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Monday 22 February 2016
Leader of Multimillion-Dollar Tax Fraud Scheme Involving the Use of Children’s Identities Sentenced to Nine Years in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that NOEL CUELLO, the former operator of a tax preparation business with multiple locations in the Bronx, New York, was sentenced today in Manhattan federal court to nine years in prison for leading a large-scale identity theft and tax fraud scheme through which identifying information of minors, including Social Security numbers, was obtained through corrupt payments to a former fraud investigator with the New York City Human Resources Administration. The identifying information was then used to file thousands of fraudulent tax returns, resulting in millions of dollars in loss to the United States Treasury. Sentence was imposed by U.S. District Judge Richard J. Sullivan.
U.S. Attorney Preet Bharara said: “Noel Cuello ran a criminal tax preparation business, raking in big fees by helping thousands of taxpayers to commit tax fraud. Using identity information stolen from the City’s Human Resources Administration, Cuello enabled taxpayers to falsely claim dependent children, resulting in millions of dollars in lost tax revenue for the government.”
According to the Complaint, Indictment, and information presented in connection with sentencings in the case:
Under federal law, taxpayers may be entitled to claim certain tax credits, including the Earned Income Tax Credit (“EITC”), which is available to qualifying low and moderate income working individuals and families. If the taxpayer claims the EITC based on having a child, the individual must list the name and Social Security number (“SSN”) of the child on his or her tax return, along with a separate schedule that contains the child’s name, SSN, year of birth, relationship to the taxpayer, and how many months the child lived with the taxpayer during the tax year.
Between at least approximately 2009 and spring 2014, through a tax preparation business in the Bronx, New York, with multiple locations, conspirators charged individual taxpayers a cash fee in return for which the business would prepare and file tax returns that falsely claimed that the taxpayer had one or more minor dependents, to take fraudulent advantage of the EITC. The business filed thousands of such returns, resulting in refunds totaling millions of dollars.
The business, which used several names over the years, was principally operated by NOEL CUELLO and his girlfriend, Luz C. Ricardo, with the assistance of his brother, Arismendy Cuello, and Jonathan Orbe, Catherine Ricart, and Joel Vargas, who played various roles, including bringing taxpayers to the business, preparing fraudulent returns, and receiving cash payments from clients.
To obtain SSNs and other information of minors to be used in the scheme, NOEL CUELLO repeatedly bribed Francisco Abreu, who worked at the time as a fraud investigator with the New York City Human Resources Administration.
The scheme continued even after law enforcement executed multiple search warrants of the business, with Orbe claiming to have purchased the business from NOEL CUELLO, and Ricart establishing new electronic filer accounts with the Internal Revenue Service, and opening new bank accounts, which were used to continue the scheme.
In addition to accepting cash in return for assisting other taxpayers to file fraudulent returns, Ricardo, Arismendy Cuello, Orbe, Ricart, and Vargas filed their own fraudulent returns in multiple years, falsely claiming to have one or more minor dependents.
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In addition to his prison term, NOEL CUELLO, who previously pled guilty to conspiracy to commit wire fraud, was sentenced to three years of supervised release, ordered to forfeit $3.5 million, and ordered to pay $3.5 million in restitution.
NOEL CUELLO, 32, of the Bronx, New York, was indicted in April 2015, along with Ricardo, 34, Arismendy Cuello, 29, Orbe, 26, Ricart, 38, and Vargas, 29, all also of the Bronx, New York. All of the defendants subsequently pled guilty and have been sentenced.
On January 7, 2016, Judge Sullivan sentenced Ricardo, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 66 months in prison.
On January 14, 2016, Judge Sullivan sentenced Vargas, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 24 months in prison.
On January 22, 2016, Judge Sullivan sentenced Arismendy Cuello, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 36 months in prison.
On January 28, 2016, Judge Sullivan sentenced Orbe, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 60 months in prison.
On January 29, 2016, Judge Sullivan sentenced Ricart, who pled guilty to conspiracy to commit wire fraud and multiple counts of filing a false personal tax return, to 36 months in prison.
Abreu, 44, of the Bronx, New York, who had previously been indicted separately for unrelated robbery and firearm offenses, pled guilty in August 2015 to those unrelated offenses, along with accepting bribes, fraud, and theft counts related to his participation in the scheme. He is scheduled to be sentenced at a future date by U.S. District Judge Naomi Reice Buchwald.
Mr. Bharara praised the outstanding work of the Internal Revenue Service-Criminal Investigation. Mr. Bharara also thanked the New York City Department of Investigation and the Social Security Administration-Office of Inspector General for their assistance in the investigation, which he noted is ongoing.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Daniel C. Richenthal, Sarah K. Krissoff, and Amanda K. Houle are in charge of the prosecution.
Kane County Woman Convicted of Witness Tampering for Hindering a Federal Investigation into Sham MarriageRead the Press Release
CHICAGO — A Kane County woman was convicted of witness tampering today for impeding a wide-ranging federal investigation into visa fraud and a sham marriage she had arranged for a Mongolian relative.
After a five-day trial in federal court in Chicago, the jury convicted ENKHCHIMEG ULZIIBAYAR EDWARDS, also known as “Eni Edwards,” on two counts of witness tampering and two counts of making false statements in a matter within the jurisdiction of the Executive Branch of the United States government. Each count of witness tampering is punishable by up to 20 years in prison, while the false statement counts each carry a maximum sentence of five years.
The jury trial was conducted before Judge Richard A. Posner of the U.S. Court of Appeals for the Seventh Circuit, who sat in the district court by designation. Judge Posner scheduled a sentencing hearing for May 26, 2016, at 10:00 a.m.
Edwards, 38, of Carpentersville, is a U.S. citizen of Mongolian descent. Evidence at trial revealed that she arranged a sham marriage in 2003 to allow her cousin, a Mongolian immigrant, to marry Edwards’ friend and seek permanent residency in the United States. In 2008 she served as the vice president of the American Mongolian Association and personally vouched for Mongolians attempting to enter the United States.
Edwards subsequently was hired as an officer of the U.S. Customs and Border Protection. In her employment application and background check, Edwards denied having close or continuing contact with foreign nationals.
During her time at CBP, Edwards was assigned to a team of federal law enforcement authorities conducting a broad investigation into visa fraud involving Mongolian immigrants. In the course of the investigation, authorities began looking into the role that Edwards played in the sham marriage. On at least two occasions during the investigation, Edwards attempted to corruptly persuade her friend to lie to investigators regarding the true reason for marrying Edwards’ cousin.
The jury verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois. The investigation was carried out by the U.S. Department of State, Diplomatic Security Service Chicago Field Office. The U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the U.S. Department of Homeland Security’s Office of Inspector General assisted in the investigation.
The government is represented by Assistant United States Attorneys Peter S. Salib and Megan Cunniff Church.
Justice Department Sues to Shut Down Houston Tax PreparerRead the Press Release
Before Incarceration, Defendants Used False Art Appraisals to Purportedly Reduce Customers’ Liabilities
The United States has filed a lawsuit asking a federal district court in Houston, Texas, to permanently bar two men from preparing false tax returns, the Justice Department announced today. The defendants named in the lawsuit are John E. Carter, individually and doing business as Midwestern Financial Group Inc., and Sulayman Mamadou Jarra, individually and doing business as African Art Appraisal Services.
According to the complaint, Carter promoted a tax evasion scheme to his clients, telling them they could reduce their federal tax liability by supposedly donating African tribal art to an educational institution or museum. The complaint states that Carter provided his clients with an appraisal by Jarra that substantially overvalued the art, and that for many of the returns, the signature was forged on the Internal Revenue Service (IRS) form where the institution purportedly acknowledged receipt of the art. Carter then used the false appraisal to prepare tax returns for his customers, claiming false deductions for charitable donations, according to the complaint.
Carter was convicted in 2014 of five counts of willfully aiding and assisting in the preparation and presentation of false tax returns. He was sentenced to 41 months in prison. In 2013, Jarra pleaded guilty to one count of aiding and assisting in the preparation and presentation of false tax returns; he received a sentence of probation.
Return preparer fraud is one of the Internal Revenue Service’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.
Jury convicts former Lafayette postal service employee for stealing from U.S. mailRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that, after a one-day trial, a federal jury found a Lafayette woman guilty of stealing from U.S. mail.
After deliberating for 17 minutes, a federal jury found Cate A. Plauche, 49, of Lafayette, guilty on 11 counts of theft of mail. United States District Judge Donald E. Walter presided over the trial. Plauche stole hundreds of dollars from mail in April of 2015 while employed as a mail carrier at a Lafayette Post Office.
Plauche faces five years in prison, three years of supervised release, restitution and a $250,000 fine for each count. The U.S. Postal Service, Office of Inspector General, conducted the investigation. Assistant U.S. Attorneys Dominic A. Rossetti and John Luke Walker prosecuted the case.
Jefferson City Man Sentenced for Distributing HeroinRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., man was sentenced in federal court today for distributing heroin.
Brian Boykin, also known as “Denormus Okain” and “B,” 38, of Jefferson City, was sentenced by U.S. District Judge Brian C. Wimes to eight years and two months in federal prison without parole. Today’s sentence reflects an upward variance to a longer term of imprisonment than what is recommended under the federal sentencing guidelines, due to Boykin’s criminal history.
On July 27, 2015, Boykin pleaded guilty to two counts of distributing heroin and one count of possessing heroin with the intent to distribute.
While on parole from a 15-year sentence imposed in St. Louis City Circuit Court, Boykin twice sold heroin to a confidential police informant in November 2013 on or near the property of the Jefferson City Housing Authority. On Feb. 13, 2014, Boykin was arrested for the two sales to the confidential informant. At the time of his arrest in front of a JCHA property, Boykin was in possession of 12 grams of heroin and 1 gram of crack cocaine.
Boykin admitted that he distributed heroin to approximately 10 people in Jefferson City, and estimated that he had distributed between 10 and 20 grams of heroin each week since October 2013. Boykin would have netted $500 on 10 grams and $1,000 on 20 grams sold per week. Over a period of 18 weeks, Boykin would have netted $9,000 on 180 grams sold and $18,000 on 360 grams sold.
The government filed a motion for the court to sentence Boykin to a longer term of incarceration than the maximum 87 months recommended by the federal sentencing guidelines. This case represents Boykin’s sixth felony prosecution. In his five previous cases, he has been convicted of distribution of a controlled substance in 1998, attempted vehicle theft in 1999, distribution of crack cocaine near a school in 2000, possession of heroin and cocaine in 2007, and trafficking in crack cocaine in 2007. For all of this criminal activity, Boykin was sentenced by various state courts to an aggregate total of 40 years’ imprisonment. However, between a suspended imposition of sentence, multiple suspended execution of sentences, unsuccessful treatment programs, and failed drug courts, Boykin has served only a total of approximately five years and three months in state prison.
Boykin was incarcerated between June 2009 and May 2013. During that period, he completed Missouri’s long-term treatment program and was released to parole. He committed the federal drug-trafficking offenses within six months of his release.
This case was prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the Drug Enforcement Administration and the Jefferson City, Mo., Police Department.
Indiana Man Found Guilty of Muscatine Bank RobberyRead the Press Release
DAVENPORT, IA – On February 11, 2016, Thomas Alexander Davis, III, 40, of Anderson, Indiana, was found guilty of bank robbery following a four-day jury trial, announced Acting United States Attorney Kevin E. VanderSchel. Davis was found guilty of committing a robbery at the US Bank in Muscatine on November 28, 2012. A sentencing date will be set by Chief District Court Judge John A. Jarvey at a later date.
Davis faces a potential prison sentence of up to twenty years in prison, a maximum $250,000 fine, and up to three years of supervised release following any prison term. This matter was investigated by the Federal Bureau of Investigation and the Muscatine Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Illinois Man Sentenced to 35 Years in Federal Prison for Sexual Offense with a MinorRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that David S. Duffin, age 44, of Chicago, Illinois, was sentenced to 420 months in prison followed by supervised release for life and a $15,000 fine on one count of Transportation of a Minor with Intent to Engage in Criminal Activity. Duffin was found guilty of the charge following a three day jury trial in August, 2015. Duffin was sentenced on February 19, 2016 by the Honorable Timothy L. Brooks in the United States District Court in Fayetteville.
According to evidence presented at the trial, on April 4, 2015, a 13-year-old female was reported missing from her home in Chicago, Illinois. The Chicago Police Department later developed evidence that the minor was with Duffin, who had driven her from her home in Chicago to a motel in Bentonville, Arkansas. On April 9, 2015, the Benton County Sheriffs’ Office located Duffin and the minor in Benton County. Evidence at trial showed that Duffin had created a Facebook profile of a teenage boy which he used to meet and communicate with the minor victim and that he had engaged in sexual intercourse with the minor victim both in Chicago and later after bringing her to Arkansas.
This case was investigated by the Federal Bureau of Investigation (FBI), the Benton County Sheriff’s Office, and the Chicago Police Department. Assistant United States Attorneys Kyra Jenner and Dustin Roberts prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Hugo Man Sentenced to 18 Months for Possession of ExplosiveRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that CARNEY SCOTT HOOD, age 26, of Hugo, Oklahoma was sentenced to 18 months imprisonment, followed by 3 years of supervised release for POSSESSION OF EXPLOSIVE WHILE UNDER INFORMATION OR INDICTMENT, in violation of Title 18, United States Code, Sections 842(i)(1), 844(a)(1) and 2.
The Indictment alleged that in or about January 2014, within the Eastern District of Oklahoma, the defendant, while under an Information in the District Court of Choctaw County, State of Oklahoma, Case No. CF-2011-152, for a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, an explosive, to-wit: ATLAS SF Electric Blasting Caps, which had been shipped and transported in interstate commerce.
The charge was the result of an investigation by the Hugo Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant was remanded into custody of the United States Marshals Service pending transportation to the designated federal facility at which he will serve his nonparoleable sentence.
Assistant United States Attorneys Christopher Wilson represented the United States.
Hobbs Man Pleads Guilty to Federal Cocaine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Jestin White, 23, of Hobbs, N.M., pled guilty on Friday afternoon in federal court in Las Cruces, N.M., to cocaine trafficking charges under a plea agreement with the U.S. Attorney’s Office.
White was arrested in May 2015, on a criminal complaint charging him with distribution of cocaine on May 19, 2015, in Lea County, N.M. According to the complaint, White distributed cocaine to an undercover law enforcement agent from Aug. 25, 2014 through May 19, 2015.
White was subsequently charged in a five-count indictment that was filed on Aug. 19, 2015. The indictment charged White with distributing cocaine on Sept. 4, 2014, Sept. 9, 2014, Oct. 23, 2014, Nov. 6, 2014, and May 19, 2015. The crimes charged in the indictment took place in Lea County. The indictment also included forfeiture allegations requiring White to forfeit $8,050.00 to the United States.
During Friday’s proceedings, White pled guilty to the indictment and admitted selling a total of 461 grams of cocaine to an undercover agent during five separate drug deals. More specifically White admitted selling the following quantities of cocaine to the agent: 2.1 grams on Sept. 4, 2014; 57 grams on Sept. 9, 2014; 57.5 grams on Oct. 23, 2014; 62 grams on Nov. 6, 2014; and 283 grams on May 19, 2015.
At sentencing, White faces a maximum penalty of 20 years in federal prison followed by not less than three years of supervised release. White remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Lea County Drug Task Force. Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department the Tatum Police Department and the Jal Police Department, and is part of the NM HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Hell’s Angels Member and Wife Plead Guilty to Methamphetamine TraffickingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that James Henry McAuley, Jr., 66, of Oakfield, NY, pleaded guilty to conspiracy to possess with intent to distribute, and to distribute, 500 grams or more of methamphetamine, before U.S. District Judge Charles J. Siragusa. The charge carries a mandatory minimum penalty of 10 years in prison, a maximum penalty of life, and a $4,000,000 fine. In addition, McAuley’s wife Donna Boon, 50, of Oakfield, NY, pleaded guilty to conspiracy to possess with intent to distribute, and to distribute, methamphetamine, also before Judge Siragusa. That charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.Assistant U.S. Attorney Brett A. Harvey, who is handling the case, stated that between 2002 through July 9, 2010, McAuley – at the time a member and Vice President of the Rochester Hell’s Angels – was the leader of a methamphetamine trafficking network. In 2002, McAuley located a source of methamphetamine supply in the Monterey, California area. The defendant and other members of the conspiracy traveled to California on numerous occasions to obtain pound-size quantities of methamphetamine from the supplier they then transported or shipped from California to the Rochester area where another member of the conspiracy would sell it to their customers.
In April 2007, McAuley was arrested on federal racketeering charges in the Northern District of New York. After his arrest and incarceration, McAuley continued to maintain control over the methamphetamine trafficking operation. The defendant used another co-conspirator to arrange for obtaining quantities of methamphetamine from the Monterey, California-based source of supply. Other members of the conspiracy sold the methamphetamine to individuals in the Rochester area, Genesee County, and other locales. McAuley admitted to trafficking up to 15 kilograms of methamphetamine.
McAuley’s wife, Donna Boon, distributed quantities of methamphetamine to others, including an individual in Genesee County, who further distributed the drugs to customers in the Genesee County area. Boon admitted to trafficking up to 30 grams of methamphetamine.
These pleas are part of a larger investigation that resulted in the indictment and arrest of members and associates of the Rochester and Monterey (California) Hell's Angels for drug trafficking and racketeering-related offenses in February 2012. Along with McAuley and Boon, Monterey (California) Hell's Angels President Richard W. Mar, and Jeffrey A. Tyler, were charged with conspiracy to possess with intent to distribute, and to distribute, 500 grams or more of methamphetamine. Three other defendants -- Paul Griffin, Richard E. Riedman, and Gordon L. Montgomery – were convicted for their roles in the methamphetamine conspiracy. Judge Siragusa sentenced Griffin to probation and Riedman to 37 months in prison, Montomgery is awaiting sentencing.Rochester Hell's Angels member Robert W. Moran, Jr., along with Gina Tata, are charged in the same indictment with assault with a dangerous weapon in aid of racketeering activity, and Moran and Tata are charged with conspiracy to commit assault with a dangerous weapon in aid of racketeering activity. In addition, Tata is charged with being an accessory after the fact to the assault and conspiracy. Another defendant, Timothy M. Stone, was convicted and of being an accessory after the fact to the assault and conspiracy, and was sentenced to 12 months in prison.
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.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam Cohen, the Genesee County Sheriff's Office, under the direction of Sheriff Gary T. Maha, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the New York State Police, under the direction of Major Craig Hanesworth, the City of Batavia Police Department, under the direction of Chief Sean Shawn Heubusch, and the Village of LeRoy Police Department.
Sentencing for McAuley and Boon is scheduled for May 24, 2016, at 10:00 a.m. and 11:00 a.m. respectively, both before Judge Siragusa.
Hampton Man Pleads Guilty to Coercion and Enticement of a ChildRead the Press Release
NEWPORT NEWS, Va. – William Rollie Armstrong, 50, of Hampton, pleaded guilty today to charges of coercion and enticement of a child, and receipt of child pornography.
According to the statement of facts filed with the plea agreement, the parents of Jane Doe, a 12 year-old child from Michigan, contacted law enforcement to report that Armstrong was having inappropriate chats with their daughter. During the course of the investigation, federal agents were able to determine that the Armstrong befriended Jane Doe through a social networking site, InterPals, by pretending to be a 13 year-old boy from New York. Armstrong sent Jane Doe sexually explicit photos and also asked the child to engage in sexual conduct that would be a crime in Virginia. Agents executed a search warrant on Armstrong’s home in Hampton and seized electronic devices. Armstrong cooperated with agents and admitted that he used a profile picture of a young boy on InterPals. He also admitted to chatting with young girls, including Jane Doe, on various social media websites, and asked them to send him nude pictures of themselves. A forensic exam of the electronic devices revealed that Armstrong had images of child pornography as well as images of Jane Doe.
Armstrong faces a maximum penalty of life in prison when sentenced on May 19, 2016. He faces a mandatory minimum of 10 years in prison on the coercion and enticement of a child charge, and a mandatory minimum of 15 years in prison on the receipt of child pornography charge due to the fact that he is a convicted sex offender. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after the plea was accepted by U.S. District Judge Mark S. Davis. Assistant U.S. Attorney Lisa R. McKeel is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:15-cr-85.
Grandville Man, Gary Alan Hoekstra, Sentenced for Wire FraudRead the Press Release
KALAMAZOO, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr. announced today that Gary Alan Hoekstra of Grandville, Michigan was sentenced to one year and one day confinement by U.S. District Court Judge Janet T. Neff for wire fraud. Hoekstra pleaded guilty to the charge in November of 2015.
Between January 2010 and October 2012, Hoekstra opened at least ten credit card accounts in the name of three victims by entering their personal identifying information into online credit applications using a computer in his home. Accounts were approved with Credit One Bank, Discover Financial, Bank of America, Chase Bank, Citibank, and American Express, and Hoekstra ran up balances on each of these accounts to total $49,439.00 so that he could obtain money, services, and other things of value. The fraud was discovered when one of the victims began receiving unpaid balance calls from the banks.
In addition to the one year and one day sentence of confinement, Judge Neff imposed a restitution order to compensate the victims for their losses, three years of supervised release to follow Mr. Hoekstra’s release from prison, and a special assessment of $100.
The U.S. Attorney’s Office for the Western District of Michigan was assisted in the investigation by the U.S. Postal Inspection Service.
U.S. Attorney Patrick A. Miles cautioned those who would use identity theft to defraud individuals and financial institutions. "Identity theft is a continuing challenge and a crime that worries almost everyone. I hope word gets out that perpetrators are being caught and sent to jail."
Assistant Inspector in Charge Cynthia Mormon, U.S. Postal Inspection Service, further stated, "Mr. Hoekstra took financial advantage of three individuals in his community. The U.S. Postal Inspection Service will pursue those who use the Postal Service to victimize and steal the identities of others for personal gain."
This case was prosecuted by Assistant U.S. Attorney Clay M. West.
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Freeport Resident Sentenced to 33 Months in Federal Prison for Tax FraudRead the Press Release
ROCKFORD — A Freeport resident was sentenced today in federal court on a federal tax fraud charge.
The defendant, DOMINIQUE CASTLE, 29, was sentenced by U.S. District Judge Frederick J. Kapala to 33 months in federal prison, and ordered to serve 3 years of supervised release following her term of imprisonment. Castle was previously sentenced for fraud related charges in Stephenson County and the federal sentence of imprisonment will be served consecutively to her state prison sentence. Judge Kapala also ordered Castle to pay $94,044 in restitution to the IRS and to four states.
On Nov. 3, 2015, Castle pleaded guilty to making a false claim to the IRS by filing a fraudulent income tax return. She also admitted to filing a total of 54 fraudulent income tax returns with the IRS and an additional 17 fraudulent income tax returns with four different states. Castle admitted in her plea agreement that in filing these returns, she obtained and used names of individuals, their Social Security account numbers, and their dates of birth in order to prepare and file the tax returns. Castle admitted that in the tax returns, she would claim fictitious amounts of income and of income taxes purportedly withheld.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Criminal Investigations Division of the IRS. The government was represented by Assistant U.S. Attorney John G. McKenzie.
Four-time Bank Robber Sentenced to 92 Months in PrisonRead the Press Release
PROVIDENCE, R.I. – Vaughn Watrous, 39, of Providence, was sentenced on Thursday to 92 months in federal prison for robbing four banks in four days in February 2013.
At sentencing, U.S. District Court Judge John J. McConnell, Jr., also ordered Watrous to serve one year of supervised release upon completion of his prison term and to pay restitution totaling $4,850 dollars to the banks he admitted to robbing. Watrous pleaded guilty on October 16, 2015 to four counts of bank robbery.
Watrous’ sentence is announced by United States Attorney Peter F. Neronha, Cranston Police Chief Colonel Michael J. Winquist, Providence Police Chief Colonel Hugh T. Clements, Jr., and Harold H. Shaw, Special Agent in Charge of the Boston Field Office of the FBI.
At the time of his guilty plea, Watrous admitted to the court that on consecutive dates beginning on February 11, 2013, he robbed Sovereign Bank branch offices on North Main Street in Providence, Atwells Avenue in Providence, and on Reservoir Avenue in Cranston. He also admitted that on February 14, 2013, he robbed a Citizens Bank branch office located inside a supermarket on Garfield Avenue in Cranston.
In each instance, Watrous passed a note to a bank teller announcing the robbery, demanding large bills and instructing tellers not to trigger the bank alarm. Cranston police officers responding to the robbery of the Citizens Bank branch office observed the defendant in the vicinity of the bank and detained him. As they did, a large pile of cash fell to the ground. Additionally, officers recovered $690 hidden inside Watrous’ left shoe and $320 from his pockets.
The case was prosecuted by Assistant U.S. Attorney John P. McAdams, with the assistance of Assistant U.S. Attorney Lee H. Vilker.
The robberies were investigated by officers and detectives from the Cranston and Providence Police Departments, with the assistance of agents from the FBI.
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Four Pennsylvania-Based Companies and Two Individuals Agree to Pay $3 Million to Settle False Claims Act Suit Alleging Evaded Customs DutiesRead the Press Release
Corporation Pleads Guilty to Criminal Charges and Sentenced
The Department of Justice announced today that three importers and their owners – Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc., Ajay Goel and Thomas Diener – and a related importer, SMC Machining LLC, incorporated at Goel’s direction and formerly owned by his wife, have agreed to pay $3 million to resolve a lawsuit brought by the United States under the False Claims Act. The lawsuit alleged that the defendants had engaged in a scheme to evade customs duties on imports of small-diameter graphite electrodes from the People’s Republic of China (PRC). Small-diameter graphite electrodes are columns of synthetic graphite with diameters of around 16 inches or less that are used as fuel in electric arc and ladle furnaces, such as those used in steel manufacturing. The companies are all based in Pennsylvania.
“The nation’s customs laws are designed to protect domestic manufacturers from foreign products that enter the country at below-market prices due to unfair practices abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This settlement shows that the Department of Justice is committed to pursuing claims against anyone involved in a scheme to seek an unfair advantage in U.S. markets by evading duties on imported goods, including the individuals who run the companies and knowingly participate in such schemes.”
The Department of Commerce assesses and the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) collects duties to protect U.S. manufacturers from unfair competition abroad by leveling the playing field for domestic products. The particular duties at issue in this case are antidumping duties, which protect domestic manufacturers against foreign companies’ “dumping” products on U.S. markets at prices below cost. Imports of PRC-manufactured small-diameter graphite electrodes have been subject to antidumping duties since Aug. 21, 2008.
The settlement announced today resolves claims that Ameri-Source International Inc. evaded antidumping duties on 15 shipments of small-diameter graphite electrodes from the PRC from December 2009 to March 2012. The United States contended that Ameri-Source International misclassified the size of the electrodes to avoid paying the duties. There are no antidumping duties on larger diameter graphite electrodes. The United States also alleged that Goel, Diener and the other companies caused and conspired in the misrepresentation to evade duties. Ameri-Source International also waived indictment and pleaded guilty today to two counts of smuggling goods into the United States. In U.S. District Court in the Western District of Pennsylvania, Ameri-Source International admitted that on April 27, 2011 and June 9, 2011, the company falsely declared imported cargo from the PRC as being graphite rods greater than 16 inches in diameter. Chief Judge Joy Flowers Conti immediately sentenced the corporation to pay a $250,000 criminal fine within 10 days and applied the payment of the $3 million to the loss of antidumping duties of $2,137,420.00.
“We are committed to protecting U.S. jobs and industries from those who seek an unfair advantage in the U.S. marketplace,” said U.S. Attorney David J. Hickton for the Western District of Pennsylvania. “This office’s aggressive criminal and civil enforcement efforts to combat and prosecute the evasive practices of both the corporations and individuals who perpetrated this scheme demonstrate our resolve to ensure a level playing field for all.”
“Antidumping duties level the playing field for U.S. manufacturers,” said CBP Commissioner R. Gil Kerlikowske. “This is a prime example of how U.S. Customs and Border Protection partners with the Department of Justice, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI) and the U.S. Department of Commerce to enforce antidumping duty laws.”
“This settlement underscores one of HSI’s primary efforts, which is to ensure a level playing field for companies engaged in legitimate trade and commerce with the United States,” said Special Agent in Charge John Kelleghan of Homeland Security Investigations (HSI) Philadelphia. “HSI special agents will continue to protect the revenue of the United States and aggressively investigate individuals and companies who attempt to operate outside our laws and regulations.”
“The Department of Commerce Office of Inspector General is dedicated to supporting bureaus such as the International Trade Administration in protecting the U.S. economy from the type of criminal activity disclosed in this case,” said Special Agent in Charge Duane E. Townsend of the U.S. Department of Commerce Office of Inspector General. “We greatly appreciate the cooperation and efforts of HSI and the U.S. Attorney’s Office that resulted in this agreement.”
The allegations resolved by the settlement were originally brought by whistleblower Graphite Electrode Sales Inc. under the qui tam provisions of the False Claims Act. The act permits private parties to sue on behalf of the government those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct. The United States may intervene in and take over the lawsuit, as it has done here. The act also allows the whistleblower to receive a share of any funds recovered through the lawsuit. Graphite Electrode Sales Inc. will receive approximately $480,000 as its share of today’s settlement.
The case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Pennsylvania, CBP, ICE HSI and the Department of Commerce’s International Trade Administration and Office of Inspector General.
The lawsuit is captioned United States ex rel. Graphite Electrode Sales, Inc. v. Ameri-Source Holdings, Inc., et al., Case No. 13-cv-0474 (W.D. Pa.). The claims resolved by this settlement are allegations only; there has been no determination of liability except as admitted in the criminal proceedings.
Four Pennsylvania-Based Companies and Two Individuals Agree to Pay $3 Million to Settle False Claims Act Suit Alleging Evaded Customs DutiesRead the Press Release
WASHINGTON – The Department of Justice announced today that three importers and their owners – Ameri-Source International Inc., Ameri-Source Specialty Products Inc., Ameri-Source Holdings Inc., Ajay Goel and Thomas Diener – and a related importer, SMC Machining LLC, incorporated at Goel’s direction and formerly owned by his wife, have agreed to pay $3 million to resolve a lawsuit brought by the United States under the False Claims Act. The lawsuit alleged that the defendants had engaged in a scheme to evade customs duties on imports of small-diameter graphite electrodes from the People’s Republic of China (PRC). Small-diameter graphite electrodes are columns of synthetic graphite with diameters of around 16 inches or less that are used as fuel in electric arc and ladle furnaces, such as those used in steel manufacturing. The companies are all based in Pennsylvania.
“The nation’s customs laws are designed to protect domestic manufacturers from foreign products that enter the country at below-market prices due to unfair practices abroad,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This settlement shows that the Department of Justice is committed to pursuing claims against anyone involved in a scheme to seek an unfair advantage in U.S. markets by evading duties on imported goods, including the individuals who run the companies and knowingly participate in such schemes.”
The Department of Commerce assesses and the U.S. Department of Homeland Security’s Customs and Border Protection (CBP) collects duties to protect U.S. manufacturers from unfair competition abroad by leveling the playing field for domestic products. The particular duties at issue in this case are antidumping duties, which protect domestic manufacturers against foreign companies’ “dumping” products on U.S. markets at prices below cost. Imports of PRC-manufactured small-diameter graphite electrodes have been subject to antidumping duties since Aug. 21, 2008.
The settlement announced today resolves claims that Ameri-Source International Inc. evaded antidumping duties on 15 shipments of small-diameter graphite electrodes from the PRC from December 2009 to March 2012. The United States contended that Ameri-Source International misclassified the size of the electrodes to avoid paying the duties. There are no antidumping duties on larger diameter graphite electrodes. The United States also alleged that Goel, Diener and the other companies caused and conspired in the misrepresentation to evade duties. Ameri-Source International also waived indictment and pleaded guilty today to two counts of smuggling goods into the United States. In U.S. District Court in the Western District of Pennsylvania, Ameri-Source International admitted that on April 27, 2011 and June 9, 2011, the company falsely declared imported cargo from the PRC as being graphite rods greater than 16 inches in diameter. Chief Judge Joy Flowers Conti immediately sentenced the corporation to pay a $250,000 criminal fine within 10 days and applied the payment of the $3 million to the loss of antidumping duties of $2,137,420.00.
“We are committed to protecting U.S. jobs and industries from those who seek an unfair advantage in the U.S. marketplace,” said U.S. Attorney David J. Hickton for the Western District of Pennsylvania. “This office’s aggressive criminal and civil enforcement efforts to combat and prosecute the evasive practices of both the corporations and individuals who perpetrated this scheme demonstrate our resolve to ensure a level playing field for all.”
“Antidumping duties level the playing field for U.S. manufacturers,” said CBP Commissioner R. Gil Kerlikowske. “This is a prime example of how U.S. Customs and Border Protection partners with the Department of Justice, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI) and the U.S. Department of Commerce to enforce antidumping duty laws.”
“This settlement underscores one of HSI’s primary efforts, which is to ensure a level playing field for companies engaged in legitimate trade and commerce with the United States,” said Special Agent in Charge John Kelleghan of Homeland Security Investigations (HSI) Philadelphia. “HSI special agents will continue to protect the revenue of the United States and aggressively investigate individuals and companies who attempt to operate outside our laws and regulations.”
“The Department of Commerce Office of Inspector General is dedicated to supporting bureaus such as the International Trade Administration in protecting the U.S. economy from the type of criminal activity disclosed in this case,” said Special Agent in Charge Duane E. Townsend of the U.S. Department of Commerce Office of Inspector General. “We greatly appreciate the cooperation and efforts of HSI and the U.S. Attorney’s Office that resulted in this agreement.”
The allegations resolved by the settlement were originally brought by whistleblower Graphite Electrode Sales Inc. under the qui tam provisions of the False Claims Act. The act permits private parties to sue on behalf of the government those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government or cause or conspire in such conduct. The United States may intervene in and take over the lawsuit, as it has done here. The act also allows the whistleblower to receive a share of any funds recovered through the lawsuit. Graphite Electrode Sales Inc. will receive approximately $480,000 as its share of today’s settlement.
The case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Pennsylvania, CBP, ICE HSI and the Department of Commerce’s International Trade Administration and Office of Inspector General.
The lawsuit is captioned United States ex rel. Graphite Electrode Sales, Inc. v. Ameri-Source Holdings, Inc., et al., Case No. 13-cv-0474 (W.D. Pa.). The claims resolved by this settlement are allegations only; there has been no determination of liability except as admitted in the criminal proceedings.
Four Ordered to Prison for Sex Trafficking of MinorsRead the Press Release
HOUSTON – A total of four people who were residing in Houston have been sentenced to federal prison for their respective roles related to the sex trafficking of minors, announced U.S. Attorney Kenneth Magidson.
Luisa Vargas, a legal permanent resident residing in Houston, was convicted of sex trafficking of a minor and harboring illegal aliens following a bench trial June 19, 2015, while Dolores Vargas, also a legal permanent resident in Houston; Blasina Vargas, a naturalized U.S. citizen residing in Houston; and Ignacio Escandon, a citizen of Cuba, had previously pleaded guilty to engaging in the sex trafficking of minors.
Today, U.S. District Judge Lynn N. Hughes ordered Luisa Vargas to serve 120 months in federal prison. Blasina and Delores each received a sentence of 60 months, while Escandon will serve an 87-month term of imprisonment.
From at least February 2012, the defendants employed women and a girl less than age 18 as prostitutes in the Westview apartments being used as a brothel. These women and young girl were instructed as to how much money to charge their clients for commercial sex. Approximately half of the proceeds were given to the defendants. As a general practice, the price paid was $40 for 15 minutes of sex. The defendants knew that most, if not all, of the ladies employed for the purpose of prostitution were aliens illegally within the United States.
All will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the future.
The charges were the of an investigation by Homeland Security Investigations, FBI, Houston Police Department and Harris County Sheriff’s Office. Assistant U.S. Attorneys Doug Davis and Julie Searle prosecuted the case.
Former Systems Administrator Convicted of Hacking into Industrial Facility Computer SystemRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced the conviction of a former systems administrator who hacked into the computer system of an industrial facility to disrupt and damage its operations.
On February 4, 2016, BRIAN A. JOHNSON, age 44, of Baton Rouge, Louisiana, pled guilty before Chief U.S. District Judge Brian A. Jackson to intentionally damaging a protected computer. JOHNSON faces possible imprisonment, fines, restitution orders, and a term of supervised release following imprisonment. Sentencing is scheduled for 9:30 a.m. on May 19, 2016, before Chief Judge Jackson.
JOHNSON worked as an information technology specialist and systems administrator for a large manufacturing facility in Port Hudson, Louisiana. During the guilty plea hearing, JOHNSON admitted that, on February 27, 2014, several days after his employment was terminated, JOHNSON remotely accessed the plant’s computer system and intentionally transmitted code and commands which resulted in significant damage to the plant’s operations.
The crime for which JOHNSON has been convicted only requires that the value of the damage exceed $5,000. Oftentimes, however, the actual value of such activity far exceeds this minimum amount. In determining the appropriate sentence and amount of restitution, the Court will determine the actual value of the damage caused by JOHHSON during the sentencing hearing.
U.S. Attorney Green stated: “Cybercrime poses a very real threat and danger to businesses and individuals alike. External threats loom large, but insiders and former insiders can also be the source of such criminal activity. We commend the victim on its quick response and cooperation with our office and the FBI. The harsh reality is that no business or individual is immune from such an attack. We must therefore unite as a community to confront these threats.”
FBI New Orleans Special Agent in Charge (SAC) Jeff Sallet stated: “The FBI New Orleans Division’s Cyber Squad should be commended for their outstanding efforts throughout this investigation. Cyber cases are extremely challenging cases to investigate, mainly due to the complex nature of the internet and logistics in identifying the location of the person attempting to sabotage corporate networks.”
The U.S. Attorney’s Office leads the Middle District of Louisiana Cyber Initiative which includes the U.S. Department of Justice’s Computer Crimes and Intellectual Property Section, the Federal Bureau of Investigation, the U.S. Secret Service, the U.S. Department of Homeland Security, the U.S. Department of Treasury, the U.S. Department of Education, the Louisiana State Police, the East Baton Rouge Parish Sheriff’s Office, and the East Baton Rouge Parish District Attorney’s Office.
This matter was investigated by the Federal Bureau of Investigation’s Cybercrimes Squad. It is being prosecuted by Assistant U.S. Attorney M. Patricia Jones, who serves as the office’s Appellate Chief, and Assistant U.S. Attorney Ryan Crosswell.
Former State Magistrate Judge Pleads Guilty to Embezzling $24,000Read the Press Release
WICHITA, KAN. – A former state district magistrate judge in southeast Kansas pleaded guilty Monday to embezzling approximately $24,000, U.S. Attorney Barry Grissom said.
Bill W. Lyerla, 64, Galena, Kan., pleaded guilty to six counts of wire fraud. In his plea, Lylera admitted he embezzled the money from the Kansas District Magistrate Judges Association while he served as an elected treasurer for the organization. In the state system, magistrate judges conduct first appearances and preliminary examinations of felony charges and hear felony arraignments, as well as performing other judicial duties. Lyerla was a magistrate judge for the state’s Eleventh Judicial District from 1991 to his resignation in 2014.
In his plea, he admitted that as treasurer for the judges association he had authority to write checks to pay for the organization’s legitimate expenses. He used that power to fraudulently write checks payable to himself on the association’s bank account.
Sentencing is set for July 6. He faces a maximum penalty of 30 years in federal prison and a fine up to $1 million on each count. Grissom commended the FBI and Assistant U.S. Attorney Debra Barnett for their work on the case.
Former School Administrator and Retired Colonel Found Guilty of Failing to Report Child Abuse at Bluegrass Challenge AcademyRead the Press Release
LOUISVILLE, Ky. – A retired Colonel in the Kentucky National Guard and the former Director of Bluegrass Challenge Academy was found guilty last week in United States District Court of failing to report child abuse, announced United States Attorney John E. Kuhn, Jr.
Following a three-day trial, a federal jury deliberated approximately two hours before finding John Wayne Smith, 65, guilty of the charge.
Smith was charged in a federal superseding indictment on April 22, 2015, with violating Title 18, United States Code, Section 2258. The statute applies to facilities and individuals on federal lands and requires that individuals in certain positions, such as school administrators, report to law enforcement or child protective services as soon as possible if they learn of facts that give reason to suspect child abuse. While the statute was enacted in 1990, this appears to be the first trial under the statute.
According to the evidence presented at trial, from 2003 to December 2013, Smith was the Director of Bluegrass Challenge Academy, a quasi-military school for students at-risk of not finishing high school. The Academy is located on Fort Knox military base. In early-February 2013, Smith learned that a 17-year-old female student at the Academy had alleged Stephen Miller, one of the staff members, forced her to touch his clothed penis. Around the same time, Smith also learned that another female student had accused Miller of touching her inappropriately. There was an internal investigation and Miller was reprimanded, but continued to work at the school, where his office was on the same hall where the female cadets showered and slept. Smith did not report the matter to law enforcement or child protective services. Law enforcement only became aware of the allegations through the investigation of an August 2013 incident, in which another female student accused a staff member of forcing her to perform oral sex on him.
In July 2015, Stephen Miller pled guilty to conduct related to both February 2013 incidents, as well as the August 2013 incident. Before Smith hired Miller to work with female students at the Academy, Miller worked as a police officer in Leitchfield, Kentucky. He resigned the position following complaints of inappropriate conduct toward two women. On February 1, 2016, Miller was sentenced to 48 months for conduct related to four separate incidents at the Academy.
Smith is scheduled to be sentenced on May 19, 2016.He faces a sentence of up to one year in prison and a $100,000 fine.
Assistant United States Attorneys Amanda E. Gregory and Stephanie M. Zimdahl are prosecuting the case. The Federal Bureau of Investigation (FBI) with assistance from the Army Criminal Investigation Division conducted the investigation.
Former Sailor and Convicted Serial Rapist Sentenced for 2010 AttackRead the Press Release
NORFOLK, Va. – Amin Jason Carl Garcia, 27, of New York, New York, a convicted serial rapist and former U.S. Navy sailor, was sentenced today to 240 months in prison for attacking a former Army officer while she was taking a shower at Camp Arifjan in Kuwait in 2010. This sentence is to be served consecutive to the state prison sentence Garcia is currently serving.
According to court documents, on April 29, 2010, the U.S. Army Criminal Investigative Division (CID) Kuwait, was contacted regarding the assault and attempted rape of a U.S. Army officer in the female shower trailer on board Camp Arifjan, Kuwait. According to the victim, approximately three minutes into her shower, an unknown black male whose face was almost fully covered by a military tan undershirt, pulled her from the shower to the opposite end of the trailer and ordered her to face away from him. The victim resisted her attacker, who subsequently cut her numerous times with a box cutter type knife and punched her several times in the head. At one point during the attack, the attacker stated that he “guessed” he would have to kill her. Eventually, the victim complied with her attacker and stated that she would do what he wanted to do, but begged that he not cut her any more. Shortly after the comment, the attacker fled the scene on foot and the victim ran to her tent to get help before being transported to the medical facility in Camp Arifjan where she received numerous stitches to her face, arm and hand.
According to court documents, while processing the crime scene, investigators recovered a shirt covered in what appeared to be blood. That shirt was believed to be the shirt that was covering the face of the attacker. Also discovered at the crime scene was what appeared to be a trail of blood that led from the female shower trailer to a male washroom. Army CID collected blood from the trail. U.S. Criminal Investigative Laboratory (USACIL) tested the blood samples and determined that they came from two different DNA profiles: one DNA profile was that of the known female victim, and the other was identified as from an unknown male with Type A blood.
According to court documents, the unknown male’s DNA also was a match for DNA recovered at the scene of a sexual assault on a Norfolk woman in 2008. The same rapist returned to the victim’s home one month after the initial assault and raped the victim’s daughter. In addition to the DNA, the Norfolk Police Department (NPD) also recovered latent fingerprints from the crime scenes. NCIS and NPD began to work together to try to identify the rapist.
According to court documents, subsequent investigative steps identified Garcia as a possible suspect in the assaults. These steps included a check of military records, which confirmed that Garcia was in the U.S. Navy Reserves, lived approximately one mile from the 2008 Norfolk victims during the time of their attacks, and was assigned to Camp Arifjan at the time of the 2010 attack.
According to court documents, in December 2013, Garcia was still in the U.S. Navy Reserves. On the weekend of Dec. 14, 2013, when Garcia was serving his reserve drill period at the Navy Operational Support Center (NOSC), Bronx, New York, NCIS investigators shadowed him. After Garcia ate lunch on base, agents seized the fork, two cups, and banana to recover swabs for DNA analysis. The analysis of the DNA seized by investigators revealed that it matched the DNA that was obtained from the assault of the victim at Camp Arifjan in April 2010 and the 2008 assaults in Norfolk. Further analysis revealed that the latent fingerprints recovered from the 2008 Norfolk crime scenes matched Garcia’s fingerprints.
Garcia pleaded guilty in federal court to the Kuwait assault on Nov. 20, 2015. In August 2014, Garcia was convicted of the 2008 rapes in Norfolk Circuit Court and was sentenced to life in prison.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and [NCIS], made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorneys Elizabeth M. Yusi and Benjamin L. Hatch 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. 2:14-cr-134.
Former SEC Senior Associate Chief Settles Conflict of Interest AllegationsRead the Press Release
PLANO, Texas – A 73-year-old former SEC accountant from Denton, Texas, has entered into a settlement concerning conflict of interest allegations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Edmund W. Bailey, Jr., now residing in Mesquite, Nevada, signed a civil settlement agreement today resolving federal conflict of interest allegations arising from an expert report he prepared after his retirement from the Securities and Exchange Commission (SEC) in 2012.
According to court documents, in March 2012, Bailey, a Senior Associate Chief Accountant, retired from the SEC. On June 3, 2013, Bailey prepared and submitted an expert report to KPMG, LLP, conveying his expert opinion as to whether certain KPMG policies and procedures were inconsistent with SEC auditor independence rules. KPMG then submitted the report to the SEC as part of a “Wells Submission,” which is information provided to the SEC by a potential defendant advocating why the agency should not institute an enforcement action in a particular matter. The United States alleged that Bailey’s expert report constituted a prohibited communication to the SEC in violation of United States post-employment conflict of interest restrictions under 18 U.S.C. § 207. Bailey has agreed to pay a civil fine of $40,000 (out of an applicable maximum of $50,000) to resolve the allegations. Bailey has denied any allegations of wrongdoing.
Today’s settlement marks the second time in four years that the U.S. Attorney’s Office for the Eastern District of Texas has pursued and resolved conflict of interest allegations against senior SEC personnel under 18 U.S.C. § 207. The prior 2012 press release can be located at http://www.justice.gov/archive/usao/txe/News/2012/edtx-barasch-011312.html.
“The public expects that its federal employees will honor and abide by the stringent conflict of interest prohibitions and ethical standards required by law,” said U.S. Attorney Bales. “Our office intends to ensure that those expectations are met.”
This case was investigated by the Securities and Exchange Commission Office of Inspector General and the U.S. Attorney’s Office for the Eastern District of Texas. The settlement was negotiated by Assistant U.S. Attorneys Randi Russell and Joshua Russ. The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Former Managing Partner and CFO of Morris, Hardwick, Schneider Law Firm, and Land Castle Title, Indicted for Multi-Million Dollar EmbezzlementRead the Press Release
ATLANTA – A federal indictment unsealed today charges Nathan E. Hardwick IV and Asha R. Maurya with conspiracy, wire fraud, and related crimes in connection with Hardwick’s alleged theft of over $20 million from the attorney escrow accounts and operating accounts of Morris Hardwick Schneider and LandCastle Title, an Atlanta-based law firm and title agency in which Hardwick and Maurya once served as top executives. In addition to charges against Maurya for assisting with Hardwick’s theft, the indictment also charges Maurya with stealing approximately $900,000 from the firm’s accounts to pay her own personal expenses.
“The indictment alleges an embezzlement scheme dating back years,” said U.S. Attorney John Horn. “Along the way, Mr. Hardwick is alleged to have repeatedly lied to his clients, law partners, banks and others. The allegations are especially troubling given that the actions were orchestrated by a lawyer who swore an oath to uphold the law and to represent his clients with integrity.”
“The magnitude of theft as alleged in the federal indictments of these two defendants clearly merited the resulting federal investigation and prosecution. The allegations describe a trusted corporate officer and attorney in personal financial troubles conspiring with another corporate officer to steal from their employer, primarily through escrow accounts entrusted to their company. Today’s federal grand jury indictments will now move those allegations into federal court,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated.
According to U.S. Attorney Horn, the indictment, and other information presented in court: Morris Hardwick Schneider and LandCastle Title (“MHS”) was a law firm and title insurance agency headquartered in Atlanta, Georgia. MHS employed approximately 80 lawyers and 800 non-lawyer employees in 16 states. MHS’s law practice specialized in residential real estate closings and default and foreclosure matters. MHS’s title insurance business involved selling title insurance policies in connection with residential real estate closings.
During periods of high activity in the real estate market, MHS performed thousands of residential real estate closings per month, and received hundreds of millions of dollars in closing funds that it was required to hold in trust in attorney escrow accounts until disbursed in accordance with its clients’ closing instructions for each transaction. At any given time, a single MHS attorney escrow account might contain millions of dollars. MHS also had operating accounts for purposes of funding its operations. MHS’s accounting and escrow account operations were based out of the firm’s Atlanta headquarters.
From MHS’s formation in 2005 until Hardwick’s resignation in August 2014, Hardwick served as managing partner of the law firm and Chief Executive Officer of the title insurance agency. Hardwick was also the majority shareholder of MHS. Hardwick worked out of MHS’s Atlanta headquarters, supervised virtually all of MHS’s day-to-day operations, and had virtually unlimited access to, and control over, MHS’s financial affairs.
Maurya was an accounting department employee of MHS from April 2009 until her termination in November 2014. Maurya was hired to be MHS’s Escrow Account Controller and was eventually promoted to the position of Chief Financial Officer of MHS’s closing division. Maurya managed MHS’s attorney escrow account operations and other accounting operations under Hardwick’s supervision.
Hardwick allegedly began experiencing severe financial problems in the late 2000s, when a sharp decline in the residential real estate market made MHS less profitable, and he was subject to a July 2008 divorce decree requiring him to pay his ex-wife over $550,000 per year in alimony and other payments for five years. Hardwick’s legitimate income could not keep pace with his lavish lifestyle, which included private jet travel; multi-million dollar homes; high-end retail goods and services; gambling at casinos in Louisiana, Mississippi, New Jersey, and Nevada; and payments to bookies and girlfriends.
The Alleged Embezzlement Conspiracy
To maintain the illusion of wealth and success despite his financial problems, and to continue to live beyond his means, in or about 2011, Hardwick allegedly began directing Maurya to make millions of dollars in shareholder distributions, bonuses, and other payments for Hardwick’s benefit, directly out of MHS’s bank accounts, in amounts that exceeded the share of MHS’s profits to which Hardwick was entitled. This occurred at times when no shareholder bonuses or distributions were scheduled to be made, and without causing or directing proportionate bonuses or distributions to be made to the other MHS shareholders. The excess bonuses, distributions, and payments to and for Hardwick’s benefit included payments to casinos, private jet charter companies, credit card issuers, and other creditors and accounts.
To fund the vast majority of these illicit payments, Hardwick and Maurya allegedly caused millions of dollars to be wire transferred to and for Hardwick’s benefit out of MHS’s attorney escrow accounts. Hardwick and Maurya fraudulently concealed Hardwick’s excess payments from the other MHS shareholders, MHS employees, outside auditors, title insurance underwriters, and others through false statements, half-truths, and by the omission of material facts, and by distributing false and misleading financial information and records.
According to the indictment and based on information presented in court, when other MHS shareholders, MHS employees, and one of MHS’s title insurance underwriters began to uncover the conspiracy in July and August 2014, Hardwick and Maurya took further steps to conceal the illicit payments and to delay and obstruct the discovery of their scheme, including by making false statements about the nature, amount, and cause of the excess payments and any resulting escrow account shortages. In particular, Maurya allegedly provided excuses and denials that attempted to attribute any problems to bank error.
Before the other MHS shareholders and employees knew the full extent of the scheme, Hardwick also allegedly tried to conceal the amount of his illicit payments and the severity of the resulting escrow account shortages by lying to obtain and to attempt to obtain loans from various individuals and entities to repay part of the money that he had stolen.
The indictment also charges Hardwick with lying to obtain over $3.5 million in loans from federally-insured banks in 2009, 2011, 2013, and 2014.
Maurya’s Alleged Embezzlement
In addition to charges against Maurya for her assistance with Hardwick’s alleged theft of over $20 million, the indictment charges Maurya separately with a scheme to defraud MHS by tricking MHS into issuing checks to pay off her personal credit card bills. Maurya is alleged to have diverted over $900,000 from MHS’s attorney escrow accounts and operating accounts to pay off her credit card bills and home mortgages.
Overview of The Charges
The indictment charges Hardwick and Maurya with one count of conspiracy to commit wire fraud and 18 counts of wire fraud. It charges Hardwick with one count of bank fraud and three counts of making false statements to federally-insured financial institutions. The indictment charges Maurya with 11 counts of mail fraud. The conspiracy, wire fraud, and mail fraud charges against Hardwick and Maurya each carry a maximum sentence of 20 years in prison and a fine of up to $250,000 per count. The bank fraud and false statements charges against Hardwick each carry a maximum sentence of 30 years in prison and a fine of up to $1 million per count. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
A federal grand jury in Atlanta returned the sealed indictment against Hardwick, 50, formerly of Atlanta, and Maurya, 40, of Atlanta, on February 9, 2016. Both defendants made their initial appearances today before U.S. Magistrate Judge Justin S. Anand.
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove each defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by Special Agents of the FBI. Valuable assistance has also been provided by Special Agents of the Criminal Investigation Division of the IRS.
Assistant United States Attorneys David M. Chaiken and J. Russell Phillips are prosecuting the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Manager of Marietta Hair Products Company Sentenced for Embezzling over $3.3 MillionRead the Press Release
ATLANTA - Veria Fields, a former employee of Bronner Bros., Inc., a hair care products company in Marietta, Georgia, has been sentenced to serve two years and four months in federal prison on charges of mail fraud relating to a theft from her former employer.
“Small businesses depend on their finance and accounting personnel to safeguard the financial health of the company,” said U.S. Attorney John Horn. “Instead, Fields violated the company’s trust by stealing millions of dollars for herself.”
“Today’s sentencing of Ms. Fields to federal prison will provide her with significant time to reflect on her ill-conceived greed driven theft scheme that diverted over three million dollars from her company to her own bank account. The FBI will continue to dedicate its investigative resources toward those individuals engaged in such unbridled and damaging white collar based criminal schemes as seen here,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges and other information presented in court: Fields was the Accounts Receivable Manager for Bronner Bros. Inc., a wholesaler of African-American hair care products headquartered in Marietta, Georgia. Fields also informally performed customer service functions for the company.
From 2006 through 2010, Fields embezzled over $3.3 million from Bronner Bros. by offering customers unauthorized discounts of five to15 percent in exchange for customers making account payments to her in cash. Rather than applying the discounted payments to the customers’ accounts as the customers expected, Fields instead pocketed the cash for herself. To conceal the unauthorized discounts and the thefts, Fields used her position as the company’s Accounts Receivable Manager to allocate portions of the payments from other Bronner Bros. customers to cover the shortfalls she created. She also wrote off portions of the bills owed by the customers.
Veria Fields, 54, of Atlanta, Georgia, has been sentenced to two years, four months in federal prison, to be followed by three years of supervised release, and to pay restitution of $3,330,828.02. Fields was convicted of these charges on November 20, 2015, after she pleaded guilty.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Bernita B. Malloy prosecuted this case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Former Insurance Agent Sentenced to Prison for Investment Fraud Scheme and Tax FraudRead the Press Release
Contact Person: Dean Secor (843) 727-4381
The case was investigated by agents of the Federal Bureau of Investigation (FBI) and the Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant United States Attorney Dean H. Secor of the Charleston office prosecuted the case. #####
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Timothy David Mays, age 51, of Walterboro, South Carolina was sentenced in federal court in Charleston, South Carolina, for Wire Fraud, a violation of 18 U.S.C. § 1343, and Willfully Filing a False Income Tax Return, a violation of 26 U.S.C. § 7206(1). United States District Judge David C. Norton of Charleston sentenced Mays on the wire fraud count to 42 months imprisonment to be followed by 3 years of supervised release, and on the tax count to 36 months imprisonment to be followed by one year of supervised release, with the sentences to run concurrently.
According to court documents and evidence presented in open court, from late 2008 through 2011, Timothy “David” Mays was an insurance agent licensed to sell life insurance and accident/health insurance who also touted himself as a “licensed” investor and CEO of Life Trust Financial, LLC, and MaysGroup Financial, investment companies located in Summerville, South Carolina. During that period, Mays represented that he provided financial services, including the sale of annuities and Certificates of Deposit (CD’s). Mays placed advertisements in local publications, including those for senior citizens and retirees, for the sale of CD’s that he claimed were being facilitated through local banks. Mays promised the investors that they would receive the advertised rate of return on the CD’s even if the bank rate was lower than he had advertised. Mays also promised that investors would receive bonuses for 401/IRA conversions and rollovers to CD’s if they met threshold investment funding amounts. Mays made all these representations knowing that he did not have any working relationship with the named banks to sell CD’s or any investment products.
Mays received approximately $1,089,000 from investors under the false pretenses that the money provided would be invested by Mays on behalf of the investors as advertised and promised. Mays only invested $200,000 of the funds for one client, and he returned approximately $203,000 to some of the clients who complained to him and asked for their money back. Mays spent approximately $583,000 on a variety of personal and business expenditures, and he turned over approximately $104,000 of funds that he had left in his accounts to federal authorities during the investigation.
Mays also filed a false U.S. Individual Income Tax Return in February 2007 for calendar year 2006 that understated his total income, and he willfully failed to file U.S. Individual Income Tax Returns for calendar years 2007, 2008, and 2009.
In addition to his prison sentence, Judge Norton also ordered Mays to pay restitution in the total amount of $710,138.41 ($583,087.41 to the victims of the fraud scheme and $127,051 to the IRS).Former IRS Employee Sentenced for $326,000 Fraud Scheme, Identity TheftRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former employee of the Internal Revenue Service was sentenced in federal court today for using stolen identities in a scheme to receive $326,000 in fraudulent tax refunds.
Demetria Michele Brown, 39, of Birmingham, Ala., was sentenced by U.S. District Judge Brian C. Wimes to two years and six months in federal prison without parole. The court also ordered Brown to pay $326,000 in restitution to the state of Missouri and the IRS.
On June 1, 2015, Brown pleaded guilty to two counts of wire fraud and one count of aggravated identity theft. Brown admitted that she engaged in a scheme to submit hundreds of false and fraudulent state and federal income tax returns in order to generate refunds from 2008 to 2011.
Brown, formerly of Fairview Heights, Ill., worked at an IRS office in St. Louis, Mo., during the fraud scheme. While employed by the IRS, Brown unlawfully obtained the personally identifiable information of at least 120 persons. Brown had direct access to taxpayers’ personally identifiable information; however, rather than risk detection by using that information to commit her fraud, Brown obtained the identities of taxpayers in the Metro-East area of St. Louis and Birmingham through illicit sources.
Brown filed more than 120 fraudulent federal tax returns, resulting in a loss of approximately $211,000. Brown filed at least 236 fraudulent state tax returns, resulting in a loss of approximately $115,000, for an aggregate loss amount of approximately $326,000.
The scheme involved Brown obtaining personal identification information, including names, Social Security numbers, and dates of birth of other persons without their knowledge or consent. Brown completed U.S. individual income tax returns and Missouri state income tax returns for persons using the personal identification information she had obtained, adding other information which was false and fraudulent, including the address, place of employment, wages earned, taxes withheld and the fact that a refund was due.
This case was prosecuted by Assistant U.S. Attorney Anthony P. Gonzalez. It was investigated by the FBI, IRS-Criminal Investigation, the Missouri Department of Revenue – Compliance and Investigation Bureau and the Missouri Department of Revenue – Criminal Investigation Bureau.
Former Executive Director of Charity Sentenced to 21 Months in Prison for Stealing over $1 Million from Employer and Laundering over $220,000 of ProceedsRead the Press Release
WASHINGTON – Byron Fogan, 43, has been sentenced to 21 months in prison on a federal charge stemming from the embezzlement of over $1 million from a private charitable foundation where he worked as executive director, announced U.S. Attorney Channing D. Phillips, Thomas Jankowski, Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI), and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office.
Fogan, of Columbia, Md., pled guilty in November 2015 in the U.S. District Court for the District of Columbia to one count of money laundering involving the laundering of approximately $220,000 of the proceeds of the embezzlement scheme. He was sentenced on Feb. 19, 2016, by the Honorable Judge Rosemary M. Collyer. Following his prison sentence, Fogan will be placed on three years of supervised release. He also must pay $223,568 in restitution to the charitable foundation as well as a forfeiture money judgment in the amount of $223,568.
According to a statement of offense submitted at the plea hearing, Fogan was the executive director of the Oasis Foundation, a private charitable foundation located in the District of Columbia. The Board of Directors of the Oasis Foundation was comprised of Fogan, a professor, and a priest. The Oasis Foundation’s purpose was to make financial donations to various non-profit and charitable organizations that worked in educational development, innovation in science and technology, the promotion of arts and culture, developing families and strong communities, and the promotion of environmental awareness and protection.
Fogan enjoyed exclusive access to, and control of, the Oasis Foundation’s finances, including all bank accounts. From on or about Jan. 1, 2011, to at least May 31, 2013, Fogan illegally obtained in excess of $1 million from the Oasis Foundation. Oasis Foundation accounts were replenished as Fogan continued to spend down the balances in each account.
Fogan spent at least $1 million of the illegally obtained funds at casinos. Spending the funds in such fashion was contrary to the purpose and mission of the organization. The Board was unaware of such spending, and would not have approved of it. Fogan continued in the unlawful spending of these funds until he was caught by law enforcement.
Of the numerous illegal transactions Fogan conducted, seven were for amounts in excess of $10,000, which comprise the money laundering charge. These seven transactions totaled $223,568.
During this time period, the defendant made some legitimate expenditures related to the Oasis Foundation, which resulted in the commingling of funds.
In announcing the sentence, U.S. Attorney Phillips, Special Agent in Charge Jankowski and Assistant Director in Charge Abbate commended the work of those who investigated the case from IRS-CI and FBI. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Assistant U.S. Attorney David Johnson, Paralegal Specialist Taryn McLaughlin, and Assistant U.S. Attorneys Zia Faruqui, Alessandra Stewart, and Maia L. Miller.
Former Employees Plead Guilty to Conspiracy to Commit Wire and Mail Fraud in Connection with Alleged $70 Million Ponzi SchemeRead the Press Release
DAYTON, Ohio – Rebekah Riddell, 30, of Dayton, Ohio, pleaded guilty to one count of conspiracy to commit mail fraud, and Rebekah Fairchild, 53, also of Dayton, Ohio, pleaded guilty to conspiracy to commit wire fraud today in U.S. District Court. Riddell’s and Fairchild’s guilty pleas were both in connection with an alleged $70 million Ponzi scheme.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service, James Vanderberg, U.S. Department of Labor Office of Inspector General, the U.S. Department of Labor Employee Benefits Security Administration, and Brian Peters, Enforcement Attorney, Ohio Department of Commerce Division of Securities, announced their guilty pleas entered into Friday before Judge Thomas M. Rose.
Riddell and Fairchild pleaded guilty in connection to the case involving William M. Apostelos, 54, and Connie M. Apostelos, 50, both formerly of Springboro, Ohio. A grand jury in the Southern District of Ohio returned a multi-count indictment against William and Connie Apostelos in October 2015. An indictment merely contains allegations, and the defendants are presumed innocent unless proven guilty in a court of law. William and Connie Apostelos’ trial is currently scheduled to begin in May 2016.
The indictment alleges that beginning in 2009, and continuing for at least five years, the couple and others orchestrated a Ponzi scheme in the Dayton area in which nearly 480 investors lost more than $30 million collectively. William Apostelos operated and oversaw multiple purported investment and asset management companies in the Dayton area, including WMA Enterprises, LLC, Midwest Green Resources, LLC and Roan Capital. He allegedly falsely reported that he held a degree in mathematics and was a registered securities broker.
Connie Apostelos, also known as Connie Coleman, also operated and oversaw multiple companies in the Dayton area, including Coleman Capital, Inc. and Silver Bridle Racing, LLC. These companies were allegedly financed through improper use of investor funds that were intended to be invested with and through William Apostelos’ companies.
The couple allegedly recruited investors from 37 states to invest in WMA and Midwest Green, telling the investors that their money would be used for acquiring stocks or securities, purchasing real estate or land, providing loans to business and buying gold and silver.
Riddell and Fairchild were employed at Midwest Green and WMA from at least August 2009 until October 2014. In order to perpetuate the scheme, they engaged in a variety of activities, including wiring later investors’ money into earlier investors’ bank accounts and providing investors (at the direction of William and Connie Apostelos) with false and fraudulent excuses for non-payment to investors.
Riddell and Fairchild each face a potential maximum sentence of five years in prison.
U.S. Attorney Stewart commended the investigation of this case by law enforcement, and Assistant United States Attorneys Brent G. Tabacchi and Alex R. Sistla, who are prosecuting the case.
Former Employee of New Mexico Human Services Department Sentenced to Prison for Defrauding Federal Food Stamp ProgramRead the Press Release
ALBUQUERQUE – A former employee of the Income Support Division of the New Mexico Human Services Department was sentenced for defrauding the federal food stamp program. Joseph Martin Padilla, 34, of Albuquerque, N.M., was sentenced in federal court today to one year and a day in prison followed by three years of supervised release. Padilla was also ordered to pay $181,398.76 in restitution to the U.S. Department of Agriculture.
Padilla is one of six defendants charged with defrauding the Food Stamp Program in a 32-count indictment that was filed in Aug. 2014. The indictment alleged that between Sept. 2009 to May 2010, Padilla, conspired with Wilfredo Lopez, 47, Joshua Moya, 33, Justin Quintana, 29, Sergio Escobedo, 36, and Veronica Hernandez, 41, to defraud the United States through the unauthorized use of Food Stamp benefits, which are currently called Supplemental Nutrition Assistance Program (SNAP) benefits. During this time, Padilla worked as a Family Assistance Analyst for the Income Support Division of the New Mexico Human Services Department (HSD) where he was responsible for determining applicants’ eligibility and benefit level for SNAP benefits.
SNAP is funded by the U.S. Department of Agriculture and is administered by the States. The program was created to alleviate hunger and malnutrition, and permits low income households to obtain more nutritious diet by increasing the food purchasing power for eligible households. In New Mexico, individuals qualify to participate in SNAP based on income and need by completing an application with the Income Support Division of HSD. Once an applicant is deemed eligible for SNAP benefits by a Family Assistance Analyst, the Analyst establishes a SNAP account in the applicant’s name and electronic benefit transfers (EBT), which are determined based on income, resources and household size, are deposited into the account on a monthly basis.
The indictment charged Padilla with abusing his position as a Family Assistance Analyst by conspiring with his co-defendants to defraud the United States through the unauthorized use of SNAP benefits. It alleged that Padilla used names and personal identifiers he obtained from his co-defendants to establish fraudulent SNAP accounts, sometimes in exchange for cash or other things of value. It also charged Padilla with establishing and using a fraudulent SNAP account to fraudulently obtain approximately $1,468.00 in SNAP benefits for himself. According to the indictment, Padilla fraudulently established 25 separate SNAP accounts through which the United States was defrauded of approximately $45,263.00 in SNAP benefits. Additionally, Padilla, aided and abetted by his co-defendants, fraudulently established SNAP accounts that were used to fraudulently obtain an aggregate of $12,705.00 in SNAP benefits.
On Nov. 23, 2015, Padilla pled guilty two counts of the indictment and admitted that he was previously employed by HSD and despite his awareness of the policies and procedures of HSD, he processed numerous applications for SNAP benefits in a fraudulent manner in exchange for cash payments. Padilla acknowledged that his illegal conduct resulted in an aggregate loss to the U.S. Department of Agriculture and the State of New Mexico of approximately $181,398.76.
On May 19, 2015, Lopez entered a guilty plea to one count of the indictment and admitted that he completed fraudulent applications for SNAP benefits in his name, another for himself in a pseudonym, and in the names of two other individuals. Lopez paid $100.00 to process each of the applications. Lopez was sentenced on Jan. 14, 2016, to four years of probation and was ordered to pay $8,382.00 in restitution to the USDA.
On May 18, 2015, Quintana pled guilty to one count of the Indictment, and admitted meeting Padilla through Moya, and knowing that Padilla had the ability to register people to receive food stamps. Quintana admitted that he agreed to pay Padilla a fee in exchange for arranging for him to receive food stamps unlawfully. Quintana obtained $486.00 in SNAP benefits through his illegal conduct. He also received a fee for collecting SNAP applications from six other people and delivering the completed applications to Padilla for the purpose of assisting them in obtaining SPA benefits unlawfully. Quintana acknowledged that his criminal conduct caused a monetary loss to the U.S. Department of Agriculture of $9,384.00. Quintana was sentenced on Aug. 17, 2015, to three years of probation and was ordered to pay $9,384.00 in restitution.
On March 9, 2015, Moya pled guilty to one count of the indictment and admitted that he fraudulently obtained SNAP benefits to which he was not entitled. Moya admitted that in early Dec. 2009, Padilla provided him with an application to obtain food stamps. Moya completed the application and returned it to Padilla for processing even though he knew that he was not entitled to SNAP benefits. Moya admitted unlawfully receiving $866.00 in SNAP benefits. Moya also admitted providing another application for SNAP benefits to a family member and that his relative unlawfully received $1,578.00 in SNAP benefits. On May 6, 2015, Moya was sentenced to six months in prison, or time served, followed by three years of supervised release. Moya also was ordered to pay $2,444.00 in restitution.
Escobedo and Hernandez have entered not guilty pleas to the charges in the indictment. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Office of Inspector General for the U.S. Department of Agriculture and the Office of Inspector General for New Mexico Human Services, and is being prosecuted by Assistant U.S. Attorney Sean J. Sullivan.
Former Deportation Officer Indicted for Accepting Bribes, Harboring an Undocumented Immigrant and Lying to U.S. Immigration AuthoritiesRead the Press Release
NEWARK, N.J. – A federal grand jury today indicted a Somerset, New Jersey, man for allegedly accepting cash bribes and sex in exchange for providing employment authorization documents and for concealing his employment of an undocumented immigrant at a hair salon he owned, U.S. Attorney Paul J. Fishman announced.
Arnaldo Echevarria, 38, a former deportation officer with Immigration and Customs Enforcement (ICE), is charged by indictment with seven counts of accepting bribes, one count of harboring an undocumented immigrant and one count of making false statements to immigration authorities. Echevarria will be arraigned in federal court on a date to be determined. He was originally charged by complaint on Apr. 9. 2015.
According to the documents filed in this case:
As a deportation officer, Echevarria enforced immigration and customs laws by identifying, locating, arresting and removing undocumented immigrants from the United States and by supervising certain undocumented immigrants who had not yet been deported. Undocumented immigrants subject to a deportation order often were able to obtain employment authorization documents which allowed them to legally work in the United States for a one-year period and which could be renewed annually.
Between 2012 and 2014, Echevarria agreed to obtain employment authorization documents for approximately seven undocumented immigrants who were not lawfully present in the country. In return, Echevarria demanded and received approximately $78,000 in cash bribes. In order to conceal them from immigration authorities, Echevarria falsely stated that they had been granted temporary protected status, which allows nationals from certain countries experiencing environmental disaster, ongoing armed conflict, or other extraordinary conditions to lawfully remain in the United States. None of the individuals who bribed Echevarria had actually applied for, or received, temporary protected status.
In addition to the cash bribes, Echevarria also allegedly demanded and received sex from two of the individuals, one of whom became pregnant with Echevarria’s child. Despite Echevarria encouraging her to have an abortion, the woman delivered the child, and Echevarria told her that no one could find out that he was the child’s father. Afterwards, Echevarria continued to have sex with this individual in exchange for his help with her employment authorization documents.
In December 2012, Echevarria received permission from his superiors at ICE to open a hair salon in West Orange, New Jersey. Echevarria certified to ICE that the hair salon would not conflict with ICE matters and would not involve undocumented workers. However, Echevarria employed his girlfriend at the time, an undocumented immigrant, to manage the salon. Echevarria’s girlfriend had entered the United States illegally, using the name and identification of an individual in Puerto Rico to obtain a Pennsylvania identification card.
Echevarria allegedly knew his girlfriend resided in the United States illegally. Prior to opening the hair salon, Echevarria queried the name and date of birth of his girlfriend’s alias in various law enforcement databases. After opening the salon, Echevarria allegedly ensured that his girlfriend’s illegal status remained a secret by signing the lease for her apartment and by placing her cable and electric bills in his name. In addition to driving his girlfriend and other employees to and from the salon each day, Echevarria also paid the employees in cash and never asked them to fill out employment eligibility paperwork.
The seven bribery counts each carry a maximum potential penalty of 15 years in prison and a $250,000 fine, twice the gross gain or loss from the offense, or three times the monetary equivalent of the things of value accepted by the defendant. The charges of harboring and making false statements are each punishable by a maximum potential penalty of five years in prison and $250,000 fine, or twice the gross gain or loss arising from the offense.
U.S. Attorney Fishman credited special agents of ICE, Office of Professional Responsibility, under the direction of Acting Special Agent in Charge John McCabe, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Michael Koribanics Esq., Clifton, New Jersey
Former Daycare Owner Pleads Guilty to Failing to Pay $891,000 in TaxesRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former owner of two daycare businesses in Parkville, Mo., and Platte City, Mo., pleaded guilty in federal court today to failing to pay $891,572 in payroll and other taxes to the Internal Revenue Service.
Lynn Jordan, 47, of Parkville, Mo., waived her right to a grand jury and pleaded guilty before U.S. District Judge Howard F. Sachs to a federal information that charges her with failing to pay over taxes to the IRS.
Jordan operated daycare businesses at two locations. The first daycare business, Growing Places, Inc., in Parkville, opened in 1999 and closed in 2011, after which Jordan opened South Platte Early Educational Center, LLC, using the same business location, clients, assets, employees, etc. Jordan closed this business in 2012. The second daycare business, Growing Places Platte City, Inc., in Platte City, opened in 2006 and closed in 2009, after which Jordan opened GPPC, Inc., using the same business location, clients, assets and employees, but with a different employer identification number. She did this because she was having problems paying business expenses, owed a lot of money to the IRS and needed a fresh start. Jordan closed this business in 2010.
By pleading guilty today, Jordan admitted the total federal criminal tax loss is $891,572.
From 2009 to 2012, Jordan withheld employment taxes from her employees’ paychecks totaling $211,704. But Jordan failed to pay over the trust fund taxes she collected from her employees to the IRS. Jordan also failed to pay over the employer’s portion of Social Security tax and Medicare tax from 2009 to 2012, totaling $123,906. Additionally, Jordan failed to pay over employment taxes from 2004 to 2008 totaling $506,588. She also failed to pay over federal unemployment taxes from 2004 to 2012 totaling $22,294. In addition to the payroll taxes, Jordan failed to file tax returns for three years from 2009 to 2012. The balance due on those tax returns totals $27,079.
During this time, Jordan spent a total of $320,738 on a large number of personal expenses from the business bank accounts. According to today’s plea agreement, Jordan withdrew more than $150,000 in cash and paid more than $50,000 on the mortgage of her personal residence from the business bank accounts. She made large ATM withdrawals and personal charges, including for lunches, salons, manicures, pedicures, travel, credit card and loan payments, checks and transfers to her personal bank accounts (in addition to her paychecks), retail stores, vehicle expenses, gas station purchases, clothing stores, medical and health expenses, restaurants, travel, expenses related to her children and credit score companies.
Under federal statutes, Jordan is subject to a sentence of up to five years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by IRS-Criminal Investigation.
Former Cay Clubs Chief Executive Officer Sentenced to 40 Years in Prison in Connection with $300 Million Dollar Scheme to Defraud InvestorsRead the Press Release
The former Cay Clubs Chief Executive Officer was sentenced to 40 years in prison, by United States District Judge Jose E. Martinez in Key West, for his participation in a $300 million dollar vacation rental fraud scheme.
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), Timothy Mowery, Special Agent in Charge, Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), made the announcement.
Fred Davis Clark, Jr., a/k/a Dave Clark, 57, formerly of Monroe County, was convicted on December 11, 2015 after a five-week trial, of three counts of bank fraud, and three counts of making a false statement to a financial institution, all in connection with a $300 million dollar fraud scheme involving sales of vacation rental units. The scheme involved sales at Cay Clubs Resorts and Marinas (Cay Clubs), to approximately 1,400 investors in the Florida Keys and elsewhere. Clark also was convicted of obstruction of the U.S. Securities and Exchange Commission (SEC), in connection with the SEC’s efforts to investigate his conduct related to Cay Clubs. Clark was sentenced to 480 months’ imprisonment and the Court entered forfeiture money judgments against Clark, including in the amount of $303,800,000 for the bank fraud and $3,300,000 for the SEC obstruction. In addition, the Court ordered forfeiture of specific assets, located overseas, totaling approximately $2.6 million dollars.
U.S. Attorney Wifredo A. Ferrer stated, “Dave Clark was the leader and orchestrator of an elaborate fraud scheme, that deceived nearly 1,400 Cay Clubs investors and lenders, in order to reap millions of dollars for his own personal benefit. Today, Dave Clark was held accountable in a court of law, for his extensive deceit and the long-standing harm he caused to others.”
Kelly R. Jackson, Special Agent in Charge, IRS Criminal Investigation (IRS-CI), stated, “Promoters of Ponzi schemes prey upon trusting investors and then steal their hard earned money. Mr. Clark made a conscious decision to deceive others, and he benefitted personally at the expense of the citizens of the Keys and elsewhere. We are pleased with today’s sentence, as justice is served for those victims of Mr. Clark’s elaborate scheme.”
“In lieu of providing honest services to thousands of investors, Dave Clark decided to deceive and swindle them out of their hard earned money,” stated Timothy Mowery, Special Agent in Charge, FHFA-OIG. “Today he is being held accountable for his actions and being afforded the opportunity to reflect on his own character.”
According to evidence submitted in court, Clark was the Chief Executive Officer of Cay Clubs, which operated from 2004 through 2008 from offices in the Florida Keys and Clearwater. Cay Clubs marketed vacation rental units for 17 locations in Florida, Las Vegas and the Caribbean, to investors throughout the United States. Cay Clubs raised more than $300 million from investors by promising to develop dilapidated properties into luxury resorts, and promising investors an upfront “leaseback” payment of 15 to 20% of the sales price of the unit at the time of closing. Evidence at trial showed that, in reality, Cay Clubs never developed the properites it had promised to investors and it came to operate as a Ponzi scheme, using proceeds from sales to new investors to pay overdue obligations to earlier investors.
Evidence showed that by at least September 2006, Cay Clubs experienced serious financial difficulties. In order to meet Cay Clubs’ financial obligations and obtain funds for himself, evidence at trial showed that Clark engaged in a serious of fraudlent mortgage transactions totalling more than $20 million worth of bank loans. According to documents and testimony introduced at trial, during these sham transactions, Clark sold units Cay Clubs had acquired, to himself, while increasing the sales price. On paper, Clark sold the units to family members and certain insiders, while causing various lending institutions to fund the transactions. Clark directed his administrative assistant and his bookkeeper to forge signatures on loan documents and falsely notarize mortgage paperwork to make it appear that family members and other insiders listed on paperwork, were in fact executing the documents. In reality, Clark was providing the deposits and down payments, directing his subordinates to execute the loan documents, and then using the proceeds of the transactions to fund Cay Club’s operations and for his own personal benefit. The financial institutions that funded the fraudulently obtained loans were insured by the FDIC.
Evidence at trial showed that while Cay Clubs continued to experience significant financial difficulties, Clark lived a lavish lifestyle, extracting more than $22 million from the operations of Cay Clubs between 2005 and 2007. Clark also obtained a personal portfolio of properties he valued at $23 million but that were held in the names of other persons. Clark also used proceeds from the investor sales to purchase a gold mine, a coal reclamation project and a rum distillery for his personal benefit.
After the collapse of Cay Clubs, the SEC began an investigation into alleged securities fraud at Cay Clubs. According to evidence presented in court, Clark engaged in conduct aimed at thwarting the SEC’s investigation, including by concealing the location of assets under his control and providing false sworn testimony before the SEC in May 2011. In March 2013, after the SEC filed a civil fraud action against him, Clark transferred more than $2.5 million to accounts he controlled in Honduras. After these transfers, U.S. law enforcement and authorities in Honduras were able to abtain a court order freezing these funds.
Clark was expelled from Panama in June 2014, and returned to the United States by Panamanian authorities at the request of U.S. law enforcement in connection with the charges set forth in the indictment.
In related cases, former Cay Clubs executives Barry J. Graham, 59, and Ricky Lynn Stokes, 54, both of Ft. Myers, Florida pleaded guilty to conspiracy to commit bank fraud, in connection with the scheme to defraud Cay Clubs investors. Graham, who was Director of Sales, was sentenced on March 30, 2015, and Stokes, who was the Director of Investor Relations, was sentenced on March 24, 2015. Each was sentenced to 60 months’ imprisonment, and was ordered to pay restitution of $163,530,377.21 to numerous individual and financial institution victims.
Mr. Ferrer commended the investigative efforts of the IRS-CI and FHFA-OIG, and the extensive assistance of the SEC’s Miami Regional Office. The matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy, Thomas A. Watts-FitzGerald and Alison Lehr, and Special Assistant U.S. Attorney Michael Padula. Mr. Ferrer also commended the efforts of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Key West Regional Office, for its assistance with this matter.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former CNMI Firefighter Sentenced to 30 Years for Sexual Exploitation of a ChildRead the Press Release
Saipan, CNMI – ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that U.S. District Court Chief Judge Ramona V. Manglona sentenced Richard Sullivan Benavente, age 45, today, to the statutory maximum of 360 months in prison followed by three years of supervised release for sexual exploitation of a child. The Court also ordered him to pay restitution to the two minor victims.
In July 2013, the CNMI Department of Public Safety received a video file from an anonymous source depicting Benavente and a minor female engaging in sexually explicit conduct. The minor was later identified. The same video file was found on Defendant’s cell phone pursuant to a search warrant. Benavente was arrested on a complaint on August 14, 2013. On August 22, 2013, a federal grand jury returned an indictment against Benavente charging him with two counts of sexual exploitation of a child and one count of attempted sexual exploitation of a child in violation of 18 U.S.C. § 2251(a). He pleaded guilty to count one of the indictment on February 10, 2014, pursuant to a plea agreement requiring him to cooperate with the United States and provide truthful information about his criminal conduct, as well as the conduct of others. However, on October 9, 2015, the Court ruled that Benavente breached his plea agreement by committing perjury at the trial of another defendant at which Benavente testified, when he claimed to own a cell phone the prosecution argued was used by that other defendant to contact minors for purposes of prostitution.
Following the sentencing, United States Attorney for the Districts of Guam and the Northern Mariana Islands, Alicia A.G. Limtiaco, stated, “Consistent with the Department of Justice’s efforts to combat child sexual exploitation, the United States Attorney’s Office, together with its federal and local law enforcement partners, will vigorously investigate and prosecute individuals who prey on children, and strive to rid our islands of this unconscionable crime. We encourage and urge members of our community to report to authorities any and all forms of abuse, exploitation and violence; and remind ourselves, that it is all of our responsibility to protect others, especially the most vulnerable such as our children and minors, from those who perpetrate these heinous crimes.”
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Rami S. Badawy, Ross K. Naughton, and Garth R. Backe.
Former Bank Employee Sentenced to Prison for Misapplication of Bank FundsRead the Press Release
DES MOINES, IA – On February 16, 2016, Barbara L. Baker, 54, of Montezuma, Iowa, was sentenced by Senior United States District Court Judge Robert W. Pratt to 60 days in prison for misapplication of bank funds, announced Acting United States Attorney Kevin E. VanderSchel. Baker will also be required to serve a three year term of supervised release following her term of imprisonment.
On August 7, 2015, Baker pled guilty to a United States Attorney’s Information charging her with the misapplication. Baker admitted from around January 20, 2012, to around July 19, 2013, she misapplied funds from Patriot Bank in Brooklyn, Iowa, for her own benefit, while she served as the chief financial officer of the bank.
This matter was investigated by the Federal Deposit Corporation Office of Inspector General and the United States Secret Service. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Federal Jury in El Paso Convicts Mexican Businessman in Pyramid SchemeRead the Press Release
A federal jury in El Paso convicted self-proclaimed licensed investment broker Roberto Trinidad Del Carpio Frescas of carrying out a Ponzi scheme that resulted in an estimated minimum $15 million loss announced United States Attorney Richard L. Durbin, Jr., U.S. Secret Service Special Agent in Charge Lee Dotson and El Paso Police Chief Greg Allen.
Late Friday afternoon, jurors convicted Del Carpio, age 39, of Chihuahua, MX, of 24 counts of wire fraud and ten counts of money laundering.
Evidence presented during trial revealed that the defendant held himself out to have superior knowledge and ability as an investor in stocks, bonds, futures in oil, gas, precious metals and currency. Though he was not licensed in the state of Texas as a dealer, or registered as an investment adviser, Del Carpio formed several companies in Texas including SMI International Institute Corporation (aka Stock Market Investment), Del Carpio Trading Institute LLC, and one in the Cayman Islands, Del Carpio Holdings, to facilitate his scheme.
From August 2010 until January 2012, Del Carpio conspired with others to collect money from over 100 known investors in Mexico and the United States. Del Carpio pocketed most all of the funds he collected though he did pay minimal amounts of money to “early” investors as a return on their investment and to encourage his victims to invest more of their money with him.
Del Carpio faces up to 20 years in federal prison for wire fraud and up to ten years in federal prison for money laundering.
Del Carpio has remained in federal custody since his arrest in February 2015. Sentencing is expected to occur within the next 60 days before United States District Judge David C. Guaderrama in El Paso.
Del Carpio’s co-defendant, 60-year-old David Brian Binder of Pittsburg, PA, is charged by indictment with one count of accessory after the fact and one count of wire fraud. Binder, who is currently out on bond, is scheduled for jury selection and trial on April 18, 2016, before Judge Guaderrama in El Paso. Upon conviction, Binder faces up to 20 years in federal prison for wire fraud and up to ten years in federal prison for accessory after the fact.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. Binder is presumed innocent until proven guilty in a court of law.
If you feel you may have been victimized as a result of the above mentioned scheme, please contact the U.S. Secret Service at (915) 532-2144 or the El Paso Police Department.
This investigation was conducted by agents with the U.S. Secret Service and the El Paso Police Department. Assistant United States Attorneys Ian Hanna and Stanley Serwatka are prosecuting this case on behalf of the Government.
Euclid man charged in federal court after arrest with more than 900 pills of fentanylRead the Press Release
A Euclid man was charged in federal court with conspiracy to distribute fentanyl and crack cocaine after he was arrested with more than 900 pills of fentanyl, law enforcement officials said.
Ryan Gaston, 29, was arrested on Feb. 3. A search of his car and home apartment revealed rocks of crack cocaine, a 9 mm High Point rifle and approximately 926 round blue pills believed to be Oxycodone 30 mg pills. A subsequent test revealed the pills were not Oxycodone, but instead fentanyl, according to the criminal complaint.
Fentanyl is a very potent synthetic opiate used to treat pain and as a surgical anesthetic. While heroin is approximately three times as potent as morphine, fentanyl is approximately 80-100 times more powerful than morphine. There were 37 fentanyl-related deaths in Cuyahoga County In 2014. Last year, there were 89 and this year, there have already been at least 19, according to the complaint.
“Each one of these pills is capable of killing a person,” said Acting U.S. Attorney Carole Rendon. “We will continue to attack the opioid problem from all sides – prevention, education, treatment and enforcement. This defendant will be held accountable for spreading poison throughout our community.”
This case is being prosecuted by Assistant U.S. Attorney Michelle Baeppler following an investigation by the Drug Enforcement Administration, the Cleveland Heights Police Department, the Cuyahoga County Sheriff’s Office and the Euclid Police Department.
Enfield Restaurant Owner Pleads Guilty to Tax EvasionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that GEORGE CARABASE, 41, of Enfield, waived his right to indictment and pleaded guilty today before U.S. District Judge Jeffrey A. Meyer in New Haven to two counts of tax evasion.
According to court documents and statements made in court, in 2010 and 2011 CARABASE failed to report to the Internal Revenue Service approximately $550,000 in gross receipts generated by Buona Vita Restaurant, a restaurant he operates in Enfield.
During the investigation of this matter, CARABASE admitted to an undercover IRS agent that he understated the restaurant’s gross receipts on his income tax returns and provided false numbers to his accountant.
In pleading guilty, CARABASE admitted that he evaded payment of a total of $183,282 in income taxes when filing his income tax returns for 2010 and 2011.
Judge Meyer scheduled sentencing for May 20, 2016, at which time CARABASE faces a maximum term of imprisonment of five years and a fine of up to $100,000 for each count. As part of his guilty plea, CARABASE has agreed to pay $208,132 in back taxes and interest, as well as applicable penalties.
This case was investigated by the Internal Revenue Service – Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney Heather Cherry.
District Men Sentenced to 13 Years in Prison for Robbing and Carjacking Three VictimsRead the Press Release
WASHINGTON – Marquell Derrington, 20, and Mark Penamon, 28, both of Washington, D.C., have each been sentenced to 13 years in prison on charges stemming from an armed robbery and armed carjacking in Northeast Washington, U.S. Attorney Channing D. Phillips announced today.
Derrington and Penamon pled guilty in November 2015, in the Superior Court of the District of Columbia, to carjacking, two counts of armed robbery, and related firearms offenses. They were sentenced on Feb. 19, 2016 by the Honorable Anita Josey-Herring. Upon completion of their prison terms, the defendants will be placed on five years of supervised release.
Derrington and Penamon admitted that, on Oct. 2, 2014, at about 6:50 a.m., they arrived at Derrington’s house via an alley off of the 900 block of I Street NE. At the mouth of the alley, two of the victims, who are home improvement contractors, were working to set up for a project at a home adjacent to the alley. As the defendants drove into the alley, they saw the victims in the backyard of the project site, and decided to rob them. The defendants approached the victims on foot, drew firearms – Derrington’s was a semi-automatic pistol with a lazer mounted on the barrel – and forced the victims to the ground. The third victim, a colleague of the first two, arrived shortly thereafter, and Derrington pistol-whipped him and commanded him and the other two to face the back wall of the house. Derrington and Penamon proceeded to hold the victims at gunpoint and rob them of their personal property. Penamon robbed one of the victim of his truck keys, and, while Derrington held all three victims at gunpoint, Penamon got the truck and drove it immediately next to the robbery location. Penamon went back to join Derrington in completing the robberies, and then both defendants fled in the victim’s vehicle.
In announcing the sentence, U.S. Attorney Phillips commended the work of those who investigated the case for the Metropolitan Police Department (MPD). He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Paralegal Specialist Todd McClelland and Assistant U.S. Attorneys Nihar Mohanty, Kacie Weston, and former Assistant U.S. Attorney David Rubenstein. Finally, he thanked Assistant U.S. Attorneys John Marston and Laura Crane, of the Felony Major Crimes Trial Section, who prosecuted the matter.
Convicted Sex Offender Sentenced to over 21 Years in Prison for Enticing a Minor to Engage in Sexual Activity and for Receiving Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Michael L. Montague, age 66, formerly of Gwynn Oak, Maryland, Friday, February 19, 2016 to 262 months in prison followed by a lifetime of supervised release for using a mobile phone to entice a minor to engage in sexual activity and for receipt of child pornography. Judge Bredar also ordered that upon his release from prison, Montague will be required to continue to register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Division; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Colonel William M. Pallozzi, Superintendent of the Maryland State Police; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to Montague’s plea agreement, from February 16 through March 26, 2014, Montague used his mobile phone to contact the victim. Montague knew the victim, and knew that he was 12 years old at the time of their communications. Montague used a mobile application to contact the victim using a number different from the telephone number assigned to Montague’s phone. Using this disguised phone number Montague contacted the victim and claimed to be “Gail,” a classmate of victim’s. Posing as “Gail,” Montague engaged in sexually explicit text and email communications with the victim.
Montague, posing as “Gail” wrote to the victim that she knew Montague, and that the victim should send pictures of himself to Montague, and Montague would send the victim pictures of “Gail.” “Gail” told the victim that Montague had very nice pictures of “Gail” that the victim should ask to see. “Gail” suggested that the victim seek permission to stay with Montague for a weekend so that “Gail” and the victim could meet for a sexual encounter. “Gail” also told the victim that she could get Montague to make a sexual video of her, and that then the victim should let Montague make a sexual video with him. Montague also sent messages to the victim posing as a male classmate of the victim who also knew Montague and “Gail.”
Forensic examination of Montague’s phone revealed sexually explicit communications with the victim, sexually explicit images and videos Montague sent to the victim, and a sexually explicit image that the victim sent to Montague.
On May 19, 2009, Montague was convicted in the Circuit Court for Baltimore County, Maryland, of child abuse and a third degree sex offense, for his sexual abuse of two girls, and was sentenced to three years in prison.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, HSI Baltimore, Maryland State Police Internet Crimes Against Children Task Force, Baltimore County Police Department and Baltimore County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorneys Zachary A. Myers and Judson T. Mihok, who prosecuted the case.
Convenience Store Owner Sentenced to Federal Prison for Trafficking in Food StampsRead the Press Release
ATLANTA - Tessema Lulseged has been sentenced to serve four years and three months in federal prison for using his Decatur, Georgia, convenience store to illegally traffic in food stamps. Lulseged allowed his customers to exchange their food stamp benefits for cash in a scheme that netted him $6.5 million.
“The purpose of the food stamp program is to offer low-income citizens nutritional assistance, and this defendant undermined the program solely for his own profit and cost taxpayers more than $6.5 million,” said U.S. Attorney John Horn.
The United States Department of Agriculture, Office of Inspector General- Investigations, actively investigates allegations of fraud in the Supplemental Nutritional Assistance Program (SNAP). Annually, this type of fraudulent activity undermines this program by misdirecting millions of dollars of taxpayer funds from the purposes they were intended. We would like to thank U.S Attorney's Office for aggressively prosecuting perpetrators of fraud and sending a strong message that illegally profiting by defrauding USDA programs will not be tolerated,” said Karen Citizen-Wilcox, Special Agent-in-Charge for USDA’s Office of Inspector General.
“This case represents an individual systematically exploiting those in need and diverting U.S. funds intended for the needy to his own bank account. The FBI is pleased with its role in bringing this case forward for prosecution which resulted in today’s federal prison sentence for Mr. Lulseged,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges and other information presented in court: From January 2009 through April 2014, Lulseged operated Tess Market, Inc., d/b/a Big T Supermarket, a convenience store in Decatur, Georgia, where he unlawfully allowed his customers to exchange their food stamp benefits for cash at the rate of 60 cents on the dollar. As part of the deal, Lulseged required customers to purchase eligible food products equal to 10% of the value of the transaction. For example, if a customer wanted to sell $100 worth of food stamp benefits for $60, that customer also had to purchase $10 worth of eligible food products from Lulseged’s store. The fraudulent scheme netted Lulseged approximately $6.5 million.
Pursuant to search and seizure warrants that were executed in February 2014, the government seized and forfeited over $700,000 in funds tainted by the fraud. The government also forfeited two pieces of real property: the defendant’s personal residence in Gray, Georgia, and his store property in Decatur, Georgia, on the grounds that they were proceeds of the fraud and properties involved in money laundering transactions.
Tessema Lulseged, 49, of Decatur, Georgia, was sentenced to four years, three months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,930,450.16. Lulseged was convicted on these charges on July 7, 2015, after he pleaded guilty.
This case was investigated by the U.S. Department of Agriculture, Office of Inspector General, Investigations Division, and the Federal Bureau of Investigation.
Assistant U.S. Attorneys J. Russell Phillips, Dahil D. Goss, and Jenny R. Turner prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Cochiti Pueblo Man Pleads Guilty to Federal Bank Robbery ChargesRead the Press Release
ALBUQUERQUE – Marcelino Chalan, 27, of Cochiti Pueblo, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to bank robbery charges.
Chalan was arrested Sept. 16, 2015, on a criminal complaint charging him with robbing the Wells Fargo Bank branch inside the Albertson’s supermarket located at 3301 Southern Blvd. in Rio Rancho, N.M., on July 20, 2015. The complaint alleged that Chalan robbed the bank by handing a handwritten note with a robbery demand to a bank teller. The teller complied with Chalan’s written and verbal robbery demands and handed money over to Chalan. Chalan left the scene in a vehicle that appeared to be driven another individual. The investigation into Chalan began after the FBI received a tip identifying Chalan as the bank robber.
Chalan was subsequently indicted on Oct. 7, 2015, and charged with robbing the Wells Fargo Bank located at 3301 Southern Blvd. in Rio Rancho on July 20, 2015; robbing the First National Rio Grande Bank located at 7620 Jefferson St. in Albuquerque on July 27, 2015; and robbing the Santa Fe Federal Credit Union located at 7101 Jefferson St. in Albuquerque on Aug. 3, 2015.
During today’s plea hearing, Chalan entered a guilty plea to the indictment without the benefit of a plea agreement. At sentencing, Chalan faces a maximum penalty of 20 years in federal prison. He remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI, the Rio Rancho Police Department, the Albuquerque Police Department and the Cochiti Pueblo Tribal Police Department. Assistant U.S. Attorney Kimberly A. Brawley is prosecuting the case.
Central Valley Antidrug Trafficking Program Recognizes District ProsecutorRead the Press Release
SACRAMENTO, Calif. — On Thursday, February 18, 2016, Assistant U.S. Attorney Karen A. Escobar received the High Intensity Drug Trafficking Area’s national Outstanding Prosecutor Award today for her leadership in the prosecution of rural trespass marijuana growers for their environmental crimes, exposing violators to criminal and civil penalties, and for bringing public attention to the environmental destruction caused by large-scale marijuana growers, United States Attorney Benjamin B. Wagner announced.
The annual HIDTA Awards Banquet, which was held in the Wardman Park Marriott in Washington D.C., recognizes outstanding investigative achievements across the country. The Outstanding Prosecutor Award is presented to the prosecutor whose work is particularly notable in advancing the mission of the HIDTA program.
The HIDTA program, created by Congress with the Anti-Drug Abuse Act of 1988, provides assistance to Federal, state, local, and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States. There are currently 28 HIDTA’s, which include approximately 17.2 percent of all counties in the United States and a little over 60 percent of the U.S. population. HIDTA-designated counties are located in 48 states, as well as in Puerto Rico, the U.S. Virgin Islands, and the District of Columbia. The Central Valley HIDTA covers 12 counties in the Eastern District of California, and funds several federal/state/local task forces in the region.
William Ruzzamenti, Executive Director of the Central Valley California HIDTA stated: “The National Prosecutor of the Year is a very significant and prestigious award. It recognizes that Ms. Escobar is not only one of this country's most outstanding prosecutors, but also as a special person within her community. Ms. Escobar blends a tremendous legal intellect with old fashion common sense in an extraordinary way to assure criminals are held accountable.”
U.S. Attorney Wagner echoed those sentiments, saying, “Karen Escobar has long been one of the most productive federal narcotics prosecutors in this district. She has been a particular leader in combatting the environmental devastation caused by marijuana cultivators in National Forests and National Parks. I am very pleased that her work is now being recognized on a national level. This award is well-deserved.”
Karen Escobar has been an Assistant U.S. Attorney in Fresno for more than 26 years, specializing in the prosecution of drug trafficking organizations plaguing California’s Central Valley. She has prosecuted more than 2,000 federal cases with a conviction rate of 99 percent. She pioneered the pursuit of environmental crime charges against illegal marijuana growers whose toxic cultivation practices endanger wildlife, the environment, and public health; holding them responsible for their actions and bringing much-needed public attention to the issue. She contributed to the development of national sentencing guidelines for environmental harm caused by illegal marijuana grows.
Central Florida Drug Importer Sentenced to Ten YearsRead the Press Release
Orlando, Florida – United States District Judge Gregory A. Presnell today sentenced Thiago Correa (22, Windermere) to 10 years in federal prison for drug importation, conspiracy, and trafficking violations, and for using a firearm in furtherance of his drug trafficking activities.
Correa is the fourth individual to be sentenced in Orlando for drug trafficking and related charges concerning the importation and distribution of methylone and ethylone, also called “Molly” or “Mol,” from China into Brevard and Orange Counties. These prosecutions are part “Project Synergy,” an international investigation headed by the Department of Justice’s Special Operations Division.
According to court documents, from approximately January 2014, through their arrests on March 18, 2015, Thiago Correa, Camila Correa (25, Windermere), Travis Simmons (25, Deland), and others conspired to import no less than 25 kilograms of ethylone and methylone from China into Orlando, Melbourne, Titusville, and Windermere. Thiago Correa was a leader and organizer in the conspiracy: he ordered the drugs from China; paid for and directed others to pay for the drugs; coordinated shipments; and recruited and directed others to distribute the drugs. During this conspiracy, Correa used a variety of firearms, including handguns and an assault rifle.
“HSI special agents and our law enforcement partners will continue to work together toward keeping dangerous and deadly substances from harming our citizens,” said Susan L. McCormick special agent in charge of HSI Tampa. “Our communities are safer today because we dismantled this drug trafficking organization.”
Camila Correa and Travis Simmons previously pleaded guilty for their roles in this case. On September 8, 2015, Simmons was sentenced to seven years in federal prison. Correa’s sentencing hearing is scheduled for March 14, 2016.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Brevard County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney J. Bishop Ravenel.
Atlanta Executives and an Internet-Based Promoter Charged with Scheme to Defraud InvestorsRead the Press Release
ATLANTA – The co-owners, chief operating officer, and an alleged paid promoter of Sterling Currency Group, which at one time billed itself as one of the largest sellers and exchangers of the Iraqi dinar in the U.S., have been indicted for their roles in a scheme to fraudulently induce investors into purchasing the Iraqi dinar. Tyson Rhame, James Shaw, Terrence Keller, and Frank Bell, have been indicted in this case and had their initial appearances before U.S. Magistrate Judge Alan J. Baverman.
“Investors in the Iraqi dinar, like all investors, are entitled to make an informed choice based on honest and transparent information,” said U. S. Attorney John Horn. “These defendants are alleged to have defrauded investors by spreading misinformation about the investment potential of the Iraqi dinar in order to profit from sale of the currency. We urge anyone who believes they were impacted by this scheme to contact the FBI.”
“This federal indictment represents extensive efforts by the government to protect investors from those who would make alleged unsubstantiated claims involving the potential revaluation of certain foreign currency. The FBI, along with the IRS Criminal Investigative Division, has made every effort to provide some protection for those who have already invested by seizing millions of dollars, the disposition of which will be further determined as this case now moves into the U.S. Courts system,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“Investment fraud schemes are designed to appeal to people's hope, often resulting in the total loss of their investment,” stated Special Agent in Charge Veronica F. Hyman-Pillot, IRS Criminal Investigation. “Individuals who line their pockets with money gained through deceiving others should know they will not go undetected and will be held accountable. The indictment of these individuals illustrates our commitment, along with our law enforcement partners, to pursue those individuals who victimize investors, violate the public trust and enrich themselves financially at the expense of the investor.”
According to U.S Attorney Horn, the indictment, and other information presented in court: During the scope of the conspiracy, the Iraqi dinar – which is the currency of the country of Iraq - was touted by some as a potential investment opportunity. Information publicly available on certain internet websites, blogs, chat rooms, and conference calls fueled this speculation by predicting that a “revaluation” of the Iraqi dinar would occur imminently. A “revaluation” or “RV,” in this context, meant a sudden, exponential rise in the value of the Iraqi dinar as compared to the U.S. dollar and other relatively stable global currencies. Individuals who owned Iraqi dinar would realize potentially enormous gains if an “RV” ever occurred in this manner.
Sterling Currency Group, LLC, which also did business as Sterling Online Processing Services, LLC, and Dinar Banker (collectively, “Sterling”), was a Georgia corporation with its principal place of business in Atlanta, Georgia. Sterling sold and exchanged so-called “exotic currencies,” including most predominantly the Iraqi dinar.Tyson Rhame and James Shaw were co-owners of Sterling, which began operations in 2004. Frank Bell began working for Sterling in 2010 and became Sterling’s Chief Operating Officer in 2011.
According to the indictment, Terrence Keller, who was also known as “TerryK,” led an internet-based group known as “The GET Team,” which consisted of a website, an internet chat forum and weekly conference calls in which, among other things, information was disseminated to participants concerning the potential investment value of the Iraqi dinar.Keller, through The GET Team, was one of the leading internet-based proponents of the “RV” theory. On The GET Team’s website, internet chat forum, and on weekly conference calls, Keller is alleged to have falsely claimed to have information from, and verified by, high-level confidential sources in the United States government, the Iraqi government, international organizations, and major financial institutions, regarding an imminent “RV.” However, Keller did not have information from, or contact with, these supposed high-level confidential sources. The indictment alleges that Keller, Rhame, Shaw, and Bell knew and believed that representations concerning an imminent “RV” of the Iraqi dinar, particularly claims that the information came from one or more supposed high-level confidential sources, would boost sales for Sterling.
Keller allegedly claimed, directly and indirectly, to The GET Team followers that he had no financial or other ulterior motive to promote the Iraqi dinar as an investment, but, rather, that he was simply disseminating his knowledge and information so that others could benefit from it as well. To that end, Keller affirmatively told his followers that he did not make substantial profits from his dealings with Sterling and other dinar dealers that advertised with the GET Team.Keller allegedly had a secret arrangement with Rhame, Shaw and Bell to promote and “pump” the Iraqi dinar in exchange for payments made by Sterling to benefit Keller. Since at least as early as August 2011, Sterling paid Keller over $160,000. Keller consistently downplayed these financial benefits to his followers and listeners.
The correlation between Sterling’s increased sales and Keller’s promotion of the Iraqi dinar was allegedly further cemented by the presence of a Sterling representative, including, at times, Rhame and Bell, on The GET Team’s conference calls and internet forums. At various times, Rhame, Bell and other Sterling representatives participated in conference calls and internet forums in which Keller made representations to followers concerning the imminent Iraqi dinar “RV,” his access to high-level confidential sources, and claims that he was just trying to be helpful and received no financial benefit for providing this information to others. The presence and participation of Rhame, Bell, and other Sterling representatives on The GET Team’s conference calls and internet forums provided further validation to followers that Keller’s claims about an imminent “RV” of the Iraqi dinar should be believed.
The indictment alleges that the promotional activities of Keller and other dinar promoters were essential to Sterling’s financial success and generated Sterling millions of dollars in dinar and other currency sales. In December 2010, Rhame is alleged to have told colleagues that Keller and the GET Team pushed 80% of Sterling’s business. In December 2011, Bell is alleged to have referred to the GET Team as Sterling’s “largest referrer.” Between approximately 2010 and June 2015, Sterling grossed over $600 million in revenue from the sale of the Iraqi dinar and other currencies. During this same time period, Rhame and Shaw received over $180 million in distributions from Sterling.
Tyson Rhame, 51, and James Shaw, 53, both of Atlanta, Georgia, Frank Bell, 54, of Decatur, Georgia, and Terrence Keller, also known as “TerryK,” 55, of Grayson, Kentucky, are each charged with conspiracy to commit mail and wire fraud as well as several counts of mail fraud and wire fraud. Rhame and Shaw are also charged with conspiracy to commit money laundering and 12 counts of money laundering.
The indictment also includes criminal forfeiture listing numerous assets to which the defendants may have an interest. Specifically, the government is seeking the forfeiture of millions of dollars held in financial accounts, foreign currencies, three private airplanes, three automobiles, numerous corporate and trust entities, as well as real property in Georgia, Florida, North Carolina, and Iowa. Also, the government filed motions to amend two civil forfeiture complaints, which similarly seek the forfeiture of a variety of assets allegedly linked to this scheme. The government’s motions and amended civil forfeiture complaints can be found at United States v. 225 Valley Road, NW, Atlanta, GA et. al., 1:15-CV-2032-LMM (Doc. 217) and United States v. Approximately 8,671,456,050 in Iraqi Dinars, et. al., 1:15-CV-2677-LMM (Doc. 212).
Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation.
Assistant United States Attorneys Thomas J. Krepp, Steven D. Grimberg, and Jamie L. Mickelson are prosecuting the case. Assistant United States Attorneys Kelly K. Connors, Dahil D. Goss, and Thomas J. Krepp are handling the parallel civil forfeiture actions.
Members of the public who believe they were impacted by this scheme are encouraged to contact the FBI at https://forms.fbi.gov/iraqi-dinar-investment-investigation.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Arkansas Man Sentenced for Armed Robberies of Bank, 11 Other Businesses in Five StatesRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Bella Vista, Ark., man was sentenced in federal court today for a series of a dozen armed robberies at a Missouri bank and 11 other businesses in a five-state crime spree during the summer of 2013.
Timothy Patrick Hoyt, 45, of Bella Vista, was sentenced by U.S. District Judge Brian C. Wimes to eight years and one month in federal prison without parole.
On Sept. 9, 2015, Hoyt pleaded guilty to the charges contained in a federal indictment in the Western District of Missouri, as well as the charges contained in four separate cases in four different federal districts in Kansas, South Dakota, Nebraska and Oklahoma, all of which have been transferred to the Western District of Missouri.
Hoyt admitted that he used what appeared to be a handgun (but which later was identified as a .177-caliber pellet or BB gun that Hoyt shoplifted from a Walmart store near Blackwater, Mo.) to rob a bank in Missouri and 10 other businesses, including eight fast food restaurants, across five states between June 26 and Aug. 6, 2013.
Hoyt pleaded guilty to all four counts of the indictment filed in the Western District of Missouri. Hoyt stole $5,123 from Alliant Bank, 118 Main St., Blackwater, on June 26, 2013, with what appeared to be a handgun. Hoyt also used what appeared to be a handgun to rob the Subway restaurant at 330 N. Massey Blvd., Nixa, Mo., on July 12, 2013; the Subway restaurant at 1820 W. 32nd St., Joplin, Mo., on July 14, 2013; and the Sally Beauty Supply Store at 2007-C W. Foxwood Dr., Raymore, Mo., on Aug. 6, 2013.
Hoyt also pleaded guilty to using what appeared to be a handgun to rob the Subway restaurant at 715 N. G Street, Wellington, Kan., on July 17, 2013; the Domino’s Pizza Restaurant at 1108 S. Minnesota Ave., Sioux Falls, S. D., on July 19, 2013; the Subway restaurant at 1116 E. 10th St., Sioux Falls on July 20, 2013; the Godfather’s Pizza restaurant at 15234 W. Maple Rd., Omaha, Neb., on July 23, 2013; and the Arby’s restaurant at 6919 S. Lewis Ave., Tulsa, Okla., on July 27, 2013.
In addition to those robberies with which Hoyt has been charged, he also admitted that he used what appeared to be a handgun to rob the Papa Murphy’s Pizza restaurant at 302 W. 28th St., Sioux City, Iowa, on July 21, 2013; the Payless ShoeSource store at 7714 State Ave., Kansas City, Kan., on July 26, 2013; and the Papa Murphy’s Pizza restaurant at 3418 8th St. S.W., Altoona, Iowa, on Aug. 7, 2013.
Hoyt was arrested after robbing the Papa Murphy’s Pizza restaurant in Altoona.
This case was prosecuted by Assistant U.S. Attorney Lawrence E. Miller. It was investigated by FBI; the Cooper County, Mo., Sheriff’s Department; the Altoona, Iowa, Police Department; the Nixa, Mo., Police Department; the Joplin, Mo., Police Department; the Raymore, Mo., Police Department; the Wellington, Kan., Police Department; the Sioux Falls, S.D., Police Department; the Sioux City, Iowa, Police Department; the Omaha, Neb., Police Department; the Kansas City, Kan., Police Department; and the Tulsa, Okla., Police Department.
Alton Man Sentenced to Three Years in Prison for Bank FraudRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced that this morning, United States District Judge David R. Herndon sentenced Christopher William Kreider, 29, of Alton, IL, to 37 months in federal prison on his conviction for bank fraud and submitting false loan applications to a financial institution.
Kreider pled guilty to the charges in this case on December 17, 2014. In pleading guilty, Kreider admitted that from March 4, 2010, through May 31, 2011, he defrauded the Alton Bell Community Credit Union by causing false loan applications to be submitted. Kreider engaged in a practice known as "straw borrowing." Kreider owned a landscaping business in Alton known as Lawnscape Lawn and Excavation. In an effort to keep this failing business afloat, Kreider solicited friends and employees to apply for loans, in their names, with Alton Bell Community Credit Union. The proceeds of these loans were either turned over to Kreider or applied for his benefit.
During the sentencing hearing today, Judge Herndon found that Kreider’s crimes caused a loss of $158,286.59 to Alton Bell Community Credit Union. In addition to the 37 month prison sentence, the Court also ordered Kreider to pay restitution of $207,116.06. This figure includes the loss amount and the audit feeds incurred by the credit union as it investigated the damage caused by Kreider’s crimes. In addition, the Court ordered Kreider to serve a period of 5 years of supervised release after he is released from prison.
The case was investigated by the Springfield, Illinois, Division of the Federal Bureau of Investigation. The prosecution was handled by Assistant United States Attorney Scott Verseman.
76-Year-Old Navajo Nation Man Sentenced to 10 Years in Prison for Sexual Abuse of a MinorRead the Press Release
PHOENIX– Today, Rex Damon Begay, Sr., 76, of Ganado, Ariz., a member of the Navajo Nation, was sentenced by Senior U.S. District Judge Paul G. Rosenblatt to 10 years in prison followed by a lifetime term of supervised release. Begay had previously pleaded guilty to abusive sexual contact with a minor less than 12-years-old. Begay will also have to register as a sex offender.
This case was brought to the attention of law enforcement after Arizona Child Protective Services alerted their counterparts on the Navajo Nation that a teenage Navajo girl had reported being sexually abused, several times, by Begay. Through a collaborative effort across multiple jurisdictions, investigation revealed that Begay had sexually mistreated several other female Navajo young members spanning many decades.
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, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigation in this case was conducted by the Navajo Nation Department of Public Safety and the Federal Bureau of Investigation. The prosecution was handled by Rachel Reames Stoddard, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-15-8137-PCT-PGR (BSB)
RELEASE NUMBER: 2016-015_Begay
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Friday 19 February 2016
“Operation Denial” to Receive National Award for ‘Outstanding Cooperative Effort’Read the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced on Feb. 19, 2016, that the "High Intensity Drug Trafficking Areas" (HIDTA) Program honored 20 individuals for their cooperative efforts in "Operation Denial," which was the Grand Forks County Drug Task Force’s investigation into the international trafficking of fentanyl and other lethal drugs. This effort was significantly aided by a multi-agency approach, which led to receiving the Outstanding Cooperative Effort award.
Established in 1990 after the Anti-Drug Abuse Act of 1988 was passed, the High Intensity Drug Trafficking Area Program (HIDTA) is a drug-prohibition enforcement program run by the United States Office of National Drug Control Policy. The mission of the program is to enhance and coordinate America’s drug-control efforts among local, state, and federal law enforcement agencies in order to eliminate or reduce drug trafficking and its harmful consequences in critical regions of the United States. The term "HIDTA" also refers to each geographic location, usually a major city, county, or border crossing, in which the program has established a headquarters which are placed in locations considered to be major drug trafficking zones; to date, 28 HIDTAs have been designated since the program began. Each HIDTA is governed by a HIDTA Executive Board which includes representatives from local, state, and federal law enforcement agencies in the area of each HIDTA. By law, each HIDTA Board is equally divided between federal law enforcement on the one side and state and local agencies on the other. The Grand Forks Narcotics Task Force is a HIDTA-funded task force.
U.S. Attorney Myers stated: "This is the first time law enforcement in North Dakota has been recognized with a National HIDTA Award. The teamwork in this international investigation was extraordinary and undoubtedly saved lives. "
Attorney General Wayne Stenehjem said: "This award underscores the exceptional work these law enforcement officers and professionals provide each and every day. They have each gone above and beyond the call of duty to keep North Dakota safe, and I couldn't be prouder of the results they achieved."
Grand Forks County State’s Attorney David Jones remarked: "It is an honor to be included in this recognition which really speaks to the professional bonds between our agencies. Our law enforcement officers and legal staff work tirelessly to make our communities safer, with our agents and officers, in particular, providing selfless service on behalf of the public. No one does this for recognition, but I can think of no higher accolade than this award for Outstanding Cooperative Effort."
The following individuals are being honored by the HIDTA program and will receive the Outstanding Cooperative Effort Award for their hard work on Operation Denial:
• Special Agent Steve Gilpin, North Dakota Bureau of Criminal Investigation
• Special Agent Scott Kraft, North Dakota Bureau of Criminal Investigation
• Special Agent Michael Ness, North Dakota Bureau of Criminal Investigation
• Special Agent Jeremy Grube, Homeland Security Investigations
• Detective Daniel Casetta, Grand Forks Police Department
• Investigator Joel Lloyd, Grand Forks County Sheriff’s Office
• Investigator Delicia Glaze, Grand Forks County Sheriff’s Office
• Detective Darin Johnson, Grand Forks Police Department
• Sergeant Devan Greuel, University of North Dakota Police Department
• Investigator Andreas Alt, WCSO/Grand Forks Police Department/ Grand Forks Narcotics Task Force
• Sergeant Derek Madsen, Pembina County Sheriff’s Office
• Christopher Steenerson, Border Patrol
• Intelligence Analyst Lisa Gemar, North Dakota Bureau of Investigation
• Intelligence Analyst Ross Brumley, North Dakota Counter Drug
• Sergeant Travis Jacobson, Grand Forks Police Department
• United States Attorney Chris Myers, District of North Dakota
• Assistant United States Attorney Scott Schneider, District of North Dakota
• Assistant United States Attorney Scott Kerin, District of Oregon
• Grand Forks County State’s Attorney David Jones
• Grand Forks County Assistant State’s Attorney Carmell Mattison
The following defendants, who are each from Grand Forks, have been sentenced in this case:
Ryan Jon Jensen - 240 months (20 years)
Joshua Tyler Fulp – 144 months (12 years)
Kain Daniel Schwandt – 42 months (3 ½ years)
David Todd Noye Jr. – 39 months (3 years 3 months)
Jameson Robert Sele – 36 months (3 years)
Brandon Corde Hubbard of Portland, Oregon, is scheduled for a change of plea hearing in federal court in Fargo on March 14, 2016.
Ronnie Lee Helms of Acworth, Georgia, and Braden James Foley of Olympia, Washington, have been indicted in this case and are currently scheduled for trial May 3, 2016, in Fargo.
Daniel Vivas Ceron was arrested in Panama City, Panama, on July 17, 2015, and is currently awaiting extradition from Panama.
An Indictment is merely and accusation and defendants are presumed innocent unless proven guilty.
Wilkes-Barre Resident Pleads Guilty to Federal Charge of Failing to Comply with Sex Offender Registration RequirementsRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Wilkes-Barre resident pleaded guilty yesterday in Scranton, before United States District Judge James M. Munley, to failing to comply with sex offender registration requirements.
According to United States Attorney Peter Smith, Joseph Brant, age 56, pleaded guilty to being a person required to comply with the Sex Offender Registration and Notification Act by reason of a sexual abuse conviction under the laws of the State of New York, but who failed to do so upon establishing a residence in Pennsylvania.
Brant was indicted by a federal grand jury in July 2015. The government filed a plea agreement in the case. The indictment charged that Brant established a residence in Wilkes-Barre, but failed to register or update his sex offender registration information in Pennsylvania as required by the law.
The charges are the result of an investigation by the Scranton and New York offices of the United States Marshals Service. The case is being prosecuted by Assistant United States Attorney Michelle Olshefski.
The maximum possible penalties for the violation include 10 years’ incarceration, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Wasilla woman indicted for Federal Grant FraudRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Kevin R. Feldis announced today that a Wasilla woman was indicted by a federal grand jury in Anchorage for presenting false claims for federal grant funds to the United States Department of Agriculture.
Crystal Jean Boze, aka “Crystal Jean Hazlitt,” 33, of Wasilla, Alaska, is the sole defendant named in the one-count indictment.
According to the indictment, Boze illegally presented three false claims for federal grant funds to two agencies of the United States Department of Agriculture (USDA). Boze’s company, Green Winter Farms LLC (a farming company located in Palmer, Alaska), was awarded a $72,103 grant by the USDA Natural Resources Conservation Service in 2012, and a $49,689 grant by USDA Rural Development in 2013. Among other things, the grants required Boze’s company to seek payment of USDA grant funds on a reimbursement basis only and to certify that each claim for reimbursement was accurate.
The indictment charges that three times between Feb. 1, 2013, and June 9, 2013, Boze, acting on behalf of her company, knowingly made and presented false and fraudulent claims to USDA seeking payment of USDA grant funds. Boze also knowingly presented false and fraudulent purchase invoices supporting documentation for each claim.
Assistant U.S. Attorney Andrea Hattan, who presented the case to the grand jury, indicated that the law provides for a maximum total sentence of five years in prison, a fine of $250,000, or both, for the charged offense. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation (FBI) and the United States Department of Agriculture Office of the Inspector General (USDA OIG) conducted the investigation leading to the indictment in this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.