Dakota Department of Tribal Relations, and the North Dakota Indian Affairs Commission.
For more information on reentry, please click on the link https://www.justice.gov/usao-nd/reentry-program.
National Reentry Week - Tribal Reentry ProgramRead the Press Release
United States Attorney Christopher C. Myers for the District of North Dakota, and Randolph J. Seiler, United States Attorney for the District of South Dakota, announced that on April 22, 2016, the Standing Rock Sioux Tribe (SRST) Reentry Week Mentorship Program Launch will take place at the council chambers in the SRST government building located in Fort Yates, ND, at 12:30 p.m., and is open to the public as well as the media.
The United States Attorney’s Offices for both the Districts of North and South Dakota have been collaborating with the tribe since approximately December of 2014 to organize a Tribal Reentry Program that would address the growing issue of recidivist activity being committed by returning members. A Memorandum of Understanding (MOU) was signed by the U. S. Attorneys for the District of North and South Dakota in a ceremony that took place at the SRST Council Chambers in Fort Yates, ND, on July 7, 2015.
The MOU has led to the creation of a charter and plan of action in instituting a reentry program that will revolve around spiritual and cultural mentors who have successfully reintegrated back into the community. These mentors will, in turn, help the returning offenders become “reacclimated” to the reservation community and provide spiritual and cultural guidance on how to avoid the common pitfalls of reentry. At the April 22nd event, the Tribe will officially assign 3 to 5 members returning to the community to the first two fully-qualified mentors in the program, with an additional 6 to 8 mentors being assigned over the next 36 months.
“The launching of the Mentorship Program is an extraordinary step in a positive direction,” said Troy Morley, a reentry services team member, Assistant U.S Attorney, and Tribal Liaison for the District of South Dakota. “The MOU we have in place has provided an incredible opportunity for the Standing Rock Sioux Tribe, and all of the state and federal partners, to work jointly towards the goal of reducing recidivism and increasing public safety for all tribal members. We are excited about this reentry program, which will allow mentors to help others successfully integrate themselves back into their communities.”
The MOU that set the program into motion was signed by the South Dakota U.S. Attorney’s Office, North Dakota U.S. Attorney’s Office, Standing Rock Sioux Tribe, Bureau of Indian Affairs Office of Justice Services - Standing Rock Agency, South Dakota Department of Corrections, North Dakota Department of Corrections and Rehabilitation, South Dakota Unified Judicial System, North Dakota U.S. Probation and Pretrial Services, South Dakota U.S. Probation and Pretrial Services, South Dakota Department of Tribal Relations, and the North Dakota Indian Affairs Commission.
For information regarding National Reentry Week, please click on this link: https://www.justice.gov/opa/blog/national-reentry-week
Mexican Citizen Sentenced to 14 Months in Prison for Immigration ViolationRead the Press Release
PITTSBURGH - A citizen of Mexico has been sentenced in federal court to 14 months in prison for violating federal immigration laws, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Juan Rivera-Santos, 39, of Mexico.
According to the information presented to the court, on or about Sept. 17, 2015, Rivera-Santos was found in North Versailles, Pa., after having unlawfully re-entered the United States following removal on several occasions.
Assistant United States Attorney Paul E. Hull prosecuted this case on behalf of the government.
United States Attorney Hickton commended the United States Immigration and Customs Enforcement (ICE) for the successful prosecution of Rivera-Santos.
Maryland Man Sentenced to 9 Years for Hobbs Act Robbery in Oxford, NCRead the Press Release
RALEIGH – The United States Attorney’s Office announced that today in federal court, United States District Judge Terrence W. Boyle sentenced BERNARD SINGLETON, 67, of Clinton, Maryland to 108 months imprisonment, followed by 5 years of supervised release.
SINGLETON was named in an Indictment filed on August 19, 2015, charging him with Robbery of a Business Engaged in Interstate Commerce and Aiding and Abetting on January 18, 2015. On November 12, 2015, SINGLETON pled guilty to the charge.
On January 18, 2015, SINGLETON and an accomplice entered the ZMart convenience store in Oxford, North Carolina, and locked the door behind them. SINGLETON pointed a firearm at the clerk while the accomplice walked behind the counter and punched the victim in the face. SINGLETON approached the victim, who was on the ground, put the gun to the back of his head, and demanded money. The accomplice removed money from the cash register. SINGLETON forced the victim into the office and demanded money from the safe, which was on a 10-minute delay. While waiting for the safe to open, SINGLETON kept the gun pointed on the victim’s head. SINGLETON and the accomplice removed the money from the safe. They also stole the victim’s wallet, which contained United States currency along with his credit cards and driver’s license. SINGLETON and the accomplice stole $9,100 in United States currency, which included several old coins, and cartons of cigarettes.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Oxford Police Department, Creedmoor Police Department and the State Bureau of Investigation. Assistant United States Attorney S. Katherine Burnette prosecuted the case for the government.
Man Convicted of Five Violent Robberies During Summer of 2014Read the Press Release
LAS VEGAS, Nev. – A Las Vegas man who wore a mask and gloves and used a black handgun with a laser sight to rob a convenience store, two liquor stores, a payday loan company, and an electronics retailer in the Las Vegas area during the summer of 2014, was convicted by a jury today of all counts charged and faces a mandatory minimum sentence of 107 years in prison, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
Following a four-day jury trial, Dominique Wells, 29, was convicted of five counts of interference with commerce by robbery, two counts of conspiracy to interfere with commerce by robbery, and five counts of using a firearm during and in relation to a crime of violence. Wells is scheduled to be sentenced by U.S. District Judge James C. Mahan on July 21, 2016. Two co-defendants, Christopher Dobbins, 28, and Andre Hall, 27, pleaded guilty in 2015 and are awaiting sentencing.
“We continue to work with the local authorities to use federal laws to prosecute persons who are committing violent robberies with guns in southern Nevada,” said U.S. Attorney Bogden. “We meet with local law enforcement regularly through our Project Safe Neighborhoods Task Force to review all the recent arrests of persons who are using firearms to commit violent crimes and to determine if prosecution in the federal system, where there is no parole, is warranted.”
According to court records and trial testimony, on June 15, 2014, Wells robbed a convenience store in Henderson using a handgun and wearing a black mask and gloves, black t-shirt and camouflage shorts. Four days later, on June 19, 2014, Wells robbed a liquor store in Las Vegas using a handgun with a laser sight, and wearing camouflage shorts, a black t-shirt, and a black face mask/ski mask. Two days after that, on June 21, 2014, Wells robbed a liquor store on the Boulder Highway in Las Vegas using a black handgun with a laser sight and wearing camouflage shorts, a black t-shirt and a black face mask/ski mask. On June 26, 2014, Wells robbed a payday loan store in Henderson using a black handgun with a laser sight. Wells and a co-defendant used duct tape to tie up three individuals inside the payday loan store. On July 3, 2014, Wells robbed an electronics retailer in Henderson using a black handgun. Wells and a co-defendant used zip ties to tie up the employees in that robbery. Wells obtained on average only $100 to $250 in each robbery.
Over the last five years, 94 persons have been charged federally with using firearms to commit commercial robberies in southern Nevada. Following are links to the news releases for some of those cases.
https://www.justice.gov/usao-nv/pr/las-vegas-cinched-hoodie-robber-sentenced-life-prison
https://www.justice.gov/usao-nv/pr/femal-getaway-driver-convicted-robberies-13-banks-and-stores-las-vegas-area-during-2012
https://www.justice.gov/usao-nv/pr/man-sentenced-over-14-years-prison-six-armed-robberies
https://www.justice.gov/usao-nv/pr/men-sentenced-prison-kidnapping-conspiracy-and-thefts-delivery-drivers-and-warehouses
https://www.justice.gov/usao-nv/pr/last-30-minutes-or-less-robbers-gets-16-years-prison
https://www.justice.gov/usao-nv/pr/man-sentenced-over-11-years-federal-prison-robbing-local-jewelry-store-stolen-handgun
https://www.justice.gov/usao-nv/pr/man-who-robbed-las-vegas-mini-mart-convicted-jury
This case was investigated by the FBI, the Las Vegas Metropolitan Police Department, and the Henderson Police Department, as part of the Safe Streets Task Force and Project Safe Neighborhoods program.
The case was prosecuted by Assistant U.S. Attorneys Phillip N. Smith, Jr. and Lisa Cartier-Giroux.
Man Acquitted on a Charge of Failing to Register as a Sex OffenderRead the Press Release
ALBANY, NEW YORK – A jury voted on Thursday to acquit Richard Hernandez, age 47, on a charge of failing to register and update his registration as a sex offender, announced U.S. Attorney Richard S. Hartunian.
Hernandez was indicted on November 18, 2015 on a single charge of traveling across state lines and failing to register and update his registration as a sex offender as required by the Sex Offender Registration and Notification Act.
The jury voted to acquit Hernandez following a four-day trial in Albany before U.S. District Judge Mae A. D’Agostino.
Local Musician Sentenced on Stolen Identity Tax Refund SchemeRead the Press Release
St. Louis, MO – Olufunsho Adeshina, a native of Nigeria residing in St. Louis, was sentenced to 40 months imprisonment for his participation in a stolen identity tax fraud scheme.
According to court documents, Adeshina received $753,063 from more than fifty refunds by filing false tax returns in the name of various individuals. The refunds were sent to various financial accounts: some were in Adeshina’s name, some were in the names of businesses he controlled and some were in the names of identity theft victims whose information Adeshina used to establish additional accounts. Adeshina admitted he sought more than $3.5 million dollars in refunds, but most of the false returns were caught and not honored by the IRS.
Adeshina was sentenced for one felony count of theft of government funds before United States District Judge Rodney W. Sippel. Adeshina has been in federal custody since April when he was arrested at Atlanta-Hartsfield Airport returning to the United States from Nigeria. In addition to the sentence of imprisonment, Adeshina was ordered to pay $753,063 in restitution to the IRS.
This case was investigated by Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
Konowa Man, Seminole Woman Sentenced to 41, 24 Months for ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that BRODIE ROPE BOOTH, age 40, of Konawa, Oklahoma and BOBBI NICOLE THOMAS, age 36, of Seminole, Oklahoma, were sentenced in federal court for CONSPIRACY, in violation of Title 21, United States Code, Section 371.
BOOTH was sentenced to 41 months imprisonment, followed by 3 years of supervised release and THOMAS was sentenced to 24 months imprisonment, followed by 3 years of supervised release.
The Informations alleged that beginning in or about the summer of 2015, and continuing until on or about July 29, 2015, in the Eastern District of Oklahoma, the defendants, did knowingly and intentionally conspire, confederate and agree with others both known and unknown to commit offenses against the United States, namely, distribution of methamphetamine.
The charges arose from an investigation by the McAlester Police Department, District 18 District Attorney’s Drug Task Force, Seminole Nation Lighthorse Police, Oklahoma Highway Patrol, Seminole County Sheriff’s Office, Seminole Police Department, Oklahoma Bureau of Narcotics, United States Marshal Service and the Drug Enforcement Administration.
The Honorable James H. Payne, Chief Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearings. The defendants will remain in the custody of the United States Marshals Service pending transportation to the designated federal facility at which they will serve their nonparoleable sentences.
Assistant United States Attorney Shannon Henson represented the United States.
Knoxville Man Sentenced to Prison for Felon in Possession of a FirearmRead the Press Release
DES MOINES, IA – On April 19, 2016, Nathan Leland Minard, 32, of Knoxville, Iowa, was sentenced by Chief United States District Court Judge John A. Jarvey to 120 months in prison for a felon in possession of a firearm charge, announced Acting United States Attorney Kevin E. VanderSchel. Minard was ordered to serve three years of supervised release following his prison term and to pay $100 to the Crime Victim’s Fund.
Minard pleaded guilty to the offense on July 13, 2015. On November 17, 2014, the Marion County Sheriff’s Office was notified that an individual had knocked on the door of a Knoxville resident, asked a few questions, and then departed the residence striking a vehicle in the yard. The resident provided law enforcement with a description of the vehicle. A Marion County Deputy Sheriff responded to the call and located the vehicle driven by Minard. A camouflaged shotgun was stuck out the window of the driver’s side of the vehicle and, at some point during the encounter, Minard racked the shotgun. The deputy was able to persuade Minard to leave the vehicle and the weapon. Minard was arrested after it was determined he was a convicted felon and not eligible to possess a firearm. Two stolen shotguns were discovered in the vehicle Minard was driving.
This matter was investigated by Marion County Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Neighborhood initiative.