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15 April 2016
With Tax Day Imminent, a Vinings Doctor is Arraigned for Tax FraudRead the Press Release
ATLANTA –Dr. Michael Jon Kell has been arraigned on four counts of tax evasion and one count of interfering with the administration of the Internal Revenue laws. Kell allegedly engaged in a two-decade scheme to evade federal taxes by funneling millions of dollars in assets through a church he created.
“Kell claimed a vow of poverty, but allegedly funneled over $2 million through a church he controlled to avoid paying income taxes on the money he earned,” said U.S. Attorney John Horn. “With the deadline for filing your 2015 tax return only days away, we urge citizens in our district to think twice about the potential consequences of not truthfully reporting their income and paying their taxes.”
“Tax evasion is not a victimless crime,” said Veronica Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “We all pay when others swindle the government. To maintain faith in our nation's tax system, honest taxpayers need to be reassured that everyone is paying their fair share, including Michael Jon Kell. The IRS and Department of Justice remain determined and vigilant in ferreting out such schemes to cheat the honest taxpayers.”
According to U.S. Attorney Horn, the charges, and other information presented in court: The indictment alleges the lengths to which Kell went to avoid paying taxes. Although no longer a practicing medical doctor, he developed numerous patented technologies and was a consultant, which generated millions of dollars in income over the years. To hide this income, he founded and served as the “pastor” of the First Meliorite Church, a church he claimed was a branch of the Universal Life Church.
Claiming to be under a “vow of poverty” that precluded him from earning income, Kell directed his substantial income and assets into bank accounts belonging to the church—all of which were under Kell’s exclusive control. He used these accounts to cover all of his personal expenses including; overseas vacations, dining out, high-end clothing purchases, online dating services, and private school tuition for his children. Kell also transferred ownership of his multi-million dollar residence in Vinings, Georgia, several times over the years to various entities he created and controlled, all in an effort to protect that property from creditors, including the Internal Revenue Service.
Dr. Michael Jon Kell, 66, of Vinings, Georgia, was arraigned by United States Magistrate Judge Janet F. King.
In an unrelated tax fraud case, three individuals, Lorri Jackson-Brown, Cherri Dallas, and Gabrielle Rhodes, have been charged with 41 counts including conspiracy, mail fraud and theft of government money. The three defendants are alleged to have conspired with each other and with a fourth individual, Wayne Pettway, to register sham businesses with the Georgia Secretary of State, obtain Employer Identification Numbers (EINs) for businesses, and file fraudulent tax returns in the names of those businesses. The filed tax returns allegedly claimed fictitious income amounts, deductions and fuel excise credits, all for the purpose of generating fraudulent tax refunds.
Lorri Jackson-Brown, 51, of Lawrenceville, Georgia, Cherri Dallas, 45, of Atlanta, Georgia, and Gabrielle Rhodes, 35 of Loganville, Georgia were indicted on March 22, 2016. Wayne Pettway, 53, of Lawrenceville, Georgia, pled guilty to conspiracy to commit theft of government money on November 21, 2014.
Assistant United States Attorney Lynsey M. Barron is prosecuting the Kell case. Assistant United States Attorney Stephen H. McClain is prosecuting the above cases.
Members of the public are reminded that the indictments only contain charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
These cases are being investigated by the Internal Revenue Service Criminal Investigation.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Winter Haven Man Charged with Assaulting Federal OfficersRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Altius Willix (47, Winter Haven) has been charged in a criminal complaint with assaulting, resisting, and impeding federal law enforcement officers while using deadly and dangerous weapons. If convicted, he faces a maximum penalty of 20 years in federal prison. Willix was arrested on April 12, 2016. The following day, he made his initial appearance before U.S. Magistrate Judge Thomas G. Wilson and was detained.
According to the complaint, on April 12, 2016, three federal agents approached Willix during the course of a narcotics investigation. Willix fled and ultimately collided with one of the agents. As the agents attempted to detain him, Willix tried to remove holstered firearms from two of those federal agents. When told to let go, Willix responded, “You’re gonna have to kill me.” Willix was ultimately handcuffed and taken into custody.
A criminal complaint is merely an informal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the U.S. Postal Inspection Service. It will be prosecuted by Assistant United States Attorney Carlton C. Gammons.
Whitehall Man Pleads Guilty to Machinegun ChargeRead the Press Release
ALBANY, NEW YORK – Shane Robert Smith, a/k/a Robert Smith, age 19, of Whitehall, New York, pled guilty today to illegal possession of a machinegun.
The announcement was made by United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation.
United States Attorney Richard S. Hartunian said: "Shane Smith repeatedly sought to acquire illegal firearms with the stated goal of executing members of racial and religious minority groups. The FBI Joint Terrorism Task Force stopped Smith before he could carry out this nightmare scenario. My Office is proud to work with the Joint Terrorism Task Force in keeping our communities safe."
"People like Mr. Smith seek to poison communities with hate and fear," said FBI Special Agent in Charge Andrew W. Vale. "His intentions to commit violent and deadly acts against members of our community were clear. The efforts of our Joint Terrorism Task Force and the United States Attorney’s Office have stopped a dangerous criminal from terrorizing our citizens."
At a change of plea hearing today, Smith pled guilty to illegal possession of a MAC 10 machinegun. He faces a maximum term of imprisonment of 10 years, a $250,000 fine, and 3 years of post-imprisonment supervised release when United States District Judge Mae A. D’Agostino sentences him on August 15, 2016. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors. With the felony conviction resulting from today’s plea, Smith will be prohibited from legally possessing firearms and ammunition.
As part of a plea agreement filed in the case, Smith admitted that he repeatedly sought to purchase or otherwise obtain fully automatic weapons, as well as semiautomatic weapons that he intended to convert into fully automatic weapons. On April 29, 2015, he made postings on social media seeking to acquire a "civilian," or semi-automatic, MAC 10 firearm. On that same date, he purchased a book on how to convert semi-automatic MAC 10 firearms to illegal fully automatic firearms. In other social media postings, Smith listed his interests as "guns, gun smithing, building bombs, knives, guerilla warfare, preserving my race and folk, and destroying the government."
After becoming aware of Smith’s April 29, 2015 social media postings, individuals working with law enforcement contacted him. In communications with these people, Smith confirmed that he sought to purchase a Mac 10 and that he intended to "rock and roll it," a phrase that means to convert a semi-automatic weapon to fully automatic. Smith further explained that the firearm was "gonna be used to execute kikes, coons, and get money for the crew." Smith explained that he planned to form a group called the "Silent Resistance Army" and that he sought to establish "a hit squad." Smith also sought to acquire Green Tip ammunition, which is designed to pierce body armor, as well as explosives such as "c4 or grenades."
After communicating through the Internet and text messages with an undercover FBI agent, Smith arranged to meet with the agent for the purpose of acquiring machineguns, silencers, and ammunition. Prior to the meeting, Smith expressed concerns about whether he was "gonna get busted by the feds." On August 5, 2015, Smith met with an undercover FBI agent in Whitehall, New York, and took possession of two machineguns, a silencer, a Beretta handgun, and 120 rounds of Green Tip ammunition (the guns were not loaded and were inoperable at the time). Smith was then immediately arrested and has been in custody ever since.
This case is being investigated by the FBI Joint Terrorism Task Force in Albany, and is being prosecuted by Assistant United States Attorneys Sean O’Dowd and Solomon Shinerock.
West Mifflin Man Sentenced to Probation for Role in Crack Dealing ConspiracyRead the Press Release
PITTSBURGH – An Allegheny County resident has been sentenced in federal court to 5 years’ probation with 10 months’ home detention on his conviction of conspiracy to distribute a quantity of crack cocaine, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Roger Dorsey, 32, of West Mifflin, Pa.
According to information presented to the Court, in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. During that timeframe, Roger Dorsey was intercepted over the wire conspiring with others to possess with intent to distribute and distributing crack cocaine, which was shipped from California in powder form to the Western District of Pennsylvania through the United States Postal Service or commercial carrier.
Prior to imposing sentence, Judge Hornak stated that the sentence was sufficient but not greater than necessary to fulfill the purposes of sentencing.
Assistant United States Attorney Tonya Sulia Goodman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Dorsey.
Warner Chilcott Sentenced to Pay $125 Million for Health Care Fraud SchemeRead the Press Release
BOSTON – Pharmaceutical company Warner Chilcott was sentenced today in U.S. District Court in Boston to pay $125 million to resolve criminal and civil liability arising from the illegal promotion of various drugs.
“Doctors’ diagnoses must be based on the best interests of the patient, and not swayed by lavish meals or cash incentives,” said United States Attorney Carmen M. Ortiz. “Today’s sentence sends a message to the health care industry: the government will take action and hold companies accountable when they prioritize profits over patient care.”
“Today’s sentencing sends a firm message that pharmaceutical companies will be held accountable when they commit fraud and put profit over patient care,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “This investigation demonstrates the FBI’s commitment to aggressively investigate pharmaceutical companies who pay kickbacks to physicians to prescribe their products”
“Pharmaceutical companies and employees that provide physicians with kickbacks will be held accountable for their deplorable conduct,” said Special Agent in Charge Phillip M. Coyne of the Department of Health and Human Services Office of Inspector General. “We will continue to crack down on kickback arrangements, which can undermine drug choices for patients, cause spikes in health care costs, and erode the public’s trust in our health care system.”
“VA spends billions of dollars on medical care, so pursuing health care fraud investigations with our Federal law enforcement partners is a priority for VA OIG,” said Jeffrey G. Hughes, Special Agent in Charge, Department of Veterans Affairs, Office of Inspector General. “The importance of pharmaceutical cases such as this one is magnified because VA civil damages are returned to the VA’s Pharmaceutical Supply Fund for the direct benefit of our Nation’s veterans.”
“The illegal marketing of pharmaceuticals and the payment of kickbacks puts patients at risk of receiving inappropriate treatment purely for profit motives,” said U.S. Office of Personnel Management Acting Inspector General Norbert E. Vint. “We appreciate the efforts of all the investigating agencies and the Department of Justice that have held this company accountable for its actions and thereby protected the patients, including those insured by the Federal Employees Health Benefits Program.”
Warner Chilcott was sentenced by U.S. District Court Judge F. Dennis Saylor, IV, to pay a criminal fine of $20,742,054, forfeiture of $2 million, and $197,946 in restitution to two insurance companies. The company also agreed to pay $102,060,000 to resolve related civil claims. In October 2015, Warner Chilcott pleaded guilty in connection with a multi-pronged health care fraud scheme involving the illegal promotion of the drugs Actonel®, Asacol®, Atelvia®, Doryx®, Enablex®, Estrace®, and Loestrin®, and various formulations of these drugs.
From 2009 to 2013, Warner Chilcott paid remuneration to physicians in order to induce those physicians to prescribe Warner Chilcott drugs, which is illegal. Warner Chilcott provided payments, meals, and other remuneration associated with so-called “Medical Education Events.” These events, which were often held at expensive restaurants, frequently contained minimal or no educational component, and were instead used to pay prescribing physicians in an attempt to gain a competitive advantage over other pharmaceutical companies. Warner Chilcott also paid numerous high-prescribing physicians to be “speakers” for the company for the primary purpose of obtaining prescriptions.
During the same period of time, Warner Chilcott submitted false, inaccurate, or misleading prior authorization requests to federal health care programs for the osteoporosis medications Atelvia® and Actonel®. A prior authorization request contains protected health information, including biographical data and information concerning a patient’s medical condition. Warner Chilcott falsified and manipulated prior authorizations by providing false medical justifications for the prescriptions, often filling out the prior authorizations themselves. The fraudulent requests were provided to certain insurance companies in order to overcome restrictions that favored less expensive osteoporosis drugs. In some instances, Warner Chilcott sales representatives submitted these prior authorizations directly to insurance companies, holding themselves out to be physicians.
In addition, Warner Chilcott made unsubstantiated superiority claims when marketing the drug Actonel® even though the claim was not supported by clinical evidence. Physicians that were told Actonel® was superior to other bisphosphonates due to its supposedly unique “mechanism of action.”
Under the terms of the criminal plea agreement, Warner Chilcott will pay a fine of $22,742,054 and forfeit $2 million dollars due to its illegal promotion. The company will pay $191,467 in restitution to Humana and $6,479 in restitution to Blue Cross Blue Shield of Massachusetts in connection with Actonel and Atelvia claims that were paid based on false or manipulated prior authorizations. Warner Chilcott also entered into a civil settlement agreement under which it agreed to pay $102,060,000 to the federal government and the states to resolve false claims it submitted to government health care programs. The civil settlement resolved illegal remunerations that Warner Chilcott paid to prescribing physicians for the “Medical Education Events” and submission of false prior authorization requests for Atelvia® and Actonel®. The federal share of the civil settlement is approximately $91.5 million, and the state Medicaid share of the civil settlement is approximately $10.6 million.
Warner Chilcott cooperated with the government’s investigation into culpable individuals, which has led to several individual prosecutions. Among them are:
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Former district manager Jeffrey Podolsky pleaded guilty to health care fraud in connection with manipulating prior authorizations;
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Former district manager Timothy Garcia pleaded guilty to health care fraud in connection with manipulating prior authorizations; and
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Former district manager Landon Eckles pleaded guilty to wrongful disclosure of individual identifiable health information, a criminal violation of the HIPAA law.
The civil case was investigated by the FDA’s Office of Chief Counsel, HHS Office of Counsel to the Inspector General, and the National Association of Medicaid Fraud Control Units. The civil settlement was handled by Assistant U.S. Attorneys Sonya Rao and Susan Poswistilo of Ortiz’s Civil Division and Trial Counsel Colin Huntley of the Commercial Litigation Branch of the Justice Department’s Civil Division.
The criminal case was investigated by the FBI, HHS-OIG, the Department of Defense’s Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, the Department of Veterans Affairs and the Office of Personnel Management’s Office of Inspector General. The criminal prosecution of the company was handled by Assistant U.S. Attorneys David Schumacher, Miranda Hooker, Sonya Rao, Susan Poswistilo and Trial Attorney Daniel Baeza of the Consumer Protection of the Justice Department’s Civil Division. The criminal prosecutions of individuals are being prosecuted by AUSAs Schumacher and Hooker of Ortiz’s Health Care Fraud Unit.
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Valencia Business Man Pleads Guilty to Federal Fraud Charges Related to Precious Metal Investment Scam that Raised $20 MillionRead the Press Release
LOS ANGELES – A businessman who prosecutors believe defrauded more than 300 investors in a precious metal investment scam has pleaded guilty to federal fraud and money laundering offenses in a case that caused victims to lose nearly $11 million.
Bruce R. Sands Jr., 54, of Valencia, pleaded guilty yesterday before United States District Judge George H. Wu to four counts of mail fraud, five counts of wire fraud and two counts of money laundering.
Sands owned Superior Gold Group, LLC and Superior Equity Group, LLC, which had offices in Santa Monica, West Hills and Woodland Hills. At times, the companies used an address in Irvine.
According to court documents, from about October 2007 through the end of 2010, the Superior Gold Companies solicited investments in precious metals and collectible coins. Individuals across the nation were solicited through national radio, television and Internet advertising.
Many investors never received the metals they purchased. In court yesterday, Sands admitted he had falsely misrepresented or failed to disclose material information to investors.
According to court documents, Sands falsely told investors that the precious metals they paid for would be delivered to them directly or sent to their retirement accounts, when Sands knew that Superior Gold would not be purchasing or delivering the precious metals.
The government alleges that, as a result of the fraudulent scheme, Sands induced more than 300 victims to invest approximately $20 million and to suffer losses of nearly $11 million while Sands funded his own lavish lifestyle and paid for his own personal expenditures, including payments on his home in Valencia, American Express bills, and luxury vehicles, including a Porsche, a Hummer and a Lincoln SUV.
“The tragedy of this crime is that Mr. Sands preyed on retirees looking for a place to protect their life savings, but he left them financially devastated,” said United States Attorney Eileen M. Decker. “Working with our law enforcement partners, we are completely committed to protecting investors and prosecuting every fraud artist seeking to take hard-earned money from honest citizens.”
“The defendant’s use of client money on personal luxury purchases instead of legitimate precious metals devastated hundreds of lives and caused millions of dollars in losses,” said James L. Struyk, Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Though the lure of a precious metal investment might be great, the public needs to be wary of investing in opportunities which require trusting someone else to buy and deliver precious metals with the risk of never taking possession.”
Sands pleaded guilty less than two weeks before he was scheduled to go on trial.
As a result of his guilty pleas, Sands faces a statutory maximum sentence of 200 years in federal prison and a fine of $2.75 million when he is sentenced by Judge Wu on July 28. Prosecutors intend to ask Judge Wu to order Sands to pay full restitution, which they currently believe would be approximately $10.8 million.
“Illegal activity involving the investment industry has brought financial ruin to many Americans,” stated Acting Special Agent in Charge Anthony J. Orlando of IRS Criminal Investigation. “IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint investigation and help put a stop to this and other types of white collar crime.”
Robert Wemyss, Inspector in Charge, U.S. Postal Inspection Service – Los Angeles Division, stated: “The U.S. Postal Inspection Service will continue to work with our partners in law enforcement to ensure that the U.S. Postal Service isn’t used as a conduit to defrauding the American consumer. The protection of our citizens is at the cornerstone of our mission.”
The investigation of Sands was conducted by the Federal Bureau of Investigation, IRS Criminal Investigation, the United States Postal Inspection Service and the United States Secret Service. The Santa Monica City Attorney’s Office, which was involved in a civil lawsuit against Sands and Superior Gold, provided assistance.
Universal Aryan Brotherhood Member Sentenced to 294 Months in Prison for Racketeering and Drug TraffickingRead the Press Release
A member of the Universal Aryan Brotherhood (UAB) prison gang was sentenced in federal court today to 294 months in prison for conspiring to conduct a racketeering enterprise and related charges, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.
Anthony Ramon Hall, aka Tony, 40, of Tulsa, Oklahoma, was sentenced today by U.S. District Judge Claire V. Eagan of the Northern District of Oklahoma, who also ordered Hall to serve five years of supervised release.
Hall pleaded guilty on June 9, 2015, and in connection with his plea, Hall acknowledged his membership in or association with the UAB, a violent, “whites only” prison-based gang with members and associates operating inside and outside of state prisons throughout Oklahoma. According to the plea, Hall held a leadership position in the UAB as a “main-council” member.
Hall admitted that he conspired in racketeering activities to advance the UAB enterprise, including possessing and selling 500 grams or more of methamphetamine. Specifically, Hall admitted to using smuggled cell phones to coordinate the delivery, receipt and sale of methamphetamine by UAB members and associates outside of prison who would then return profits to him while he was incarcerated. Hall also coordinated the firebombing of automobile car that belonged to someone Hall believed had stolen from the UAB drug conspiracy, he admitted.
The U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Tulsa Police Department; Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service-Criminal Investigation; FBI; Tulsa County Sheriff’s Office and Oklahoma Department of Corrections investigated the case. Trial Attorney John C. Hanley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Allen Litchfield and Jan Reincke of the Northern District of Oklahoma are prosecuting the case.
Universal Aryan Brotherhood Member Sentenced to 294 Months in Prison for Racketeering and Drug TraffickingRead the Press Release
TULSA, Okla.–A member of the Universal Aryan Brotherhood (UAB) prison gang was sentenced in federal court today to 294 months in prison for conspiring to conduct a racketeering enterprise and related charges, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.
Anthony Ramon Hall, aka Tony, 40, of Tulsa, Oklahoma, was sentenced today by U.S. District Judge Claire V. Eagan of the Northern District of Oklahoma, who also ordered Hall to serve five years of supervised release.
Hall pleaded guilty on June 9, 2015, and in connection with his plea, Hall acknowledged his membership in or association with the UAB, a violent, “whites only” prison-based gang with members and associates operating inside and outside of state prisons throughout Oklahoma. According to the plea, Hall held a leadership position in the UAB as a “main-council” member.
Hall admitted that he conspired in racketeering activities to advance the UAB enterprise, including possessing and selling 500 grams or more of methamphetamine. Specifically, Hall admitted to using smuggled cell phones to coordinate the delivery, receipt and sale of methamphetamine by UAB members and associates outside of prison who would then return profits to him while he was incarcerated. Hall also coordinated the firebombing of automobile car that belonged to someone Hall believed had stolen from the UAB drug conspiracy, he admitted.
The U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Tulsa Police Department; Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service-Criminal Investigation; FBI; Tulsa County Sheriff’s Office and Oklahoma Department of Corrections investigated the case. Trial Attorney John C. Hanley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Allen Litchfield and Jan Reincke of the Northern District of Oklahoma are prosecuting the case.
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Two Registered Sex Offenders Charged with Producing, Distributing, Possessing Child PornographyRead the Press Release
COLUMBUS, Ohio – A federal grand jury has charged Dennis K. Rawlins, 67, of Jackson, Ohio and Mark R. Heyd, 61, of Kailua, Hawaii with conspiring to produce, producing, distributing and possessing child pornography. Rawlins and Heyd were both also registered sex offenders as a result of prior convictions.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Franklin County Prosecutor Ron O’Brien and Westerville Police Chief Joseph Morbitzer announced the superseding indictment returned yesterday.
The superseding indictment alleges that beginning in the summer of 2015 and continuing through January of this year, the defendants induced a 15-year-old male to engage in sexually explicit conduct for the purposes of producing child pornography. Heyd allegedly sent Rawlins money through PayPal to take the victim on shopping trips, to movies and to various hotels in the Columbus, Ohio area. Rawlins engaged in sex acts with the victim in the hotels, and video of the sexual conduct was sent to Heyd via computer webcams and online chat services like Skype. Photographs were also taken on cell phones and exchanged via Kik messenger.
Given their prior convictions, Rawlins and Heyd face an enhanced mandatory life sentence for conspiracy to produce and production of child pornography. Rawlins faces 15 to 40 years in prison for distribution of child pornography and 10 to 20 years of incarceration for possession of child pornography. Committing a sex offense while registered as a sex offender adds a 10-year mandatory consecutive term of incarceration.
Heyd was arrested in Hawaii on March 16 and both men remain in custody.
Acting U.S. Attorney Glassman commended the investigation of this case by the FBI Columbus Child Exploitation Task Force, which includes officers from the Westerville Police Department, Reynoldsburg Police Department, Powell Police Department and Belmont County Sheriff’s Office, as well as Assistant U.S. Attorney Heather A. Hill and Special Assistant Jennifer M. Rausch, Director of the Special Victims Unit for Franklin County Prosecutor Ron O’Brien’s Office, who are prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Two New York Men Arraigned on Wire Fraud Charges for Credit and Gift Card Fraud SchemeRead the Press Release
NEWARK N.J. – Two New York men who allegedly defrauded credit card companies of hundreds of thousands of dollars are expected to appear in court later today, U.S. Attorney Paul J. Fishman announced.
Nikolay Krechet, 45, of Queens, New York, and James Olla, 24, of Brooklyn, New York, are each charged with one count of conspiracy to commit wire fraud and four counts of wire fraud. They were originally charged by complaint on May 28, 2015, and indicted by a federal grand jury on Feb. 18, 2016. They both arraigned before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court and entered pleas of not guilty.
According to documents filed in this case and statements made in court:
From January 2014 to August 2015, Krechet, Olla, and others procured stolen information related to credit cards belonging to various individuals, including a victim living in New Jersey. Using this stolen information, the conspirators obtained gift cards from various retailers and then either sold the cards or used them to purchase goods, which they then sold.
Each count of wire fraud and conspiracy to commit wire fraud carries a maximum potential penalty of 30 years in prison and a fine of up to $1 million.
U.S. Attorney Fishman credited special agents of FBI, under the direction of Special Agent in Charge Timothy Gallagher; the U.S. Secret Service, under the direction of Acting Special Agent in Charge Kenneth Pleasant; and the U.S. Postal Inspection Service, under the director of Assistant Inspector in Charge James R. Buthorn, with the investigation.
The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg of the General Crimes Unit and Assistant U.S. Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.
Defense counsel: Krechet: Thomas Ambrosio Esq., Lyndhurst, New Jersey
Olla: Andrew Olesnycky Esq., Westfield, New Jersey
Two Men from Delaware County Indicted on Child Exploitation ChargesRead the Press Release
PHILADELPHIA – An indictment was unsealed today charging Daniel Mattson, 34, of Springfield, PA, and Anthony Lembo, 33, of Newtown Square, PA, with numerous counts involving child exploitation, United States Attorney Zane David Memeger. Both defendants were arrested this morning by FBI agents. Following an initial appearance they were ordered detained pending a formal detention hearing on April 20, 2016.
According to the indictment, on various dates between 2009 and April of 2015, Mattson and Lembo distributed, received, and maintained a collection of thousands of images and videos of children being sexually abused and in sexually explicit positions. It is further alleged that Lembo received the same type of sexually explicit images of children that he downloaded from the Internet and received from other users on the Internet.
If convicted of all charges, each defendant faces a mandatory minimum sentence of five years in prison with a maximum sentence, per count, of 20 years in prison, a possible fine, a period of supervised release, and a special assessment.
This case was investigated by Delaware County Detectives in the Office of District Attorney and the FBI. It is being prosecuted by Assistant United States Attorney Michelle Rotella.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Two Local People Charged in Connection with Dunbar Armored Truck RobberyRead the Press Release
St. Louis, MO – Charles Johnson and Shayne Kier Jones were charged in a criminal complaint for the April 4 armed robbery of a Dunbar Armored truck.
According to the affidavit filed with the criminal complaint, on April 4, 2016, Charles Johnson and Shayne Kier Jones robbed Dunbar Armored Company shortly after a money pickup from the Parking Division of the City of St. Louis. The money was taken from a Dunbar Armored employee at gun point. Jones was employed by Dunbar, and that day his duty was to exit the armored truck to do the pickup and delivery of U.S. currency. A second employee (CT) was assigned as the driver. At the end of the day’s route CT was told by Jones that he, Jones, would drive the armored truck back to Dunbar. Jones then decided to stop for gas. After getting the gas, Jones acted like he was lost and stopped the truck at Antelope and Switzer in the City of St. Louis. He got out of the truck and two individuals with guns rushed him and demanded the money in the truck. As threats of violence were being made, Jones began to throw the money bags out the back door to Johnson and another man (JB). CT said that there was a white Buick vehicle right next to the armored car. CT and Jones then drove the truck from the scene of the armed robbery.
Both CT and Jones were interviewed as victims by law enforcement that night. On April 7, Jones was interviewed by employees of Dunbar again, denying any involvement in the robbery. He then changed his story and told them that he committed the robbery as he was threatened by unknown people.
On April 14, the owner of the white vehicle, JB, which was used in the robbery, was interviewed and finally admitted his involvement in the robbery. He told law enforcement that Johnson contacted him with the concept of the robbery. Johnson told JB that he had a cousin who worked for the armored truck company and was willing to help in the robbery. JB’s role was to be the driver of the getaway car, the white car. Johnson provided the Dunbar shirts used in the robbery, skull caps and sunglasses. On April 4, JB and Johnson drove to the site they had picked out for the robbery. Jones drove the armored truck to that location, got out of the truck, which allowed JB and Johnson to approach and demand money. JB did not know that Jones was the inside employee until he saw him outside the truck. JB realized that he had seen Jones as a customer at JB’s work. Johnson also worked at the same place. After the robbery, JB and Johnson drove the white car loaded with the stolen money to JB’s residence where the money was transferred to another car. They then drove to JB’s mother’s house and divided the stolen money into three shares. As Jones was still being interviewed by law enforcement, Johnson took two shares of the stolen money and left.
Johnson and Jones, both of St. Louis City, were each charged in a criminal complaint with one count of conspiracy to interfere with commerce by threats of violence, a violation of Title 18:1951 and 2.
If convicted, conspiracy to interfere with commerce by threats of violence carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
As is always the case, charges set forth in a criminal complaint are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Two Indicted for Mail Fraud Conspiracy in connection with Denton County Highway ExpansionRead the Press Release
SHERMAN, Texas - U.S. Attorney John M. Bales announced today that two Dallas men have been charged with conspiracy to commit mail fraud in connection with a Denton County highway expansion project in the Eastern District of Texas.
James Kevin Bollman, 48, and Wade Wylie Blackburn, 33, were named in the one-count indictment returned by a federal grand jury today in Sherman, Texas.
According to the indictment, from June 2008 through July 2015, Bollman and Blackburn are alleged to have conspired to defraud the Texas Department of Transportation (TXDOT) by purchasing property and then selling it to TXDOT at an inflated price. The fraudulent activity included the purchase of six parcels of land in Denton County, Texas all adjacent to IH-35. Bollman and Blackburn purchased the property for the purpose or selling it to TXDOT at an inflated price. To facilitate the scheme, the defendants made false representations to TXDOT which facilitated a quicker sale to TXDOT with an upfront option fee and increased the value. The scheme is alleged to have resulted in fraudulent net proceeds of $12,948,321.
Under federal statutes, Bollman and Blackburn each face up to 20 years in federal prison if convicted. The maximum statutory sentence prescribed by Congress and is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Christopher A. Eason and J. Andrew Williams.
A grand jury indictment is not evidence of guilt and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Drug Traffickers Sentenced to 8 Years in PrisonRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Terry James Morris, age 79, of West Rancho Dominguez, California, today to eight years in prison followed by four years of supervised release for conspiring to distribute and possession with intent to distribute cocaine and heroin, and obstruction of justice. Chief Judge Blake also sentenced co-defendant Charlie Williams, a/k/a/ “Pee Wee,” age 69, formerly of Los Angeles, California today to eight years in prison followed by four years of supervised release for conspiring to distribute and possession with intent to distribute cocaine.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Jeffrey S. Sallet of the Federal Bureau of Investigation, New Orleans Division; Special Agent in Charge John S. Comer of the Drug Enforcement Administration – Los Angeles, California Division; and Special Agent in Charge Laura A. Bucheit of the Drug Enforcement Administration – Las Vegas, Nevada Division.
Following four days of trial, the defendants entered their guilty pleas to the offenses described above. According to stipulated facts agreed upon by the defendants, from November 2013 to August 2014, Morris was responsible for shipments of kilogram quantities of cocaine and heroin from California to Maryland. The initial two loads of cocaine were transported by tractor trailer and delivered to a coconspirator in Maryland. Thereafter, in January 2014, Morris purchased a recreational vehicle (RV) for more than $50,000 in cash, which was then used to transport the drugs from California to a restaurant in Harford County, Maryland.
Morris arranged to have at least three different drivers, including Williams, transport the drugs in the RV to a coconspirator in Maryland. The drivers would also transport drug proceeds from the sale of the narcotics back in the same RV. For example, in the spring of 2014, Williams drove the RV from Compton, California to Belcamp, Maryland. There, he met the coconspirator and delivered more than five kilograms of cocaine. Morris paid Williams $15,000 to drive the RV loaded with the drugs from California to Maryland.
On August 6, 2014, one of Morris’ couriers was arrested after having driven the RV from California to Maryland. Inside the RV, concealed in hidden traps, were 25 kilograms of cocaine and six kilograms of heroin which were supposed to be delivered to the coconspirator in Maryland.
The FBI developed a confidential source (CS) who consensually recorded Morris in phone calls and on video. The FBI also obtained a wiretap on Morris’ cell phone. Numerous phone calls and videos captured Morris discussing his drug activities.
After the courier had been arrested, Morris made a series of phone calls to the CS in whose name Morris had registered the RV. In order to conceal Morris’ involvement, Morris told the CS to first say to law enforcement that he had leased the RV to the courier, then to say that the CS had merely lent the RV to the courier. Morris also provided the CS with the courier’s name, a physical description and a phone number, in the event that the CS was questioned by law enforcement, unaware that the CS had been cooperating with law enforcement.
United States Attorney Rod J. Rosenstein praised the FBI and DEA for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Seema Mittal and Christopher J. Romano, who prosecuted the case.
Tipp City Manufacturing Company Employees Sentenced for Embezzling Company FundsRead the Press Release
DAYTON – Michael J. Wion, 44, of Venice, Florida, and Tess Cremeens, 47, of Troy, Ohio, were sentenced in U.S. District Court for their roles in embezzling more than $725,000 from their former employer.
Wion was sentenced to 48 months in prison and was ordered to pay $733,640 in restitution to Repacorp, Inc. and $140,794 to the IRS. Cremeens was sentenced to 18 months in prison and ordered to pay approximately $250,000 to Repacorp and $70,000 to the IRS.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentences handed down today by U.S. District Judge Thomas M. Rose.
According to court documents, from approximately 2006 until May 2012, Wion was the controller for Repacorp, a privately owned manufacturing company headquartered in Tipp City, Ohio. As controller, he occupied a management-level position and was in charge of accounts payable/receivable and payroll, as well as other accounting and financial operations.
Wion devised a scheme to embezzle money from the company through PayPal accounts for approximately five years, by setting up multiple accounts to facilitate and conceal his movement of funds from Repacorp’s PayPal accounts to his own accounts. During that time he made approximately 300 electronic transfers.
Wion and Cremeens both devised a scheme to steal money from the company’s payroll, as well. For nearly three years, the pair booked additional payments in QuickBooks as automotive allowances being paid to former employees who were no longer with the company but who appeared in the system as active names. In total, they transferred money from payroll to their own bank accounts more than 100 times.
In addition to embezzling hundreds of thousands of dollars from their former employee, Wion and Cremeens also evaded thousands of dollars in federal taxes. Between 2008 and 2012, Wion admitted to failing to pay approximately $140,000 in federal taxes. Cremeens failed to pay more than $70,000 in federal taxes between 2010 and 2012.
"As we approach the end of tax filing season, those who might consider committing income tax fraud should be aware of the extremely negative consequences as evidenced today," said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. "Today's sentencing of Mr. Wion and Ms. Cremeens again emphasizes that the IRS and U.S. Attorney's office will continue their aggressive pursuit of those who would attempt to defraud America's tax system."
Wion pleaded guilty on December 4, 2015 to one count of wire fraud, one count of conspiracy to commit wire fraud and one count of tax evasion. Cremeens pleaded guilty on December 11, 2015 to one count of conspiracy to commit wire fraud and one count of tax evasion.
Acting U.S. Attorney Glassman commended the cooperative investigation by the IRS Criminal Investigation and FBI, as well as Assistant United States Attorney Alex R. Sistla, who is representing the United States in this case.
Three Sentenced for Conspiracy to Distribute Hydrocodone and Carisoprodol and Obtaining Fraudulent PrescriptionsRead the Press Release
GREENEVILLE, Tenn. – Three individuals who conspired to fraudulently obtain controlled substances and distribute hydrocodone and carisoprodol were recently sentenced in federal court by the Honorable J. Ronnie Greer, U.S. District Judge.
Jeffery Lynn Anderson, 37 of Kingsport, Tenn., was sentenced on April 4, 2016, to serve 77 months in federal prison for conspiring to distribute hydrocodone and carisoprodol and for conspiring to fraudulently obtain controlled substances. Kirstina Dawn Blazer, 35, of Kingsport, Tenn., was sentenced on April 11, 2016, to time served, after serving more than a year in custody for her participation in the conspiracy. Elizabeth Bowers Campbell, 38, of Johnson City, Tenn., was sentenced on March 28, 2016, to serve four years of probation, including intermittent periods of incarceration as a special condition of probation, for her role in the offenses.
Anderson, Blazer, and Campbell, met at a Johnson City pain clinic where Campbell and an additional co-defendant Kimberly Culbertson were employed. In April 2015, Anderson, Blazer, Campbell, and Culbertson were named in a four-count indictment charging trafficking of oxycodone, hydrocodone, and carisoprodol, as well as conspiracy to fraudulently obtain controlled substances. The charges initiated from an investigation of fraudulently issued prescriptions using the DEA number of a now-retired Johnson City physician who had previously employed Campbell and Culbertson. According to documents on file with the U.S. District Court, over 10,500 dose units of hydrocodone and 450 dose units of carisoprodol (cumulatively) were fraudulently obtained and distributed by Anderson, Blazer, and Campbell.
All four charged in the indictment have now pleaded guilty. Culbertson is scheduled for sentencing on August 8, 2016.
Acting U.S. Attorney Nancy S. Harr commended the hard work of law enforcement in this investigation and stated, “The U.S. Attorney’s Office takes cases involving distribution of these highly addictive prescription medications very seriously. We will continue to work together with law enforcement to prosecute these types of offenses.”
This investigation was conducted by the Tennessee Bureau of Investigation. Assistant Attorney General (Virginia)/Special Assistant U.S. Attorney M. Suzanne Kerney-Quillen and Special Assistant U.S. Attorney Corey Shipley represented the United States.
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Texas Man Pleads Guilty to Bringing Illegal Aliens to the United StatesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Arturo Luna, age 45, Laredo, Texas, pleaded guilty yesterday before United States District Court Chief Judge Christopher C. Conner in Harrisburg to offenses related to illegally bringing illegal aliens into the United States.
According to United States Attorney Peter Smith, Luna was a “coyote,” a person who illegally brought aliens from Mexico into the United States, including aliens who were brought to the Middle District of Pennsylvania between August and September 2013.
Co-defendants, Martha Ortiz was sentenced to 36 months imprisonment in January 2015 and Herberto Ortiz Gutierez was sentenced to 112 months imprisonment in December 2015.
The case was investigated by Drug Enforcement Administration, Customs & Border Patrol, Homeland Security Investigations, and Pennsylvania State Police. Prosecution of the case is assigned to Assistant United States Attorney Christy H. Fawcett.
A sentence following a finding of guilt or plea of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 10 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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State Representative Indicted for Embezzlement from Campaign Fund and Failure to File Federal Income Tax ReturnsRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Reginald Fullwood (41, Jacksonville) with 10 counts of wire fraud and 4 counts of failure to file federal income tax returns. If convicted, he faces a maximum penalty of 20 years in federal prison for each wire fraud offense, and a year of imprisonment for each failure to file charge. The indictment also notifies Fullwood that the United States is seeking a money judgment in the amount of $65,445, the proceeds of the criminal conduct charged in counts one through ten.
According to the indictment, while Fullwood was seeking election to the Florida House of Representatives, as well as during re-election campaigns, he caused numerous electronic funds transfers from the “Reggie Fullwood Campaign” bank account to a bank account of an entity owned by Fullwood, Rhino Harbor, LLC. Fullwood then used those funds, approximately $65,000 in financial contributions, for personal expenditures including restaurants, grocery stores, retail stores, jewelry stores, florists, gas stations and liquor stores. The indictment also alleges that in order to conceal his fraudulent embezzlement of campaign funds, Fullwood submitted or caused to be submitted false and fraudulent campaign expenditure reports to the State of Florida, which included inflated and/or non-existent campaign expenses.
As set forth in the indictment, in the State of Florida, a candidate or the spouse of a candidate may not use funds on deposit in a campaign account to defray normal living expenses for the candidate or the candidate’s family, other than expenses actually incurred for transportation, meals, and lodging during travel in the course of the campaign.
Fullwood is also charged with four counts of willful failure to file personal federal income tax returns for calendar years 2010 through 2013.
“Public officials, whether elected or appointed, hold positions of trust in the eyes of the public. That trust is broken when these officials commit crimes,” said Special Agent in Charge Kim Lappin, IRS-Tampa Field Office. “No public official gets a free pass to ignore the tax laws, and IRS-CI works to ensure that everyone pays their fair share.”
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 Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Mark B. Devereaux.
St. Petersburg Real Estate Agent Sentenced for His Role in Mortgage Fraud ConspiracyRead the Press Release
Tampa, Florida - U.S. District Judge James S. Moody has sentenced Gary Blankenship (45, St. Petersburg) to eight months in federal prison for conspiracy to commit wire and bank fraud. He pleaded guilty on February 4, 2016.
According to his plea agreement, in 2005, entities controlled by co-conspirators entered into a contract to purchase The Arbors, an apartment complex in Hillsborough County. The new owners then engaged in a plan to convert the complex from rental apartments to condominium units.
Blankenship’s co-conspirator, Brendan Bolger, aided the developers in the sale of numerous condominium units through his company, Capital Management Guarantee, LLC. In order to induce buyers to purchase units, Bolger created an addendum to the purchase contract offering buyers various incentives, such as rental supplements, money to defray maintenance costs, and a design credit to upgrade the units’ amenities. When the buyers cancelled the design credit within 10 days of signing the addendum, Bolger paid them a kickback from his company’s bank account for the amount of the design credit. Blankenship’s role in the conspiracy as a realtor consisted of marketing The Arbors units by promising buyers undisclosed incentives. In this manner, Bolger, Blankenship and other co-conspirators failed to disclose material facts to buyers’ mortgage lenders about the financing of the condominium sales.
This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of Inspector General. It was prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay Hoffer.
Santa Barbara County Man Named in Federal Case Alleging Production of Child Pornography by Enticing Minors over InternetRead the Press Release
LOS ANGELES – A man who resided in Carpinteria has pleaded not guilty after being named in a federal grand jury indictment that charges him with producing, receiving, distributing and possessing child pornography in 2015 – crimes he allegedly committed soon after completing a state prison term as a result of other child pornography offenses.
Christopher Robin Coates, 41, was taken into federal custody Wednesday afternoon by federal authorities after the grand jury charged him on Tuesday. Coates was turned over by local authorities in Santa Barbara County, where an extensive investigation occurred resulting in him being charged by Santa Barbara County District Attorney Joyce E. Dudley with multiple child exploitation crimes. The District Attorney’s Office dismissed the state charges after the federal indictment was filed – an indictment that brings the possibility of a life sentence for Coates.
Coates was arraigned Thursday afternoon in United States District Court in Los Angeles. At the arraignment, Coates pleaded not guilty to nine felony offenses in the indictment, and he was ordered to stand trial on May 24 before United States District Judge George W. Wu.
Coates is specifically charged with two counts of producing child pornography by using Kik Messenger to entice two minor boys to engage in sexually explicit conduct last year. Coates also is charged with two counts of receiving child pornography after enticing the victims to engage in the illicit conduct.
The indictment further charges Coates with three counts of using Kik Messenger to distribute child pornography (one count involves one of the victims allegedly enticed by Coates to send images), and one count of possessing child pornography involving a victim under the age of 12.
The indictment alleges that Coates was convicted in Santa Barbara Superior Court in 2011 and in 2013 of possessing child pornography, as well as sexual battery of a disabled adult in 2010. Count nine of the indictment charges Coates with producing child pornography while being required to register as a sex offender as a result of his prior convictions.
“This defendant, if he is convicted, faces a lengthy period of incarceration in federal prison – which would be warranted by his history of crimes against children,” said United States Attorney Eileen M. Decker. “As this case unfortunately illustrates, child pornography is not a victimless crime; on the contrary, it victimizes the most vulnerable among us.”
On July 15, 2015, law enforcement officers conducted a parole search of Coates’ residence. During the search, authorities recovered a Samsung tablet under a mattress that contained hundreds of images and videos of child pornography.
“Protecting children from crimes of sexual abuse and exploitation is a priority for the U.S. Postal Inspection Service,” stated Robert Wemyss, Inspector in Charge for the Los Angeles Division. “I'm proud of the work of the Postal Inspection Service and our investigative partners to bring child predators to justice. U.S. Postal Inspectors have investigated these crimes for more than a century. While the predators' use of sophisticated technology has evolved, the core harm has not changed: a child's lost innocence. We will not lose sight of this, and remain steadfast in our efforts to investigate, apprehend, and assist in the prosecution of those who seek to exploit children via the U.S. Mail.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If he is convicted in this case, Coates faces a potential sentence of life without parole in federal prison. Because of his prior convictions, Coates also faces enhanced mandatory minimum sentences, including a minimum sentence of 35 years for the production counts, a minimum sentence of 15 years for the distribution and receipt counts, and a minimum sentence of 10 years for the possession count. The charge of committing child exploitation offenses while being require to register as a sex offender carries a mandatory consecutive sentence of 10 years in federal prison.
“Protecting the most vulnerable members of society from predators is paramount, and the potential sentence in this case reflects the seriousness of the charges and the repeated harm he caused through the exploitation of children,” said James L. Struyk, Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Unfortunately the actions of this previously convicted child predator will never truly be erased from the Internet or from the minds of his young victims. This investigation is an excellent example of federal agencies working closing with the Santa Barbara District Attorney’s Office and taking swift action to protect our children.”
The investigation into Coates was conducted by the United States Postal Inspection Service and the Federal Bureau of Investigation. The Santa Barbara Sheriff’s Department and the California Department of Corrections and Rehabilitation provided substantial assistance. The investigation is the result of a tip to the Postal Inspection Service by the National Center for Missing & Exploited Children.
Roseville Podiatrist Sentenced to 3 Years in Federal Prison for Health Care Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Neil Van Dyck, 64, of Roseville, was sentenced today by United States District Judge Garland E. Burrell Jr. to three years in prison and a $10,000 fine for committing healthcare fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Van Dyck was a California-licensed podiatrist who operated a podiatry practice in Roseville called Placer Podiatry. Van Dyck offered “spa”-like treatments and performed routine foot care at his practice. Between 2009 and 2014, however, Van Dyck submitted over $2.8 million in fraudulent claims for reimbursement to Medicare, Medi-Cal, Tricare and private insurers. He falsely claimed that he performed more expensive procedures than he actually performed, or that the routine foot care that was provided was justified because of illness or symptoms that were not present. Often the treatments were performed by unlicensed staff, sometimes when Van Dyck was not present at his practice. Additionally, Van Dyck altered a single-use skincare patch by cutting it into pieces and billed Medicare for multiple applications. In 2011, in response to a request for documents from an investigator for Medicare, Van Dyck altered patients’ medical records to justify his fraudulent bills. Medicare, Medi-Cal, Tricare, and the private insurers paid Van Dyck over $1 million for his fraudulent claims.
“Van Dyck schemed to increase his profits at the expense of patients and taxpayers,” said Steven Ryan, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Instead, along with our law enforcement partners, my agents ensured that he ended up paying a high price, indeed, for his criminal actions.”
The Court previously entered an order requiring Van Dyck forfeited $1.2 million from a retirement account into which proceeds of the healthcare fraud scheme were traced. Most of this money is expected to be used to pay restitution to the insurance victims. The date for a further restitution hearing is set for May 27, 2016.
This case was the product of an investigation by the Department of Health and Human Services and the Federal Bureau of Investigation. Assistant United States Attorney Todd A. Pickles prosecuted the case.
Quincy Man Arrested for Scam Targeting Law FirmsRead the Press Release
BOSTON – A Quincy man was arrested today for using counterfeit cashier’s checks to defraud victims, including law firms, of at least $1 million.
Manuel Ponce Vazquez, 59, was arrested this morning and charged by complaint with one count of mail fraud.
As alleged in the complaint, beginning in August 2013, Vazquez defrauded law firms and other victims by sending them counterfeit cashier’s checks, then convincing them to forward a portion of the checks’ supposed value to a bank account he opened using an alias. Once the checks were discovered to be fraudulent, the victims’ bank accounts were debited, and the victims were left with thousands of dollars in losses, having unwittingly forwarded their own money to Vazquez.
In one scam described in the complaint, Vazquez or a co-conspirator allegedly posed as a member of a London architectural firm seeking to retain a California law firm to help him collect a debt. Before the law firm took any action to collect the supposed debt, it received a cashier’s check, ostensibly from the debtor, fully repaying the debt. At the direction of Vazquez or his co-conspirator, the law firm deposited the check, kept a small portion as a fee, and forwarded the remainder—$97,035—to a bank account Vazquez had opened in an assumed name. Within a day of receiving the money, the complaint alleges, Vazquez had withdrawn almost all of it from bank branches in and around Braintree. When the law firm’s bank discovered that the cashier’s check was fraudulent, the bank debited the value of the check from the law firm’s account.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss involved in the scam, and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistance was also provided by Braintree Police Department and the Norfolk District Attorney’s Office. This case is being prosecuted by Assistant U.S. Attorney Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Puerto Rico and Dominican Republic Men Convicted by Jury of Drug Conspiracy and Firearms ChargesRead the Press Release
St. Thomas, USVI – After a four-day trial, a federal jury found Alexandro Gerandino-Aracena, 39, of the Dominican Republic, and Ricardo Cardona, 35, of Puerto Rico, guilty of conspiracy to possess with intent to distribute cocaine and various firearms possession charges, United States Attorney Ronald W. Sharpe announced today.
According to evidence presented at trial, on the morning of September 3, 2015, Gerandino-Aracena and Cardona traveled from Fajardo, Puerto Rico, to St. Thomas in a private vessel equipped with a hidden compartment to purchase 150 kilograms of cocaine. Gerandino-Aracena and Cardona docked their vessel at the Marine Center Dock at the University of the Virgin Islands, where they met other members of the drug trafficking organization to collect the cocaine in exchange for $250,000 and three assault rifles. Earlier that day in Puerto Rico, U.S. Drug Enforcement Administration (DEA) agents seized $1.4 million dollars in cash, which was partial payment for the cocaine. Gerandino-Aracena and Cardona each face a minimum of 10 years in prison and a maximum of life imprisonment, and a maximum fine of $10,000,000.
On the fourth day of trial, co-defendant Marco Asala Belgar, 35, of the Dominican Republic, pleaded guilty to misprision of a felony and faces a maximum of three years’ imprisonment and a maximum fine of $250,000. Co-defendant Pedro Beltre Guzman, 36, of the Dominican Republic, also pleaded guilty during the trial to possession of firearms by an illegal alien and faces a maximum of 10 years’ imprisonment and a maximum fine of $250,000.
On March 29, 2016, co-defendant Jose Luis Ponce-Pagan, 36, of Puerto Rico, pleaded guilty to conspiracy to possess with the intent to distribute 100 kilograms of cocaine and faces a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, and a $10,000,000 fine. All defendants remain in custody pending sentencing, which is scheduled for August 24, 2016.
This case is the result of a joint investigation by the DEA, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives and U.S. Customs and Border Protection. It was prosecuted by Assistant United States Attorneys Sigrid M. Tejo-Sprotte and Delia L. Smith.
Prince George’s County Pimp Pleads Guilty to Transportation of a Minor to Engage in ProstitutionRead the Press Release
Greenbelt, Maryland –Michael Andrew Davila, age 27, of Berwyn Heights, Maryland, pleaded guilty on April 14, 2016, to transportation of a minor for prostitution. His mother, Maria Elena Davila, age 51, of Germantown, Maryland, pleaded guilty to conspiracy to commit evidence tampering in connection with the case.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Chief Hank Stawinski of the Prince George’s County Police Department.
According to Michael Davila’s plea agreement, in early January 2015, Michael Davila recruited a 15 year old female through Instagram to engage in prostitution. Later in January, the victim turned 16 years old. Between January and March 2015, Davila arranged for the victim to engage in acts of prostitution, advertised the victim online for sexual services in Maryland, Washington, D.C., and Virginia, using a false name and age for the victim, and transported or arranged for transportation of the victim throughout Maryland, DC. and Virginia to engage in commercial sex acts. Davila kept a portion of the proceeds earned by the victim for engaging in commercial sex acts.
According to their plea agreements, Davila and co-defendant Elsie Pazmino answered text messages and calls from clients seeking to engage in sexual acts with the victim and arranged “dates” for the victim with those clients. Davila educated the victim on how to arrange dates with customers for sexual services and set the prices that Victim 1 would charge for such services. On at least one occasion in January 2015, Pazmino admitted that she answered a telephone call from a potential customer in front of the victim, so that the victim could learn how to talk to potential customers and set up dates. According to their plea agreements, Davila and Pazmino arranged and paid for hotel rooms in which the victim engaged in prostitution.
Davila and co-defendant John Hamlett transported the victim, and other females Davila was prostituting, to locations within and outside Maryland to engage in prostitution. Davila paid Hamlett $50 to $100 per night of driving females working for Davila, including the victim.
During the time that the victim engaged in acts of prostitution, Davila provided her with a cellular phone to communicate with Davila and potential customers. Law enforcement’s review of the contents of the victim’s cellular phone revealed numerous text messages between Davila and the victim regarding proceeds earned by the victim from prostitution, locations where she was engaging in acts of prostitution, and the posting of ads online to advertise the victim for prostitution. Davila communicated with the victim through the use of cellular phone chat applications KIK and Pinger.
According to their plea agreements, Davila was arrested on April 20, 2015, on federal charges relating to the sex trafficking of a minor, at a motel in Laurel, Maryland, where he was staying with his mother, Maria Davila,. After his arrest, Maria Davila admitted that she accessed and erased the contents of Michael Davila’s KIK account, which he had used to communicate with the victim. Maria Davila also repeatedly tried to access and delete Michael Davila’s Pinger account, which he had also used to communicate with the victim while he was prostituting her. On April 21, 2015, Michael Davila had several phone calls with Maria Davila, while he was in pretrial detention at the Chesapeake Detention Facility in Baltimore, Maryland. During those calls, Michael and Maria Davila discussed the need to erase the KIK and Pinger accounts and Maria Davila’s efforts to delete the accounts. Michael Davila provided multiple passwords for Maria Davila to try to access his Pinger account so that it could be erased. Davila also sent a letter to Maria Davila, which stated in part, “Please keep tryna log into the Kik and Pinger” and then listed multiple passwords, many of which were the same as the passwords that Davila provided to his mother over the phone as captured in recorded jail calls.
As part of his plea agreement, Michael Davila must 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).
Michael and Maria Davila and the government have agreed that if the Court accepts their plea agreements Michael Davila will be sentenced to between 120 and 175 months in prison and Maria Davila will be sentenced two years in prison. U.S. District Judge George J. Hazel has scheduled sentencing for Michael Davila on August 29, 2016, at 2:30 p.m. and for Maria Davila on August 1, 2016 at 9:30 a.m. Michael and Maria Davila remain detained.
Elsie Liseth Pazmino, age 29, of Berwyn Heights, and John David Hamlett, age 33, of Laurel, Maryland, previously pleaded guilty to their roles in the sex trafficking. Hamlett was sentenced to 30 months in prison. Pazmino faces a maximum sentence of five years in prison. U.S. District Judge George J. Hazel has scheduled Pazmino’s sentencing on June 2, 2016 at 2:30 p.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), 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 and Prince George’s County Police Department for their work in the investigation and thanked the Anne Arundel County Police Department for its assistance. Mr. Rosenstein thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, who are prosecuting the case.
Pittsburgh-area Woman Admits Purchasing Gun for FelonRead the Press Release
PITTSBRUGH – An Allegheny County resident pleaded guilty in federal court to a charge of falsification of a firearms purchase form, United States Attorney David J. Hickton announced today.
Edwina Yancey, 31, of East Pittsburgh, Pa. pleaded guilty to one count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that on or about July 28, 2014, Edwina Yancey, with the intent to deceive a licensed firearms dealer, made a false statement in connection with her purchase of a Glock, Model 23, .40 caliber pistol. Following her purchase of the pistol, Edwina Yancey transferred it to a person she knew to be a convicted felon, who was prohibited from possessing the pistol.
Judge Hornak scheduled sentencing for Aug. 11, 2016. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, the court continued the defendant’s bond.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Edwina Yancey.
Pair Sentenced for Roles in Methamphetamine ConspiracyRead the Press Release
CHARLOTTESVILLE, VIRGINIA – Two men who played roles in trafficking methamphetamine into the Charlottesville area were sentenced this week in separate hearings in the United States District Court for the Western District of Virginia in Charlottesville, United States Attorney John P. Fishwick Jr. announced today.
Today in District Court, John Mark Fisher, 54, of Roanoke, Virginia, who pled guilty in January 2016 to possession with the intent to distribute and distributing 50 grams or more of methamphetamine, was sentenced to 132 months in federal prison. A second defendant, Alfonso Lopez-Rios, 33, of Charlottesville, Va., pled guilty in August 2015 to possession with the intent to distribute and distributing 50 grams or more of methamphetamine. Thursday in District Court, Lopez-Rios was sentenced to 58 months in Federal Prison.
“The use of methamphetamine has a dramatic effect on communities all across the Western District of Virginia and we will continue to work with our partners in law enforcement to stop the trafficking of this very addicting and destructive drug,” United States Attorney John P. Fishwick Jr. said today.
According to evidence presented at previous hearings by Assistant United States Attorney Christopher Kavanaugh, Lopez-Rios admitted to participating in a larger conspiracy in which he would travel from Charlottesville, Virginia to North Carolina to obtain large quantities of methamphetamine. In his travels, Lopez-Rios would also drive to Roanoke to sell half-pound and pound quantities of methamphetamine to Fisher, another high-level distributor in the Roanoke area.
Lopez-Rios, Fisher, along with a third man, Jose Alfredo Gonzalez-Martinez, are being prosecuted as part of Operation Ice Storm, a multi-agency operation headed by the Drug Enforcement Administration and in partnership with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The operation’s goal is to target larger distributors and traffickers of methamphetamine into Charlottesville and surrounding areas.
The investigation of the case was conducted by the Drug Enforcement Administration and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant United States Attorney Christopher Kavanaugh prosecuted the case for the United States.
Owners of Tax Preparation Business Get Multi-Year Prison Sentences for Filing Bogus Tax Returns for Prison InmatesRead the Press Release
The owners of a tax preparation business that filed fraudulent tax returns on behalf of inmates at various New Jersey prisons were each sentenced today to multi-year prison sentences, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Paul J. Fishman for the District of New Jersey.
Kamal J. James aka Bro Messiah Aziz El, 34, of Seaford, Delaware, and Crystal G. Hawkins aka Sis. Crystal Gabri El, 39, of Laurel, Delaware, were sentenced to 96 and 48 months in prison, respectively. They were previously charged in a superseding indictment with one count of conspiracy, 16 counts of making false claims and three counts of mail fraud. They were convicted on all counts following a one-week trial before U.S. District Judge Peter G. Sheridan for the District of New Jersey, who imposed the sentences today in Trenton, New Jersey federal court.
According to the superseding indictment and the evidence presented at trial:
Between October 2011 and October 2013, James and Hawkins operated Release Refunds, a purported tax preparation business – previously based in Brick, New Jersey, and in Seaford – through which they solicited current and former New Jersey prison inmates as clients and then filed fraudulent tax returns on their behalf. The company is no longer in business.
James and Hawkins sent Release Refunds “promotional” flyers to inmates at various New Jersey prisons and halfway houses offering tax return preparation services. The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign income tax returns and other Internal Revenue Service (IRS) documents, but not to include any information about their income or withholdings. James and Hawkins then filled in the missing income information on the return forms, fabricating the inmates’ earnings to trigger fraudulent and inflated refunds.
During the course of the investigation, an undercover IRS-Criminal Investigation agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins. They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents. James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns – including false income information that James and Hawkins provided – to be filed on behalf of the agent for tax years 2010 through 2012. The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee for the defendants.
In addition to the prison terms, Judge Sheridan sentenced both James and Hawkins to three years of supervised release and ordered them to pay restitution in the amount of $570,897.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentences. They also thanked the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge James V. Buthorn and the New Jersey Department of Corrections, under the direction of Commissioner Gary M. Lanigan, for their roles in the case.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton and former Trial Attorney Thomas Jaworski of the Tax Division.
Owners of Tax Preparation Business Get Multi-Year Prison Sentences for Filing Bogus Tax Returns for Prison InmatesRead the Press Release
TRENTON, N.J. – The owners of a tax preparation business that filed fraudulent tax returns on behalf of inmates at various New Jersey prisons were sentenced today to multi-year prison sentences, U.S. Attorney Paul J. Fishman and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
Kamal J. James, a/k/a “Bro Messiah Aziz El,” 34, of Seaford, Delaware, and Crystal G. Hawkins, a/k/a “Sis. Crystal Gabri El,” 39, of Laurel, Delaware, were sentenced to 96 and 48 months in prison, respectively. They were previously charged in a superseding indictment with one count of conspiracy, 16 counts of making false claims and three counts of mail fraud. They were convicted on all counts following a one-week trial before U.S. District Judge Peter G. Sheridan, who imposed the sentences today in Trenton federal court.
According to the superseding indictment and the evidence at trial:
Between October 2011 and October 2013, James and Hawkins operated Release Refunds, a purported tax preparation business – previously based in Brick, New Jersey, and in Seaford – through which they solicited current and former New Jersey prison inmates as clients and then filed fraudulent tax returns on their behalf. The company is no longer in business.
James and Hawkins sent Release Refunds “promotional” flyers to inmates at various New Jersey prisons and halfway houses offering tax return preparation services. The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign income tax returns and other IRS documents, but not to include any information about their income or withholdings. James and Hawkins then filled in the missing income information on the return forms, fabricating the inmates’ earnings to trigger fraudulent and inflated refunds.
During the course of the investigation, an undercover IRS-Criminal Investigation agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins. They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents. James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns – including false income information that James and Hawkins provided – to be filed on behalf of the agent for tax years 2010 through 2012. The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee for the defendants.
In addition to the prison terms, Judge Sheridan sentenced both James and Hawkins to three years of supervised release and ordered them to pay restitution of $570,897.
U.S. Attorney Fishman and Acting Assistant Attorney General Ciraolo credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentences. They also thanked the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge James V. Buthorn; and the N.J. Department of Corrections, under the direction of Commissioner Gary M. Lanigan, for their roles in the case.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton and former Trial Attorney Thomas Jaworski of the Justice Department’s Tax Division.
Defense counsel:
James: Pro se; (Bruce Throckmorton Esq., Trenton, standby counsel)
Hawkins: Pro se; (Andrea Bergman Esq. Assistant Federal Public Defender, Trenton, standby counsel)
Ohio Valley students design and execute mock trial to highlight teen dating violence prevention and educationRead the Press Release
WHEELING, WEST VIRGINIA – In recognition of National Crime Victims’ Rights Week, observed between April 10 and April 16, 2016, local community and student leaders hosted an educational mock trial event designed to highlight the realities of teen dating violence, United States Attorney William J. Ihlenfeld, II, announced.
The interactive mock trial, which took place in the United States Federal Courthouse in Wheeling before an audience of local high school students, was developed by the YWCA Wheeling Family Violence Prevention Program in collaboration with the U.S. Attorney’s Office for the Northern District of West Virginia. Students from John Marshall and Wheeling Park High Schools led the effort to design the underlying premise and content of the mock trial. U.S. District Judge John Preston Bailey presided over the trial and students portrayed several crucial roles, including the victim, the defendant, a witness, and members of the jury.
YWCA Wheeling Family Violence Prevention Program Director Patricia Flanigan described the mock trial as a “unique opportunity to educate our younger generation on the reality of the consequences of committing a crime of dating violence or domestic violence. We were very excited to use National Crime Victims’ Rights Week as a platform to demonstrate to local youth the criteria of a federal dating violence crime.” Flanigan commended the students involved in the mock trial, noting that they “took an active role in planning and developing this insightful educational event.”
Each year, the Office for Victims of Crime leads the observance of National Crime Victims’ Rights Week, designed to recognize victims of crime and highlight the work of victim advocates and service providers. This year, the theme for National Crime Victims’ Rights Week is Serving Victims. Building Trust. Restoring Hope. This theme is designed to emphasize the importance of early intervention and victim services. Individuals interested in learning more about National Crime Victims’ Rights Week are encouraged to visit the Office for Victims of Crime website at http://ovc.ncjrs.gov/ncvrw/.
Miami-Dade County Residents Sentenced for Possession of Counterfeit Access Devices and Aggravated Identity TheftRead the Press Release
On April 11, 2016, Robert Diaz, a resident of Miami, Florida, was sentenced to 60 months in prison, to be followed by three years of supervised release. On April 12, 2016, Maritza Conde Moreno, a resident of Miami, Florida, was sentenced to 74 months in prison, to be followed by three years of supervised release.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcements Homeland Security Investigations (ICE-HSI), Miami Field Office, and Tony Pustizzi, Chief, Coral Springs Police Department, made the announcement.
Diaz and Moreno each plead guilty on January 28, 2016 to one count of conspiracy to commit access device fraud in violation of Title 18, United States Code, Section 1029(b)(2), one count of possession of fifteen or more counterfeit access devices, in violation of Title 18 United States Code, Sections 1029(a)(3) and 2, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2.
According to court documents, in or around August and September 2013, numerous unauthorized purchases were made using fraudulent credit cards at BJ’s Wholesale (BJ’s) in Hialeah Gardens, Florida. Surveillance video captured Diaz, among others, making these fraudulent purchases. On February 2, 2014, a BJ’s employee recognized Diaz in the store and notified the Hialeah Gardens Police Department. Officers arrived at the location and conducted a traffic stop, resulting in Diaz and Moreno being taken into custody. An inventory search was conducted of their vehicle and a bag containing 78 counterfeit credit cards and numerous receipts from BJ’s and Home Depot were found on the floorboard.
Beginning on or around April 2014 through on or around July 2014, at a Home Depot in Coral Springs, Florida, Diaz, Moreno, and co-defendant Jose Luis Conde Varela used counterfeit credit cards in self-checkout lines to make unauthorized purchases.
On October 22, 2015, law enforcement executed a search warrant at the residence of Diaz and Moreno and, pursuant to a complaint, arrested Diaz, Moreno and Varela. As a result of the search of the residence, law enforcement uncovered, among other things, over 4,993 stolen credit card numbers, 311 fraudulent credit cards and a credit card encoder. In addition, at the time of his arrest, Diaz was in possession of a flash drive with 484 stolen credit card numbers.
Co-Defendant Jose Luis Conde Varela pled guilty on February 23, 2016 to one count of conspiracy to commit access device fraud in violation of Title 18, United States Code, Section 1029(b)(2), one count of use of one or more unauthorized access devices to obtain anything of value aggregating $1,000 or more, in violation of Title 18 United States Code, Sections 1029(a)(2) and 2, and one count of Aggravated Identity Theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2. Varela is scheduled to be sentenced on May 11, 2016.
Mr. Ferrer commended the investigative efforts of ICE-HSI and the Coral Springs Police Department. The case was prosecuted by Assistant United States Attorney Joshua S. Rothstein.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. 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.
Member of Alleged International Organization of Money Launderers for the Largest Drug Cartels Extradited to the United StatesRead the Press Release
Earlier today, Jhon Jairo Hincapie-Ramirez, a citizen of Colombia, was arraigned at the federal courthouse in Brooklyn, New York, for his alleged role in an international money laundering organization that brokered financial transactions designed to conceal the source of illegal narcotics trafficking by using the Chinese and Hong Kong financial system and the shipment of counterfeit goods around the world to launder over $5 billion for drug cartels based in Mexico and Colombia.[1] Hincapie-Ramirez was arrested in Colombia in August 2015, on a provisional arrest warrant issued from the Eastern District of New York, and was extradited to the United States on April 14, 2016.
The arraignment was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.
As alleged in the superseding indictment, the investigation determined that from approximately January 1, 2004 through December 31, 2014, members of the organization conspired to carryout trade-based money laundering activities in China, Colombia, Panama, the United States, Spain, Ecuador, Venezuela, and elsewhere. The group was led by Colombian nationals based in Guangzhou, China (the Guangzhou Enterprise). The Guangzhou Enterprise laundered money through bank accounts in Hong Kong and China on behalf of drug trafficking organizations in Mexico and Colombia to fund purchases of counterfeit goods in China, which were then shipped to Colombia and elsewhere for resale.
The Guangzhou Enterprise typically paid Colombian pesos to the drug traffickers in exchange for their U.S. dollar proceeds of drug trafficking at a heavily discounted exchange rate, which reflected the risks incurred by the money brokers. The Enterprise then located Colombian or other South American customers – usually businesses – that needed U.S. dollars to pay for imported goods or services. They then sold the U.S. dollars to those customers, who used the money to purchase goods and services in China for resale.
United States Attorney Capers thanked the Drug Enforcement Administration, New York Division; Internal Revenue Service-Criminal Investigation, New York Field Office; the Department of Justice, Office of International Affairs; DEA Dallas Field Office; New York City Police Department; New York State Police; DEA Beijing Country Office; DEA Hong Kong Country Office; IRS Beijing Country Office; IRS Hong Kong Country Office; the Financial Investigations Group of the Hong Kong Customs and Excise Department; and the Chinese Ministry of Public Security for their assistance in this case.
The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Tyler J. Smith and Ameet B. Kabrawala are in charge of the prosecution.
The Defendant:
JHON JAIRO HINCAPIE-RAMIREZ
Alias: El Profe
Age: 55
Nationality: ColombianE.D.N.Y. Docket No. 15-CR-81 (CBA)
[1] The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Massachusetts Man Sentenced to Prison for Role in Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Filed Fraudulent Income Tax Returns Using the Stolen Identities of Puerto Rican U.S. Citizens
A Lawrence, Massachusetts, resident pleaded guilty today to one count of conspiracy to defraud the United States, 14 counts of conversion of government property, two counts of access device fraud and 14 counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Carmen M. Ortiz for the District of Massachusetts, Special Agent in Charge Joel Garland of the Internal Revenue Service–Criminal Investigation’s (IRS-CI) Boston Field Office and Special Agent in Charge Stephen A. Marks of the U.S. Secret Service.
According to the indictment and documents filed with the court, between 2011 and 2015, Juan Santiago, 38, and another individual used the personal identifying information of Puerto Rican U.S. citizens to file fraudulent federal income tax returns. The fraudulent tax returns resulted in the issuance of tax refunds in the form of U.S Treasury checks, which were mailed to addresses in Massachusetts and elsewhere, controlled by Santiago and the other individual. The scheme resulted in thousands of fraudulent income tax returns filed with the IRS during the prosecution years. Santiago distributed a list of 100 stolen identities that were associated with approximately $333,540 in fraudulent tax refunds.
Sentencing is set for July 15. Santiago faces a statutory maximum sentence of five years in prison on the conspiracy charge, five years in prison on each count of conversion of government property and five years in prison on each count of access device fraud. For each count of aggravated identity theft, Santiago faces a mandatory minimum prison term of two years, which will run consecutive to any other term of imprisonment he receives. Santiago also faces monetary penalties.
Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation and the U.S. Secret Service, who investigated this case and Senior Litigation Counsel Corey Smith of the Tax Division, who prosecuted this case in conjunction with the U.S. Attorney’s Office’s Public Corruption Unit.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Massachusetts Man Pleads Guilty to Transporting Child PornographyRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Matthew McElroy, 39, of Chicopee, Massachusetts, pled guilty today in U.S. District Court to transporting child pornography.
According to court records, in January 2016, a federal agent was investigating the distribution and production of child pornography over the internet when he received an email message attaching three child pornography images from an individual later identified as McElroy, who claimed that the images depicted his niece and that he had sexual contact with her. A search warrant was obtained for McElroy’s Chicopee residence and he was arrested on a criminal complaint. McElroy later admitted that he used his email account to trade child pornography.
McElroy faces between five and 20 years in prison, a $250,000 fine and supervised release of between five years and life. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Chicopee Police Department.
Married Couple Sentenced for Crimes Connected to Fatal Shooting of Off-Duty MPD OfficerRead the Press Release
Memphis, TN – A married couple has been sentenced to federal prison for crimes they committed in connection to the fatal shooting of an off-duty Memphis Police officer. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentences today.
According to information presented in court, Lorenzo Clark, 36, of Memphis, unlawfully possessed a Glock 9mm pistol on Sunday, October 11, 2015. The firearm was used by the defendant in the fatal shooting of 31-year-old Terence Olridge, an officer with the Memphis Police Department (MPD). Olridge was off duty at the time of the shooting.
Last October, MPD officers responded to a shooting call at Lorenzo Clark’s Cordova residence. Officers later recovered the Glock 9mm used in the shooting from the defendant. Lorenzo Clark admitted to possessing the Glock 9mm prior to and during the shooting with Olridge. Officers also recovered a shotgun, a high-powered rifle, more than 390 rounds of ammunition and a bulletproof vest during their search of the residence.
In January 2016, Lorenzo Clark pled guilty before U.S. District Judge Sheryl H. Lipman to one count of felony firearm possession.
On Friday, April 15, 2016, Judge Lipman sentenced Clark to 51 months in federal prison. The sentence was above his guideline range due to the additional firearms and ammunition law enforcement recovered from his home.
Lorenzo Clark’s wife, Natalie Clark, 37, of Memphis, was also charged in the October indictment for providing all three aforementioned firearms to Lorenzo Clark despite knowing he had been convicted of a felony.
In January 2015, Natalie Clark pled guilty before Judge Lipman to one count of disposing of a firearm to a felon.
On Friday, Judge Lipman sentenced her to one year and one day in federal prison.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), along with the MPD.
Assistant U.S. Attorney Marques Young prosecuted this case on the government’s behalf.
Man who Assaulted Girlfriend and Child on Tulalip Tribal Land Sentenced to Nearly Six Years in PrisonRead the Press Release
A 26-year-old man who resided with his girlfriend and their two children on Tulalip Tribal land has been sentenced in U.S. District Court in Seattle to 70 months in prison and three years of supervised release for a series of assaults and threats against the woman and her children, announced U.S. Attorney Annette L. Hayes. JOSHUA CARL VANDERWEL pleaded guilty to assault by strangulation, felony harassment and assault in the third degree on December 3, 2015. VANDERWEL was arrested and originally charged in Tulalip Tribal court following the assaults in September 2014. The case was charged federally in December 2014.
At the sentencing hearing, U.S. District Judge Robert S. Lasnik recommended that VANDERWEL undergo intensive drug treatment for his methamphetamine addiction while incarcerated and on supervised release. The judge noted that VANDERWEL’s girlfriend suffered an “extended period of hell on earth…” with VANDERWEL assaulting her, “threatening to push her off a cliff and slash her throat.”
According to records filed in the case, during the week of September 20, 2014, VANDERWEL repeatedly assaulted and threatened his girlfriend. The assaults included strangling her, hitting her with a metal pipe, throwing knives and lamps at her, and threatening to kill her and burn the house down with her small children inside. VANDERWEL kept the woman captive in the home, not allowing her to use the phone or go to work.
VANDERWEL was arrested by Tulalip Tribal Police, and the case was originally prosecuted as part of a pilot project authorized by the Violence Against Women Reauthorization Act of 2013 (VAWA 2013). The Tulalip Tribes of Washington is one of the first Tribes in the nation to exercise special criminal jurisdiction over certain domestic violence crimes, regardless of the defendant’s Indian or non-Indian status.
The case was investigated by the Tulalip Tribal Police. The case was prosecuted by Assistant United States Attorneys Ye-Ting Woo and Rebecca Cohen and by Special Assistant United States Attorney Sharon Jones Hayden. Ms. Hayden is a Tulalip Tribal Prosecutor specially designated to prosecute cases in federal court.
Los Lunas Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Joseph Baldonado, 30, of Los Lunas, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to a methamphetamine trafficking charge. Under the terms of the plea agreement, Baldonado will be sentenced to 60 months in federal prison followed by four years of supervised release.
Baldonado was arrested in Jan. 2016, on a criminal complaint charging him with distribution of methamphetamine in Valencia County, N.M. According to the complaint, Baldonado sold quantities of methamphetamine to an undercover agent on the following dates: 58.2 ounces on Jan. 6, 2016, 58.8 ounces on Jan. 12, 2016, and 57.2 ounces on Jan. 22, 2016.
Baldonado was subsequently indicted on Feb. 9, 2016, and charged with three counts of distribution of methamphetamine on Jan. 6, 12, and 22, 2016, in Valencia County.
During today’s proceedings, Baldonado pled guilty to Count 3 of the indictment charging him with possession of methamphetamine with intent to distribute. In entering the guilty plea, Baldonado admitted possessing more than 50 grams of methamphetamine on Jan. 22, 2016, and selling it to another person for $1,600. Baldonado remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the HIDTA Region I Narcotics Task Force and is being prosecuted by Assistant U.S. Attorney Eva M. Fontanez.
The HIDTA Region I Narcotics Task Force is comprised of the Albuquerque Police Department, Albuquerque office of the DEA, Pojoaque Tribal Police Department, Rio Rancho Police Department, Sandoval County Sheriff’s Office and the Valencia County Sheriff’s Office. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Lawrence Man Pleads Guilty to Cashing $146,000 in Stolen Tax Refund ChecksRead the Press Release
BOSTON – A Lawrence man pleaded guilty today in connection with receiving stolen U.S. Treasury checks.
Rolfi Espinal, 49, pleaded guilty to three counts of receipt of stolen public money. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for June 19, 2016. Espinal was charged in December 2015.
From September to December 2011, Espinal accepted fraudulent U.S. Treasury checks totaling $146,698, which he cashed through his girlfriend’s bank account. In January 2013, Espinal falsely told federal agents that he received the checks as payment for used cars that he had sold to an individual, when, in fact, the individual did not exist and Espinal knew that the checks were obtained fraudulently. Furthermore, Espinal told the agents that he paid taxes on all of the income when he had only paid taxes on $34,000 of business receipts for the 2011 tax year.
The charge of receipt of stolen public moneys provides for a sentence of no more than 10 years in prison, three years of supervised release and a fine of $250,000. If the Court accepts the plea agreement, Espinal will be sentenced to 15 to 21 months in prison and ordered to pay $13,500 in restitution to the IRS. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations Boston; and Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service, made the announcement today. Lawrence Police Department and the Massachusetts State Police also assisted with the investigation. The case is being prosecuted by Assistant U.S. Attorney Seth B. Kosto of Ortiz’s Cybercrime Unit.
Landscaper Sentenced in Union, Unemployment Fraud CaseRead the Press Release
PROVIDENCE, R.I. – Steven F. Pagliarini, 57, Executive Vice-President and Treasurer of Central Landscaping Construction Company, located in Johnston, R.I., and Executive Vice-President of Central Nurseries, Inc., located in Chepachet and Johnston, R.I., was sentenced today to 3 years probation for orchestrating a scheme to avoid paying union benefits, and for providing false information to the State of Rhode Island to ensure some of his employees were paid unemployment compensation to which they were not entitled.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Pagliarini to pay restitution totaling $171,695.22. Pagliarini pleaded guilty on January 28, 2016, to three counts of falsification of documents and one count of wire fraud.
Pagliarini’s sentence is announced by United States Attorney Peter F. Neronha; Cheryl Garcia, Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region; Susan A. Hensley, Regional Director, U.S. Department of Labor Employee Benefits Security Administration; Todd Damiani, Special Agent in Charge of Region One U.S. Department of Transportation Office of Inspector General; Christina D. Scaringi, Special Agent in Charge of the Northeast Region of the U.S. Department of Housing and Urban Development Office of Inspector General; and Scott Jensen, Director of Rhode Department of Labor and Training (RIDLT).
According to information presented to the court, at various times between January 2007 and December 2010, Pagliarini submitted false documents to union welfare and pension plan administrators of two unions that represent construction equipment operators and other employees of Central Landscaping. The documents did not accurately reflect the actual number of hours worked by some employees and the actual amount of wages paid to those employees. The employees worked on federally-funded projects at the Hartford Park Project in Providence and the I-195 Relocation Project.
Additionally, according to information presented to the court, in order to avoid paying wages to some employees between November 2009 through April 2010, Pagliarini falsely reported to the RIDLT that the employees of Central Nurseries had been laid-off because of a lack of work. Pagliarini required the employees to work part-time but did not pay them. Based on documents filed with RIDLT, employees were paid a total of $68,487 in unemployment compensation.
The case was prosecuted by Assistant U.S. Attorney Dulce Donovan.
The matter was investigated by the United States Attorney’s Office; U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation; U.S. Department of Labor Employee Benefits Security Administration; U.S. Department of Transportation Office of Inspector General; U.S. Department of Housing and Urban Development Office of Inspector General; and the Rhode Island Department of Labor and Training.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Lancaster County Man sentenced to more than 15 years for dealing cocaineRead the Press Release
Contact Person: William K. Witherspoon (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Mitchell Narada Kelly, a/k/a "Duncey", age 36, of Lancaster County, South Carolina was sentenced yesterday in federal court in Columbia, South Carolina, for possession with the intent to distribute and distribution of a quantity of cocaine, a violation of 18 U.S.C. §§ 841(a)(1), 841(b)(1)(C) and 851. United States District Judge Mary Geiger Lewis of Columbia sentenced Kelly to 188 months (15 years and 8 months) in prison, followed by 6 years of supervised release and a special assessment of $100.
Evidence presented at the change of plea hearing established that members of the Lancaster County Sheriff’s Department Narcotics Unit, FBI and ATF developed informants that agreed to make a controlled purchase of cocaine from Kelly. The officers sent the individuals to Kelly’s residence where they purchased cocaine from Kelly on April 9, 2015, June 3, 2015 and June 24, 2015. The cocaine purchased in each controlled buy weighed between one and three ounces. Based upon these controlled buys, the officers obtained a search warrant to search Kelly’s house where they found digital scales, a small amount of cocaine, various types of ammunition and a .40 caliber Ruger model SR40C pistol. During his guilty plea hearing, Kelly admitted to having five (5) prior felony drug convictions before these purchases.
The case was investigated by agents of the Federal Bureau of Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives and Lancaster County Sheriff's Department. Assistant United States Attorney William K. Witherspoon of the Columbia, South Carolina office prosecuted the case.
This case was a part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases.
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Lakeland Drug Dealer Pleads GuiltyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Donavan Antwan Daniels (36, Lakeland) has pleaded guilty to one count of conspiracy to possess with intent to distribute 28 grams or more of crack cocaine. He faces a minimum mandatory penalty of 5 years, up to 40 years, in federal prison. A sentencing date has not yet been set.
According to the plea agreement, during June and July 2015, Daniels sold crack cocaine to a law enforcement confidential source on four separate occasions. These transactions took place in Lakeland.
This case was investigated by the Drug Enforcement Administration and the Lakeland Police Department. It is being prosecuted by Assistant United States Attorneys Maria Chapa-Lopez and Taylor G. Stout.
Justice Department Seeks to Shut Down Florida Tax Return Preparers and Owner of “Tax MD” Tax Preparation BusinessRead the Press Release
Businesses Allegedly Prepare Fraudulent Tax Returns While Charging Customers Undisclosed, Unconscionable Fees
The United States filed a civil injunction suit seeking to bar Patrick Clarke of Hallandale Beach, Florida, and Ruby Rodriguez of Orlando, Florida, from owning, operating, or franchising a tax return preparation business and preparing tax returns for others, the Justice Department announced today.
The complaint also requests that the court order Clarke and Rodriguez to disgorge the fees that they obtained through the alleged fraudulent tax return preparation. According to the complaint, Clarke owns and operates Tax MD, a tax return preparation business with stores in Florida and North Carolina. Rodriguez allegedly manages one of Clarke’s stores located in Orlando.
According to the complaint, Clarke’s preparers, including Rodriguez, target primarily low to moderate income customers with misleading advertisements, prepare and file fraudulent tax returns to improperly increase their customers’ refunds and profit through unconscionable, exorbitant and often undisclosed fees—all at the expense of their customers and the U.S. Treasury.
The complaint alleges that Clarke’s preparers, including Rodriguez, engage in fraudulent activity, including:
- Falsely claiming the Earned Income Tax Credit;
- Claiming improper filing status (i.e. head of household for married individuals);
- Fabricating businesses and related business income and expenses;
- Fabricating Schedule A deductions, including for unreimbursed employee business expenses; and
- Charging deceptive and unconscionable fees
According to the complaint, Clarke was previously a franchisee of LBS Tax Services. This is one of 10 lawsuits that the Justice Department has filed in Florida against former LBS franchisees or related individuals, including Walner Gachette, Douglas Mesadieu, Jean Demesmin, Kerny Pierre-Louis, Demetrius Scott, Jason Stinson, Wilfrid Antoine, Tonya Chambers, Jehoakim Victor, Lauri Rodriguez, Milot Odne, Christopher Lawrence and Kenneth Aikens.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Jacksonville Man Accused of Burying His Dead Mother in Her Yard and Then Stealing Her Social Security and Pension BenefitsRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Brian Lee Adams (56, Jacksonville) with one count of bank fraud, one count of theft of government property, and four counts of aggravated identity theft. If convicted, he faces up to 30 years in federal prison for the bank fraud count, up to 10 years for the theft of government property count, to be followed by two years’ imprisonment for the aggravated identity theft counts. The indictment also notifies Adams that the United States is seeking a money judgment in the amount of $35,345.36, the proceeds from the alleged activity.
According to the indictment, Adams’s mother, whose initials are J.Y.A., died in an unknown manner at some time prior to July 4, 2014. Adams buried her in the yard of her Green Cove Springs residence to conceal the event, cause, and circumstances of her death. Adams then stole his deceased mother’s pension funds and Social Security benefits until June 2015, when authorities discovered what he had done with her body.
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 Social Security Administration, Office of the Inspector General; the United States Secret Service; the U.S. Department of Health and Human Services, Office of Inspector General; the Florida Department of Law Enforcement; and the Clay County Sheriff’s Office. It will be prosecuted by Assistant United States Attorney Mac D. Heavener, III.
IRS Employees Arrested for Fraudulent Tax Returns, Two Others Charged for Tax EvasionRead the Press Release
SACRAMENTO, Calif. — This week, prior to the annual tax return filing deadline, four individuals, including two current IRS employees, were charged in separate cases with federal tax crime, United States Attorney Benjamin B. Wagner announced today.
Longtime IRS Employees Arrested Today in Fresno
Two long-time IRS employees were arrested today at the IRS facility in Fresno as they came to work. On April 14, 2015, a 38-count indictment was brought against Della Ornelas, 48, and Randall Ruff, 52, both of Fresno, charging them with aiding others in the preparation of false tax returns, and making their own fraudulent tax returns as employee of the United States. According to the indictment, Ornelas and Ruff are married to each other, and are longtime employees of the Internal Revenue Service in Fresno. They are charged with helping themselves, family and friends file false tax returns that claimed false dependents, generating large tax refunds that were diverted into bank accounts they controlled. They allegedly defrauded the United States of approximately $146,561 over a seven-year period.
This case is the product of an investigation by the Treasury Inspector General for Tax Administration and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorney Mark J. McKeon is prosecuting the case. (case # 1:16-cr-054)
Fairfield Resident Indicted for Tax Evasion
On Thursday, April 14, 2016, a federal grand jury returned an indictment against Bobby Louis Sanders, 52, of Fairfield, charging him with two counts of tax evasion. According to the indictment, Sanders failed to pay the tax due of $31,061 for tax years 2009 and 2010 and failed to file tax returns for tax years 2009 and 2010. The indictment alleges that Sanders willfully provided false information on W-4 forms claiming exemptions he was not entitled to claim.
This case is the product of an investigation by the Internal Revenue Service. Assistant U.S. Attorney William S. Wong is prosecuting the case. (case # 2:16-cr-081)
Citrus Heights Man Indicted for Failure to File Tax Returns
On April 12, 2016, Donnie Francis Schroeder, 52, of Citrus Heights, was charged with four-counts of failure to file income taxes for tax years 2009 through 2012. According to court documents, between 2009 and 2012, Schroeder willfully did not file income taxes on income he earned as a 50 percent partner in a sweeping and cleaning business that operates in Sacramento and Reno, Nevada.
This case is the product of an investigation by the Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorney André M. Espinosa is prosecuting the case. (case # 2:16-cr-080)
If convicted, Ornelas and Ruff face a maximum statutory sentence of three years in prison for each count of aiding and abetting false tax returns and five years in prison for making fraudulent tax return by an employee of the United States. If convicted, Sanders faces a maximum statutory penalty of five years in prison and a $100,000 fine on each count. If convicted, Schroeder faces a maximum statutory penalty of one year in prison and a $25,000 fine for each count. 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 against each of the foregoing defendants are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
In addition to the above, so far in 2016, eight individuals have been indicted, five have been convicted and 14 were sentenced for either submitting false claims for refunds or evading taxes. For more information, see the press release also issued this week.
Head of Methamphetamine Organization Sent to Prison for Twenty-Five YearsRead the Press Release
A man who was responsible for distributing pounds of ice methamphetamine and tampering with witnesses was sentenced today to 25 years in federal prison.
Martin Lawrence, 53, from Cedar Rapids, Iowa, received the prison term after an October 28, 2015, jury verdict finding him guilty of three counts: conspiracy to distribute at least 50 grams of ice methamphetamine; possession of at least 5 grams of ice methamphetamine with the intent to distribute; and witness tampering.
Evidence at trial showed Lawrence was the head of a drug trafficking organization responsible for distributing significant quantities of ice methamphetamine, a highly pure, crystalized form of methamphetamine, in Eastern Iowa. Lawrence obtained the drug from a source of supply located in Omaha, Nebraska, and transported it back to Iowa for redistribution. Lawrence relied on a network of retail-level distributors who distributed the drug throughout northeast Iowa.
Investigators learned of the organization after Lawrence’s step-son brought a stuffed animal containing methamphetamine to his elementary school. During the investigation of this case, law enforcement seized additional methamphetamine, cash, and numerous luxury vehicles from Lawrence including a Mercedes, BMW, Corvette, and Porsche.
After his arrest on federal charges, Lawrence instructed government witnesses to avoid contact with law enforcement in order to prevent these witnesses from testifying at their trial. Based on these instructions, Lawrence was found guilty of witness tampering.
During the same trial, Troy Lawrence was also convicted of conspiracy to distribute at least 50 grams of ice methamphetamine; distribution of at least 5 grams of ice methamphetamine with the intent to distribute; and witness tampering. On January 14, 2016, Troy Lawrence was sentenced to a 262 month term of imprisonment.
Lawrence was sentenced in Cedar Rapids by United States District Court Senior Judge Mark W. Bennett. Lawrence was sentenced to 300 months imprisonment. A special assessment of $300 was imposed. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
Lawrence is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case is being prosecuted by Assistant United States Attorney Lisa C. Williams and was investigated by the Cedar Rapids Police Department, Drug Enforcement Administration, Linn County Sheriff’s Office, and the Dubuque Drug Task Force.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-0069.
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Glen Burnie Man Sentenced to over Four Years in Prison for Leading a Drug Distribution ConspiracyRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Alex Raymond Valerio, age 36, of Glen Burnie, Maryland, today to 51 months in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute crack cocaine.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; and Anne Arundel County Police Chief Tim Altomare.
According to Valerio’s plea agreement, from at least May 2013 through July 23, 2014, he was the leader of a conspiracy to distribute crack cocaine, heroin, and powder cocaine in Baltimore and Anne Arundel County, Maryland. His co-conspirators included Joseph Melendez, Marc Gaston, Moises Rosario, Eddie Eusebio Mateo, Ronald Francis Wosk Jr., James Maurice McCants, Keith Joseph Herring, Robert James Bookhamer, Dartanon Antione Gaines, Marvin Michael Desormeaux, and others.
Valerio obtained heroin and cocaine from Melendez, Gaston, and others in the New York area. Valerio either met with these suppliers personally or directed Rosario or Mateo to meet with them on his behalf. Valerio coordinated the quantity and price of the drugs to be purchased directly with the suppliers. Valerio converted some of the cocaine obtained from these suppliers into crack cocaine at his residence in Glen Burnie. Valerio’s customers, including Wosk, McCants, Herring, Bookhamer, Gaines, Desormeaux, and others, were in direct contact with Valerio to coordinate the purchase of heroin, cocaine, or crack cocaine. Valerio arranged for the price and quantity of these drug transactions and either met with the customers personally or directed Rosario or Mateo to conduct the transactions.
From March through July 2014, Valerio and his co-conspirators were intercepted in telephone calls and text messages discussing their drug trafficking activities. Law enforcement also observed Valerio meeting with his co-conspirators to conduct drug transactions.
On July 23, 2014, investigators executed search warrants at residences of the co-conspirators and other locations connected with the conspiracy. From Valerio’s home law enforcement recovered: two hydraulic presses; spoons with cocaine residue; drug paraphernalia including cutting agent and packaging material; a hand press; approximately 30.9 grams of cocaine; and $24,000 in cash. From Bookhamer’s home in Baltimore law enforcement recovered: $7,108 in cash; plastic bags with approximately 22 grams of cocaine; drug paraphernalia and packaging materials; a .45 caliber handgun with two magazines; a rifle with a large capacity magazine; a box of .45 caliber ammunition; and multiple cell phones. Investigators recovered from Mateo and Rosario’s home in Pikesville: a six ton shop press, a dye press, five bundles of heroin (totaling approximately 11.7 grams), scales with cocaine reside, marijuana seeds, and twenty marijuana plants.
James Maurice McCants, age 43, of Baltimore, was sentenced to 92 months in prison; Joseph Melendez, age 28, of Brooklyn, New York, and Marc Gaston, age 37, of New York, New York, were each sentenced to five years in prison; Moises Rosario, age 33, and Eddie Eusebio Mateo, age 31,both of Pikesville, Maryland, were sentenced to two years in prison and 18 months in prison, respectively; Keith Joseph Herring, age 27, of White Marsh, Maryland, was sentenced to 21 months in prison; and Robert Bookhamer, age 37, of Baltimore, was sentenced to time served.
Dartanon Antione Gaines, age 36, of Owings Mills, Maryland, Ronald Francis Wosk, Jr., age 29, of Baltimore, and Marvin Michael Desormeaux, age 41, of Aberdeen, Maryland, also pleaded guilty to their roles in the drug conspiracy and are awaiting sentencing.
United States Attorney Rod J. Rosenstein commended the DEA and Anne Arundel County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kenneth S. Clark, who is prosecuting this Organized Crime Drug Enforcement Task Force case.
Georgia DOT Foreman Pleads Guilty to Allowing Illegal Dumping at Atlanta SitesRead the Press Release
George H. Bell, a former Georgia Department of Transportation maintenance foreman, entered a guilty plea in federal court to accepting bribe payments in exchange for allowing more than 38,000 cubic yards of unsuitable dirt to be dumped at DOT sites in metro-Atlanta.
“As a DOT supervisor, Bell accepted thousands of dollars in bribes in exchange for allowing others to dump unsuitable dirt, all at the expense of the environment and the people of this district,” said U. S. Attorney John A. Horn. “His criminal conduct resulted in environmental damage and has already left Georgia taxpayers with a staggering $2.5 million clean-up bill.”
“Public corruption comes in many forms but, at its core, established rules and policy are intentionally ignored, often for personal gain. That was the case here and it comes at great expense to the taxpaying public. It is because of the serious consequences as seen here that public corruption remains the FBI’s number one criminal program priority,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“The Georgia DOT reported the issue and has cooperated fully with all agencies involved in the investigation to ensure that all responsible parties are held accountable and prosecuted to the fullest extent of the law for these illegal actions,” said Georgia DOT Commissioner Russell R. McMurry. “We are appalled by the corrupt actions of this lone former employee that in no way reflect the hard work and commitment displayed by more than 4,000 GDOT employees.”
According to U.S. Attorney Horn, the charges and other information presented in court: Bell worked for the Georgia Department of Transportation (“GA DOT”) for approximately 15 years. By the end of his career, Bell served the GA DOT in a supervisory role as an Assistant Area Maintenance Foreman. In that capacity, Bell oversaw various transportation projects under the control of the GA DOT, including the maintenance and repairs of Georgia roadway system.
From approximately April to December 2014, Bell accepted cash bribe payments from the owners of a dirt hauling company that is not identified in court proceedings (“Owners”). In exchange for those bribe payments, Bell allowed the Owners to dump unsuitable dirt at various GA DOT locations around metro-Atlanta. Unsuitable dirt is dirt that is removed during construction or landscaping projects that cannot be built upon in the future. In this case, the dirt contained construction debris, including: nails, concrete fragments, and various pieces of metal.
More specifically, in April 2014, one of the Owners asked Bell if the GA DOT would accept multiple loads of dirt. Bell allowed the unsuitable dirt to be dumped at a GA DOT site, but then charged the Owner $600 to dump the dirt. Bell used GA DOT personnel and equipment to spread the dirt after the Owners had dumped it. After that, Bell and the Owners agreed that Bell would charge the Owners about $5 per load (if the Owners spread the dirt themselves) and $7 per load (if Bell used GA DOT personnel and equipment to spread the dirt). For several months thereafter, Bell accepted bribe payments from the Owners in exchange for allowing the Owners to illegally dump unsuitable dirt at a GA DOT location. In total, the Owners paid Bell approximately $15,000 in cash bribe payments.
Bell allowed the Owners to dump well over 1000 dump truck loads of unsuitable dirt at the GA DOT sites located at: (1) Hugh Howell Road and Stone Mountain Highway, in Stone Mountain; (2) North Decatur Road and I-285, in DeKalb County; (3) 805 George Luther Drive, in DeKalb County; and (4) Chamblee Dunwoody Road and I-285, in DeKalb County. Bell permitted over 38,000 cubic yards of dirt to be dumped at the GA DOT location near Hugh Howell Road alone. Unfortunately, Bell also allowed the Owners to dump the dirt at a protected wetland site and at a site where the dirt entered Stone Mountain Lake. Based on the massive amount of unsuitable dirt that Bell allowed to be dumped, the clean-up costs associated with his criminal acts have already exceeded $2.5 million.
On August 11, 201, Bell, 49, of Lithonia, Georgia, was indicted by a federal grand jury on bribery charges. Under federal law, conspiring to accept bribe payments carries a maximum sentence of five years in prison and a fine of up to $250,000.
The sentencing hearing for Bell has been scheduled for June 29, 2016, before U.S. District Judge Thomas. W. Thrash, Jr.
This case is being investigated by the Federal and Georgia Bureaus of Investigation.
Assistant United States Attorney Jeffrey W. Davis is prosecuting the case. Former Assistant United States Attorney Jamie L. Mickelson previously prosecuted the case.”
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Gainesville Pharmacy Technician Arrested and Charged with Attempted Online Enticement of A Child to Engage in Illegal Sexual ActivityRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Matthew Bryan Caniff (32, Gainesville) has been arrested and charged by a federal criminal complaint with using the Internet to attempt to entice a minor to engage in sexual activity. He faces a minimum mandatory penalty of 10 years, and up to life, in federal prison. His detention hearing is scheduled for today at 3:00 p.m. before United States Magistrate James R. Klindt.
According to the complaint, between March 31 and April 1, 2016, Caniff engaged in a series of online text conversations with a person he believed to be a 13-year-old child. This "child" was actually an undercover FBI agent. During the course of these conversations, Caniff discussed in graphic detail his desire to meet and have sex with the “child” at “her” home. He also sent several explicit photos of himself to the “child,” and told “her” that he would bring prescription drugs with him to share with “her.” Caniff confirmed that the “child” was alone at the residence and that “her” parent was going to be out of town for several days. During the early morning hours on April 1, 2016, Caniff drove from Gainesville to a home in St. Johns to meet the “child” for sex. He was arrested by deputies from the St. Johns County Sheriff's, and a knife and several pills were found in his possession.
This case was investigated by the St. Johns County Sheriff’s Office, the Alachua County Sheriff’s Office, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Freedom Mortgage Corporation Agrees to Pay $113 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
Freedom Mortgage Corporation has agreed to pay the United States $113 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting single family mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements for the FHA insurance program, the Justice Department announced today. Freedom Mortgage Corporation is headquartered in Mt. Laurel, New Jersey.
“It is imperative that mortgage lenders that participate in the FHA insurance program follow the rules and requirements set forth by HUD,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to work with our partners at HUD, its Office of Inspector General, and U.S. Attorneys around the country to protect homeowners and taxpayers from those who knowingly seek to abuse the FHA program for their own gain.”
“Freedom Mortgage did not properly comply with FHA rules for the mortgages it was generating and did not adequately monitor early payment defaults,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “It also failed to report to HUD the defaults it did discover, as required by its participation in the program. Today’s settlement recognizes those failures and imposes an appropriate sanction.”
During the time period covered by the settlement, Freedom Mortgage Corporation participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and endorsing mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that Freedom Mortgage Corporation failed to comply with certain FHA origination, underwriting and quality control requirements. As part of the settlement, Freedom Mortgage Corporation admitted to the following facts: Between Jan. 1, 2006 and Dec. 31, 2011, it certified mortgage loans for FHA insurance that did not meet HUD underwriting requirements and were therefore not eligible for FHA mortgage insurance. Additionally, Freedom Mortgage Corporation did not adhere to FHA’s quality control (QC) requirements. Between 2006 and 2008, Freedom Mortgage Corporation did not share its early payment default (EPD) QC reviews with production and underwriting management, nor did it require responses to its EPD QC findings from its production or underwriting staff. Due to staffing limitations between 2008 and 2010, Freedom Mortgage Corporation did not always perform timely QC reviews or perform audits of all EPD loans, as required by HUD. An EPD is a loan that becomes 60 days past due within the first six months of the loan. The EPD QC reviews that Freedom Mortgage Corporation did perform revealed high defect rates, exceeding 30 percent between 2008 and 2010. Yet, between 2006 and 2011, Freedom Mortgage Corporation did not report a single improperly originated loan to HUD, despite its obligation to do so. Additionally, in 2012, after identifying hundreds of loans that “possibly should have been self-reported to HUD,” it reported only one. As a result of Freedom Mortgage Corporation’s conduct, HUD insured hundreds of loans that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured and subsequently incurred substantial losses when it paid insurance claims on the ineligible loans approved by Freedom Mortgage Corporation.
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and demonstrates HUD OIG’s continued efforts to combat fraud in the origination of single family mortgages insured by the FHA,” said HUD Inspector General David A. Montoya.
“FHA-approved lenders have a responsibility to comply with underwriting standards,” said HUD’s General Counsel Helen Kanovsky. “We are gratified that Freedom Mortgage Corporation has accepted responsibility for its actions.”
The settlement was the result of a joint investigation conducted by HUD, HUD OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of New Jersey.
Freedom Mortgage Corp. Agrees to Pay $113 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
NEWARK, N.J. – Freedom Mortgage Corp. has agreed to pay the United States $113 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting single family mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements for the FHA insurance program, the Justice Department announced today. Freedom Mortgage is headquartered in Mt. Laurel, New Jersey.
“Freedom Mortgage did not properly comply with FHA rules for the mortgages it was generating and did not adequately monitor early payment defaults,” U.S. Attorney Paul J. Fishman for the District of New Jersey said. “It also failed to report to HUD the defaults it did discover, as required by its participation in the program. Today’s settlement recognizes those failures and imposes an appropriate sanction.”
“It is imperative that mortgage lenders that participate in the FHA insurance program follow the rules and requirements set forth by HUD,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to work with our partners at HUD, its Office of Inspector General, and U.S. Attorneys around the country to protect homeowners and taxpayers from those who knowingly seek to abuse the FHA program for their own gain.”
During the period covered by the settlement, Freedom Mortgage participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and endorsing mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that Freedom Mortgage failed to comply with certain FHA origination, underwriting and quality control requirements.
As part of the settlement, Freedom Mortgage admitted to the following facts:
Between Jan. 1, 2006, and Dec. 31, 2011, it certified mortgage loans for FHA insurance that did not meet HUD underwriting requirements and were therefore not eligible for FHA mortgage insurance. Freedom Mortgage did not adhere to FHA’s quality control (QC) requirements. Between 2006 and 2008, Freedom Mortgage did not share its early payment default (EPD) QC reviews with production and underwriting management, nor did it require responses to its EPD QC findings from its production or underwriting staff. Due to staffing limitations between 2008 and 2010, Freedom Mortgage did not always perform timely QC reviews or perform audits of all EPD loans, as required by HUD. An EPD is a loan that becomes 60 days past due within the first six months of the loan. The EPD QC reviews that Freedom Mortgage did perform revealed high defect rates, exceeding 30 percent between 2008 and 2010. Yet, between 2006 and 2011, Freedom Mortgage did not report a single improperly originated loan to HUD, despite its obligation to do so. In 2012, after identifying hundreds of loans that “possibly should have been self-reported to HUD,” it reported only one. As a result of Freedom Mortgage’s conduct, HUD insured hundreds of loans that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured and subsequently incurred substantial losses when it paid insurance claims on the ineligible loans approved by Freedom Mortgage.
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and demonstrates HUD OIG’s continued efforts to combat fraud in the origination of single family mortgages insured by the FHA,” HUD Inspector General David A. Montoya said.
“FHA-approved lenders have a responsibility to comply with underwriting standards,” HUD’s General Counsel Helen Kanovsky said. “We are gratified that Freedom Mortgage Corporation has accepted responsibility for its actions.”
The settlement was the result of a joint investigation conducted by HUD, HUD OIG, the Civil Division’s Commercial Litigation Branch, and Senior Litigation Counsel Anthony J. LaBruna and Assistant U.S. Attorney Mark Orlowski of the Civil Division of the U.S. Attorney’s Office for the District of New Jersey.
Frederick Cocaine Dealer Sentenced to Eight Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Trevin Montrez Sampson, a/k/a “Bucket,” age 30, of Frederick, Maryland, today to eight years in prison, followed by four years of supervised release, for conspiracy to distribute and possess with intent to distribute cocaine. Sampson was the third member of the conspiracy to be sentenced for distributing cocaine in and around Frederick.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Frederick Police Department Chief Edward G. Hargis.
According to their plea agreements, from October 2014 through December 6, 2014, Trevin Sampson, his brother, Jacoby Sampson, and Peter Nicholson participated in a conspiracy to distribute cocaine in and around Frederick. During the investigation, Frederick Police initiated wiretaps on the Sampson brothers’ telephones and intercepted a series of calls in which the brothers arranged for Nicholson to transport a large amount of cocaine from Baltimore County to Frederick. On November 24, 2014, Nicholson was stopped in his vehicle by law enforcement as he was en route to deliver cocaine to Trevin and Jacoby Sampson, as well as other customers. Nicholson attempted to run away and in the course of his flight, placed a white cloth bag into an empty recycling bin. Nicholson was arrested and the white cloth bag was recovered by law enforcement. The bag contained multiple smaller bags which contained a total of 609.5 grams of cocaine. Two of the smaller bags were labeled “T,” for Trevin Sampson, and “Luv,” for Jacoby Sampson.
The Sampsons and Nicholson spent the evening of November 25, 2014 and the following morning attempting to locate the white cloth bag, finally concluding, in a series of intercepted phone calls, that the bag had probably been seized by law enforcement. Later on November 26, 2014, Trevin Sampson persuaded Nicholson to transport additional cocaine to Frederick, which Nicholson agreed to deliver the next day. On November 27, 2014, officers conducted surveillance as Nicholson traveled from Baltimore County to Frederick in a taxi. The officers initiated a traffic stop and as the taxi was coming to a stop, Nicholson ran from the car towards the nearby woods, tossing one package as he ran and throwing another package over a fence before he was taken into custody. The packages were retrieved and found to contain a total of 60.48 grams of cocaine, which Trevin Sampson admits was intended for him.
On December 1, 2014, Trevin Sampson exchanged a series of text messages with one of his customers and arranged to meet the customer at a residence in Frederick. Officers conducting surveillance saw the customer enter the residence and leave a short time later with Trevin Sampson. Officers subsequently stopped the customer at a parking lot in Hagerstown, Maryland and recovered 125.8 grams of cocaine, which the customer had purchased from Trevin Sampson.
During their participation in the drug conspiracy, Trevin Sampson and his co-conspirators admitted to distributing at least 500 grams of cocaine.
Peter Andrew Nicholson, a/k/a “White Boy Pete,” age 32, of Rosedale, Maryland, previously pleaded guilty and on December 23, 2015, was sentenced to nine years in prison for conspiracy to distribute and possess with intent to distribute cocaine. Jacoby Olajuwon Sampson, a/k/a “Luv/Luva,” and “Coby,” age 27, of Frederick, pleaded guilty to the same charge and was sentenced to five years in prison.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and the Frederick Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Peter J. Martinez, who prosecuted the case.