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8 April 2016
Tampa Man Pleads Guilty to Federal Drug ChargesRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Raheem Lavontae Bryant (23, Tampa) has pleaded guilty to five counts of distributing crack cocaine and powder 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 court documents, between December 2015 and January 2016, Bryant sold crack and powder cocaine, on five separate occasions, to undercover detectives from the Hillsborough County Sheriff’s Office. The transactions took place in the parking lots of various businesses in Tampa and Thonotosassa.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hillsborough County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Taylor G. Stout.
This is another case prosecuted as part of the Department of Justice’s Project Safe Neighborhoods (PSN) Comprehensive Anti-Gang Initiative (CAGI). The program’s objective is to reduce criminal gangs, violent crime, illegal drugs, and guns through combined enforcement, prosecution, prevention, and re-entry efforts.
Superseding Indictment Charges Duell with Five Counts of Perjury in Schenectady Arson Homicide CaseRead the Press Release
ALBANY, NEW YORK – A superseding indictment filed today charges Jennica Duell with five counts of making false declarations before a federal grand jury, announced United States Attorney Richard S. Hartunian and Special Agent in Charge Delano Reid of the Bureau of Alcohol, Tobacco, Firearms & Explosives.
The superseding indictment alleges that the false declarations were made before a grand jury conducting an investigation into the fire on or about May 2, 2013 at 438 Hulett Street in Schenectady, New York, that caused the deaths of David Terry and three young children, seriously injured another child, and destroyed the building and the personal property inside.
The superseding indictment alleges that Duell testified under oath before the federal grand jury on May 24, 2013 and January 31, 2014 and knowingly made material declarations on each date which were irreconcilably contradictory and inconsistent to the degree that one of them was necessarily false. Each count alleges that on May 24, 2013, Duell testified regarding specific events that occurred May 1-2, 2013, and then, on January 31, 2014, gave irreconcilably contradictory testimony about those events. The specific events alleged included declarations about: Duell’s relationships with David Terry and another man; Duell and others traveling from Saratoga Springs to 438 Hulett Street; Duell and others getting gasoline; how the fire at 438 Hulett Street was started, and by whom; and discussion that the story for Duell and others would be that they were in Saratoga Springs when the fire was started.
Duell, age 28, of Schenectady, New York, is detained pending trial. Her arraignment on the superseding indictment is scheduled for Tuesday, April 19, 2016, at 12:30 pm before U.S. Magistrate Judge Christian F. Hummel in U.S. District Court in Albany, New York. The scheduled trial date is May 16, 2016 in Albany.
The superseding indictment is merely an accusation and the defendant is presumed innocent unless and until proven guilty in a court of law. If convicted, Duell faces a maximum sentence of imprisonment for five years and a $250,000 fine on each count, and a term of supervised release of up to three years.
The charges resulted from an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives of the U.S. Department of Justice, the Schenectady Police Department, and the Schenectady Fire Department. The case is being prosecuted by First Assistant U. S. Attorney Grant C. Jaquith and Assistant United States Attorney Wayne A. Myers.
Further questions or inquiries may be directed to First Assistant U.S. Attorney Jaquith at 518-431-0247.
The Bureau of Alcohol, Tobacco, Firearms and Explosives notes that there is a reward of up to a total of $40,000 for information leading to the arrest and conviction of the person(s) responsible for the arson that occurred on May 2, 2013 at 438 Hulett Street in Schenectady, resulting in personal injury and death. All information will be treated confidentially and the callers will remain anonymous if requested. Anyone having information should call the ATF Albany Field Office at 518-431-4182, or email [email protected].
St. Albans Man Held on Federal Gun ChargeRead the Press Release
The Office of the United States Attorney for the District of Vermont stated today that Derrick D. Jones, age 33, appeared in Federal Court today at his arraignment on a Grand Jury indictment charging him with possessing a .32 cal Smith & Wesson handgun as a convicted felon.
According to court filings, on March 7, 2016, the Vermont State Police, St. Albans Barracks (“VSP”) executed a State search warrant at Jones’s St. Albans, Vermont apartment. Officials seized 85 Oxycodone pills; a 25 gram bag of cocaine; $1,607 in cash; several counterfeit $50 and $100 bills; and a loaded .32 caliber Smith & Wesson revolver. Jones was charged with drug violations in State court and released on conditions. Because he has a prior felony conviction in New York State, the VSP contacted the Bureau of Alcohol, Tobacco & Firearms and the U.S. Attorney’s Office.
On March 31, 2016, a federal Grand Jury indicted Jones for possessing the .32 cal. handgun as a convicted felon. On April 7, 2016, the VSP arrested Jones on the federal warrant at his St. Albans apartment. Finding him with 20 more Oxycodone pills, the VSP obtained another search warrant. Officials found in his apartment 2.7 grams of heroin; four grams of crack cocaine; 19 grams of marijuana; and handgun ammunition.
At a hearing today before U.S. Magistrate Judge John M. Conroy, Jones was detained in the custody of the U.S. Marshal’s Service pending trial. Meanwhile, the VSP filed new State charges based upon the drugs seized on April 7.
The maximum penalty for the federal firearms charge is 10 years imprisonment. Jones is represented by Assistant Federal Public Defender Elizabeth Quinn. The United States is represented by Assistant U.S. Attorney Bill Darrow. The indictment is an accusation only and that the defendant is presumed innocent until and unless proven guilty.
Southern Illinois Residents Charged with Methamphetamine OffenseRead the Press Release
Union and Williamson County residents were indicted on April 5, 2016, for a methamphetamine offense, Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Troy A. Smith, 44, of Jonesboro, and Jeremiah Lee Jae Sadler, a/k/a "Jeremiah L. Sadler, 36, of Marion, are charged in a one-count indictment charging conspiracy to distribute methamphetamine. The indictment alleges that the offense occurred between 2015 and February 2016, in Union and Williamson Counties. Sadler made his initial appearance in federal court on April 7, 2016. He is being held without bond pending an April 11, 2016, detention hearing. Smith is scheduled to make his initial appearance on April 11, 2016.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The methamphetamine offense carries a maximum penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Southern Illinois Enforcement Group, Southern Illinois Drug Task Force, and Drug Enforcement Administration. The Union and Williamson County State’s Attorney’s Offices also assisted in the investigation.
Roseville Resident Sentenced for Loan Modification and Foreclosure Rescue Scam That Targeted Spanish-Speaking CommunityRead the Press Release
SACRAMENTO, Calif. — Ligia Sandoval Spafford (Sandoval), 48, of Roseville, was sentenced Thursday by U.S. District Judge Troy L. Nunley to two years and three months in prison for a scheme to defraud distressed homeowners, United States Attorney Benjamin B. Wagner announced. Sandoval was ordered to self-surrender on June 9, 2016.
Sandoval paid $115,065.00 in restitution, the full amount of restitution ordered by the Court, to compensate the victims for the losses that they incurred as a result from this fraud scheme. In February 2015, Sandoval and her then husband, Martin Wayne Flanders, 51, of Roseville, pleaded guilty to mail fraud for the fraud scheme. On October 29, 2015, Flanders was sentenced to six years and five months in prison.
In sentencing, Judge Nunley stated: “She knew what was going on and enticed these people to become part of this scheme. They trusted her. … She ruined some peoples’ lives. That she paid restitution does not do anything to take away from the anxiety and fear they [the victims] had at the time that this was occurring. These victims were devastated.”
According to court documents, between 2008 and 2010, Flanders charged clients advance fees in exchange for a number of financial services, including loan modifications, mortgage loan audits, credit repair, debt relief, bankruptcy filings, and a program to sell homes to “investors” with a rent-to-own option. Sandoval and Flanders marketed these services to economically distressed homeowners with particular emphasis on those who were Spanish speakers. Sandoval, a Spanish-speaker, promoted the services she and Flanders, who was not a fluent Spanish speaker, offered during a radio program that aired twice weekly on a Bay Area Spanish‑language Christian radio station, Radio Luz. Sandoval who was a licensed real estate agent, further assisted Flanders in the fraud scheme by interacting with and explaining the services to Spanish-speaking clients. The services offered by Flanders and Sandoval were also advertised on a Spanish-language television station, Univision, and in Spanish-language magazines. About 98 percent of the defendants’ clients were of Hispanic descent, some of whom spoke little to no English.
Sandoval and Flanders made numerous false statements to investors as to the success of the programs being offered or refunds that would be available if the programs were not successful. “Ghost offers” – i.e., fictitious offers to purchase the victim’s property through short sale – and “skeleton bankruptcies” – i.e., sham bankruptcy petitions that were quickly dismissed by the bankruptcy court – were also used by Sandoval or Flanders to try to stall the foreclosure process. At least 25 to 30 individuals paid for services and did not receive them or did not receive refunds when the programs failed to deliver as promised. The total loss to the victims is at least $115,000. Some homeowners who were not able to obtain relief were foreclosed upon by their lenders.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Todd A. Pickles and Shelley Weger prosecuted the case.
Rosebud Man Sentenced for Assault with a Dangerous Weapon and Assaulting a Federal OfficerRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rosebud, South Dakota, man convicted of Assault with a Dangerous Weapon and Assaulting, Resisting, Opposing and Impeding a Federal Officer was sentenced on April 4, 2016, by U.S. District Judge Roberto A. Lange.
Eric Joseph Oliver, age 34, was sentenced to 40 months in custody, folllowed by two years of supervised release, and a $200 special assessment to the Federal Crime Victims Fund.
Oliver was indicted by a federal grand jury on July 14, 2015, for Assault with a Dangerous Weapon, Assault Resulting in Serious Bodily Injury, Assault by Strangulation and Suffocation, and Assaulting, Resisting, Opposing, and Impeding a Federal Officer. He pled guilty to Assault with a Dangerous Weapon and Assaulting a Federal Officer on January 7, 2016.
On the evening of May 30, 2015, Oliver and his girlfriend, the victim, were at a home in Rosebud. An argument ensued between the couple and Oliver would not let the victim leave. Oliver hit the victim in the face with his hands and stabbed her with a sharp instrument. The victim sustained two shallow stab wounds; one to the right side of her neck and one to the top of her head. The victim was able to escape and call Rosebud Sioux Tribe Law Enforcement Services for assistance. The victim was transported to the Indian Health Services Hospital in Rosebud to receive medical care.
Two officers responded to the call, and Oliver was non-compliant with them. Oliver was escorted out of the house and once outside of the home, he kicked one of the officers twice and spat at another officer’s face.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services and Federal Bureau of Investigation. Assistant U.S. Attorney Carrie G. Sanderson prosecuted the case.
Oliver was immediately turned over to the custody of the U.S. Marshals Service.
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Rocklin Identity Thief Sentenced to 3 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Melvin Lee Gregory, 33, of Oroville, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to three years in prison: two years for participating in a bank fraud and identity theft scheme and one year for violating terms of probation, United States Attorney Benjamin B. Wagner announced.
According to court documents, on April 2, 2015, Gregory was released from federal prison after serving a four-year sentence for a previous conviction. Between April 2, 2015, and August 22, 2015, while on probation, Gregory opened a bank account and deposited several forged checks. On August 22, 2015, Gregory was observed attempting to break into and steal U.S. Mail from a Roseville mailbox, and minutes later he successfully stole U.S. Mail from a Rocklin mailbox. When Gregory was arrested by Rocklin Police, he was in possession of stolen U.S. Mail, burglary tools, and stolen identification documents. Gregory pleaded guilty on November 17, 2015.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated: “We are working closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those responsible for complex Identity Fraud Schemes and to protect postal customers’ mail and personal information from theft.”
This case was the product of an investigation by the United States Postal Inspection Service and the Rocklin Police Department. Assistant United States Attorney Michelle Rodriguez prosecuted the case.
Richfield man sentenced to prison for possessing child pornographyRead the Press Release
A Richfield man was sentenced to 6 1/2 years in prison for receiving child pornography, Acting U.S. Attorney Carole S. Rendon said.
Khalid Farmer Black was sentenced to 78 months in prison. He pleaded guilty earlier this year to one count of receipt of visual depictions of minors engaged in sexually explicit conduct.
This case was prosecuted by Assistant U.S. Attorney Michael A. Sullivan following an investigation by the FBI
Repeat Sex Offender Sentenced to 30 Years in Prison for Creating Video of His Rape of a ChildRead the Press Release
A repeat sex offender who repeatedly raped a child left in his care was sentenced today in U.S. District Court in Seattle to 30 years in prison and lifetime supervised release, announced U.S. Attorney Annette L. Hayes. LEROY ANTHONY WILLIAMS, 33, was arrested in September 2014, when the victim’s mother called Auburn Police after finding a video of a sexual assault of a child on his phone. WILLIAMS attempted to destroy the phone before police arrived, but was unsuccessful. At sentencing U.S. District Judge Robert S. Lasnik said WILLIAMS’ conduct was “horribly depraved and awful…. We need to get you off the streets and away from children.”
According to records filed in the case, an Auburn resident called 9-1-1 on September 29, 2014 after finding a video on WILLIAMS’ phone showing him raping an 11-year-old child. WILLIAMS has a prior conviction as a juvenile for sexually assaulting a 6-year-old child and has repeatedly failed to register as a sex offender as required by law. Because of his prior conviction WILLIAMS is subject to a 25-year mandatory minimum prison term.
Federal charges were brought in October 2014. WILLIAMS pleaded guilty on December 17, 2015. Following today’s sentencing he will be transferred to King County to face charges for the rape of the child in this case.
The case was investigated by the Auburn Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
The case was prosecuted by Assistant United States Attorney Matthew Hampton.
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.justice.gov/psc
Rapid City Woman Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that Rapid City, South Dakota, woman convicted of Conspiracy to Distribute a Controlled Substance was sentenced on March 25, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Susan Land, age 43, was sentenced to 36 months in custody, followed by four years of supervised release, and a $100 special assessment to the Federal Criminal Victims Fund.
Land was indicted for conspiracy to distribute methamphetamine by a federal grand jury on November 19, 2014. She pled guilty on December 4, 2015.
On September 22, 2014, Land conspired and agreed with other persons, and travelled from North Dakota, to intentionally distribute 83 grams of methamphetamine to South Dakota. Land distributed more than 200 grams of methamphetamine during the course of this conspiracy.
This case was investigated by the Unified Narcotics Enforcement Team, United States Drug Enforcement Administration, South Dakota Division of Criminal Investigation, Pennington County Sheriff’s Office, and the Rapid City Police Department. Assistant U.S. Attorney Ted L. McBride prosecuted the case.
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Pine Ridge Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a Pine Ridge, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on March 25, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Jay Dooley, age 23, was sentenced to 120 months in custody, followed by 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund. He pled guilty on December 11, 2015.
Beginning in February of 2014, Dooley obtained methamphetamine from Corey Thompson and others, which he intended to distribute within South Dakota. Dooley distributed more than 500 grams of methamphetamine during the course of this conspiracy.
This case was investigated by the Unified Narcotics Enforcement Team, United States Drug Enforcement Administration, South Dakota Division of Criminal Investigation, Pennington County Sheriff’s Office, and the Rapid City Police Department. Assistant U.S. Attorney Ted L. McBride prosecuted the case.
Dooley was immediately turned over to the custody of the U.S. Marshals Service.
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Pair Convicted on Health Care Fraud, Conspiracy ChargesRead the Press Release
ABINGDON, VIRGINIA – A pair of lab professionals who billed Medicaid, Medicare, TennCare, and a variety of other health care providers and insurance companies, were convicted yesterday of federal conspiracy and health care fraud charges following a bench trial, announced United States Attorney John P. Fishwick Jr. and Virginia Attorney General Mark R. Herring.
Beth Palin, 49, and Joseph D. Webb Jr., 55, both of Bristol, Tenn., were convicted on April 7, 2016 following a bench trial of one count each of conspiracy to commit health care fraud and health care fraud.
“These two individuals abused the healthcare system and billed programs and insurance companies for unnecessary tests for no other reason than to line their own pockets,” United States Attorney John P. Fishwick Jr. said today. “I am thankful for the work of the Virginia AG’s Office, Medicaid Fraud Control Unit and all of our law enforcement partners who worked on this case. It is important for us to keep fraud and abuse out of these very important social programs.”
“Heroin and prescription opioid addiction is touching families in every corner of the state, and Southwest Virginia has been hit as hard as anywhere,” said Attorney General Mark Herring. “It’s unconscionable that anyone would exploit this epidemic to enrich themselves on such a massive scale. Virginians are dying every single day from heroin and prescription drug overdose, and fraud schemes like this can make it harder for people who are trying to get treatment and make a change in their lives.”
“Clinical labs play a critical role in providing care for people on Medicare,” said Nick DiGiulio, Special Agent in Charge for the Office of Inspector General at the U.S. Department of Health and Human Services. “Lab professionals who aim to get rich quick by cheating patients and taxpayers, as in this case, can expect to pay a high price for their crimes.”
According to evidence presented during the bench trial by Assistant Attorney General and Special Assistant United States Attorney Janine Myatt, Webb and Palin owned Bristol Labs, which was a lab that specialized in urine drug screen testing. Bristol Labs worked with Dr. Charles Kim Wagner, a medical doctor licensed by the Drug Enforcement Administration to prescribe Suboxone. Wagner opened what purported to be a substance abuse treatment program that involved only medication assisted treatment using Suboxone in Bristol, Virginia. His practice accepted cash payment only and charged $250 for an initial visit and $100-$110 each week thereafter. Wagner’s office was located next to Bristol Labs in an adjacent office suite within the same physical building as Bristol Labs. Drug screenings were required for Wagner’s patients at each weekly visit and Wagner sent 100 percent of his patients to Bristol Labs for their drug screenings.
Although patients often paid cash for doctor’s appointments, they could use Medicare or Medicaid to pay Bristol Labs for prescriptions and the cost of urine drug screenings. The type of drug screening Wagner ordered depended solely on the method of payment. If a patient was uninsured or “self-pay,” Wagner ordered a $25 dip-stick or “quick cup” urine drug screen from Bristol Labs. However, if a patient was paying via insurance, Medicaid or Medicare, Wagner ordered two separate, automated screens performed by Bristol Labs and by another confirmation Lab in Denver, Colorado. These patients paid nothing out of pocket, however Medicare, Medicaid or their insurance company would be billed between $120-$1,800 for these tests each week. These tests were medically unnecessary and Wagner did not use the results of the tests to direct patient care.
Palin and Webb eventually opened their own addiction practice in Gate City, Virginia, called Mtn. Empire Medical Care. Palin and Webb instituted a nearly identical drug testing protocol to the one at Wagner’s practice, self-pay patients paid an extra $25 and got a quick cup test while insured patients got two automated screens which were billed to their insurance companies and paid nothing out of pocket. These expensive tests were medically unnecessary.
In total, this conspiracy fraudulently billed Virginia Medicaid, TennCare, Medicare, Aetna, Optum/United Health Care, Anthem/Blue Cross-Blue Shield of Virginia, Anthem/Blue Cross-Blue Shield of Tennessee and Cigna, $14,278,340 for medically unnecessary urine screens.
Dr. Wagner died during the course of this investigation and was therefore not charged in this matter.
The investigation of the case was conducted by Virginia Office of the Attorney General’s Medicaid Fraud Control Unit, United States Health and Human Services-Office of Inspector General, the Tennessee Bureau of Investigation, the Internal Revenue Service, the Bristol, Virginia Police Department, The Virginia State Police, the Bristol, Tennessee Police Department, the Scott County Sheriff’s Office and the United States Marshals Service. Assistant Attorney General and Special Assistant United States Attorney Janine Myatt and Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Owner of Pizza Franchises Acknowledges Submitting False Tax Return that Omitted Income from Skimmed CashRead the Press Release
BIRMINGHAM – Federal prosecutors on Thursday charged the owner and operator of dozens of pizza franchise restaurants in Alabama, Georgia and Louisiana for filing a false federal income tax return that did not include money he skimmed from his Little Caesars restaurants, announced U.S. Attorney Joyce White Vance and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Veronica Hyman-Pillot.
The U.S. Attorney’s Office charged RAMON S. ARIAS, 64, of Mountain Brook, with one count of making a false tax return. In a plea agreement reached between Arias and the government, he agrees to plead guilty to the charge, pay $224,290 in restitution to the IRS, and to cooperate with the IRS Civil Division in filing accurate amended tax returns for 2010 through 2013.
Arias owned, controlled and operated 26 to 45 Little Caesars franchises in the three states from 2010 through 2013, according to the plea agreement. The stores were incorporated under various business names, with other individuals owning percentages of the businesses, but Arias was primarily responsible for running the businesses and managing the finances, the plea agreement states.
It says Arias operated a scheme to divert cash from the gross receipts of some of the businesses, primarily two to four of the restaurants in Alabama, during the four years. Arias used a certified public accountant to prepare his business and individual income tax returns, but did not provide the accountant with any information about the skimmed money, according to the plea agreement.
The amounts of skimmed cash under-reported on Arias’ individual returns for 2010, 2011, 2012 and 2013 were $238,664, $265,413, $312,955 and $287,023, respectively, according to the plea agreement.
The maximum penalty for making a false tax return is three years in prison and a $250,000 fine.
IRS-CI investigated the case, which Assistant U.S. Attorney J. Patton Meadows is prosecuting.
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Norwegian Shipping Company Sentenced in Alabama to Pay $2.5 Million for Illegally Discharging Oil into the OceanRead the Press Release
The Norwegian shipping company DSD Shipping (DSD) was sentenced to pay a total corporate penalty of $2.5 million as a result of its convictions in Mobile, Alabama, for obstructing justice, violating the Act to Prevent Pollution from Ships (APPS), tampering with witnesses and conspiring to commit these offenses. The company was ordered to pay $500,000 of the penalty to the Dauphin Island Sea Lab Foundation to fund marine research and enhance coastal habitats in the Gulf of Mexico and Mobile Bay.
In addition, DSD was placed on a three year term of probation and was ordered to implement an environmental compliance plan to ensure the company’s vessels obeyed domestic and international environmental regulations in the future. The sentence was announced by Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division and U.S. Attorney Kenyen R. Brown for the Southern District of Alabama.
The operation of commercial marine vessels generates large quantities of waste oil, oil-contaminated waste water and garbage. International and U.S. law forbid the discharge of waste oil and garbage into the ocean and require that these vessels use pollution prevention equipment, known as an oily-water separator, to prevent the discharge of oil-contaminated waste water. Should any overboard discharges occur, they must be documented in either an oil record book or a garbage record book, logs that are regularly inspected by the U.S. Coast Guard.
The evidence demonstrated at trial that DSD operated the M/T Stavanger Blossom, a 56,000 gross ton crude oil tanker, from 2010 to 2014 without an operable oily-water separator as required by law. On Jan. 29, 2010, an internal corporate memorandum written by a vessel engineer warned DSD that the pollution prevention equipment did not work. The memo further warned that if the problem was not addressed, “some day, it might end up that someone is getting caught for polluting.” However, rather than repair or replace the oily-water separator, DSD operated the vessel illegally for the next 57 months before the conduct was identified by U.S. Coast Guard inspectors in November 2014. As the testimony at trial revealed, DSD illegally discharged approximately 20,000 gallons of oil-contaminated waste water and plastic bags containing 270 gallons of sludge into the ocean during the last two-and-a-half months of the vessel’s operation.
The evidence also established that DSD lied about these activities by maintaining fictitious record books aboard the vessel. These records omitted the illegal discharges of oil and garbage and falsely claimed that pollution prevention equipment was used when it was not. Further, when the U.S. Coast Guard examined the ship, DSD’s senior ship officers lied about the discharges and ordered their subordinates to do the same.
In court documents filed prior to sentencing, prosecutors informed the court that despite convictions for eight felony offenses, DSD continued to deny wrongdoing in Norwegian press accounts. Prosecutors also noted that previous deficiencies in the operation of pollution prevention equipment had been identified in other DSD vessels while they were in international ports.
Three senior engineering officers employed by DSD to operate the ship were also sentenced. Defendant Bo Gao, chief engineer of the vessel, and Xiaobing Chen, second engineer of the vessel, were both sentenced to six months imprisonment as a result of their conduct. Defendant Xin Zhong, fourth engineer of the vessel, was sentenced to two months imprisonment. All three also face the loss of their marine engineering license and exclusion from employment in the merchant marine. A fourth DSD employee, Daniel Paul Dancu, pleaded guilty in October 2015, and will be sentenced on April 11, 2016.
“We will continue to aggressively prosecute and hold accountable those shipping companies who flout the laws that protect our oceans and coastal waterways from harmful vessel pollution and waste,” said Assistant Attorney General Cruden. “It is fitting that a portion of this penalty will go towards repairing and protecting the Gulf coastal environment that is threatened by these illegal discharges. This egregious abuse of the seas we share as a nation and an international community must stop.”
“We are very pleased with the fines and custody sentences imposed by the court in the case today,” announced U.S. Attorney Brown. “The fine and probation imposed against DSD, and the custody sentence imposed on the engineering officers reflect the seriousness of the offenses committed against the United States and the environment. The U.S. Attorney’s Office will continue to investigate and prosecute environmental crimes. It is incumbent upon all individuals and corporations to protect our environment and the resources along the Northern Gulf of Mexico.”
“The Coast Guard will not tolerate the pollution of our marine environment,” said Rear Admiral Dave Callahan for the Eighth Coast Guard District Commander. “The individuals committing environmental crimes are putting our natural resources at risk and they must be held accountable. I am thankful for the hard work and dedication that Coast Guard Sector Mobile, the Coast Guard Investigative Service, the Department of Justice, and the Environmental Protection Agency have put into the investigation and prosecution of this case.”
“The Coast Guard Investigative Service is deeply committed to protecting our nation’s waters and ensuring that those within the commercial shipping industry are good stewards of the marine environment,” said Director Michael Berkow for the Coast Guard Investigative Service. “Sadly, although entirely preventable, pollution from vessels remains all too common. We hope the sentences in this case deter others from committing similar conduct. We are grateful to our investigative partners for their assistance in the prosecution of this case.”
“When a company fails to comply with our nation’s environmental laws, it can have a devastating effect on both public health and wildlife,” said Special Agent in Charge Andy Castro of EPA’s criminal enforcement program in Alabama. “The defendants knowingly discharged oily waste from a vessel into the open water and then tried to cover up their crimes by falsifying entries in the vessel’s log books. This successful prosecution is another example of the effective partnership between the Department of Justice, the Coast Guard and EPA to protect the environment and our natural resources.”
This case was investigated by the U.S. Coast Guard Sector Mobile, U.S. Coast Guard District Eight, the Coast Guard Investigative Service, and the EPA’s Criminal Investigations Division. Assistant U.S. Attorney Michael D. Anderson, with the U.S. Attorney’s Office for the Southern District of Alabama, and Trial Attorney Shane N. Waller, with the Department of Justice’s Environmental Crimes Section, prosecuted the case.
Northampton Man Charged with Child Exploitation OffenseRead the Press Release
BOSTON – A Northampton man was charged yesterday in U.S. District Court in Springfield with offering to distribute child pornography.
James J. Smith, 37, was charged in a complaint with one count of offering to distribute material involving the sexual exploitation of children. During an initial appearance in court yesterday, Smith was detained pending a detention hearing on April 12, 2016.
According to the complaint, on Jan. 8, 2015, a search warrant executed at Smith’s residence recovered a cell phone containing a storage card. After waiving his Miranda rights, Smith unlocked the phone and law enforcement officers found approximately 110 images of child pornography, including images of an eight-year-old girl. The phone also contained e-mail addresses and Craigslist correspondence concerning children engaged in sexually explicit conduct. Law enforcement officers recovered e-mails in which Smith offered to distribute, and did distribute, child pornography involving children aged 10 and younger as well as e-mails in which Smith offered to receive, and did receive, child pornography. Smith also sent messages in which he expressed a sexual interest in a16-year-old girl.
The charging statute provides for a minimum mandatory sentence of 15 years and no greater than 30 years in prison, up to a lifetime of supervised release and a fine of $250,000. 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Northampton Police Chief Jody Kasper; and Easthampton Police Chief Bruce McMahon, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Members of the public who have questions, concerns or information related to this case, or any information relating to the sexual exploitation of children, should call (617) 748-3274.
Niagara Falls Man Arrested on Gun ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that James Smith, 24, of Niagara Falls, NY, was arrested and charged by criminal complaint with being a felon in possession of a firearm. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that according to the complaint, on February 25, 2016, New York State Parole Officers and others conducted a search at Smith’s residence on Orleans Avenue in Niagara Falls. The defendant is under the supervision of New York State Parole following a July 2010 federal conviction and an August 2014 Niagara County Conviction.
As officers entered, Smith attempted to go into the basement. The defendant was stopped and the basement was searched. Officers recovered a Colt, .32 caliber semi-automatic handgun with a magazine loaded with two rounds of ammunition. As a result of his previous convictions, Smith is prohibited from legally possessing a firearm.
The defendant made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroder. He is being detained.
The complaint is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, and .
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
New York Man Pleads Guilty to Fake Lottery ScamRead the Press Release
BOSTON – A New York man pleaded guilty today in U.S. District Court in Boston in connection with his role in a bogus lottery scheme in which the victims were told they had won millions of dollars in lotteries but must first pay the taxes in order for their winnings to be released to them.
Wilder Vladimir Merelan, of West Hempstead, NY, 29, pleaded guilty to an Information charging him with one count of conspiracy to commit mail and wire fraud. U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for Aug. 10, 2016.
From 2012 to 2015, Merelan’s Jamaican co-conspirators solicited victims, who ranged in age from 69 to 91. The victims were told that they had won millions of dollars in a lottery but had to pay taxes on their winnings to the IRS before the funds could be released to them. Victims mailed checks or wired funds to Merelan, who kept a portion for himself and then distributed the rest as directed by his co-conspirators. Merelan was described to these victims as a “sub agent” for the IRS. Approximately 16 victims, including a Massachusetts man, sent more than $830,000 to Merelan in an effort to secure their supposed lottery winnings. Some of the funds were stopped by banks or intercepted by the U.S. Postal Service. However, Merelan received $733,999.
After depositing the checks and receiving the wire transfers into his bank accounts, Merelan withdrew cash, wired funds to individuals in the United States and Jamaica, and purchased reloadable prepaid cards, essentially draining his accounts of the funds he had received.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss, whichever is greater. 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; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Shelly Binkowski, Inspector in Charge of the Postal Inspection Service; and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
New Mexico HOPE Initiative Launches Community Education ProgramRead the Press Release
ALBUQUERQUE – Millions of Americans from coast to coast struggle daily with the negative effects of the nation’s opioid and heroin crisis, but few states are harder hit with overdose deaths than New Mexico. To tackle this growing crisis, Chancellor Paul B. Roth of UNM’s Health Sciences Center and U.S. Attorney Damon P. Martinez launched the New Mexico HOPE – Heroin and Opioid Prevention and Education – Initiative in January 2015.
This initiative is already seeing results. More people are receiving treatment for addiction, and more criminals are being prosecuted for drug trafficking. Now, those efforts will be more fully supported by a comprehensive education program.
“Drug abuse exacts a terrible toll on our community,” said Dr. Roth, a longtime emergency room physician. “This initiative is an important collaboration between our health system and law enforcement to find creative solutions to help people find their way out of the maze of drug addiction.”
“This epidemic does not discriminate. It impacts the lives of the infant born addicted to opioids, and the high school athlete who becomes addicted to opioid painkillers prescribed for an injury and later dies from a heroin overdose, and the grandparent who ends up addicted to opioid painkillers following a medical procedure and doesn’t know where to turn for help. And it impacts the lives of families who are devastated by their loved ones’ addiction and overdose deaths,” said U.S. Attorney Damon P. Martinez. “Through this Initiative, the medical and law enforcement communities are working together to bring hope to New Mexico by educating our communities about the dangers of prescription painkillers and heroin to prevent more New Mexicans from succumbing to this epidemic.”
The HOPE Initiative’s education efforts will be aimed at preventing abuse and addiction in our state’s youth, as well as helping those who are currently suffering from addiction, to find help and hope of recovery. It will also offer support for families struggling to find treatment and other resources for their loved ones who are addicted. Neighbors, coworkers, and others who feel that their safety may be jeopardized by someone’s addiction to or trafficking of opioid painkillers and heroin, can also find help and resources under this program.
UNM Health Sciences Center and the U.S. Attorney’s office, in collaboration with the Drug Enforcement Administration, Bernalillo County Opioid Accountability Initiative and Healing Addiction in our Community (HAC), a non-profit organization, will be utilizing a newly launched website, billboards, social media, the news media, and community and student education programs to reach the public with messages of prevention, treatment, public safety, and hope.
To view the website, go to hopeinitiativenm.org. Billboards are located at 15 locations in Bernalillo County, most within the vicinity of high schools. An image of the billboard and a list of the billboard locations are attached. Interested New Mexicans can follow HOPE on https://twitter.com/USAO_NM and https://www.facebook.com/usaonm/. For information on scheduling an educational event, contact [email protected]. Upcoming event schedules will be available on the website.
HOPE Billboard HOPE Billboard Locations
Mother Daughter Duo Charged in Theft SchemeRead the Press Release
PHILADELPHIA – Madeline Rosario, 25, and Maribel Nunez, 58, both of Philadelphia, PA, were charged by indictment, unsealed today, in an aggravated identity theft scheme to defraud the IRS, announced United States Attorney Zane David Memeger. Rosario is charged with conspiracy, theft of government property and aggravated identity theft. Her mother is charged with conspiracy and theft of government property.
According to the indictment, between November of 2010 and March of 2014, the defendants controlled five business accounts at Wachovia/Wells Fargo bank for the purpose of depositing fraudulently obtained United States Treasury refund checks and 3rd party refund checks. It is alleged that they conspired with others, to commit theft of government funds and knowingly converted to their own approximately 84 fraudulent tax refund U.S. Treasury checks totaling approximately $439,843.69. Rosario and Nunez allegedly opened and controlled the five business accounts at Wachovia/Wells Fargo Bank. The accounts were then used for depositing the fraudulently obtained tax refund checks.
If convicted, Rosario faces a two year mandatory minimum sentence with a statutory maximum sentence of 15 years and a $300 special assessment; Nunez faces a maximum statutory sentence of 15 years and a $200 special assessment. Both defendants could also face fines and a period of supervised release.
The case was investigated by IRS Criminal Investigations and the FBI. It is being prosecuted by Assistant United States Attorney Maureen McCartney.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Middletown Man Sentenced to 17 Years in Prison for Robbery Spree in Orange and Sullivan CountiesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOHN CREWS, JR., was sentenced today in White Plains federal court to a prison term of 17 years for his participation in a series of armed robberies in the summer of 2013. CREWS pled guilty on September 21, 2015, to conspiring to commit armed robberies and brandishing a firearm in the course of those robberies. CREWS pled guilty before U.S. District Judge Vincent L. Briccetti, who imposed today’s sentence.
According to the allegations contained in the Indictment, and information adduced during the Court proceedings:
In the summer of 2013, CREWS and others carried out a string of armed robberies in Orange County and Sullivan County. In a span of approximately six weeks, Crews participated in 10 robberies. He and others robbed two gas stations, a bar, a bakery, three stores, and a restaurant. They also carried out two home invasions. The robberies were in Middletown, Wallkill, and Monticello. CREWS brandished a gun during each of the robberies.
* * *
In addition to his prison term, CREWS, 28, of Middletown, New York, was sentenced to three years of supervised release and was ordered to pay restitution in the amount of $5,577 to various establishments that he robbed.
Mr. Bharara praised the outstanding investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York State Police, the City of Middletown Police Department, the Town of Wallkill Police Department, the Village of Monticello Police Department, the Orange County District Attorney’s Office, and the Sullivan County District Attorney’s Office.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Michael Gerber and Lauren Schorr are in charge of the prosecution.
Mexican National Arrested on Federal Heroin and Cocaine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Diego Mauricio Curiel-Cervantes, 22, a Mexican national, made his initial appearance today in federal court in Albuquerque, N.M., on a criminal complaint charging him with heroin and cocaine trafficking offenses. Curiel-Cervantes remains in federal custody pending a preliminary hearing and a detention hearing scheduled for April 11, 2016.
Curiel-Cervantes was arrested early this morning after the DEA agents allegedly found 1.30 gross kilograms (2.6 pounds) of heroin and 3.45 gross kilograms (7.59 pounds) of cocaine concealed in his luggage at the Greyhound Bus Station in Albuquerque.
If convicted on the charges in the criminal complaint, Curiel-Cervantes faces a statutory penalty of a mandatory minimum of ten years and a maximum of life in federal prison. Charges in criminal complaint are merely accusations, and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.
The New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with Bernalillo County, the Albuquerque City Council, DEA, Healing Addiction in our Community (HAC) and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Methamphetamine Trafficker Convicted in Federal CourtRead the Press Release
G. F. Peterman, III, Acting United States Attorney for the Middle District of Georgia, announced the conviction today of Jose Alberto Sandoval Moya of Douglas, Coffee County, Georgia of conspiracy to possess with the intent to distribute methamphetamine weighing more than 50 grams. The verdict was returned in United States District Court in Albany, Georgia, before the Honorable W. Louis Sands, Senior United States District Judge. This conviction exposes Sandoval Moya to a potential range of sentence of a mandatory minimum term of imprisonment of ten (10) years up a maximum possible term of imprisonment of life.
Evidence presented during the trial showed that Sandoval Moya conspired together with Raymond Riviera Cortez, also of Douglas, Georgia, and Corrinne Gillis of Fitzgerald, Georgia, to possess with the intent to distribute methamphetamine. The evidence further revealed that Sandoval Moya arranged for Gillis to travel to Mexico on three occasions to bring methamphetamine to South Georgia for distribution. The conspiracy concluded when Gillis was arrested at the US/Mexico Border at the Matamoros, Mexico/Brownsville, Texas crossing in possession of over 17 kilograms (over 43 pounds) of 100% pure methamphetamine, the largest seizure ever made at that point of entry into this country. The drug had been hidden in the tires of the vehicle in order to smuggle it past authorities at the border. Each tire contained between 10 and 12 pounds of methamphetamine.
Sentencing for Mr. Moya should take place in approximately 60 days.
“The quantity of this seizure and the testimony at trial regarding the smuggling of other amounts on previous occasions show that Mr. Moya was without doubt a major source of methamphetamine in South Georgia. This conviction will remove a substantial supplier from the illegal drug stream in our state,” said Acting United States Attorney G. F. “Pete” Peterman, III.
The case was investigated by the Georgia Bureau of Investigation, Sylvester Regional Office, the Sheriff’s Offices of Ben Hill and Coffee County, Georgia and by Department of Homeland Security. It was prosecuted by AUSA Leah McEwen.
Inquiries regarding the case should be directed to Pamela Lightsey, Public Affairs Specialist, United States Attorney’s Office at (478) 621-2603.
Message to Potential Tax Cheats from Federal Prosecutors: Tax Crimes Result in Criminal Prosecution, Lengthy Prison Sentences and FinesRead the Press Release
CHARLOTTE, NC - With the deadline for filing income tax returns rapidly approaching, Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina, and Thomas J. Holloman, III, Special Agent in Charge, Charlotte Field Office, IRS Criminal Investigation, jointly announce recent tax fraud prosecutions and sentencings, and deliver a powerful warning to those who are thinking about breaking the law by committing tax crimes.
“During this time of the year, IRS will receive millions of tax returns from honest taxpayers who file their returns on time and pay taxes they owe,” said U.S. Attorney Rose. “Today’s warning is not for them. Today’s warning is for tax cheats who break tax laws and abuse our tax system. If you belong in this category, pay close attention. My office will hold accountable anyone who participates in a tax fraud scheme that puts an added tax burden on honest taxpayers and drains our public finances.”
“Tax fraud exists in many forms, from unscrupulous tax preparers filing false and fraudulent returns, to identity thieves, and to those that go complex lengths to hide their income and evade paying the taxes they owe. If you are considering engaging in this criminal activity, you will be caught.” said Special Agent in Charge Holloman. “There is no offseason for IRS Criminal Investigation, as we continue to engage in a year-round effort to investigate potential criminal violations of the Internal Revenue Code and other financial related crimes, in a manner that fosters confidence in the tax system and compliance with the laws. IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves through tax fraud schemes.”
On March 16, 2016, Frank Alton Moody, II, an operator of Charlotte-area payroll services company CenterCede Services, Inc., was indicted for failing to pay more than $9 million in federal payroll taxes to the IRS that had been withheld on behalf of CenterCede’s clients. According to the indictment which was unsealed yesterday, Moody instructed and supervised others to prepare, sign and file employer’s quarterly federal tax return, Forms 941 and thereafter did not remit payment of taxes reflected. (3:16-cr-00070).
The prosecution of Moody for his role in failing to pay over employment taxes is just one example of our district’s commitment to prosecuting tax cheats including those who cheat on their own taxes, those who prepare false tax returns for others, and those who file fraudulent tax returns using stolen identity information.
TAX EVASION AND FILING FALSE TAX RETURNS.
Over the last year, the U.S. Attorney’s Office has prosecuted and convicted numerous individuals for omitting income from their individual tax returns, and defendants have received substantial sentences for tax charges, ranging from several years in prison to home confinement. For example, the following individuals were sentenced for lying to the IRS about their taxable income:
Amy Hilty (3:15-cr-00233), an accountant and former resident of Stanley, N.C., was sentenced to 18 months in prison in February 2016. Hilty pleaded guilty to tax evasion for hiding more than $520,000 in personal income from the IRS and failing to file tax returns for years 2008 through 2011. Hilty also pleaded guilty to wire fraud.
Jarrett Mitchem (1:14-cr-00035), a resident of Hendersonville, N.C. maintained a UBS bank account with a balance of approximately $4M and failed to report the earnings from the foreign investments on his 2005 - 2008 tax returns. He was sentenced in February 2016 to nine months in prison and three months of home confinement.
Sammie Marks (3:15-cr-00125), a resident of Matthews, N.C., owned and operated a metal and salvage business and failed to report more than $1.1 million of income he received from his business during years 2009 through 2013. Marks was sentenced in December 2015 to one year and one day in prison.
Janice Terry-Kidd (3:14-cr-00243), a resident of Huntersville, N.C., embezzled approximately $526,000.00 from her employer, Wilburn Auto Body, from 2008 to 2013. As a Human Resource Officer responsible for payroll, Terry-Kidd used the social security number of a previous employee to create fraudulent payroll checks and direct them to be deposited into her personal bank account. In addition, Terry-Kidd failed to report income from the embezzled payroll checks on her own personal income tax return resulting in approximately $106,000.00 of tax due and owing. Terry-Kidd was sentenced in November 2015 to 33 months in prison.
Teng Lor (3:15-cr-00080), a resident of Matthews, N.C., and the owner of T&C Equipment, Inc. and LOR Enterprises, Inc. which operated Laundromats in the Charlotte area concealed gross receipts and taxable income of more than $545,000 from the IRS for the 2010 through 2012 years. Lor was sentenced in October 2015 to six months in prison and six months of home confinement.
Mark Le (3:14-cr0010), a Huntersville physician, hid approximately $2.4 million in personal income from the IRS in 2009 and 2010 by falsely claiming that certain payments were business expenses of his medical practice. Le used these funds to purchase and construct a $2.4 million 8000-square foot residence on Lake Norman. Le, who pled guilty to tax evasion and health care fraud, was sentenced to 18 months in prison in September 2015.
FRAUDULENT RETURN PREPARERS
Our office diligently works to investigate and prosecute unscrupulous tax return preparers. Examples of prosecutions of tax return preparers during the last year include:
Malik Shropshire (3:15-cr-00025), a resident of Charlotte, he was sentenced in February 2016 to 51 months in prison for filing false tax returns and lying on a loan application. Shropshire worked as a tax return preparer and aided and assisted in the preparation of hundreds of false tax returns, that included, among other things, false Schedule C businesses, false dependents, and false refundable education credits.
Fitzroy Lawrence (3:15-cr-00057), a resident of Charlotte, he was sentenced in February 2016 to 27 months in prison for filing false tax returns. Lawrence aided and assisted in the preparation of hundreds of false tax returns which were filed with the IRS, seeking fraudulent tax refunds totaling approximately $2.6 million.
STOLEN IDENTITY REFUND FRAUD
In addition to prosecuting tax evaders and fraudulent tax return preparers, our office also investigates and prosecutes those individuals who steal the identities of taxpayers to file fraudulent tax returns. Examples include:
Yolanda Tiess Kitson (1:13-cr-00031), was sentenced to 72 months in prison and ordered to pay restitution of more than $3.9 million for her role in a fraudulent tax refund scheme involving using stolen identities to obtain fraudulent tax refunds.
Cara Michelle Banks (1:15-cr-00032) pleaded guilty for her role in the same fraudulent tax refund scheme as Kitson and is awaiting sentencing.
Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims. Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated identity theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.
The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against a wide range of tax schemes ranging from identity theft to return preparer fraud. Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice to shutdown scams and to prosecute the criminals behind them. The IRS has issued its annual “Dirty Dozen” which lists common tax scams that taxpayers may encounter, particularly during filing season. Taxpayers are urged look out for, and to avoid, the following common schemes:
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Identity Theft
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Phone Scams
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Phishing
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Return Preparer Fraud
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Offshore Tax Avoidance
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Inflated Refund Claims
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Fake Charities
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Falsely Padding Deductions on Returns
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Excessive Claims for Business Credits
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Falsifying Income To Claim Credits
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Abusive Tax Shelters
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Frivolous Tax Arguments
Education is the best way to avoid these common schemes. To learn more about the Dirty Dozen scams and for help with recognizing and avoiding abusive tax schemes, the IRS offers educational material at www.irs.gov. Suspected tax fraud can be reported to the IRS using Form 3949-A found on the IRS.gov website.
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Member of International Child Exploitation Conspiracy Sentenced to 21 Years in PrisonRead the Press Release
A member of an international child exploitation conspiracy was sentenced to 21 years in prison today for his participation in two websites that were operated for the purpose of coercing and enticing minors as young as eight years old to engage in sexually explicit conduct on web camera.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Section Chief Calvin A. Shivers of the FBI’s Violent Crimes Against Children Section (VCACS) made the announcement.
Brian K. Hendrix, 42, of Mt. Juliet, Tennessee, was sentenced by U.S. District Judge T.S. Ellis III of the Eastern District of Virginia, who also ordered Hendrix to serve a 10 year term of supervised release. Hendrix will also be required to register as a sex offender. In January, Hendrix was convicted at trial by a federal jury on child pornography charges. The investigation, Operation Subterfuge, identified more than 300 minor victims in the United States and an estimated 1,600 minor victims were lured to the websites.
According to evidence presented at trial, Hendrix’s co-conspirators created false profiles on social networking sites, such as YouTube, posing as young teenagers to lure children to the websites they controlled. Once children were on the conspirators’ websites, the conspirators, including Hendrix, showed the children pre-recorded videos of prior minor victims, often engaging in sexually explicit conduct, to make the new victims think that they were chatting with another minor. Using these videos, Hendrix and co-conspirators coerced and enticed children to engage in sexually explicit activity on their own web cameras, which the website automatically recorded. Conspirators earned points based on their contribution to the success of website objectives, which allowed them access to the sexually exploitative videos of children. Several of these sexually exploitative videos were found on digital devices belonging to Hendrix. Law enforcement agencies have disabled both websites.
Trial Attorney Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Tracy Doherty-McCormick of the Eastern District of Virginia prosecuted the case. CEOS Trial Attorney Ravi Sinha assisted with the prosecution.
VCACS special agents led the investigation with the assistance of the FBI’s Operation Rescue Me and the FBI’s Digital Analysis and Research Center. The South Africa Police Service, Family Violence, Child Protection and Sexual Offenses, Gauteng; Dutch Police Service Agency, KLPD; Royal Canadian Mounted Police, National Child Exploitation Coordination Centre; and the Australian Federal Police, Child Protection Operations, Sydney were active partners in the investigation. The U.S. Attorney’s Office of the Middle District of Tennessee contributed to the investigation and the prosecution.
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 U.S. Attorneys’ Offices and 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.justice.gov/psc.
Maryland Man Sentenced to Prison for Conspiracy to Commit Bank FraudRead the Press Release
ALEXANDRIA, Va. – Kyle Cary, 25, of Hyattsville, Maryland, was sentenced today to 40 months in prison and three years of supervised release for conspiracy to commit bank fraud for his role in a five-year check fraud and identity theft conspiracy.
Cary pleaded guilty on January 8. As detailed in the below chart, seven co-conspirators were previously sentenced to significant prison terms for their roles in this same conspiracy.
According to statements of fact filed with the plea agreements, Ray Ekobena and his younger brother, Stefan Ekobena, printed fraudulent checks using victims’ bank account information. The Ekobenas obtained victims’ bank account information by enlisting bank tellers and other insiders who had access to sensitive personal information through their employment. The Ekobenas also employed a network of recruiters. One such recruiter was Cary (aka Hugo Stacks), who would recruit bank account holders to provide him with their debit card, the PIN for the debit card, and other information which Cary would then provide to his co-conspirators via middlemen such as Gani Cole and Rodney Hardy. Co-conspirators such as Jerome Johnson, Deallto Davis and Alan Lamin also furthered the conspiracy by depositing the fraudulent checks into bank accounts under false names and withdrawing the resulting funds before the banks discovered the fraud.
In total, the conspiracies victimized over 200 individuals and caused an actual loss amount of $712,231. Victims include well-known small businesses and charities, including the Leukemia & Lymphoma Society.
Name
Age
Hometown
Sentencing Information
Ray Ekobena
27
Alexandria
Sentenced Nov. 6, 2015 to 104 months in prison and three years of supervised release. Ordered to forfeit $712,231.22 and pay that amount in restitution.
Stefan Ekobena
24
Atlanta, Georgia
Sentenced Nov. 6, 2015 to 66 months in prison and three years of supervised release. Ordered to forfeit $199,808.29 and pay that amount in restitution.
Rodney Hardy
25
Hyattsville, Maryland
Sentenced Nov. 6, 2015 to 30 months in prison and three years of supervised release. Ordered to forfeit $20,618.41 and pay that amount in restitution.
Jerome Johnson
32
Washington, D.C.
Sentenced Dec. 4, 2015 to 30 months in prison and three years of supervised release. Ordered to forfeit $100,000.00 and pay $19,091.30 in restitution.
Deallto Davis
20
Washington, D.C.
Sentenced on Dec. 4, 2015 to 6 months in prison and three years of supervised release. Ordered to forfeit $7,678.24 and pay $60,954.75 in restitution.
Gani Cole
27
Bryans Road, Maryland
Sentenced on April 1, 2016 to 30 months in prison and three years of supervised released. Ordered to forfeit $5,247.48 and pay that amount in restitution.
Kyle Cary
25
Hyattsville, Maryland
Sentenced today to 40 months in prison and three years of supervised released. Ordered to forfeit $78,000.00 and pay $18,906.27 in restitution.
Alan Lamin
25
Washington, D.C.
Sentenced July 8, 2015 to 54 months in prison and three years of supervised release. Ordered to pay $124,640 in restitution.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Maria Kelokates, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service (USPIS); Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; and Colonel Edwin C. Roessler Jr., Chief of the Fairfax County Police Department, made the announcement after sentencing by U.S. District Judge Claude M. Hilton. Assistant U.S. Attorney Kellen S. Dwyer and Special Assistant U.S. Attorney Joseph V. Longobardo prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-180 and 1:15-cr-327.
Manhattan U.S. Attorney Announces $1.2 Billion Settlement of Its Claims Against Wells Fargo Bank, N.A., for Improper Mortgage Lending PracticesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Julián Castro, Secretary of the U.S. Department of Housing and Urban Development (“HUD”), Benjamin C. Mizer, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division, Brian J. Stretch, United States Attorney for the Northern District of California, and David A. Montoya, Inspector General of HUD (“HUD-OIG”), announced today that the United States has settled civil mortgage fraud claims against WELLS FARGO BANK, N.A. (“WELLS FARGO” or the “Bank”), and WELLS FARGO executive KURT LOFRANO (“LOFRANO”), stemming from WELLS FARGO’s participation in the Federal Housing Administration (“FHA”) Direct Endorsement Lender Program. In the settlement, WELLS FARGO agreed to pay $1.2 billion and admitted, acknowledged, and accepted responsibility for, among other things, certifying to HUD, during the period from May 2001 through December 2008, that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the Government having to pay FHA insurance claims when certain of those loans defaulted. The agreement resolves the United States’ civil claims in its lawsuit in the Southern District of New York, as well as an investigation conducted by the U.S. Attorney’s Office for the Southern District of New York regarding WELLS FARGO’s FHA origination and underwriting practices subsequent to the claims in its lawsuit, and an investigation conducted by the U.S. Attorney’s Office for the Northern District of California into whether American Mortgage Network, LLC (“AMNET”), a mortgage lender acquired by WELLS FARGO in 2009, falsely certified and submitted ineligible residential mortgage loans for FHA insurance.
The settlement was approved today by U.S. District Judge Jesse M. Furman.
Manhattan U.S. Attorney Preet Bharara said: “Today, Wells Fargo, one of the biggest mortgage lenders in the world, has been held responsible for years of reckless underwriting, while relying on government insurance to deal with the damage. Wells Fargo has long taken advantage of the FHA mortgage insurance program, designed to help millions of Americans realize the dream of home ownership, to write thousands and thousands of faulty loans. Driven to maximize profits, Wells Fargo employed shoddy underwriting practices to drive up loan volume, at the expense of loan quality. Even though Wells Fargo identified through internal quality assurance reviews thousands of problematic loans, the Bank decided not to report them to HUD. As a result, while Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust. With today’s settlement, Wells Fargo has finally resolved the years-long litigation, adding to the list of large financial institutions against which this Office has successfully pursued civil fraud prosecutions.”
HUD Secretary Julián Castro said: “This Administration remains committed to holding lenders accountable for their lending practices. The $1.2 billion settlement with Wells Fargo is the largest recovery for loan origination violations in FHA’s history. Yet, this monetary figure can never truly make up for the countless families that lost homes as a result of poor lending practices.”
Principal Deputy Assistant Attorney General Benjamin C. Mizer said: “This settlement is another step in the Department of Justice’s continuing efforts to hold accountable FHA approved lenders that unlawfully submitted false claims at the expense of American homeowners and taxpayers. In addition to today’s resolution with Wells Fargo, the department has pursued similar misconduct by numerous other lenders, returning more than $4 billion to the FHA fund and the Treasury and filing suit where appropriate. We remain committed to protecting the public fisc from all who seek to abuse it, whether they do business on Wall Street or Main Street.”
Northern District of California U.S. Attorney Brian Stretch said: “Misconduct in the mortgage industry helped lead to a destructive financial crisis that spanned the globe. American Mortgage Network’s origination of FHA-insured loans that did not comply with Government requirements also caused major losses to the public fisc. Today’s settlement demonstrates the Department of Justice’s resolve to pursue remedies against those who engaged in this type of misconduct.”
HUD Inspector General David A. Montoya said: “This matter is not just a failure by Wells Fargo to comply with federal requirements in FHA’s Direct Endorsement Lender program – it’s a failure by one of our trusted participants in the FHA program to demonstrate a commitment to integrity and to ordinary Americans who are trying to fulfill their dreams of homeownership.”
According to the Second Amended Complaint filed in Manhattan federal court:
WELLS FARGO has been a participant in the Direct Endorsement Lender program, a federal program administered by FHA.As a Direct Endorsement Lender, WELLS FARGO has the authority to originate, underwrite, and certify mortgages for FHA insurance.If a Direct Endorsement Lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder or servicer of the loan may submit an insurance claim to HUD for the outstanding balance of the defaulted loan, along with any associated costs, which HUD must then pay.Under the Direct Endorsement Lender program, neither FHA nor HUD reviews a loan for compliance with FHA requirements before it is endorsed for FHA insurance.Direct Endorsement Lenders are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance and maintaining a quality control program that can prevent and correct any deficiencies in their underwriting.The quality control program requirements include conducting a full review of all loans that go 60 days into default within the first six payments, known as “early payment defaults”; taking prompt and adequate corrective action upon discovery of fraud or serious underwriting problems; and disclosing to HUD in writing all loans containing evidence of fraud or other serious underwriting deficiencies.WELLS FARGO failed to comply with these basic requirements.
First, between at least May 2001 and October 2005, WELLS FARGO, the largest HUD-approved residential mortgage lender, engaged in a practice of reckless underwriting of its retail FHA loans, all the while knowing that it would not be responsible when the defective loans went into default.To maximize its loan volume (and profits), WELLS FARGO elected to hire temporary staff to churn out and approve an ever increasing quantity of FHA loans, but neglected to provide this inexperienced staff with proper training.At the same time, WELLS FARGO’s management applied pressure on its underwriters to approve more and more FHA loans.The Bank also imposed short turnaround times for deciding whether to approve the loans, employed lax underwriting standards and controls, and paid bonuses to underwriters and other staff based on the number of loans approved.Predictably, as a result, WELLS FARGO’s loan volume and profits soared, but the quality of its loans declined significantly. Yet, when WELLS FARGO’s senior management was repeatedly advised by its own quality assurance reviews of serious problems with the quality of the retail FHA loans that the Bank was originating, management failed to implement proper and effective corrective measures, leaving HUD to pay hundreds of millions of dollars in claims for defaulted loans.
Second, WELLS FARGO failed to self-report to HUD the bad loans that it was originating, in violation of FHA program reporting requirements.During the period 2002 through 2010, HUD required Direct Endorsement Lenders to perform post-closing reviews of the loans that they originated and to report to HUD in writing loans that contained fraud or other serious deficiencies.This requirement provided HUD with an opportunity to investigate the defective loans and request reimbursement for any claim that HUD had paid or request indemnification for any future claim, as appropriate.During this nine-year period, WELLS FARGO, through its post-closing reviews, internally identified thousands of defective FHA loans that it was required to self-report to HUD, including a substantial number of loans that had gone into “early payment default.”However, instead of reporting these loans to HUD as required, WELLS FARGO engaged in virtually no self-reporting during the four-year period from 2002 through 2005, and only minimal self-reporting after 2005.
In his capacity as Vice President of Credit-Risk – Quality Assurance at WELLS FARGO, LOFRANO executed on WELLS FARGO’s behalf the annual certifications required by HUD for the Bank’s participation in the Direct Endorsement Lender program for certain years. LOFRANO also organized and participated in the working group responsible for creating and implementing WELLS FARGO’s self-reporting policies and procedures. In contravention of HUD’s requirements, that group failed to report to HUD loans that WELLS FARGO had internally identified as containing material underwriting findings. Moreover, LOFRANO received WELLS FARGO quality assurance reports identifying thousands of FHA loans with material findings – very few of which WELLS FARGO reported to HUD.
* * *
As part of the settlement, WELLS FARGO has admitted, acknowledged, and accepted responsibility for, among other things, the following conduct:During the period from May 2001 through on or about December 31, 2008, WELLS FARGO submitted to HUD certifications stating that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the Government having to pay FHA insurance claims when certain of those loans defaulted.From May 2001 through January 2003, WELLS FARGO’s quality assurance group conducted monthly internal reviews of random samples of the retail FHA mortgage loans that the Bank had already originated, underwritten, and closed which identified for most of the months that in excess of 25 percent of the loans, and in several consecutive months, more than 40 percent of the loans, had a material finding.For a number of the months during the period from February 2003 through September 2004, the material finding rate was in excess of 20 percent. A “material” finding was defined by WELLS FARGO generally as a loan file that did not conform to internal parameters and/or specific FHA parameters, contained significant risk factors affecting the underwriting decision, and/or evidenced misrepresentation.
WELLS FARGO also admitted, acknowledged, and accepted responsibility for the following additional conduct:Between 2002 and October 2005, WELLS FARGO made only one self-report to HUD, involving multiple loans.During that same period, the Bank identified through its internal quality assurance reviews approximately 3,000 FHA loans with material findings.Further, during the period between October 2005 and December 2010, WELLS FARGO only self-reported approximately 300 loans to HUD.During that same period, WELLS FARGO’s internal quality assurance reviews identified more than 2,900 additional FHA loans containing material findings.The Government was required to pay FHA insurance claims when certain of these loans that WELLS FARGO identified with material findings defaulted.
LOFRANO admitted, acknowledged, accepted responsibility for, among other things, the following matters in which he participated:From January 1, 2002, until December 31, 2010, he held the position of Vice President of Credit Risk – Quality Assurance at WELLS FARGO; in that capacity, he supervised the Decision Quality Management group; in 2004, he was asked to organize a working sub-group to address reporting to HUD; in or about October 2005, he organized a working group that drafted WELLS FARGO’s new self-reporting policy and procedures; and during the period October 2005 through December 31, 2010, based on application of the Bank’s new self-reporting policy and by committee decision, WELLS FARGO did not report to HUD the majority of the FHA loans that the Bank’s internal quality assurance reviews had identified as having material findings.
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Mr. Bharara and Mr. Stretch thanked HUD’s Office of General Counsel, HUD-OIG, and the Commercial Litigation Branch of the U.S. Department of Justice’s Civil Division for their extraordinary assistance with the prosecution and settlement of this case.
This case against WELLS FARGO is the latest in a string of civil fraud lawsuits brought by this Office since May 2011 alleging fraudulent lending practices by residential mortgage lenders. In addition to WELLS FARGO, this Office has pursued claims against Citi Mortgage (a subsidiary of Citibank), Flagstar Bank, Deutsche Bank (and a number of its subsidiaries), Countrywide, Bank Of America (“BOA”), former BOA executive Rebecca Mairone, Golden First Mortgage Corp. (“Golden First”), former Golden First owner David Movtady, Allied Home Mortgage Corp. (“Allied”), and former Allied executives Jim Hodge and Jeanne Stell.
Assistant U.S. Attorneys Jeffrey S. Oestericher, Christopher B. Harwood, Rebecca S. Tinio, Caleb Hayes-Deats, and Dominika Tarczynska are in charge of the case.
Man Sentenced to 15 Years in Prison for Producing Sexually Explicit Photos of 11-Year-Old BoyRead the Press Release
Assistant U. S. Attorney Alexandra Foster (619) 546-6735
NEWS RELEASE SUMMARY – April 8, 2016
SAN DIEGO – James Murphy, a retiree living in San Diego, was sentenced today to 15 years in prison for taking sexually explicit photographs of an 11-year-old boy at a Tijuana orphanage.
According to the plea agreement, Murphy, 63, traveled to Tijuana, Mexico from San Diego on November 19, 2015, supposedly to participate in humanitarian work at an orphanage in Mexico. While there, he took sexually explicit pictures of the boy and shared pornographic photos with him. These encounters occurred inside a motor home, which Murphy used as his sleeping quarters while staying at the orphanage in Mexico.
During the sentencing hearing, U.S. District Judge Cathy Ann Bencivengo admonished the defendant for stealing a child’s innocence - which he will never be able to regain. She added her concern that the defendant was preying on children for his own sexual satisfaction.
“For at least the next 15 years, children will be safe from the clutches of this predator,” said U.S. Attorney Laura Duffy. “We will do everything possible to protect vulnerable children wherever they may be.”
“Justice was served today as a serial child predator was sentenced to 15 years in federal prison,” said Dave Shaw, special agent in charge for HSI San Diego. “While we are satisfied and relieved with this sentencing, we will not forget the young victims now left with permanent emotional and physical scars. HSI will continue its tireless work with our law enforcement partners around the world to seek out and bring justice to those who mercilessly exploit children.”
DEFENDANT Case Number: 15CR3175-JM
James Murphy Age: 63
SUMMARY OF CHARGES
Count One
Use of a Child to Produce a Sexually Explicit Visual Depiction, in violation of Title 18, U.S. code Sec. 2251(c)(1).
AGENCY
Immigration and Customs Enforcement’s Homeland Security Investigations
Justice Department Sues to Stop Mississippi Tax Return Preparer from Preparing Federal Tax Returns for OthersRead the Press Release
Return Preparer in De Kalb, Mississippi, Allegedly Overstated Refunds through
Fictitious or Exaggerated Business and Farm Losses and Tax CreditsChristopher Chamberlin, a tax return preparer in De Kalb, Mississippi, has prepared income tax returns for customers that fraudulently overstate the customers’ refunds, according to a civil complaint filed by the Justice Department today. The complaint asks the U.S. District Court for the Southern District of Mississippi to permanently bar Chamberlin from preparing tax returns for anyone other than himself.
According to the complaint, Chamberlin is the sole proprietor of C&T Services LLC, located in De Kalb. The complaint alleges that Chamberlin prepared returns that fraudulently overstated refunds by reporting fictitious or exaggerated expenses on Schedule C, Profit or Loss from Business (Sole Proprietorship) and Schedule F, Profit or Loss from Farming. The falsely claimed Schedule C and Schedule F expenses in turn generated losses that purportedly qualified Chamberlin’s customers to receive or increase the earned income tax credit (EITC) or to otherwise create or maximize refunds, according to the complaint. Based on audit adjustments the Internal Revenue Service (IRS) has made to tax returns prepared and filed by Chamberlin for tax years 2012 and 2013, the suit alleges, the United States estimates that the defendant’s conduct may have cost the U.S. Treasury over $1 million for those years alone.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Opposes Canadian Pacific’s Petition to Establish Voting TrustRead the Press Release
Canadian Pacific’s Proposed Voting Trust Structure Risks Irreversibly Harming Competition
The Department of Justice filed a reply today in opposition to Canadian Pacific Railway Limited’s (“CPRL”) petition for a declaratory order regarding use of a voting trust pending the Surface Transportation Board’s (“STB”) review of a potential merger between Canadian Pacific Railway Company (“CP”) and Norfolk Southern Railway Company (“NS”).
The reply states that the proposed voting trust would fail to preserve the independence of the merging railroads during the pendency of the transaction’s regulatory review and would risk harm to current and future competition. It urges the STB to reject the proposed voting trust structure or, in the alternative, to deny the request for a declaratory order.
“Canadian Pacific’s voting trust proposal would compromise Norfolk Southern’s independence and effectively combine the two railroads prior to completion of the STB’s review,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “That makes no sense. We urge the STB to preserve its ability to review the impact of the proposal on competition and consumers before Canadian Pacific starts scrambling the eggs.”
On March 2, 2016, CPRL, the holding company that owns CP, petitioned the STB for a declaratory order approving a proposed voting trust structure pending the STB’s review of a merger between CP and NS. Under the proposed voting trust structure, CPRL would acquire NS, CP’s stock would be placed in trust, and CP’s current CEO would become CEO of NS. As explained in the filing, this proposed voting trust structure fails under each prong of the STB’s regulatory requirements.
The proposal fails to preserve the independence of NS and CP. In addition, both CP and NS will have the economic incentives and the ability to align their business strategies before a review of the transaction. Finally, the proposal would also make it difficult, if not impossible, to effectuate a successful divestiture if the STB were to reject the merger applications.
The STB is an independent agency. The Administrative Procedure Act provides the STB discretion to issue declaratory orders to terminate a controversy or remove uncertainty.
Jury finds Berkeley County man guilty of stalking ex-girlfriendRead the Press Release
CLARKSBURG, WEST VIRGINIA – A federal jury returned a guilty verdict today convicting John Glenn Bartley, 56, of Inwood, West Virginia, of multiple federal stalking charges, United States Attorney William J. Ihlenfeld, II, announced.
Evidence presented at trial indicated that Bartley harassed his former girlfriend by mailing indecent photographs of her to others. Specifically, after the victim ended the relationship with Bartley, Bartley mailed lewd photographs of the victim to her brother, to her ex-husband, and to prior and prospective employers of the victim.
Following a three day trial, a jury found Bartley guilty of three counts of “Stalking” and one count of “Interstate Violation of a Protective Order.” He faces up to five years in prison and a fine of up to $250,000 on each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Michael Stein and Sarah Montoro prosecuted the case on behalf of the government. The Federal Bureau of Investigation led the inquiry.
U.S. District Judge Irene M. Keeley presided.
Jury Convicts Two in Identity Theft and Illegal Employment ConspiracyRead the Press Release
HOUSTON - A federal jury in Houston has convicted two El Salvadorian nationals both residing in Houston on all counts as charged in a conspiracy to employ 10 or more unauthorized aliens within a 12-month period, announced U.S. Attorney Kenneth Magidson.
The federal jury sitting in Houston returned guilty verdicts against Rudy Alexander Martinez, 36, and Israel Arquimides Martinez, 44, this afternoon following a two-week trial and approximately six hours of deliberation. Both were convicted of the conspiracy as well as employing unauthorized aliens, encouraging and inducing undocumented aliens to come to reside in the United States and conspiracy to do same as well as aggravated identity theft.
The jury heard that both defendants were employees of a waste disposal company and worked at one of the company’s locations in Houston. Rudy Martinez was a commercial route manager, while Israel Martinez was the residential operations lead driver. From on or around July 30, 2008, and continuing until on or around April 24, 2012, the defendants conspired to hire and continued to employ aliens they knew were unauthorized to work in the U.S. at the company.
Federal law requires employers to hire only U.S. citizens and aliens who are authorized to work here. However, the defendants and others hired manual laborers with little or no regard to their legal work status. Internal audits were conducted, after which the defendants and co-conspirators failed to take corrective measures to ensure the employing company hired workers authorized to work in the country. They also continued to employ undocumented aliens after receiving information, in some cases from the aliens themselves, which would indicate the person was not authorized to work in the U.S.
The jury also heard that the defendants encouraged undocumented aliens to obtain false documentation and assigned false identities to undocumented aliens. In some cases, they also provided the undocumented aliens with employment documents related to the false identity the aliens assumed so they could remain employed as helpers at the waste disposal company’s Houston location.
The individuals whose identities were assumed did not authorize or even know their identities were assumed by these undocumented aliens at the direction and encouragement of the conspirators. These individuals were often former employees of the companies, or individuals who had applied for employment but were never hired. Their information was stolen from documentation and records they executed in connection with their application for employment. The defendants and their co-conspirators would enter these individuals’ information into the payroll system and the undocumented alien would receive a paycheck for their work under the other individual’s name.
On or around Jan. 31, 2012, the defendants and their co-conspirators “fired” at least 10 helpers they knew to be unauthorized aliens purportedly because the aliens failed to supply documentation establishing they were legally present and authorized to work in the U.S. During the “termination” process, the defendants informed and encouraged unauthorized aliens to assume the identity of actual U.S. citizens or individuals who had legal status to reside and work here. They also informed undocumented aliens they could come back to work if they got “good papers” belonging to other individuals. Following their termination, the defendants and their co-conspirators assigned false identities to the terminated aliens and assisted them with obtaining related identifiers to use for employment and payroll purposes. The defendants then “rehired” at least 10 aliens under their assumed identities.
For conspiracy to encourage and induce aliens to reside or encouraging or inducing aliens to reside in the United States, both face up to 10 years in prison and a possible $250,000 fine. For the unlawful employment of unauthorized aliens charges or the conspiracy to so, they also face up to five years in prison as well as a $250,000 fine. In addition, the conviction of aggravated identity theft also carries a mandatory 24 months which must be served consecutively to any other prison term imposed. Sentencing is July 29, 2016.
Following the convictions, the court ordered the defendants into custody.
Agents assigned to Homeland Security Investigations - Worksite Enforcement Unit conducted the investigation leading to the charges. Assistant U.S. Attorneys Casey N. MacDonald and Douglas Davis are prosecuting the case.
Jefferson County Man Charged with Firearm and Heroin OffensesRead the Press Release
On April 5, 2016, L C Richardson, a/k/a "L.C. Richardson," 38, of Mt. Vernon, was charged by indictment with Unlawful Distribution of Heroin and two counts of Unlawful Possession of a Firearm by a Felon, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
The indictment alleges that the offenses occurred on January 22, 2016, and January 25, 2016, in Jefferson County. Richardson made his initial appearance in federal court on these charges on April 7, 2016. He was ordered held without bond pending a June 13, 2016, jury trial.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The heroin offense carries a maximum penalty of up to 20 years in federal prison, to be followed by 3 years’ supervised release, and a $1,000,000 fine. The firearm offenses carry a maximum penalty of up to 10 years in prison, to be followed by 3 years’ supervised release, and a $250,000 fine.
The ongoing investigation is being conducted by the Jefferson County Sheriff’s Office, Mt. Vernon Police Department, and Bureau of Alcohol, Tobacco, Firearms, and Explosives. The Jefferson County State’s Attorney’s Office also assisted in the investigation.
Jasper Pain Clinic Physician Sentenced to Nearly Three Years in Prison for Illegally Dispensing NarcoticsRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Vestavia Hills physician and owner of a Jasper neurology and pain clinic to nearly three years in prison for dispensing narcotic painkillers without a legitimate medical reason, announced U.S. Attorney Joyce White Vance, Drug Enforcement Administration Assistant Special Agent in Charge Clay A. Morris and Alabama Law Enforcement Agency Sec. Stan Stabler.
U.S. District Judge L. Scott Coogler sentenced Dr. MUHAMMAD WASIM ALI, 51, on 10 counts of unlawfully distributing controlled substances "outside the scope of professional practice and not for a legitimate medical purpose" to three people working undercover with law enforcement. Ali pleaded guilty to the charges in November.
The judge sentenced Ali to 30 months in prison, ordered him to forfeit $2,450 to the government as proceeds of illegal activity, and fined him $85,000. The judge also placed him on supervised release for three years following his prison term. During the supervised release, he cannot work in any medical facility that handles or prescribes controlled substances. In the course of the investigation and prosecution, Ali surrendered both his DEA Controlled Substances Registration, which enabled him to write prescriptions, as well as his medical license. The 30-month sentence, fine and forfeiture are in accord with a binding plea agreement reached between the government and Ali. Ali must report to prison in 30 days.
Ali practiced medicine at the Walker Rural Health Care/Jasper Neurological Care clinic. According to his guilty plea, Ali dispensed 1,100 oxycodone pills to three undercover officers between August 2014 and November 2014 without conducting acceptable medical examinations or requesting and/or reviewing medical records. Ali’s medical files for the three individuals listed multiple falsified examinations and multiple falsified and baseless diagnoses.
“Abuse of prescription opiates, which contributes to heroin addiction, is a nationwide problem that has resulted in epidemic overdose death rates,” Vance said. “Alabama leads the nation in the number of per capita prescriptions for opioid painkillers, a troublesome distinction. While responsible and legitimate painkiller prescribing is an important part of the practice of medicine, doctors who use their prescription pads to provide opiates without legitimate medical reason are illegally dealing drugs,” she said. “My office and our law enforcement partners are committed to shutting that down.”
“The use, abuse, distribution and diversion of opiate pharmaceutical drugs are at epidemic levels in Alabama and across the United States,” Morris said. “The doctors who abandon their Hippocratic Oath and distribute highly addictive pain medicine without a legitimate medical purpose hurt our communities and ruin the great reputation of the many doctors who work tirelessly to help others,” he said. “Today’s sentence should send a clear message to those who illegally distribute drugs. DEA and our law enforcement partners will work relentlessly to protect our communities, citizens and neighborhoods against illegal drug distribution that leads to drug addiction and ruined lives.”
“The illegal distribution and abuse of opiate drugs continues to be a great concern in Alabama,” Stabler said. “This growing problem impacts the lives of many families -- regardless of their demographics. State Bureau of Investigation narcotics agents worked closely with our federal partners during the course of this investigation,” he said. “We will continue to work as a team and collaborate with federal, state, county and municipal law enforcement agencies to fight the unlawful distribution of illegal drugs.”
Ali was one of three Birmingham-area physicians charged last year as part of DEA's Operation Pilluted in Alabama, Arkansas, Louisiana and Mississippi, which focused on reducing trafficking and abuse of pharmaceuticals.
The DEA, Internal Revenue Service, Criminal Investigation, and the Alabama Law Enforcement Agency investigated the case, which Assistant U.S. Attorneys Chinelo Diké-Minor and Robin Beardsley Mark prosecuted.
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Indonesian Domestic Worker Rescued from Forced LaborRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – April 8, 2016
SAN DIEGO –Firas Majeed and Shatha Abbas were arrested today and charged with forcing an Indonesian woman to work in their El Cajon home for up to 18 hours a day without pay. The victim was rescued from the home after providing a note to a visiting nurse, asking for help.
Majeed and Abbas were arraigned today on a criminal complaint before U.S. Magistrate Judge Karen S. Crawford. They were charged with Forced Labor, Trafficking with Respect to Forced Labor, and Document Servitude. The charges include allegations that Majeed and Abbas benefitted through a scheme intended to cause the victim to believe that she would suffer physical restraint if she did not perform labor and services. Majeed and Abbas are also alleged to have concealed the victim’s passport in order to prevent and restrict her liberty to move and travel, and to maintain her labor and services.
The victim reported that she was previously held at a home belonging to relatives of Abbas in Dubai, United Arab Emirates. In Dubai, the victim was allegedly required to provide domestic services for 20 hours a day, every day, for five years. The victim was not paid a salary, and was directed to travel to the United States and work at the home of Majeed and Abbas.
The complaint further alleges that the victim traveled to El Cajon with Majeed in November 2015, and thereafter was required to provide domestic services, including cleaning and laundry, for the entire household, for 16-18 hours every day of the week. The victim reported that she received no days off and was not paid for her services. The victim also reported that she speaks no English, had no money, and was not allowed to leave, except to throw away the family’s trash.
The victim was removed from the residence of Majeed and Abbas on March 22, 2016, by agents from Immigration and Customs Enforcement’s Homeland Security Investigations. Healthcare workers reported to the national Human Trafficking Resource Center that the victim was seen in the back of the residence and closely monitored. Agents translated the note requesting help that the victim had provided to a visiting nurse, which prompted her rescue.
Victims of labor trafficking are often overwhelmed by fear, and they fail to report crimes against them. Frequently victims are unfamiliar with U.S. culture. They may be unaware of their rights or may have been intentionally misinformed about rights in this country. Many don’t speak English, and are unable to communicate with service providers, police, or others who might be able to help them.
They many times don’t self-identify as victims and often blame themselves for predicaments. Many are not legally in the U.S. and they have a fear of being arrested or deported. And, even though an unfortunate number of victims have been beaten and/or raped, they feel their current situation may still be better than where they came from. They may be afraid that speaking out may result in harm to families in their home countries, who are often threatened by traffickers. For all those reasons, these cases are tremendously difficult to investigate and prosecute.
U.S. Attorney Laura Duffy praised the victim for having the courage to seek help, and the healthcare workers who responded to her note.
“Human trafficking is a deplorable practice that amounts to modern slavery, and many of these victims are hiding in plain sight,” Duffy said. “Bringing human traffickers to justice and assisting trafficking survivors is one my top priorities. We all need to work together to recognize the signs and put a stop to this devastating crime.”
“Today’s arrests bring to light the sad reality of modern day slavery,” said Dave Shaw, special agent in charge for HSI San Diego. “HSI will not tolerate any form of human exploitation. Forced labor, which often involves individuals who are held in isolation, degraded, and most alarming – stripped of their basic human freedom, has no place in a modern society.”
Majeed and Abbas are scheduled for a preliminary examination before U.S. Magistrate Judge Jan M. Adler on April 21, 2016.
DEFENDANTS Case Number: 16MJ1016
Firas Majeed (aka Firas Ghazi Majeed Al Tameemi) Age: 44
Shatha Abbas (aka Shatha Yehia Abbas Hussain) Age: 38
SUMMARY OF CHARGES
Title 18, United States Code, Section 1589 (Forced Labor)
Maximum penalty: 20 years of custody; $250,000 Fine
Title 18, United States Code, Section 1590 (Trafficking with Respect to Forced Labor)
Maximum penalty: 20 years of custody; $250,000 Fine
Title 18, United States Code, Section 1592 (Document Servitude)
Maximum penalty: 5 years of custody; $250,000 Fine
AGENCY
Homeland Security Investigations
*The charges and allegations contained in an indictment or complaint are merely accusations, and defendants are considered innocent unless and until proven guilty.
Hudson County, New Jersey, Man Convicted of Production and Distribution of Child PornographyRead the Press Release
TRENTON, N.J. – A Hudson County, New Jersey, man was convicted today for posing as a teenage boy, and at times a teenage girl, to solicit underage females online to produce images of themselves engaged in sexually explicit conduct, possessing, and distributing those images to others, U.S. Attorney Paul J. Fishman announced.
Erik Vanderbeck, 49, of Bayonne, New Jersey, was convicted of two counts of production of child pornography, one count of distribution of child pornography and one count of possession of child pornography. The jury deliberated approximately one hour following a one-week trial before U.S. District Judge Freda L. Wolfson in Trenton federal court.
According to documents filed in this case and the evidence at trial:
Vanderbeck allegedly met various minor females in Internet chat rooms while pretending to be a teenage boy, and at times, a teenage girl. Over the course of their correspondence, Vanderbeck would ask them to send him nude images of themselves. Once Vanderbeck received nude images, he would threaten to post the victim’s nude images online unless she sent more. In some cases, Vanderbeck would send nude images that he had received from certain of his victims to other minors to induce them to self-produce child pornography. When one of the victims threatened to report Vanderbeck to the authorities, he replied, “The cops will never catch me.”
Law enforcement officers executed a search warrant at Vanderbeck’s home in Bayonne on July 22, 2014. They recovered computer equipment belonging to Vanderbeck containing images appearing to be of child pornography. Several of his victims said they produced images of child sexual abuse out of fear and in response to his threats.
Each count of production of child pornography carries a maximum potential penalty of 30 years in prison; the distribution count carries a maximum potential penalty of 20 years in prison; and the possession count carries a maximum potential penalty of 10 years in prison. All of the counts also are punishable by a $250,000 fine. Sentencing is scheduled for July 14, 2016..
U.S. Attorney Fishman credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James Ball in Newark, and the Bayonne Police Department, under the direction of Chief Drew Niekrasz, with the investigation leading to the today’s guilty verdict. He also thanked the Missouri Internet Crimes Against Children Task Force for its role in the investigation.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Danielle Corcione of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Joshua Markowitz Esq., Lawrenceville
Hamer Man Sentenced for Assaulting and Robbing Postal CarrierRead the Press Release
Contact Person: Eric Klumb (843) 727-4381
Columbia, South Carolina---- United States Attorney Bill Nettles announced that Hamer resident Cristopher Rakel German, age 25, was sentenced to a two-and-a-half years in prison for assaulting a mail carrier with intent to rob in violation of 18 U.S.C. §2114(a). The sentence was imposed on April 5th by United States District Court Judge R. Bryan Harwell sitting in Florence. On August 16, 2013, German had stopped a mail carrier after the carrier had attempted to deliver a package addressed to a fictitious name at the home of German’s relative. After the carrier refused to give the package to German, he shoved her and grabbed it. The package contained an unknown quantity of marijuana.
The case was investigated by Inspectors of the U.S. Postal Inspection Service. Assistant United States Attorney Eric Klumb prosecuted the case.
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Gambino Crime Family Associate Gennaro Bruno Pleads Guilty to 2002 Murder of Martin BosshartRead the Press Release
Earlier today, Gennaro “Jerry” Bruno, an associate of the Gambino organized crime family of La Cosa Nostra (the “Gambino crime family”) pleaded guilty at the federal courthouse in Brooklyn, NY, to racketeering and admitted to murdering Martin Bosshart on January 2, 2002 and conspiring to prevent testimony in a grand jury investigation into the Bosshart murder. Today’s plea took place before United States District Judge William F. Kuntz, II, who accepted Bruno’s plea. Pursuant to Bruno’s plea agreement with the government, Bruno will be sentenced to 21 years in prison. Sentencing is scheduled for May 6, 2016.
The plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI). For their outstanding investigative work and assistance in this case, Mr. Capers extended his grateful appreciation to the FBI, the New York City Police Department, the Queens County District Attorney, and the U.S. Attorney’s Office for the Southern District of New York.
According to court filings and facts presented during the plea proceeding, Bruno became an associate in the Corozzo Faction of the Gambino crime family by approximately 2000, after proving himself over a number of years as a member of a violent gang called the “Young Guns.” Over the next 14 years, Bruno engaged in numerous crimes with and on behalf of a faction of the Gambino crime family aligned with Joseph “JoJo” Corozzo, a powerful Gambino member who had risen to become the consigliere of the family. Bruno and other Gambino crime family members and associates moved large quantities of high-potency marijuana from Canada into the New York City area. In 2001, Bruno’s criminal associate Martin Bosshart began making efforts to exclude one of Bruno’s coconspirators from the marijuana importation operation. In an effort to prevent Bosshart from doing so, Bruno plotted with other Gambino crime family members and associates to murder Bosshart. On the night of January 2, 2002, Bruno lured Bosshart to an isolated location in Queens, NY. There, Bruno shot Bosshart in the back of the head at point-blank range, killing him immediately. The body of Martin Bosshart, who was 30 years old at the time, was recovered at the scene.
Thereafter, Bruno evaded justice for years and conspired with other Gambino associates to obstruct an official grand jury investigation into the Bosshart murder, all the while continuing to participate in the core money-making activities of the Gambino crime family, including drug trafficking and extortion. As part of the alleged pattern of racketeering, Bruno, among other things, used his position in the Gambino crime family to extract extortionate payments from the owner of a waste carting company in Queens, NY. Bruno was arrested in Las Vegas on October 28, 2014, and removed to the Eastern District of New York to face the charges against him.
The government’s case is being prosecuted by Assistant United States Attorneys M. Kristin Mace, Nadia Shihata, and Mathew Miller.
The Defendant:
GENNARO BRUNO, a/k/a “Jerry”
Age: 43
Las Vegas, NevadaE.D.N.Y. Docket No. 14-CR-556 (WFK)
Fulton Man, Boonville Woman Charged with Illegal Firearm Following Police Chase, Shoot-out with OfficersRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Fulton, Mo., man and a Boonville, Mo., woman have been charged in federal court with illegally possessing a firearm following a police chase in the Columbia, Mo., area yesterday in which they fired upon pursuing officers.
Russell Deane Moore, Jr., 25, of Fulton, and Victoria Ann Buol, 24, of Boonville, were charged in separate but related criminal complaints filed in the U.S. District Court in Jefferson City, Mo., on Thursday, April 7, 2016. Moore and Buol, who were arrested at the conclusion of the law enforcement pursuit yesterday, will appear in court for a detention hearing this afternoon.
The federal criminal complaints charge Moore with being a felon in possession of a firearm and Buol with possessing a stolen firearm. They allegedly were in possession of a stolen Smith & Wesson 9mm semi-automatic pistol on Thursday, April 7, 2016.
According to affidavits filed in support of the criminal complaints, a Columbia, Mo., resident reported on Wednesday, April 6, 2016, that her Jeep had been stolen from her residence. Firearms and other items were also stolen from the residence, including the Smith & Wesson pistol. At approximately 2:44 a.m. on Thursday, April 7, 2016, a Boone County deputy sheriff saw the stolen Jeep pull into the Midway Travel Center, 6401 E. Hwy. 40, Columbia. The Jeep appeared to be unoccupied, the affidavit says, but as the deputy approached, he saw Buol move from the front passenger seat into the driver’s seat. She drove away from the deputy, the affidavit says, stopping in the parking lot to pick up Moore, who got into the front passenger’s seat.
The deputy pursued the Jeep with his emergency lights activated. The Jeep turned onto Highway 40 and, as it was crossing Interstate 70, Moore allegedly shot at the deputy multiple times. The Jeep turned onto Highway UU and stopped at the intersection of Sugar Creek Road. Moore got out of the Jeep and started shooting at the deputy, the affidavit says, then got back into the Jeep and the pursuit continued.
The deputy’s patrol vehicle was struck by gunfire and disabled. Other officers continued their pursuit of the stolen Jeep into the southern part of Columbia. The chase eventually moved onto Interstate 70 East, where officers continued to pursue the stolen Jeep into Callaway County, Mo. Throughout the pursuit, the affidavit says, multiple shots were fired from the Jeep at various officers. Shots were also fired from the Jeep at four semi-trailer trucks traveling on Interstate 70, nearly striking one of the drivers.
According to the affidavit, Moore and Buol later told investigators that they fired at the semi-trailer trucks in an effort to cause a serious accident, which would terminate officers’ pursuit of them and aid in their escape.
The pursuit ended when the Jeep ran out of gas on County Road 172 in Callaway County. Buol threw out the pistol from the front passenger seat, the affidavit says, and Moore and Buol were arrested.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Moore has two prior felony convictions for burglary.
Dickinson cautioned that the charges contained in these complaints are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Larry Miller. It was investigated by the Boone County, Mo., Sheriff’s Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Former Real Estate Associate Sentenced to Federal Prison for His Role Tampa Mortgage SchemeRead the Press Release
Tampa, Florida – U.S. District Judge Elizabeth A. Kovachevich has sentenced Joseph Pasquale (39, Worcester, MA) to four years and nine months in federal prison for conspiracy to commit bank fraud and bank fraud. A federal jury found him guilty in January 2016.
According to testimony and evidence presented at trial, Pasquale worked as a real estate sales associate for a brokerage based in Cape Coral. Between October 2007 and March 2008, he was involved in the negotiation and sale of four condominium units at the Arbors of Carrollwood, to clients in California and Massachusetts. Pasquale engaged in a conspiracy to conceal sales incentives from mortgage lenders, which these clients received from the seller, along with private loans that Pasquale made to the buyer-clients enabling them to bring cash to their respective real estate closings. As a consequence of his actions, Pasquale helped to cause a loss of approximately $937,000 to Wells Fargo Bank when the mortgages involved in the case went into foreclosure.
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 L. Hoffer.
Former Manhattan Restaurant Owner Arrested for Running A $12 Million Ponzi SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today that HAMLET PERALTA, the former owner of a restaurant in Manhattan, was charged in Manhattan federal court with committing wire fraud through a scheme in which he obtained more than $12 million from investors on false pretenses and used that money to repay other investors and for personal expenses. PERALTA was arrested by FBI agents in Macon, Georgia, yesterday and will be presented before U.S. Magistrate Judge Charles Weigle in Macon this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Hamlet Peralta solicited investors for his fictitious wholesale liquor business by peddling wholesale lies. Peralta’s Ponzi scheme allegedly fleeced his victims out of more than $12 million, virtually all of which he spent on himself or to repay other investors. Thanks to the work of the FBI and NYPD in this investigation, Peralta will not be able to victimize any other investors.”
FBI Assistant Director-in-Charge Diego Rodriquez said: “Fraud cases remain a priority for the FBI as we continue to identify and investigate those who commit financial crimes against unwitting victims. Peralta, who allegedly engaged in a multimillion-dollar enrichment scheme, will ultimately be brought to justice for his actions. We are appreciative of the support and cooperation we continue to receive from our law enforcement partners in this and so many cases.”
NYPD Commissioner William J. Bratton said: “As alleged, Hamlet Peralta violated the trust that investors placed in his fictitious wholesale liquor business venture by spending millions of his victim’s investments on clothes, food, and to continue the scheme. Thanks to the NYPD investigators and our federal law enforcement partners, Peralta will be held accountable for his actions.”
According to the allegations in the Complaint unsealed today in Manhattan federal court[1]:
From at least in or about July 2013, up to and including at least in or about 2014, PERALTA solicited more than $12 million from various investors by falsely representing that the investors’ money would be used to engage in wholesale liquor distribution for a profit. PERALTA promised investors high rates of return in the form of regular interest payments on their investments, which he represented were based on the profits to be generated by what he claimed would be his successful wholesale liquor business.
In truth and in fact, however, PERALTA misappropriated the millions of dollars in investments he received, and used those funds to repay other investors or for his own purposes. Of the more than $12 million provided to him by investors based on the representation that their money would be used to purchase wholesale liquor for resale, PERALTA in fact purchased no more than $700,000 in wholesale liquor. He used nearly all of the remaining money – more than $11 million – to repay other investors, wire money to himself, take out large cash withdrawals, and pay for personal expenses other than liquor.
As one example, in or about 2013, PERALTA told a prospective investor (“Investor-1”) who was a frequent customer at PERALTA’s restaurant and who had become friendly with PERALTA that he (PERALTA) owned a separate business called West 125th Street Liquors and that he had been approved as an exclusive wine distributor to a major national restaurant supply company (the “Restaurant Supply Company”) that was beginning a wholesale wine business. PERALTA told the investor that he would receive four percent interest on his investments, based on profits from the wholesale liquor distribution business. In truth and in fact, however, PERALTA did not own West 125th Street Liquors, and he had not been approved to be a distributor for the Restaurant Supply Company.
Over the course of the next year, based on PERALTA’s representations, the investor provided PERALTA with more than $3.5 million. Of that amount, none, or at most only a minimal amount, was spent on wholesale liquor purchases. Rather, Investor-1’s money was used to pay back other investors; was used to pay for expenses such as restaurant bills and high-end clothing purchases; and was wired to PERALTA’s personal accounts and/or withdrawn in cash. In or about June 2014, PERALTA provided Investor-1 with a document that purported to be on the letterhead of the Restaurant Supply Company indicating that the Restaurant Supply Company would be electronically transferring PERALTA $1,826,350 within seven days. In truth and in fact, however, neither PERALTA nor West 125th Street Liquors has ever been a supplier to the Restaurant Supply Company.
* * *
PERALTA, 36, of the Bronx, New York, has been charged with one count of wire fraud, which carries a maximum term of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and the NYPD Internal Affairs Bureau, and noted that the investigation is continuing.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Martin Bell, Russell Capone, and Kan M. Nawaday are in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Hattiesburg Resident Pleads Guilty to Failure to Register as a Sex OffenderRead the Press Release
Hattiesburg, Miss. – Thomas Lamon Williams, 23, formerly of Hattiesburg, pled guilty in federal court on Thursday, April 7, 2016, to one count of failure to register as a sex offender, U.S. Attorney Gregory K. Davis announced today.
Williams is a person required to register under the Sex Offender Registration and Notification Act, enacted as part of the Adam Walsh Child Protection and Safety Act of 2006. His original underlying sex offense conviction is statutory rape in Grenada County, Mississippi. Williams traveled in interstate commerce from Mississippi to Florida and knowingly failed to register and update his registration.
Williams will be sentenced on June 16, 2016, at 9:15 a.m., by U. S. District Judge Keith Starrett, and faces a maximum sentence of 10 years in prison and a $250,000 fine.
This case was investigated by the U.S. Marshals Service and prosecuted by Assistant U.S. Attorney Andrea Jones.
Federal Jury Convicts New York Man in Connection with Scranton Bank RobberyRead the Press Release
SCRANTON - The United States Attorney=s Office for the Middle District of Pennsylvania announced today that Jemel Laquan King, a/k/a “Melo,” age 37, a resident of New York, was convicted of conspiracy, aiding and abetting a bank robbery and brandishing a firearm during the robbery. The four-day trial was held before U.S. District Court Judge James M. Munley in Scranton.
According to United States Attorney Peter Smith, the jury returned with the verdict of guilty after approximately two hours of deliberation. King conspired with others to commit the November 26, 2014 armed robbery of the NBT Bank on Keyser Avenue in Scranton. During the robbery, two robbers used firearms, restrained tellers, and threatened their lives. The tellers were held at gun point, forced to open the vault and were handcuffed and left inside the vault. Approximately $100,000 was taken during the robbery.
Judge Munley has not scheduled a sentencing date for King; King will remained detained pending a sentencing hearing.
Those previously charged with conspiring with King to commit the robbery include Jule Futrell, age 46, Endicott, New York, and Dorian Whitehead, age 30, Binghamton, New York. Both pled guilty.
The investigation was conducted by the Federal Bureau of Investigation - Scranton and Binghamton offices. The case was prosecuted by Assistant United States Attorneys Michelle Olshefski and Todd Hinkley.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalties in this case include 25 years’ incarceration, plus an additional minimum of 7 years’ incarceration for the use of the firearm during the commission of a violent crime. 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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Federal Jury Convicts Fort Myers Man of Heroin TraffickingRead the Press Release
Fort Myers, FL – United States Attorney A. Lee Bentley, III announces that a federal jury today found Norris Williams (45, Fort Myers) guilty of three counts of possession with intent to distribute heroin and one count of attempting to possess with intent to distribute one kilogram or more of heroin. He faces a minimum mandatory penalty of 10 years, up to life, in federal prison. The sentencing is scheduled for July 5, 2016.
According to evidence presented at trial, Williams, a nine-time convicted felon, sold heroin to an undercover officer on three occasions between November 2014 and February 2015. Williams had also attempted to purchase a one kilogram brick of heroin from an undercover officer in October 2015. He had negotiated a price of $75,000 for that kilogram brick; $50,000 cash up front and a promise to pay the balance at a later date. When he met the undercover officer in a parking lot to complete that transaction, he handed the officer a shoebox containing $49,900.
This case was investigated by the Drug Enforcement Administration’s Fort Myers Resident Office, with assistance from the Cape Coral Police Department and the Lee County Sheriff’s Office. It is being prosecuted by Assistant United States Attorneys Charles Schmitz and David G. Lazarus.
Federal Jury Convicts Auburndale Man of Methamphetamine Trafficking ConspiracyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Thomas Kohler (58, Auburndale) guilty of conspiring to possess 500 grams or more of methamphetamine with the intent to distribute it. He faces a minimum mandatory penalty of 10 years, up to life, in federal prison. The sentencing hearing is scheduled for July 1, 2016.
According to evidence presented at trial, Kohler was part of a conspiracy involving the Isaias Villa drug trafficking organization to distribute high-purity methamphetamine in Polk County. Isaias Villa received kilogram quantities of methamphetamine from the Atlanta area and then supplied it to dealers in Polk County. From at least early 2015 through September 9, 2015, Kohler was involved with Isaias Villa in at least two of these trips to Georgia. He also conspired to collect approximately $82,000 in drug proceeds and, on September 8, 2015, delivered a kilogram of methamphetamine to a coconspirator.
To date, the investigation has resulted in the federal convictions of five individuals and the seizure of approximately two kilograms of methamphetamine, more than $100,000 in U.S. currency, and homemade explosives.
This case was investigated by the Drug Enforcement Administration and the Polk County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Dan Baeza.
Federal Grand Jury Criminal Indictments AnnouncedRead the Press Release
TULSA, Okla.— The results of the April 2016 Federal Grand Jury were announced today by Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma.
The following individuals have been charged with violations of United States law in indictments returned by the Grand Jury. The return of an indictment is a method of informing a defendant of alleged federal crimes which must be proven in a court of law beyond a reasonable doubt to overcome a defendant’s presumption of innocence.
Angela Harden. Theft from Indian Country in Excess of $1,000. Harden, a non-Indian, 45, of Claremore, is charged with stealing over $1,000 of personal property belonging to an Indian. If convicted, she faces a statutory maximum penalty of five years in prison and a $250,000 fine. The Cherokee Nation Marshal Service and the Federal Bureau of Investigation are investigating the case.
Jason Scott Leach. Embezzlement from a Labor Organization. Leach, 32, of Locust Grove, Oklahoma, the former President of the United Steelworkers of America Local 13-669, is charged with nine counts of embezzlement. From April 2013 to September 2014, he allegedly stole over $2,500 from the labor organization. If convicted, he faces a statutory maximum penalty of five years in prison and a $10,000 fine. The United States Department of Labor, Office of Labor-Management Standards is the investigating agency.
Jeremy Paul Leach. Embezzlement from a Labor Organization. Leach, 35, of Locust Grove, Oklahoma, the former Secretary-Treasurer and Recording Secretary of the United Steelworkers of America Local 13-669, is charged with 12 counts of embezzlement. From July 2013 to October 2014, he allegedly stole over $3,000 from the labor organization. If convicted, he faces a statutory maximum penalty of five years in prison and a $10,000 fine. The United States Department of Labor, Office of Labor-Management Standards is the investigating agency.
Chrisostomo Isias Navarro-Chicaj. Reentry of Removed Alien. Navarro-Chicaj, 32, is charged with having returned to the United States unlawfully after being deported in October 2013 from Houston, Texas. If convicted, the statutory maximum penalty is 20 years in prison and a $250,000 fine. United States Immigration and Customs Enforcement is the investigating agency.
Enrique Reyes-Deluna. Reentry of Removed Alien. Reyes-Deluna, 48, is charged with having returned to the United States unlawfully after being deported in February 2011 from Brownsville, Texas. If convicted, the statutory maximum penalty is 20 years in prison and a $250,000 fine. United States Immigration and Customs Enforcement is the investigating agency.
Debbie J. Stockton. Interstate Transportation of Stolen Moneys. Stockton, 60, of Sapulpa, is charged with transporting, transmitting, and transferring in interstate commerce approximately $69,607.45 which was stolen. If convicted, she will face the statutory maximum penalty of 10 years in prison and a $250,000 fine. The Federal Bureau of Investigation and the Oklahoma Insurance Department are the investigating agencies.
James Wilson. Sexual Exploitation of a Child, Possession of Child Pornography, and Transfer of Obscene Material to Minor. Wilson, 31, of Tulsa, is charged with sexual exploitation of a minor from October 2014 to March 2016; possession of child pornography; and transferring obscene materials to a 12 year old girl. If convicted, the statutory minimum penalty is 15 years in prison and the statutory maximum penalty is not more than 30 years in prison and a $250,000 fine for the sexual exploitation of a child charge; and not more than 10 years in prison and a $250,000 fine for the other two charges. United States Immigration Customs Enforcement’s Homeland Security Investigations is the investigating agency.
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Ellis County Woman Sentenced to 105 Months in Federal Prison for Defrauding MedicaidRead the Press Release
DALLAS – An Ellis County woman who pleaded guilty last year to one count of health care fraud arising from her submission of false and fraudulent claims for counseling and psychotherapy services to Medicaid, on behalf of Medicaid beneficiaries, was sentenced this afternoon, announced U.S. Attorney John Parker of the Northern District of Texas.
Alexis C. Norman, 44, of Midlothian, Texas, was sentenced by U.S. District Judge Jane J. Boyle to 105 months in federal prison and ordered to pay $2,969,045.97 in restitution to Medicaid. Judge Boyle remanded the defendant into custody at the conclusion of the hearing.
According to documents filed in the case, Norman was the CEO and Executive Director of Greater Southwest Group, Inc. (GSWG) and Ellis County Community Services (ECCS). She obtained Medicaid group numbers for GSWG and ECCS and used those numbers, together with individual Medicaid provider numbers of licensed counselors and Medicaid recipient information, to submit fraudulent claims to Medicaid.
Norman, who is neither a psychotherapist nor a mental health provider, submitted claims for individual and family psychotherapy sessions that were not performed. As part of her fraud scheme, Norman used the Medicaid provider information of licensed counselors who applied for positions as contract counselors at GSWG and ECCS, but who were never hired and never worked for Norman, GSWG, or ECCS. Norman also used the Medicaid provider numbers of licensed counselors, without their knowledge and consent, to submit claims under the GSWG and ECCS group numbers for services that they did not perform and for psychotherapy services that predated and postdated their actual employment with Norman. The indictment alleges that Norman used the identification of more than 500 Medicaid recipients, most of whom were minor children, in her scheme.
From December 2, 2009, through July 17, 2014, Norman submitted claims to Medicaid and to Medicaid Managed Care Organizations, through GSWG and ECCS, totaling approximately $5,502,724.88; Norman was paid approximately $2,596,045.97 for these claims. The defendant was also ordered to pay $373,000.00 in restitution for her participation in a fraud scheme involving the summer food service program funded by the United States Department of Agriculture.
The investigation of Norman led to the investigation of her friend, Brenda Ward, 48, of Cedar Hill, Texas, who was running a similar fraud scheme. Ward was President and CEO of H.E.L.P.-ing. Communities, Inc. (HCI). She was neither a psychotherapist nor a mental health provider, but she submitted fraudulent claims to Medicaid for individual, family and group psychotherapy sessions that were not performed. Ward was indicted in February 2015 and subsequently pleaded guilty to one count of healthcare fraud, admitting that from January 2009 through February 9, 2015, she submitted fraudulent claims to Medicaid and to Medicaid Managed Care Organizations, through HCI, totaling approximately $1,639,923, and was paid approximately $887,809 on those claims. She was sentenced earlier this year by U.S. District Judge Sidney A. Fitzwater to 57 months in federal prison and ordered to pay $887,809 in restitution to Medicaid.
The FBI, the U.S. Department of Health and Human Services – Office of Inspector General, the Texas Attorney General’s Medicaid Fraud Control Unit, and the United States Department of Agriculture – Office of Inspector General investigated both the Norman and Ward cases, and Assistant U.S. Attorney Douglas Brasher prosecuted both cases.
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District Man Sentenced to 16 Years in Prison for Sexually Assaulting Woman in 2002 AttackRead the Press Release
WASHINGTON – Jeremiah Juwley, 30, formerly of Washington, D.C., was sentenced today to a 16-year prison term for sexually assaulting a woman in 2002, U.S. Attorney Channing D. Phillips announced.
Juwley pled guilty in February 2016, in the Superior Court of the District of Columbia, to attempted first-degree sexual abuse. The plea, which was subject to the Court’s approval, called for a sentence of 16 years in prison. The Honorable José M. López accepted the plea today and sentenced the defendant accordingly. Upon his release from prison, Juwley will be required to register as a sex offender for the rest of his life. He also will be on lifetime supervised release.
According to the government’s evidence, in the early morning hours of Sept. 14, 2002, the victim, then 22, was walking alone to a friend's home in the 1100 block of Columbia Road NW after leaving a nightclub. While in route, Juwley, a stranger to her, began walking behind her. To evade him, she walked to an outdoor stairwell that was somewhat secluded.
Juwley continued to pursue her. When he caught up to her, he grabbed her around the waist. The victim screamed. Juwley told her to shut up and knocked her face down onto the ground. She continued to scream, turning her face towards the apartment building so someone could hear her. The defendant continued to strike her in the face and started banging her head on the ground, eventually knocking her unconscious. Juwley then attempted to sexually assault her.
The victim reported the assault to the Metropolitan Police Department (MPD) and was taken to Howard University Hospital, where she was treated for injuries and swabbed for DNA. The case was cold until April 2014, when the defendant was identified as a suspect through the Combined DNA Index System (CODIS), a web of state and national databases containing DNA profiles from convicted offenders and crime scenes that is used as an investigative tool. Juwley’s DNA was in the system as a result of a 2011 conviction in a carjacking case; he was sentenced to a seven-year prison term in that case. Juwley’s DNA profile matched the DNA left behind by the assailant in 2002. Juwley was arrested in the sexual assault case in December 2015.
In announcing the sentence, U.S. Attorney Phillips commended the work of detectives from the MPD’s Sexual Assault Unit, the Third Police District, and officers from the Forensic Science Division. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Lezlie Richardson; Paralegal Specialists Jason Manuel, Tiffany Jones, and Tierra Naches, and Michael Ambrosino, Special Counsel for DNA and Forensic Evidence Litigation. Finally, he expressed appreciation for the work of former Assistant U.S. Attorney Jeff Cook and Assistant U.S. Attorneys Kenya Davis and Nicholas Miranda, who investigated and prosecuted the case.
District Man Pleads Guilty to Second-Degree Murder in 2014 Slaying of His Estranged WifeRead the Press Release
WASHINGTON – Michael Gayle 35, of Washington, D.C., pled guilty today to a charge of second-degree murder stemming from the brutal strangling and stabbing of his estranged wife at her home in Southeast Washington, U.S. Attorney Channing D. Phillips announced.
Gayle pled guilty in the Superior Court of the District of Columbia. The Honorable Lynn Leibovitz scheduled sentencing for June 20, 2016. The charge carries a potential maximum penalty of life in prison.
According to the government’s evidence, in the early morning hours of June 29, 2014, Gayle went to the home of his wife, 31-year-old Eboni Domally, in the 5200 block of Queens Stroll Place SE. On that date, Gayle was no longer living at the home, having moved out over two months earlier. After arriving at the home, Gayle choked Ms. Domally, and then later stabbed her, causing extensive sharp force injuries to Ms. Domally. These injuries eventually led to Ms. Domally’s death. Ms. Domally’s young son observed the events and ran to get help.
Gayle left the home before help arrived. He was ultimately arrested on July 22, 2014, by the U.S. Marshals Service and the Capital Area Regional Fugitive Task Force at his mother’s home in Charlotte, N.C. He has been in custody ever since.
Gayle pled guilty in 2012 in the Circuit Court for Prince George’s County, Md., to assault and burglary charges stemming from another incident in September 2011 with his wife.
In announcing the plea, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department (MPD). He also expressed appreciation for the assistance provided by the U.S. Marshals Service, the Capital Area regional Fugitive Task Force, and the Charlotte-Mecklenburg Police Department. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Patricia A. Riley, Special Counsel to the U.S. Attorney; Victim/Witness Advocate Marcia Rinker; Paralegal Specialists Benjamin Kagan-Guthrie and Kendra Johnson; former Lead Paralegal Specialist Kwasi Fields. and Librarian Lisa Kosow. Finally, he commended the work of Assistant U.S. Attorneys Magdalena Acevedo and Amy H. Zubrensky, who investigated and prosecuted the case.
Defendants Sentenced to Imprisonment in Extensive Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Six defendants have been sentenced to terms of imprisonment for their participation in an extensive stolen identity tax refund fraud scheme involving the personal identifying information (PII) of more than 29,000 individuals. The defendants used the PII, including names, dates of birth, and Social Security numbers, to file thousands of fraudulent federal income tax returns with the IRS claiming, collectively, tens of millions of dollars in refunds.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Delany De-Leon Colon, Acting Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations Miami Office (DOL-OIG), Carlos A. Canino, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Dexter Williams, Chief, City of Miramar Police Department, Steve Steinberg, Chief, Aventura Police Department, William Hernandez, Chief, North Miami Beach Police Department (NMBPD), and Franklin Adderley, Chief, Fort Lauderdale Police Department, made the announcement.
Harlan Decoste, a/k/a “Money King,” a/k/a “Moneyking_111,” 27, of Miramar, was sentenced to a total of 234 months in prison, to be followed by 3 years of supervised release, and was ordered to pay joint and several restitution in the amount of $28,211,434. Kerby Luma, a/k/a "Money Makin Kerb," 26, of Miramar, was sentenced to a total of 132 months in prison, to be followed by 3 years of supervised release, and was ordered to pay joint and several restitution in the amount of $28,211,434. Frantz Decoste, a/k/a "Gripe_111," 21, of Miramar, was sentenced to a total of 54 months in prison, to be followed by 3 years of supervised release, and was ordered to pay joint and several restitution in the amount of $28,211,434. Francis Jeudy, a/k/a "Money Makin Rab," a/k/a "Brizzleon111," 26, of Miramar, was sentenced to a total of 116 months in prison, to be followed by 3 years of supervised release, and was ordered to pay joint and several restitution in the amount of $28,211,434. Andy Cherrelus, a/k/a "Risktakers111," 24, of Miami, was sentenced to 94 months in prison, to be followed by 3 years of supervised release, and was ordered to pay joint and several restitution in the amount of $10,000,000. Each of the defendants previously pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, one count of conspiracy to possess fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(b)(2), one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(1)(a). Frantz Decoste and Jeudy also pled guilty to one count of possession of stolen mail, in violation of Title 18, United States Code, Section 1708.
In a separate sentencing hearing, Chad Davis, a/k/a "Chadillac," a/k/a "Chadillac 305," 29, of Miami, was sentenced to 4 months in prison, to be followed by three years of supervised release. Davis previously pled guilty to one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3).
“During the course of this stolen identity tax refund scheme, the defendants targeted our U.S. taxpayers and the IRS by unlawfully possessing and using personal information to submit tens of millions of dollars in fraudulent tax refund claims,” said U.S. Attorney Wifredo Ferrer. “The prosecution of those who attempt to steal our tax dollars will continue to remain a top priority for the U.S. Attorney’s Office and our law enforcement partners.”
Kelly R. Jackson, Special Agent in Charge, IRS Criminal Investigation (IRS-CI), stated, “This is one of the largest stolen identity tax refund fraud schemes prosecuted in the United States. These defendants perpetuated an elaborate scheme driven by insatiable greed and a blatant disregard for the integrity of the United States tax system. This case is another example of IRS-CI’s commitment to investigate individuals who participate in stolen identity tax refund fraud and hold them accountable for their actions.”
“We continue to utilize our vast resources to disrupt and dismantle these criminal organizations,” stated Robert C. Hutchinson, Special Agent in Charge, ICE's Homeland Security Investigations.
"We work together with the common goal of making our communities safer," said Delany De Leon Colon, Acting Inspector In Charge, U.S. Postal Inspection Service, Miami Division. "We will continue to work collaboratively to take criminals off our streets."
“The Department of Labor Office of Inspector General is committed to working with our Identity Theft Strike Force partners to combat fraud involving the unemployment insurance program in the Southern District of Florida and other affected areas. This collaborative effort has been an invaluable tool in bringing the perpetrators of these crimes to justice,” stated Rafiq Ahmad, Special Agent in Charge of the Atlanta Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
“A great example of local and federal agencies working together to remove from our streets those who seek fraudulent financial gain by stealing identity information from honest citizens,” said Carlos A. Canino, Special Agent in Charge, ATF.
“This massive stolen identity scheme impacted thousands of victims and fraudulently claimed tens of millions of dollars in IRS refunds,” said George L. Piro, Special Agent in Charge, FBI Miami. “The investigation highlights the necessary and extensive cooperation by numerous law enforcement agencies that brought these fraudsters to justice. I commend these agencies for their commitment to investigate cyber intrusions that rob citizens of their identities.”
According to court documents, while officers from the Miramar Police Department were investigating an armed home invasion that occurred at a home occupied by Harlan Decoste, Frantz Decoste, Luma, and Jeudy, in the Silver Falls Subdivision in Miramar, they discovered evidence of narcotics activity within the home. As a result, officers obtained a state court search warrant for the residence.
While officers were searching the home pursuant to the state court warrant, they found evidence of fraud related activity in various bedrooms and common areas, consisting of approximately 500 debit cards issued in other persons’ names, one ledger/notebook that contained PII, one ledger/notebook that contained information related to tax returns, five United States income tax refund checks in other persons’ names, and various tax return documentation in other persons’ names. In addition, the officers seized approximately 10 computers and 3 USB drives. There were also significant amounts of United States currency, jewelry, expensive shoes and clothing, and other valuable items in the home.
Federal Agents obtained a search warrant to review the electronic and other evidence recovered from the residence. A forensic review of those items revealed that the computers contained over 29,000 individual pieces of PII. Some of the PII appeared in photographs of computer screens (screenshots) from a medical center. The screenshots each contained approximately twelve patient names, dates of birth, and Social Security numbers. The PII was also contained in rich text format document files. Many of the rich text document files contained the PII from the patient screenshots, along with additional user-inputted information such as the victims’ true addresses, fictitious addresses associated with tax returns, account numbers, IRS filing personal identification numbers, and refund amounts.
Further analysis revealed that the defendants filed and caused to be filed numerous fraudulent federal tax returns claiming, collectively, tens of millions of dollars associated with the PII recovered from the residence. The defendants provided payment instructions on the tax returns, directing the IRS to transfer the tax refunds to various accounts in other persons' names that the defendants and their co-conspirators controlled. The defendants then withdrew the unlawfully obtained tax proceeds for their personal use and to further the fraud scheme.
Mr. Ferrer commended the investigative efforts of IRS-CI, ICE-HSI, USPIS, DOL-OIG, ATF, FBI Miami Cyber Task Force, as well as the Miramar, Aventura, North Miami Beach and Fort Lauderdale Police Departments. The case was prosecuted by Assistant United States Attorney Brooke Watson.
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.
Dallas Woman Pleads Guilty to Role in Armed Car-JackingRead the Press Release
TYLER, Texas – A 27 year old Dallas, Texas woman has pleaded guilty in federal court to Car-Jacking and Bank Robbery charges, announced U.S. Attorney John M. Bales today.
According to information presented in court, on March 13, 2015, Chanel Collins, 27, a Dallas resident, drove Laquaylan Patterson (Patterson) from Jarvis Christian College, just east of Hawkins, Texas, to an apartment complex in Tyler, Texas, with the intent to aid Patterson in committing an armed carjacking.
Upon arriving at the apartment complex, Patterson got out of Collins’ car, armed with a semiautomatic pistol, and told Collins to wait for his signal to her cell phone. Patterson then approached a woman who was visiting her mother at the complex, brandished his pistol, and demanded the woman’s car keys. The woman surrendered her keys and Patterson took her vehicle and drove away. Patterson then signaled Collins and she also departed the complex in her car. Collins and Patterson then drove their respective vehicles back to Jarvis Christian College.
Later that same day, Collins drove her vehicle to a car wash in Big Sandy, Texas, to aid Patterson in committing an armed robbery of the 1st National Bank of Gilmer, located in Big Sandy. As Collins was waiting for Patterson at the car wash, Patterson drove the vehicle he had carjacked to the bank. Patterson entered the bank and brandished a pistol, climbed behind the teller counter, and demanded money from the tellers. The tellers stood aside as Patterson removed all the bills from two cash drawers and put the money in a bag. Patterson then fled the bank, driving in the carjacked vehicle to the car wash where Collins was waiting. Once Patterson arrived at the car wash, he and Collins fled in her vehicle.
Collins and Patterson were indicted by a Federal Grand Jury in Tyler, Texas on June 17, 2015. Collins is facing a maximum sentence of 25 years’ incarceration plus a fine of $250,000.00. A sentencing hearing for Collins will be held at a later date. Patterson’s case is still pending trial.
This case was investigated by the Federal Bureau of Investigation, Tyler Office, the Texas Rangers’ Office, the Big Sandy Police Department, and the Tyler Police Department, and is being prosecuted by Assistant U.S. Attorney Jim Noble.