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6 April 2016
Honduran National Pleads Guilty to Illegally ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ORLI DAGOBERTO ARGUETA-SANCHEZ, a/k/a Orli Dagoberto Argueta, age 27, a citizen of Honduras, pled guilty today to a one-count Bill of Information for illegal reentry of removed alien.
According to the Bill of Information, on or about January 6, 2016, ARGUETA-SANCHEZ was found in the United States after having been officially deported and removed on or about November 7, 2008.
ARGUETA-SANCHEZ faces a maximum term of imprisonment of two years and a fine of $250,000, one year supervised release after imprisonment, and a $100 special assessment. U.S. District Judge Ivan L.R. Lemelle set sentencing for May 25, 2016.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, Immigration Enforcement in investigating this matter. Assistant United States Attorney Irene González is in charge of the prosecution.
Health Care Fraud Charge Filed in Fayette County Addiction Specialists Inc. CaseRead the Press Release
PITTSBURGH – Four southwestern Pennsylvania residents have been indicted by a federal grand jury in Pittsburgh on multiple charges of distribution and dispensing of Schedule III and Schedule IV controlled substances, conspiracy and health care fraud United States Attorney David J. Hickton announced today.
The 238-count superseding indictment, returned on April 5, named Dr. Dominic W. Dileo, 67, of Uniontown, Pa., Rosalind Sugarmann, 61, of Allison Park, Pa., Brandon S. Eicher, 40, of Smithfield, Pa., and Louis M. Polito, 60, of Uniontown, Pa., as the defendants.
According to the superseding indictment, between January of 2013 and November of 2015, Dr. DiLeo, Sugarmann and Polito unlawfully dispensed or distributed Suboxone or Xanax on more than 200 occasions to Sugarmann and to two other persons whose names were not set forth in the superseding indictment. The superseding indictment further alleges that, from in and around February 2013 until in and around May of 2014, Sugarmann and Eicher defrauded Medicaid in connection with the performance of their duties at Addiction Specialists, Inc. (“ASI”). The superseding indictment describes Sugarmann as an owner of ASI and Eicher as the Clinical Director at ASI. The superseding indictment charges them with defrauding Medicaid by submitting bills to Medicaid for services which they knew were not covered by Medicaid, and by falsifying ASI medical records in preparation for an audit conducted on behalf of Medicaid.
The law provides for a maximum total sentence of 10 years in prison for each instance in which Suboxone was distributed, five years for each instance in which Xanax was distributed, ten years for health care fraud, plus a maximum fine of $250,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Shaun E. Sweeney and Stephen R. Kaufman are prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, Drug Enforcement Agency, U.S. Department of Health and Human Service, Office of Inspector General, Internal Revenue Service – Criminal Investigation, and the Pennsylvania Office of Attorney General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Green Bay Man Indicted for Social Security Disability FraudRead the Press Release
United States Attorney Gregory J. Haanstad of the Eastern District of Wisconsin, announced that on April 5, 2016, a federal grand jury returned an indictment against Randall J. Frisque (age: 58) of Green Bay, Wisconsin.
Frisque is alleged to have illegally received approximately $117,500 in Social Security Administration Disability funds, contrary to Title 18, United States Code, Section 641. He faces up to 10 years imprisonment, a $250,000 fine, and 3 years of supervised release.
This case was investigated by the U.S. Social Security Administration and the Office of Inspector General for the Department of Health and Human Services. The case will be prosecuted by Assistant United States Attorney Daniel R. Humble.
An indictment is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove him guilty beyond a reasonable doubt.
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Gardiner Man Sentenced to Five Years for Robbing Two PharmaciesRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Rudger S. Ellis, 23, of Gardiner, Maine was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to five years in prison to be followed by three years of supervised release for committing two pharmacy robberies. He was also ordered to pay a $1,000 fine and $726 in restitution.
On February 7, 2015, Ellis entered the Rite Aid Pharmacy located on North Belfast Avenue in Augusta, Maine, wearing a hooded gray sweatshirt, blue and white athletic pants, and gloves and covering his face with a plaid cloth. Ellis approached the counter and demanded that the pharmacist give him oxycodone, Oxycontin, and Ritalin. He told the pharmacy employees to hurry up and said that he had a gun. Ellis absconded with six bottles containing oxycodone.
On February 18, 2015, Ellis robbed the Rite Aid Pharmacy located on Spring Street in Gardiner, again wearing a hooded sweatshirt and gloves and covering his face with a plaid cloth. He approached the pharmacy counter and demanded oxycodone 30 milligram pills. He repeatedly told pharmacy employees to “hurry” and several times commanded: “now, now, now!” Ellis absconded with 11 bottles of oxycodone.
Steven C. Chaput committed the robberies with Ellis. He has pled guilty and awaits sentencing.The investigation was conducted by the Augusta and Gardiner Police Departments and the Federal Bureau of Investigation.
Gang Member Convicted in Meth Case Sentensed to 14 YearsRead the Press Release
LOS ANGELES – A street gang member has been sentenced to 14 years in federal prison after being found guilty of two narcotics trafficking charges in relation to the sale of about two ounces of methamphetamine during an undercover investigation.
Aaron “Droopy” Ramos, 31, a resident of the Florence-Graham district of Los Angeles, was Monday yesterday afternoon to 168 months in federal prison by United States District Judge Christina A. Snyder.
Following a jury trial in December, Ramos was found guilty of conspiracy to distribute methamphetamine and distribution of methamphetamine. (Ramos was also convicted at trial in 2014, but that conviction was reversed by Judge Snyder because of comments made by a juror.)
“Drug trafficking continues to be a core activity of street gangs,” said United States Attorney Eileen M. Decker. “Taking this violent drug trafficker off of our streets both protects the community and cuts off a source of funding for the gang.”
A second defendant in the case – Sharon “Hyper” Paiz, 35, of Lancaster – who obtained the narcotics involved in the transaction, pleaded guilty and faces a mandatory minimum sentence of 10 years in federal prison when she is sentenced by Judge Snyder on June 20.
In court papers, prosecutors argued that Ramos was a high-ranking member of the 18th Street gang and that he was the driver in a fatal drive-by shooting. Ramos “was involved in a drive-by shooting simply for sport,” according to a sentencing memo filed in the case. “The shooting was a gang initiation that resulted in the death of a non-gang member that [Ramos] was supervising in his leadership role.” Ramos was convicted in relation to this shooting in state court and has nearly completed an 8-year prison sentence.
The investigation into Ramos and other 18th Street gang members was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Former Traffic Court Judge Gets Prison Term for Tax ChargeRead the Press Release
PHILADELPHIA - Michael Sullivan, 51, of Philadelphia, was sentenced today to 10 months in prison for one count of failure to report and pay payroll taxes. Sullivan had failed to report and pay payroll taxes for employees of the Fireside Tavern, South Marshall Street, Philadelphia. Sullivan was an owner and operator of the Tavern. Sullivan was a judge for the former Philadelphia Traffic Court.
Sullivan pleaded guilty to the charge on October 20, 2015. In addition to the prison term, U.S. District Court Judge Eduardo Robreno ordered restitution in the amount of $58,314, one year of supervised release, and a $25 special assessment.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service is being prosecuted by Assistant United States Attorney Paul L. Gray.
Former St. Louis Police Officer Pleads Guilty to Violating Civil Rights by Assaulting ArresteeRead the Press Release
A former St. Louis Metropolitan Police officer pleaded guilty today to depriving an arrestee, identified in court documents as M.W., of his civil rights by assaulting him while he was handcuffed, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Tammy Dickinson of the Western District of Missouri.
Thomas Carroll, 52, of St. Louis, pleaded guilty before U.S. District Judge Henry E. Autrey of the Eastern District of Missouri to deprivation of rights under color of law. Carroll was taken into custody immediately upon the conclusion of today’s hearing.
“Each time a law enforcement officer abuses their authority and the power entrusted to them, it erodes the public trust and makes it that much more difficult for good law enforcement officers to do their jobs,” said Principal Deputy Assistant Attorney General Gupta. “The Civil Rights Division is committed to prosecuting those law enforcement officers who abuse their authority, break the law and then attempt to cover up their criminal behavior.”
“I have zero tolerance for the actions of police officers who discard justice for their own angry vendetta,” said U.S. Attorney Dickinson. “I know the vast majority of law enforcement officers join me in repudiating this brand of brutality. This former police officer not only violated the civil rights of a person in police custody, he violated the public trust and his oath of office.”
M.W. was arrested at Ballpark Village on July 22, 2014, because he was unlawfully in possession of a credit card that belonged to Carroll’s daughter. Carroll, who was on duty that night, responded to Ballpark Village and confronted M.W., who was already under arrest, handcuffed and seated in the backseat of another officer’s patrol car. Carroll yelled at M.W., telling him that he made a “huge mistake” and “broke into the wrong girl’s car.”
Another police officer then drove M.W. to the Central Patrol police station, and Carroll followed behind in his own patrol car.
Carroll admitted that, despite orders from a superior officer to stay away from M.W., he entered the interview room where M.W. was handcuffed and shackled to the floor. Carroll began yelling at M.W., questioning him about who broke into his daughter’s car. Carroll threw M.W. into a chair and then picked him up and threw him into a wall. While M.W. was on the ground, Carroll punched M.W. in the torso. M.W. was handcuffed throughout the assault. As a result, M.W. suffered bodily injury.
M.W. never posed a threat to Carroll. Nonetheless, Carroll assaulted M.W. knowing it was wrong and against the law to do so, and knowing that it violated his oath as police officer.
By pleading guilty today, Carroll admitted that he deprived the victim of his constitutional right to be free from unreasonable seizure, which includes the right to be free from unreasonable force by a law enforcement officer.
According to the plea agreement, the government will present evidence at Carroll’s sentencing hearing regarding the severity of the assault, which is in dispute, including evidence that Carroll brandished his gun and put it in M.W.’s mouth as well as evidence regarding the nature and extent of the injuries suffered by M.W. The government will also present evidence that Carroll engaged in obstructive conduct in the days immediately after he assaulted M.W.
Under federal statutes, Carroll is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000.
In a separate but related case, a former prosecutor for the St. Louis Circuit Attorney’s Office pleaded guilty on Oct. 26, 2015, to concealing her knowledge of Carroll’s assault. Bliss Barber Worrell, 28, of Clayton, Missouri, pleaded guilty to misprision of a felony. Worrell was an assistant circuit attorney in the St. Louis Circuit Attorney’s Office Misdemeanor Division from August 2013 through July 2014. Worrell will be sentenced at a later date.
Worrell admitted that she failed to notify authorities of the assault and that she took an affirmative step to conceal the felony. Worrell also admitted that she filed charges without disclosing knowledge of the assault to her colleagues, supervisors or the judge assigned to setting a bond. She admitted that she allowed the charges to stand despite later learning that the facts that made out the charge of attempted escape were fabricated to cover for injuries that the arrestee sustained during the assault.
These cases are being investigated by the FBI’s St. Louis Division. These cases are being prosecuted by First Assistant U.S. Attorney David M. Ketchmark of the Western District of Missouri, who has been appointed as Special Attorney to the U.S. Attorney General, and Trial Attorney Fara Gold of the Civil Rights Division. The U.S. Attorney’s Office of the Western District of Missouri is prosecuting these cases with the Civil Rights Division due to the recusal of the U.S. Attorney’s Office of the Eastern District of Missouri.
Carroll Information
Carroll Plea Agreement
Former No. 2 of Los Angeles Sheriff’s Department Found Guilty of Obstructing Federal Investigation into Misconduct at County JailsRead the Press Release
LOS ANGELES – Paul Tanaka, who was the second in command of the Los Angeles Sheriff’s Department, was found guilty today of two obstruction of justice charges for overseeing efforts to derail a federal investigation into corruption and civil rights violations by sheriff’s deputies at two downtown jail complexes.
After only a few hours of deliberations, a federal jury convicted Tanaka of being the leader of a broad conspiracy to obstruct the federal investigation, a scheme that started when the Sheriff’s Department learned that an inmate at the Men’s Central Jail (MCJ) was an FBI informant. Tanaka directed a conspiracy that has previously resulted in the conviction of eight other former LASD deputies.
In addition to the conspiracy count, Tanaka was found guilty of one substantive count of obstructing justice.
Tanaka, 57, faces a statutory maximum sentence of 15 years in federal prison when he is sentenced by United States District Judge Percy Anderson on June 20.
“Another jury has spoken and sent a clear message that the former leaders of the Sheriff’s Department who abused their positions by encouraging, and then concealing, a corrupt culture, must be held accountable,” said United States Attorney Eileen M. Decker. “Mr. Tanaka joins eight of his former subordinates who have been found guilty of actively working to undermine a federal investigation into illegal conduct at the jails. Law enforcement agencies that house inmates, even dangerous ones, must remain steadfast in upholding the law and protecting the civil rights of all of the individuals in their custody. This is required by both the higher standard to which law enforcement is held and their sworn oath to uphold the law.”
Tanaka was the undersheriff – the number 2 in the LASD – until 2013, and he ran an unsuccessful campaign for sheriff in 2014. As he rose through ranks during a 31-year career with the LASD, Tanaka became well aware of “problem deputies” at the jails, allegations of rampant abuse of inmates and insufficient internal investigations into deputy misconduct. Nevertheless, Tanaka encouraged jail deputies to work in a “gray area,” and he transferred a jail supervisor who sought to implement reforms at the jails, according to the testimony presented during a 10-day trial.
The scheme to disrupt the federal investigation started in August 2011 when unknown deputies recovered a mobile phone from an inmate in MCJ, linked the phone to the FBI, and determined that the inmate was an informant in the FBI’s corruption and civil rights investigation. The phone was given to the inmate as part of an undercover investigation by a corrupt deputy, who subsequently pleaded guilty to a federal bribery charge.
In response to the federal investigation, members of the Tanaka-led conspiracy took steps to hide the cooperator from the FBI and the United States Marshals Service, which was attempting to bring the inmate to testify before a federal grand jury. The evidence presented during the trial showed that the deputies altered records to make it appear that the cooperator had been released from jail, when in fact he had been re-booked into custody under a fake name and moved to secure locations. Members of the conspiracy prohibited FBI access to the informant, and then told the cooperator that he had been abandoned by the FBI.
Over the course of several weeks, members of the conspiracy sought an order from a Los Angeles Superior Court judge to compel the FBI to turn over information about its investigation to the LASD. After the judge refused to issue the order because he had no jurisdiction over the federal law enforcement agency – and even though it was clear that the FBI was acting legally – two LASD sergeants confronted the lead FBI agent at her residence in an attempt to intimidate her. The sergeants threatened the agent with arrest and later reiterated this threat to her supervisor, stating that the agent’s arrest was imminent.
Tanaka oversaw co-conspirators who told fellow deputies not to cooperate in the federal investigation. Members of the conspiracy engaged in witness tampering by telling fellow deputies that the FBI would lie, threaten, manipulate and blackmail them to obtain information about the Sheriff’s Department.
“Mr. Tanaka created a culture of corruption seen only in the movies, and certainly nothing that anyone would expect from the nation’s largest Sheriff’s department,” said David Bowdich, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “My hope is that this conviction is the last chapter in this case so that the dedicated, law-abiding deputies at the L.A. Sheriff's Department, as well as the citizens they're sworn to serve and protect, can move on without distraction.”
Tanaka was indicted last year along with William Thomas Carey, a former LASD Captain who headed the Internal Criminal Investigations Bureau. Carey pleaded guilty last year and is pending sentencing. Now that Tanaka has been convicted, 10 members of the department – including former Sheriff Leroy Baca – have been convicted in relation to the scheme to obstruct justice.
As a result of the federal investigation into the LASD, another nine deputies who held various ranks have been convicted on charges related to the illegal use of force, illegal firearms and bribery. Two additional deputies are scheduled to go on trial May 3 in a case alleging an illegal use of force at the Twin Towers jail.
Former Massey Energy CEO Sentenced to a Year in Federal PrisonRead the Press Release
Don Blankenship Sentenced on Federal Conspiracy Charge
Acting U.S. Attorney Carol Casto announced that former Massey Energy Chief Executive Officer Don Blankenship was sentenced today to a year in federal prison and ordered to pay a $250,000 fine. Blankenship was sentenced for conspiracy to willfully violate mine health and safety standards after a jury returned a guilty verdict on the federal crime.
“This sentence is a victory for workers and workplace safety,” said Acting U.S. Attorney Casto. “It lets companies and their executives know that you can’t take chances with the lives of coal miners and get away with it. Putting the former chief executive officer of a major corporation in prison sends a message that violating mine safety laws is a serious crime and those who break those laws will be held accountable.”
Over the course of the trial, in which jury selection began on Oct. 1, 2015, and the jury returned a guilty verdict on Dec. 3, 2015, the jury heard evidence from 27 witnesses called by the United States. Many of these witnesses were coal miners who worked at the Upper Big Branch (UBB) mine prior to the 2010 explosion and they testified in detail from their firsthand knowledge of the unsafe working conditions at UBB, violations of U.S. Mine Safety and Health Administration (MSHA) regulations and organized efforts to obstruct and interfere with MSHA inspectors. The jury heard from Bill Ross, former Manager of Technical Services at Massey, who testified that he warned Blankenship about the company’s practice of rampant violations and told the defendant prior to the UBB explosion that Massey’s standard tactic of ignoring or defrauding MSHA could not be sustained without the possibility of a serious accident that could have fatalities. The evidence also showed that Blankenship received daily updates on safety violations and helped perpetuate them.
“Putting profits over the safety of workers is reprehensible,” said Acting U.S. Attorney Casto. “The jury acknowledged that with the guilty verdict and the sentence imposed today recognizes that disregarding safety laws has real consequences. From the beginning, the objective of this investigation and this prosecution was to not only show that those who violate safety laws will be held responsible, but also to deter these violations in the future to make everyone’s workplace safer.”
“Today’s sentence marks the culmination of a comprehensive, joint investigation that took over five years to complete and resulted in five criminal convictions.” said Special Agent in Charge Scott S. Smith of the FBI’s Pittsburgh Field Office. “Along with dedicated prosecutors in the U.S. Attorney’s Office and investigators in U.S. Department of Labor’s Office of Inspector General, the FBI is committed to holding those who commit crimes by enabling safety violations and who place profits above the value of human life accountable.”
“Donald Blankenship’s trial and conviction came after an explosion that killed 29 miners at the Upper Big Branch mine,” said Special Agent in Charge John Spratley of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations’ Philadelphia Regional Office. “His sentencing today reaffirms the responsibility of company executives to ensure they adhere to health and safety standards. The Department of Labor’s Office of Inspector General will continue to work with the Mine Safety and Health Administration and our law enforcement partners to investigate criminal worker safety violations that pose a threat to American workers.”
The prosecution was the result of a comprehensive investigation that, including Blankenship, resulted in five criminal convictions. In addition to the convictions of individuals, the outcome of the investigation also included a resolution of over $200 million with Alpha Natural Resources after it acquired Massey. This agreement established a foundation dedicated to mine safety and health research, the first of its kind and set aside nearly $50 million in funding for the foundation. That funding has provided the resources for some of the best and brightest minds in the country to pursue research that will make mines safer all over the world.
This matter was investigated by the FBI and the U.S. Department of Labor’s Office of Inspector General. Assistant U.S. Attorneys Steven R. Ruby, Gregory McVey and Gabriele Wohl, as well as former U.S. Attorney Booth Goodwin, handled the prosecution and tried the case before a federal jury.
The prosecution is part of a sustained effort by the U.S. Attorney’s Office for the Southern District of West Virginia to protect the health and safety of West Virginia workers by vigorously prosecuting workplace safety crimes and holding accountable those responsible for dangerous working conditions.
Former Eugene Property Manager Pleads Guilty to Wire FraudRead the Press Release
EUGENE, Ore. – Eugene property manager, Terry Shockley, 63, pleaded guilty before U.S. District Judge Ann Aiken today for engaging in a scheme to defraud clients and investors through his now-defunct property management company, TS Property Management (TSPM).
According to the plea agreement, Terry Shockley admitted to engaging in a scheme to defraud the clients of and investors in TS Property Management, resulting in a loss of over $3.5 million to his victims. The plea agreement sets forth the details of the scheme, which included operating the company under material false pretenses such as statements claiming that certain amounts were held in trust for clients, statements about the financial health of the company, and lulling statements to the Oregon Real Estate Agency in an attempt to convince the state regulator that nothing was wrong and the business was financially sound. In reality, Shockley had been experiencing financial issues since at least as early as December 2012 and was operating under substantial debt.
Shockley faces a statutory maximum sentence of 20 years in prison for each count of wire fraud. According to the plea agreement, Shockley has agreed to entry of a restitution order taking into account the full amount of his victims’ losses. Shockley will be sentenced on September 6, 2016 at 10:00 a.m.
The Federal Bureau of Investigation, with assistance from the Oregon Real Estate Agency, investigated this case and it is being prosecuted by Assistant U.S. Attorney Nancy M. Olson.
Former Belton Woman Sentenced for Stealing $471,000 from EmployerRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Belton, Mo., woman was sentenced in federal court today for embezzling $471,000 from her employer.
Kimberly Joyce Padgett, 43, of Osawatomie, Kan., formerly of Belton, was sentenced by U.S. District Judge Gary A. Fenner to two years and three months in federal prison without parole. The court also ordered Padget to pay $471,000 in restitution.
On Nov. 12, 2015, Padgett pleaded guilty to five counts of wire fraud. Padgett admitted that she embezzled approximately $471,000 from her employer, Reliant Financial Services in Kansas City, Mo. As part of Padgett’s duties at Reliant Financial Services, she managed the business’s books, paid the bills, managed the accounts receivable, operated the telephones, and prepared the paychecks. Padgett was also a signor on the business’s bank accounts and had use of the business’s credit cards for authorized business expenses. Padgett was terminated from employment in March 2015 when the fraud scheme was discovered.
During 2007 up to and including 2015, Padgett embezzled money from the Reliant Financial Services bank account intended for payroll tax and office supplies. Padgett wrote $350,000 in checks to herself and deposited those funds into her personal PayPal account and her husband’s bank account. Padgett used her PayPal account to pay for trips around America for herself, and at least once for a coworker, the coworker’s daughter, Padgett’s daughter, and others. She also used her company credit card in an unauthorized manner to support a lavish lifestyle by paying expenses for herself and others, including clothing, jewelry, gasoline, vacations, hotels, and restaurants.
From 2012 to 2015, Padgett made little to no payments in payroll taxes. Company owners had no knowledge the payroll taxes were not paid, and did not learn the taxes were not paid until they were contacted by the IRS.
This case was prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the FBI.
Former BVU Board Chairman Pleads GuiltyRead the Press Release
ABINGDON, VIRGINIA – The former Chairman of the Board of Directors for the Bristol Virginia Utilities Authority pled guilty this morning in the United States District Court for the Western District of Virginia in Abingdon to a Federal conspiracy charge, United States Attorney John P. Fishwick Jr. announced.
Bruce J. Clifton Jr., 64, of Bristol, Va., waived his right to be indicted and pled guilty this morning to a one count Information charging him with conspiracy to commit program fraud and having knowledge of the actual commission of felony and concealing such felony from the United States.
“The level of corruption at BVU was overwhelming,” United States Attorney John P. Fishwick Jr. said today. “In cooperation with our partners in law enforcement, we continue to dismantle these corrupt individuals and put those who have profited from corruption in federal prison.”
“The sheer number of FBI investigations and subsequent charges against individuals involved in the Bristol Virginia Utilities Authority should demonstrate the government’s commitment to seeking out and holding accountable those who manipulate the system for their personal gain. Public corruption continues to be the Bureau’s top criminal priority. We encourage the public to continue to report suspicious activity; through their concern and information the FBI strives to wipe out corruption at all levels,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division.
According to evidence presented at today’s hearing by Assistant United States Attorney Zachary T. Lee, Clifton was a citizen member of the BVU Board of Directors from January 2, 2010 through March 27, 2016, having served as the Chairman of the Board from July 2015 to March 27, 2016.
In 2011, BVU entered into an agreement with Company #1. The agreement stated that if BVU signed a contract with Company #1, Company #1 would pay to entertain BVU executives and BVU Board Members in Dallas, Texas. This entertainment included the payment of hotel expenses, limousine services, meals and tickets to an NFL game between the Dallas Cowboys and the Seattle Seahawks on November 6, 2011, in which not only tickets would be provided but also access to a luxury suite would be available. On or about September 29, 2011, a contract was entered into with Company #1 and funds in the amount of $4,496,096 were allocated by BVU to pay Company #1.
On or about November 5, 2011 and November 8, 2011, Wes Rosenbalm, Bruce J. Clifton Jr., and other members of the BVU Board of Directors, traveled to Dallas, Texas. During this trip, these individuals attended a Dallas Cowboys football game, stayed at the Westin Park Central Hotel, were transported by a limousine service, were provided a tour of Dallas, Texas, and were provided multiple meals, all at the expense of Company #1.
The total value of the services and things of value provided to Clifton, individually, was approximately, $2,500. The total costs to Company #1 for providing these services and things of value to Clifton and BVU employees and BVU Board Members, exceeded $10,000. On or about January 9, 2012, Clifton completed his Virginia state mandated financial disclosure form for the year 2011 and did not disclose the payment of expenses and things of value he received from Company #1 for his trip to Dallas, Texas.
In addition, Clifton, who is a general sales manager of Company #2, used his position on the BVU Board of Directors and worked with BVU Employee #3, to ensure that Company #2 secured bids to provide BVU with fleet vehicles. Clifton ensured Company #2 won bids to provide vehicles to BVU by getting information from BVU Employee #3 about each bid submitted and then adjusting the bid from Company #2 to ensure it was the lowest bid. When Employee #3 passed away in April 2011, Clifton approached BVU Employee #4 and explained that Employee #3 would tell Clifton when he was not the low bidder for a contract and when Clifton needed to “sharpen his pencil.”
On or about July 17, 2015, Clifton was interviewed by an agent with the Federal Bureau of Investigation and admitted that Clifton had told another car salesman that he had been provided inside information related to bids received by BVU for the purchase of automobiles.
Clifton admitted today that on September 16, 2013, the BVU Board of Directors met and after entering executive session, discussed the implications of alleged misconduct of Wes Rosenbalm. During that meeting, which BVU Board Members did not know was being recorded, members discussed the fact that many of the board members had engaged in similar activity, including accepting tickets and attending the previous trip to Dallas, Texas, which had been paid for by a vendor. Board members also discussed that many other employees could get wrapped up in a scandal if the information related to Wes Rosenbalm came to light in public. Specifically, Stacey Pomrenke and David Copeland were employees mentioned as potentially being involved in illegal activity associated with vendors of BVU.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Zachary Lee and Special Assistant United States Attorney Kevin Jayne prosecuted the case for the United States.
Federal Jury Convicts Man of Sex Trafficking MinorRead the Press Release
Memphis, TN – After a three-day trial, a federal jury found a man guilty of trafficking a minor for sex. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty verdict today.
According to information presented in court, between May and June 2014, Harold Davis, 27, of Memphis, met a female teenage runaway. Davis obtained a cellphone and a wig for the teen and subsequently put her image on Backpage.com to advertise her for commercial sexual encounters.
The defendant’s activity was discovered when a Shelby County Sheriff’s Deputy stopped Davis’ vehicle for a traffic violation. He noticed the female minor in the backseat of the vehicle. The deputy also observed an unusually large amount of condoms and female hygiene products in the car.
The Federal Bureau of Investigation’s (FBI) Human Trafficking Task Force furthered the investigation into Davis, linking the Backpage ads to Davis through his phone number and email accounts.
On Tuesday, April 5, 2016, a federal jury convicted Davis on one count of sex trafficking a minor and one count of using the internet to conduct an unlawful activity.
Davis is scheduled to be sentenced by U.S. District Judge Samuel H. Mays Jr. on Thursday, July 14, 2016. He faces a mandatory minimum ten-year sentence and up to life in prison.
This case was investigated by the FBI and Shelby County Sheriff’s Department.
Assistant U.S. Attorneys Debra Ireland and Kasey Weiland are prosecuting this case on the government’s behalf.
Employee Sentenced for Using Personal Information Stolen from Her Employers to Obtain Fraudulent Tax Refunds and Credit CardsRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Tricia N. Bryan, age 30, of Gwynn Oak, Maryland, today to 30 months in prison followed by five years of supervised release for wire and bank fraud, and aggravated identity theft. Judge Motz ordered Bryan to pay restitution of $65,356.84, the amount of the actual losses, and forfeit property purchased with the fraudulent credit cards she opened in other peoples’ identities, including a flat screen TV, and a designer Vera Wang sapphire and a diamond engagement ring.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; Commissioner Kevin Davis of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
From March to November 2010, and from November 2011 to July 2013, Bryan worked for a defense contractor in Columbia, Maryland who provided data entry services for the National Guard Bureau’s Health Readiness Record. From November 2013 to March 2015, Bryan worked at a global investment management firm in Owings Mills, Maryland. At both places of employment, Bryan was entrusted with the personal identity information of individuals, including military personnel.
According to her plea agreement, beginning in March 2010 to June 2013, Bryan engaged in a bank fraud scheme in which she applied for credit cards using personal identity information she stole from work at the defense contractor, including the identity of soldiers. Bryan applied for at least 26 separate accounts, and made at least $14,332.54 in charges on fraudulently obtained credit cards.
On July 18, 2013, state search warrants were executed at her residence. Items seized included credit card applications and credit cards in the names of others, receipts for items purchased with the fraudulently obtained credit cards, and sticky notes Bryan made bearing personal information of soldiers in the Health Readiness Record.
In a separate fraud scheme, from March 2011 to February 2014, Bryan also used personal identity information she stole from work at both places of employment to electronically file at least 61 false federal tax returns and 11 fraudulent state income tax returns. Of these, 18 federal returns and seven state income tax returns were accepted for filing. Three federal refunds and one state refund were attempted to be deposited into closed accounts and the replacement checks never claimed or cashed by Bryan. Overall, Bryan actually received $41,674 in fraudulent federal refunds and $8,849 in fraudulent state refunds.
The total amount of actual loss arising from the bank and tax refund fraud schemes was $65,356.84.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the Defense Criminal Investigative Service, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine and Special Assistant U.S. Attorney Joshua Felsen, a cross-designated Baltimore City Assistant State’s Attorney, who prosecuted the case.
District Man Sentenced to Six Years in Prison for Attacking Girlfriend During ArgumentRead the Press Release
WASHINGTON – Kenneth Charles, 38, of Washington, D.C., was sentenced today to a six-year prison term for a vicious assault on his girlfriend last fall that left her in a coma for months, U.S. Attorney Channing D. Phillips announced.
Charles pled guilty in February 2016, in the Superior Court of the District of Columbia, to a charge of aggravated assault. He was sentenced by the Honorable Todd E. Edelman. Following his prison term, Charles will be placed on three years of supervised release.
According to the government’s evidence, on the evening of Oct. 19, 2015, Charles got into an argument with his girlfriend at the apartment they shared in Southeast Washington. The argument began in the bedroom, but was loud enough so that the victim’s daughter, who was inside the apartment with a friend at the time, could hear the yelling. As the argument ensued, the victim left the bedroom and walked out to the balcony.
When she reached the balcony, the victim tossed Charles’s clothes over the side and onto the ground below. She then immediately sat down in a chair on the balcony. Charles followed the victim out to the balcony, walked over to the edge, looked over and saw his clothes, and then turned to the victim and punched her in the face multiple times. Following the assault on the balcony, he and the victim made their way into the apartment, at which point, the argument and physical struggle continued. Charles punched the victim repeatedly until she lost consciousness. At some point during the altercation, the victim hit her head on a table. Charles, however, continued punching her even after she had fallen into the table and was unconscious.
Charles attempted to clean up the scene before he left the apartment. He did not call police before leaving. A witness called 911. At the hospital, the victim was unconscious and unresponsive. Two months after her arrival in the hospital, the victim slowly began to awaken from her coma. She is still recovering from the attack.
In announcing the sentence, U.S. Attorney Phillips commended the work of those who investigated the case for the Metropolitan Police Department, including detectives of the Criminal Investigations Division Homicide Branch as well as officers and detectives from the Seventh District. He also expressed appreciation for the work of the D.C. Department of Fire and Emergency Medical Services and the U.S. Marshals Service. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Victim/Witness Advocate Jennifer Clark; Paralegal Specialists Zekiah Wright, Debra Joyner, and Tierra Nanches; Investigative Analyst Zachary McMenamin, and Assistant U.S. Attorney Richard DiZinno. Finally, he commended the work of Assistant U.S. Attorney Robert Eckert and Jessica Brooks, who investigated and prosecuted the case.
Detroit man pleads guilty to interstate heroin traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – James Leon Fisher, 29, of Detroit, Michigan, pled guilty to heroin trafficking in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Fisher, along with thirteen other individuals, conspired to transport heroin across state lines from Detroit, Michigan to Morgantown, West Virginia. The operation was disrupted in February 2016 when a federal grand jury returned three separate heroin trafficking indictments.Specifically, Fisher sold heroin in December 2015 in Monongalia County, West Virginia. He pled guilty to “Distribution of Heroin.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Zelda Wesley prosecuted the case on behalf of the government. The Mon Metro Drug and Violent Crime Task Force investigated.U.S. Magistrate Judge Michael John Aloi presided.
Dallas Check Cashing Business Owner Sentenced to 21 Months in Federal Prison for Role in Stolen Tax Refund SchemeRead the Press Release
DALLAS — A Dallas check cashing business owner, Obinna Njoku, who pleaded guilty to his role in a stolen tax refund scheme, has been sentenced by U.S. District Judge Sam A Lindsay to 21 months in federal prison and ordered to pay $309,679 in restitution, announced U.S. Attorney John Parker of the Northern District of Texas.
Njoku pleaded guilty in August 2015 to a superseding information charging one count of conspiracy to launder monetary instruments. At Monday’s sentencing hearing, Judge Lindsay ordered Njoku to surrender to the Bureau of Prisons on May 10, 2016.
According to the factual resume filed in the case, Njoku was the sole director of All-Ways Insurance Group, LLC, and he owned and operated All-Ways Check Cashing, Inc., a money service business licensed in Texas and federally, as an agent of MoneyGram. In 2012, All-Ways had at least two locations in Dallas, including one on Forest Lane. Njoku was also the designated anti-money laundering compliance officer for All-Ways, in its agency for MoneyGram, and represented to MoneyGram that All-Ways had implemented an anti-money laundering compliance policy and would comply with all reporting and recordkeeping requirements.
From January through April 2012, according to the factual resume, Njoku was asked by several individuals to cash, through All-Ways, numerous checks purported to be federal income tax refunds issued to individuals in the Dallas area. The individuals asking Njoku to cash these checks brought “batches” of checks, often eight to 12 at a time, to Njoku at the Forest Lane All-Ways location. These “batches” often had consecutive check numbers, and each check was always for less than $10,000. The individuals who brought the checks to Njoku to cash were not the individuals to whom the checks were payable. The total amount of each “batch” of checks presented to Njoku, as well as the amount of cash released to the respective individual presenting the “batch” of checks, was usually well over $10,000.
Njoku believed, according to the factual resume, that the individuals asking for the checks to be cashed had prepared and filed federal income tax returns for the persons to whom the checks were issued, and those individuals had generated illegally inflated refund amounts. While he believed the checks were likely derived from criminal activity involving fraudulent federal tax returns, Njoku did not ask or seek any details. Instead, Njoku deliberately blinded himself to what he suspected was the source of the checks and deposited the checks into his All-Ways bank accounts at Comerica Bank. As his commission for cashing these checks, Njoku kept 25 to 35 percent of the overall amount of each check “batch” presented to him for cashing, which was much more than the usual three to five percent he collected from other check cashing customers.
The investigation by special agents with Internal Revenue Service Criminal Investigation revealed that the checks presented to Njoku for cashing resulted from fraudulently filed federal income tax returns, and the payees on those checks had their identities stolen by individuals who used their personal information to file fraudulent tax returns and fraudulently claim refunds. These fraudulent federal tax returns submitted in these victims’ names were electronically filed, used an incorrect address for the taxpayer, claimed a refund, and directed the refund to be processed as an e-Collect check. The total amount of the checks obtained through wire fraud and cashed by Njoku through All-Ways was at least $300,000, according to the factual resume.
Internal Revenue Service Criminal Investigation investigated the case. Assistant U.S. Attorney John J. de la Garza was in charge of the prosecution.
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Dallas Carjackers SentencedRead the Press Release
DALLAS — Donshay Jones, 24, of Dallas, was sentenced today by U.S. District Judge Ed Kinkeade to serve a total of 168 months (14 years) in federal prison, following his guilty plea to felony offenses stemming from the February 2014 armed carjacking of a young woman and her young child in Dallas, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Jones pleaded guilty in November 2015 to one count of carjacking and one count of using, carrying, and brandishing a firearm during and in relation to a crime of violence. Jones’ co-defendant, Joshua Sutherland, 22, also of Dallas, pleaded guilty to one count of carjacking and was sentenced last year by Judge Kinkeade to 87 months in federal prison.
According to documents filed in the case, Jones and Sutherland were in an apartment building’s parking lot on Ledbetter Drive in Dallas on February 18, 2014. With Sutherland acting as the “look out,” Jones shoved the woman and her four-year-old son against a wall, pointed and held a firearm on them, and threatened to kill them both unless she turned over her valuables, including her car keys. After the woman pointed out her car to Jones, Jones searched her person, and then he and Sutherland got into her car and drove away.
The Dallas Police Department and the Federal Bureau of Investigation conducted the investigation. Deputy Criminal Chief Assistant U.S. Attorney Lisa J. Dunn prosecuted the case.
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Co-Owner of Company That Originated Millions in Fraudulent Mortgages Sentenced to 21 Months in PrisonRead the Press Release
NEWARK, N.J. - The co-owner of a mortgage company that was responsible for a long-running, large-scale mortgage fraud scheme that caused millions in losses was sentenced today to 21 months in prison, U.S. Attorney Paul J. Fishman announced.
Lester Soto, 59, of Freehold, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with two counts of conspiracy to commit bank fraud. Judge Salas imposed the sentence today in Newark federal.
According to the documents filed in this and other cases, as well as statements in court:
From September 2006 to May 2008, Soto and others, including fake document creators, a complicit lawyer and paralegal, and numerous loan officers, engaged in two related mortgage fraud conspiracies through a company called Premier Mortgage Services (Premier). Soto and his conspirators targeted properties in low-income areas of New Jersey. After recruiting “straw buyers,” Soto and his conspirators used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets and income than they actually did.
Soto and his conspirators then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties. Soto and his conspirators then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (HUD-1s), which hid the true sources and destinations of the mortgage funds provided by financial institutions. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings.
Besides being a part-owner of Premier, Soto also acted as a loan officer on certain Premier mortgage loan applications and took a percentage of Premier’s profits. Soto employed document makers to create false and fraudulent documents and put mortgage brokers at Premier in contact with these document makers to create other false and fraudulent documents. Soto instructed Premier employees to provide him with loan files that Premier employees believed contained suspicious information, and then personally shepherded these loan files through to funding.
Other conspirators, including Isaac DePaula, 36, of Brazil, Adilson Silva, 50, of Union, New Jersey, and Klary Arcentales, 47 of Lyndhurst, New Jersey, were loan officers at Premier. DePaula, Silva, and Arcentales recruited straw buyers, provided false and fraudulent documents to the straw buyers, and incorporated false and fraudulent documents into loan applications to induce financial institutions to fund mortgage loans. The loan officers profited illegally by receiving a commission from Premier for each mortgage loan that they closed and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for themselves, often via shell corporations or nominee bank accounts.
Rodrigo Costa, 35, of Brazil, created false and fraudulent documents, including Verifications of Deposit (VODs) and Verifications of Rent (VORs). Other defendants, including DePaula and Silva, then submitted Costa’s fraudulent documents to support the fraudulent mortgage loan applications of various straw buyers. For his participation, Costa received a portion of the illicit proceeds from the mortgages.
Michael Rumore, 57, of Toms River, New Jersey, was an attorney licensed in the State of New Jersey. Rumore served as the settlement agent on mortgage loans brokered by DePaula, Silva, and Soto for various subject properties. Rumore used his status as an attorney to further the fraudulent scheme, including by convening closings, receiving funds from lenders, and preparing HUD-1s that purported to reflect the sources and destinations of funds for mortgages on subject properties B when in fact, the HUD-1s were neither true nor accurate. Rumore disbursed mortgage loan proceeds directly to Premier, Soto, DePaula, and Silva, including amounts not reflected on the HUD-1s. Rumore received a fee for each fraudulent loan in which he participated.
Antonio Pimenta, 48, of Neshanic Station, New Jersey, owned and managed Kelmar Construction Co. (Kelmar). Kelmar built properties that were then sold to straw buyers utilizing fraudulent mortgage loans brokered by Arcentales.
In addition to the prison term, Judge Salas ordered Soto to serve five years of supervised release and pay restitution of $3,745,344.19.
Arcentales, one of the loan officers who provided fraudulent documents to financial institutions on behalf of straw buyers, was recently sentenced on March 28, 2016 to 18 months in prison. Linda Cohen, 58, of Orange, New Jersey, a paralegal who served as the settlement agent on mortgage loans brokered by Arcentales for various properties, was sentenced on March 30, 2016 to six months in prison.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s sentence. Fishman also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its participation in the investigation.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Zach Intrater of the U.S. Attorney’s Office Criminal Division.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov
Defense counsel: Jeff Smith Esq., of Teaneck, New Jersey
Chaves County Man Pleads Guilty to Federal Firearms Charge and Possessing Contraband in PrisonRead the Press Release
ALBUQUERQUE – Richard Gonzales, 30, of Dexter, N.M., pleaded guilty today in federal court in Las Cruces, N.M., to violating federal firearms laws and possession of contraband in prison.
Gonzales was arrested in Feb. 2016, on a criminal complaint charging him with being a felon in possession of a firearm and ammunition and possessing contraband in prison. According to the complaint, law enforcement officers found Gonzales, who is a convicted felon, in possession of a firearm and ammunition on Nov. 5, 2015, during a routine traffic stop. Thereafter, on Nov. 23, 2015, corrections officers at the Chaves County Detention Center recovered 14.6 grams of methamphetamine from Gonzales during a strip search after he returned to the detention center following his initial appearance in federal court in Roswell, N.M.
During today’s proceedings, Gonzales pled guilty to a felony information charging him with being a felon in possession of a firearm and possession of contraband in prison. In entering his guilty plea, Gonzales admitted that he unlawfully possessed a firearm on Nov. 5, 2015, in Chaves County, N.M. He acknowledged that he was prohibited from possessing firearms or ammunition as a result of his prior convictions for burglary, conspiracy to commit burglary and being a felon in possession of a firearm.
Gonzales also admitted possessing 14.6 grams of methamphetamine on Nov. 23, 2015, while he was incarcerated at the Chaves County Detention Center. Gonzales further admitted that he was on supervised release for a prior conviction at the time he committed the two crimes charged in the felony information.
At sentencing, Gonzales faces a maximum of 20 years in federal prison followed by up to three years of supervised release. Gonzales 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, the Chaves County Metro Narcotics Task Force and the Roswell Police Department. Assistant U.S. Attorney Alfred J. Perez of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
The HIDTA Chaves County Metro Narcotics Task Force is comprised of investigators from the Roswell Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI and the Chaves County Sherriff’s Office. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Buffalo Man Pleads Guilty to Selling Drugs That Were Smuggled into the Attica Correctional FacilityRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul, Jr. announced today that Jerome Tallington, 28, of Buffalo, NY, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to narcotics conspiracy and possession with intent to distribute and distribution of heroin. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Meghan A. Tokash, who is handling the case, stated that the defendant sold heroin and marijuana to Elizabeth Camue Martinez. Between September 2013 and December 2013, Martinez then smuggled gram quantities of heroin and ounces of marijuana into the Attica Correctional Facility and provided it to her husband, Andres Martinez, who was at that time incarcerated in the facility, knowing that he would then distribute the heroin and marijuana to other inmates.
Elizabeth Camue Martinez and her husband Andres Martinez have also been convicted and are awaiting sentencing.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office, the New York State Police, under the direction of Major Steven Nigrelli, the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major Wayne C. Olson, the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard, the Wyoming Country District Attorney’s Office, under the direction of Donald O’Geen, and the New York State Department of Corrections and Community Supervision, under the direction of Commissioner Anthony Annucci.Sentencing is scheduled for July 22, 2016 at 9:00 a.m. before Judge Vilardo.
Buffalo Man Charged with August 2015 Robbery of Bellevue BankRead the Press Release
PITTSBURGH - A resident of Buffalo, New York, has been indicted by a federal grand jury in Pittsburgh on a charge of bank robbery, United States Attorney David J. Hickton announced today.
The one-count indictment named Casey Swain, 37, as the sole defendant.
According to the indictment presented to the court, on or about Aug. 7, 2015, Swain stole $4,970 from the First Niagara Bank located at 484 Lincoln Avenue, Bellevue, Pennsylvania.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Ryan K. Hart is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and Bellevue Police Department conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bossier City resident sentenced to 15 years in prison for receiving child pornographyRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Bossier City man was sentenced Monday to 180 months in prison for receiving child pornography.
Christopher J. Leger, 53, of Bossier City, La., was sentenced by U.S. District Judge S. Maurice Hicks Jr. on one count of receiving child pornography. He was also sentenced to 10 years of supervised release and must register as a sex offender. According to the November 18, 2015 guilty plea, federal agents executed a search warrant March 13, 2014 on Leger’s residence. Child pornography had previously been downloaded from a computer at the address. After examining media devices from the residence, agents found 76 images and two videos of child pornography.
“The internet is not a safe haven for those downloading and sharing images of abused children,” Finley stated. “These materials are illegal and perpetuate the extreme abuse of children. This prison sentence shows that abusers will be vigorously prosecuted.”
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood combines 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 U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) also encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
Homeland Security Investigations and Louisiana Internet Crimes Against Children Task Force conducted the investigation. Assistant U.S. Attorney Earl M. Campbell prosecuted the case.
Blankenship sentenced to a year in Federal prisonRead the Press Release
CHARLESTON, W.Va. – Acting United States Attorney Carol Casto announced that former Massey Energy Chief Executive Officer Don Blankenship was sentenced today to a year in federal prison and ordered to pay a $250,000 fine. Blankenship was sentenced for conspiracy to willfully violate mine health and safety standards after a jury returned a guilty verdict on the federal crime.
“This sentence is a victory for workers and workplace safety. It lets companies and their executives know that you can’t take chances with the lives of coal miners and get away with it,” stated Acting United States Attorney Carol Casto. “Putting the former chief executive officer of a major corporation in prison sends a message that violating mine safety laws is a serious crime, and those who break those laws will be held accountable.”
Over the course of the trial, in which jury selection began on October 1, 2015, and the jury returned a guilty verdict on December 3, 2015, the jury heard evidence from 27 witnesses called by the United States. Many of these witnesses were coal miners who worked at the Upper Big Branch (UBB) mine prior to the 2010 explosion, and they testified in detail from their firsthand knowledge of the unsafe working conditions at UBB, violations of U.S. Mine Safety and Health Administration (MSHA) regulations, and organized efforts to obstruct and interfere with MSHA inspectors. The jury heard from Bill Ross, former Manager of Technical Services at Massey, who testified that he warned Blankenship about the company’s practice of rampant violations, and told the defendant prior to the UBB explosion that Massey’s standard tactic of ignoring or defrauding MSHA could not be sustained without the possibility of a serious accident that could have fatalities. The evidence also showed that Blankenship received daily updates on safety violations and helped perpetuate them.
“Putting profits over the safety of workers is reprehensible. The jury acknowledged that with the guilty verdict, and the sentence imposed today recognizes that disregarding safety laws has real consequences,” said Casto. “From the beginning, the objective of this investigation and this prosecution was to not only show that those who violate safety laws will be held responsible, but also to deter these violations in the future to make everyone’s workplace safer.”
“Today’s sentence marks the culmination of a comprehensive, joint investigation that took over five years to complete and resulted in five criminal convictions.” said Special Agent in Charge Scott S. Smith of the FBI’s Pittsburgh Field Office. “Along with dedicated prosecutors in the U.S. Attorney’s Office and investigators in United States Department of Labor’s Office of Inspector General, the FBI is committed to holding those who commit crimes by enabling safety violations and who place profits above the value of human life accountable.”
"Donald Blankenship's trial and conviction came after an explosion that killed 29 miners at the Upper Big Branch mine. His sentencing today reaffirms the responsibility of company executives to ensure they adhere to health and safety standards. The Department of Labor's Office of Inspector General will continue to work with the Mine Safety and Health Administration and our law enforcement partners to investigate criminal worker safety violations that pose a threat to American workers," said John Spratley, Special Agent in Charge of the Philadelphia Regional Office, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
The prosecution was the result of a comprehensive investigation that, including Blankenship, resulted in five criminal convictions. In addition to the convictions of individuals, the outcome of the investigation also included a resolution of over $200 million with Alpha Natural Resources after it acquired Massey. This agreement established a foundation dedicated to mine safety and health research, the first of its kind, and set aside nearly $50 million in funding for the foundation. That funding has provided the resources for some of the best and brightest minds in the country to pursue research that will make mines safer all over the world.
This matter was investigated by the Federal Bureau of Investigation and the United States Department of Labor’s Office of Inspector General. Assistant United States Attorneys Steven R. Ruby, Gregory McVey, and Gabriele Wohl, as well as former United States Attorney Booth Goodwin, handled the prosecution and tried the case before a federal jury.
The prosecution is part of a sustained effort by the United States Attorney’s Office for the Southern District of West Virginia to protect the health and safety of West Virginia workers by vigorously prosecuting workplace safety crimes and holding accountable those responsible for dangerous working conditions.
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Bergen County, New Jersey, Man Admits Embezzling Millions of Dollars from North Jersey BusinessRead the Press Release
TRENTON, N.J. – The former chief financial officer of a Bergen County business today admitted to embezzling millions of dollars from the company and to evading taxes, U.S. Attorney Paul J. Fishman announced.
Gomidas Garabed Hartounian, 52, of Franklin Lakes, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to a superseding information charging him with one count of wire fraud and one count of tax evasion.
According to documents filed in this case and statements made in court:
From April 2007 through April 2014, Hartounian was the CFO for “Company A,” a for-profit company with its principal place of business in Englewood, New Jersey. Hartounian is also the sole owner of MGB LLC, a company registered to his residence. Hartounian fraudulently designated MGB as a vendor in Company A’s accounting system without disclosing that he controlled MGB. He directed Company A employees to issue checks to MGB for freight services that MGB supposedly provided Company A. When asked for the MGB invoices, he claimed that he was maintaining them in his office.
Because Hartounian didn’t have sole signatory power, he forged the signatures of the chief executive officer or the chief operating officer before depositing the checks into bank accounts that he controlled. Hartounian also had checks issued directly from Company A bank accounts to pay for his personal expenses, including real estate taxes to the Borough of Franklin Lakes for $6,562 in August 2011.
Hartounian also admitted that he filed a false federal tax return, Form 1040, for the calendar year 2012 in which he knowingly did not report $1.29 million in income that he received as the sole owner of MGB. Instead, Hartounian falsely understated his income for 2012 as $133,290.
The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss resulting from the crime. The tax evasion count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss resulting from the crime. Sentencing is scheduled for Aug. 16, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Shana W. Chen of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Alan Silber Esq., Roseland, New Jersey
Baltimore Serial Robber Sentenced to Six Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced Robert William Sykes, Jr., age 27, of Baltimore, Maryland, today to six years in prison followed by three years of supervised release for two armed commercial robberies. At today’s sentencing hearing Judge Garbis found that Sykes also committed at least one, and up to eight, additional armed robberies.
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 Office; Baltimore Police Commissioner Kevin Davis; and Baltimore City State’s Attorney Marilyn Mosby.
According to the information presented at today’s sentencing hearing, Sykes admitted that on November 30, 2014, he robbed a discount store located in the 5100 block of Liberty Heights Avenue in Baltimore. Sykes, wearing a red and white hoodie jacket, entered the store and demanded money from the cashier, threatening to shoot if the teller did not comply with his demands. The cashier gave Sykes approximately $97, and Sykes fled through the front doors. A customer who was in the store followed Sykes and took a picture of him as he got into the driver’s side door of a Cadillac. That car was subsequently determined to be registered to Sykes.
Sykes also admitted that on December 2, 2014, he robbed an auto parts store located in the 2000 block of Maryland Avenue in Baltimore. Sykes entered the store holding a handgun in his left hand. He demanded that the two employees who were standing at the cash registers give him money. When the employees told him that they were unable to open the registers without a key, Sykes fled the store. Several hours later, two Baltimore City Police officers on patrol in the Western District recognized Sykes’ Cadillac as being the car used to flee the November 30th robbery. Police stopped the car and detained Sykes, who was the driver and sole occupant. During the course of the investigation, which included an interview with Sykes and the execution of a search warrant on his car, police learned that Sykes is left handed, and they recovered a red and white hoodie jacket, matching the jacket worn in several robberies, and a black BB gun, believed to have been used to facilitate the robberies.
During the sentencing hearing, the government presented evidence of Sykes’ participation in five other robberies. For example, according to the government’s evidence, on October 20, 2014, and November 1, 2014, Sykes robbed a convenience store located in the 700 block of Washington Boulevard in Baltimore, each time wearing the red and white hoodie jacket. In each robbery Sykes displayed the gun to the store employees and ordered the employees to give him the money in the cash registers. After the employees gave Sykes the money from their registers, Sykes ordered the employees to lay on the floor. Sykes then left the store.
The government also presented evidence that on November 3, 2014, Sykes also robbed a convenience store, in the 3600 block of Potee Street. Also on November 3rd Sykes attempted to rob a convenience store in the 200 block of West Coldspring Avenue and on November 5, 2014, attempted to rob a discount store in the 5300 block of York Road.
After hearing the government’s evidence, Judge Garbis ruled that Sykes committed at least one and up to eight robberies in addition to the two robberies to which he pleaded guilty.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Special Assistant United States Attorney Piper F. McKeithen, a cross-designated Baltimore Assistant State’s Attorney assigned to Exile cases, who prosecuted the case.
Atlantic County, New Jersey, Tax Preparer Sentenced to Two Years in Prison for Tax FraudRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, tax preparer was sentenced today to 24 months in prison for including fraudulent credits and deductions on federal tax returns for his clients in an effort to gain repeat business, U.S. Attorney Paul J. Fishman announced.
Tinh Van Vo, 50, of Egg Harbor Township, New Jersey, was previously convicted of 10 counts of aiding and assisting in the preparation of false federal income tax returns following a two-week trial before U.S. District Judge Robert B. Kugler, who imposed the sentence today in Camden federal court.
According to documents filed in this case and the evidence at trial:
Vo prepared and filed fraudulent U.S. Individual Income Tax Returns through his business, TVO Services in Atlantic City, New Jersey. The returns attached schedules for fictitious educational credits, charitable contributions, and job expenses the taxpayers were not entitled to take – all to generate fraudulently inflated refunds.
In addition to the prison term, Judge Kugler sentenced Vo to one year of supervised release. During that time, Vo is prohibited from employment that allows him to prepare or assist in the preparation of tax returns. Vo must also pay a $15,000 fine.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the Criminal Division in Camden, New Jersey.
Defense counsel: William J. Hughes Jr. Esq., Atlantic City, New Jersey
Alien Pleads Guilty to Unlawfully Possessing FirearmsRead the Press Release
TULSA, Okla.—Mauricio Arevalo-Magana, 25, pleaded guilty in federal court to the charge of Alien Unlawfully in the United States in Possession of Firearms, announced Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma. United States District Court Chief Judge Gregory K. Frizzell will sentence Arevalo-Magana on July 12, 2016.
In the summer of 2015, Arevalo-Magana, an alien illegally in the United States, exchanged drugs for firearms in Tulsa. Those firearms, which included semi-automatic rifles, had been stolen during a burglary of a home in Ponca City by another individual. Agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrested that individual and were able to recover approximately 43 stolen firearms. ATF agents then became aware of the Arevalo-Magana’s unlawful exchange.
At the time, ATF only knew Arevalo-Magana by his alias, “Wicho.” With the assistance of the Tulsa Police Department, ATF agents were able to discover Arevalo-Magana’s true name and apprehend him. Arevalo-Magana faces a statutory maximum sentence of 10 years in prison and a $250,000 fine.
This case was investigated by ATF. Assistant United States Attorney Neal C. Hong prosecuted the case.
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5 April 2016
Wheeling woman pleads guilty to cocaine traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Jessica Carrie Estep, 30, of Wheeling, pled guilty to cocaine trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
In late 2015, Estep conspired with other individuals to possess and sell cocaine in Ohio County, West Virginia. She pled guilty today to one count of “Conspiracy to Distribute Cocaine Base.” She faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Randy Bernard prosecuted the case on behalf of the government. The Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.U.S. Magistrate Judge James E. Seibert presided.
Virginia man pleads guilty to unlawful possession of firearmsRead the Press Release
MARTINSBURG, WEST VIRGINIA – Evan Megeath, 33, of Strasburg, Virginia, pled guilty in federal court today to unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.Megeath, who has multiple previous felony convictions in state court in Virginia, was discovered in unlawful possession of a .22 caliber rifle in July 2015 in Jefferson County, West Virginia. Megeath was previously convicted of “Breaking and Entering,” “Grand Larceny,” “False Pretenses,” “Bad Check,” and “Possession of a Schedule II Controlled Substance” in the Circuit Court of Warren County, Virginia.
Megeath pled guilty today to one count of “Felon in Possession of a Firearm.” He faces up to 10 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Paul Camilletti and Anna Krasinski prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.U.S. Magistrate Judge Robert W. Trumble presided.
U.S. Attorney’s office co-sponsors Indianapolis job and resource fairRead the Press Release
Indianapolis – United States Attorney Josh J. Minkler today announced a community-wide job and resource fair for formerly incarcerated individuals hosted by the U.S. Attorney’s Office for the Southern District of Indiana and Indiana University McKinney School of Law. The event will occur this Friday, April 8, 2016.
“Reintegrating individuals into our community from federal and state prisons is a responsibility I am passionate about,” said Minkler. “For me, this is a public safety issue. Gainfully employed re-entrants are much less likely to commit crimes. I hope our community shares my commitment to assist these individuals in becoming contributing citizens.”
What: JOB FAIR
When: April 8, 2016, 11:00am-3:00pm
Where: Julia Carson Center, 300 East Fall Creek Parkway, North Drive
As part of the U.S. Attorney’s Office Smart on Crime Initiative, Minkler’s office is collaborating with Indiana University McKinney School of Law and the City of Indianapolis to host this community-wide event. Some of the employers participating in the job fair include Eskenazi Health, Mays Chemical Company, Goodwill, Barber Construction, All Building Trades, Associated Builders and Contractors, Golden Corral, Labor Union – Local #20, Professional Building Maintenance, Sheet Metal Workers #20, Chipotle, Jiffy Lube and other construction and union organization, all of which desire to fill a range of positions. The goal of the job fair is to help re-entrants meet with many local employers from a wide range of industries.
Members of the McKinney Law School community will be managing the resource fair with assistance from the Indiana Christian Legal Clinic and the Marion County Prosecutor’s Office. The job and resource fair will provide information regarding child support matters and criminal record expungement. In addition, the event will provide free assistance with resume writing, interview skills and mock job interviews. Moreover, Indiana Department of Workforce Development, PACE/OAR and Keys to Work will offer assistance with application etiquette, dress for success, and job readiness.
Re-entrants face many barriers upon release from incarceration. The purpose of the community-wide job and resource fair is to provide them with the opportunity to connect with useful re-entry and community agencies that will help provide referrals and resources to enhance their employment opportunities.
U.S. Attorney Minkler thanks all of our partners and the community for their continued support of this initiative.
U.S. Attorney Announces Return to Mongolia of Looted Dinosaur FossilsRead the Press Release
This afternoon, Robert L. Capers, United States Attorney for the Eastern District of New York, will host a repatriation ceremony at which the United States will return to Mongolia the fossilized remains of six species of dinosaur. The fossils were unlawfully removed from Mongolia and seized by U.S. Immigration and Customs Enforcement (ICE) agents in New York and Utah.
The largest of these fossils, an Alioramus skull, was forfeited to the United States as a result of a civil forfeiture action handled by the U.S. Attorney’s Office. The other fossils being returned at today’s ceremony were administratively forfeited by ICE and U.S. Customs and Border Protection (CBP). HSI Executive Associate Director of Homeland Security Investigations (HSI) Peter T. Edge and Mongolia’s Ambassador to the United States Altangerel Bulgaa will sign the ceremonial certificates transferring ownership of the fossils from the United States to Mongolia. Mongolian paleontologist Dr. Bolortsetseg Minjin, and Director of the Institute for the Study of Mongolian Dinosaurs, will participate in the ceremony as a representative of the Mongolian Ministry of Education, Culture and Sciences.
“Mongolia is home to the world’s largest reserve of dinosaur fossils with many discoveries waiting to be made,” stated U.S. Attorney Capers. “We are proud of our role in restoring this rich paleontological heritage to the Mongolian people and taking these cultural treasures from the hands of looters and smugglers. We stand beside the people of Mongolia by disrupting the international trade in smuggled fossils and returning them to their home where they will be studied and treasured.”
“Today’s ceremony is an excellent demonstration of the cooperation between HSI, our colleagues at the Department of Justice, and our foreign counterparts with the Government of Mongolia,” stated HSI Executive Associate Director Edge. “A successful repatriation requires extensive cooperation among all parties involved, which is rewarded by the knowledge that we’ve returned what rightfully belongs to the people of Mongolia.”
“CBP is extremely proud to have played an important role in returning these valuable national treasures to the people of Mongolia,” said Robert E. Perez, Director of CBP’s New York Field Operations. “CBP’s cooperation with HSI and the United States Attorney’s Office for Eastern District of New York demonstrates the continuing resolve of law enforcement in the United States to address illegal trafficking in stolen artifacts.”
“Three years ago, we celebrated our first repatriation ceremony of the skeleton of a Tarbosaur-Bataar. The T-Bataar case was a unique one in many aspects. Most importantly, it has laid foundation of further strong and fruitful cooperation between our two governments in the fight against illegal trade of cultural heritages including fossils. Thanks to this fruitful cooperation, 23 dinosaur fossils were repatriated to Mongolia during the last three years and now we are witnessing a repatriation of seven fossils including an Alioramus skull,” stated Ambassador Altangerel. “I take this opportunity, on behalf of the Government and people of Mongolia, to express our profound gratitude for the hard work and dedication of American law enforcement agencies. I have no doubt that these efforts will further strengthen of our bilateral ties, opening new opportunities and giving new impetus to our future cooperation.”
The Mongolian dinosaur fossils being returned at today’s repatriation ceremony include:
- Alioramus skull
- Bactrosaurus skeleton
- Protoceratops baby skeleton pieces
- Troodontid egg bed
- Psittacosaurus skeleton and skull
- Hadrosaurus skeleton pieces
The Alioramus was a dinosaur that lived in the late Cretaceous period, approximately 65 to 70 million years ago. It is related to the Tyrannosaurus and Tarbosaurus. The Alioramus skull was seized by CBP after being shipped from France with false declarations which suggested that it was an inexpensive replica, not a genuine fossil. When the shipper petitioned for the Alioramus skull’s release, it conceded that it was a genuine Mongolian fossil but submitted forged Mongolian export documents. Mongolian patrimony laws prohibit the export and foreign ownership of dinosaur fossils.
According to Dr. Bolortsetseg Minjin, the Alioramus is an extremely rare dinosaur; only two specimens have been reported in the scientific literature, and both are from Mongolia. The Alioramus fossil being returned today is the most complete skull discovered to date. Its relative completeness, color and overall state of preservation are typical of the Nemegt Formation, which is only exposed in the Gobi Desert of Mongolia. In 2014, Mongolia nominated the Nemegt Formation and other fossil sites in the Gobi Desert for inclusion in the World Heritage List, citing the sites’ distinction as the largest dinosaur fossil reservoir in the world.
The government’s civil forfeiture action against the Alioramus skull was handled by Assistant United States Attorney Karin Orenstein.
E.D.N.Y. Docket No. 14-CV-5198 (BMC)
Two Former Senior Executives of Global Financial Services Company Charged in Scheme to Defraud Clients through Secret Trading Commissions on Billions of Dollars in Securities TradesRead the Press Release
Two former high-ranking executives of a Boston-based financial services company that is one of the world’s largest asset managers and custody banks were charged in an indictment that was unsealed today with a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division made the announcement.
Ross McLellan, 44, of Hingham, Massachusetts, and Edward Pennings, 45, were charged in a five-count indictment with conspiring to commit securities fraud and wire fraud, as well as two counts each of securities fraud and wire fraud. McLellan, a former executive vice president of the bank who served as president of its U.S. broker-dealer unit, was arrested this morning in Hingham and will appear in U.S. District Court in Boston later today.
“The defendants are charged with reaping millions of dollars of illicit profits by abusing their clients’ trust and secretly setting their own inflated compensation,” said Assistant Attorney General Caldwell. “The charges announced today reflect our continued commitment to hold individuals accountable for toying with the integrity of our financial system.”
“The secret conversations and backroom plotting laid bare in today’s charges paint a vivid picture of a brazen fraud,” said U.S. Attorney Ortiz. “The defendants never thought anyone would hear those conversations – conversations in which they plotted to overcharge their clients by millions of dollars, and to hide their tracks. With each trade, they chipped away at the savings of thousands of retirees whose pensions they were charged with safeguarding. Bankers who abuse their clients’ trust in this way must be held accountable. And we will work hard to ensure that they are.”
“As alleged, Ross McLellan and Edward Pennings cheated and lied to investors so that the bank could line its pockets,” said Special Agent in Charge Shaw. “Actions like theirs undermine investor confidence. This case demonstrates the FBI's commitment to unraveling elaborate and complex schemes, motivated by sheer greed, that ultimately undermine our financial markets.”
The indictment alleges that, between February 2010 and September 2011, McLellan and Pennings, together with others, conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions, the indictment alleges. McLellan and Pennings then allegedly took steps to hide the commissions from the clients and others within the bank, including compliance staff.
The government’s ongoing investigation is being conducted by the FBI’s Boston Division. The case is being prosecuted by Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorney and Deputy Chief of Economic Crimes Stephen E. Frank of the District of Massachusetts. The Fraud Section and the U.S. Attorney’s Office of the District of Massachusetts have also received valuable assistance from the U.S. Securities and Exchange Commission as well as from authorities in the United Kingdom, including the City of London Police. The Criminal Division’s Office of International Affairs also provided assistance.
Two Durable Medical Equipment Company Owners Charged in Similar Health Care Fraud SchemesRead the Press Release
McALLEN, Texas ‐ Federal charges have been filed against two individuals in separate cases for defrauding Texas Medicaid and/or Medicare in two separate schemes to defraud through false billings, announced U.S. Attorney Kenneth Magidson.
Manuel Gomez, Jr., 34, of Katy, owned two Rio Grande Valley area durable medical equipment (DME) companies, while Elva Santos, 36, of McAllen, owned Hope & Miracle DME in Mission.
A sealed indictment against Gomez was returned March 29, 2015, and unsealed today upon his arrest. He is expected to make an initial appearance in Houston before U.S. Magistrate Judge Stephen Smith at 10.00 a.m. tomorrow. Santos was charged in an unsealed information and is set for her appearance April 8, 2016, at 10:30 a.m. before U.S. Magistrate Judge Peter Ormsby.
Both are charged separately in difference cases but in similar schemes to defraud and sent false and fraudulent claims regarding DME, specifically incontinence supplies and diabetic supplies.
In his case, Gomez and/or his co-conspirators sent such claims totaling approximately $2,347,841.71 to Texas Medicaid, on which Texas Medicaid allegedly paid out $2,088,473.67, according to the indictment. Santos allegedly submitted false and fraudulent claims for $713,759.73 on which Texas Medicaid paid out $581,743.39. To conceal their schemes, both forged and/or caused others to forge the signatures of physicians on the required DME prescription forms also known as Title XIX forms.
Gomez owned Illusion Medical Equipment and Illusion Medical Equipment II LLC and is charged with one count of conspiracy to commit health care fraud, six counts of health care fraud and one count of aggravated identity theft.
The indictment alleges that Gomez conducted his scheme from Dec. 1, 2007, to Nov. 30, 2011. Gomez and his co-conspirators were allegedly responsible for the submission of false and fraudulent billings and the misuse of the identifying information of Texas Medicaid recipients. Gomez also allegedly paid illegal kickbacks in exchange for patient information, including patient Texas Medicaid numbers. He and/or his co-conspirators would then use the fraudulently obtained Texas Medicaid numbers to submit claims to Texas Medicaid in order to receive reimbursements.
In the separate, yet similar case against Santos, from Jan. 20, 2011, to May 10, 2013, she allegedly submitted the false and fraudulent claims. In one instance alleged in the information, Santos submitted or caused others to submit false or fraudulent claims with Medicare for a patient who was deceased on dates that Santos claimed to have provided diabetic supplies to the patient. The delivery tickets maintained by Hope & Miracle DME contained forged signatures of the deceased beneficiary after the date of her death.
Health care fraud carries a maximum punishment of 10 years in federal prison without parole and a $250,000 fine upon conviction. If convicted of the identity theft, Gomez also faces a mandatory 24 months which must be served consecutively to any other prison term imposed. The Texas Attorney General’s Medicaid Fraud Control Unit and the U.S. Department of Health and Human Services‐Office of Inspector General conducted the investigation. Assistant U.S. Attorney Michael Day is prosecuting the cases.
An indictment or information are accusations of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Twice Convicted Alien Smuggler Heads to PrisonRead the Press Release
LAREDO, Texas – A naturalized U.S. citizen from Cuba who had been residing in Louisville, Kentucky, has been ordered to federal prison following his convictions in two separate cases involving the smuggling of illegal aliens, announced U.S. Attorney Kenneth Magidson.
Yudelvis Alberto Jimenez-Elvirez, 29, entered a guilty plea Oct. 7, 2015, to smuggling illegal aliens and was released on bond. That same evening, he was arrested again on similar charges. He went to trial in that case and was convicted Dec. 16, 2015, after only 15 minutes of deliberation.
Today, U.S. District Judge Marina Garcia Marmolejo, who presided over the trial, handed Jimenez-Elvirez a total 97-month sentence to run concurrently on both cases.
Also sentenced today was Ricardo Gallo, 31, a U.S. permanent resident alien also from Cuba, who had pleaded guilty in the conspiracy involving the October 2015 smuggling attempt. He will serve 41 months in prison and must pay a $5000 fine.
At trial, Border Patrol agents testified about a semi-tractor and trailer being followed by a Chevrolet Tahoe that arrived at the Freer Border Patrol immigration checkpoint on the night of Oct. 7, 2015. Both vehicles displayed Florida license plates. Immediately after the 18-wheeler driver – Gallo - had been cleared to proceed, law enforcement learned that trailer had been detained on June 30, 2015, and used in an unsuccessful attempt to smuggle 17 Mexican and Guatemalan nationals illegally in the United States.
Agents pursued the 18-wheeler, but were unable to make contact with its driver because Jimenez, driving the Tahoe, blocked the agents’ official vehicle. Both vehicles were traveling at 80-85 miles per hour. Agents were eventually able to stop both vehicles and discovered 27 aliens sitting atop cargo of crushed aluminum cans in the trailer.
Five of the 27 aliens testified at trial, reporting that they or family members had made financial arrangements with smugglers in Mexico to smuggle them into country and to deliver them to various destinations within the United States. They testified about swimming or wading the Rio Grande River and entering Laredo illegally without inspection, later being taken to a warehouse in Laredo to wait for the trailer that would smuggle them further.
Jimenez and Gallo will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges were the result of an investigation conducted by Border Patrol and Homeland Security investigations. Assistant U.S. Attorney (AUSA) Jose Homero Ramirez prosecuted the cases. AUSA Shawn Coker handled the sentencing hearing today.
Traveling minister convicted on all counts for his role in a $4.8 million tax refund scamRead the Press Release
A jury convicted a traveling minister from Arkansas on all 14 counts for his role in a $4.8 million tax refund scam, said Carole S. Rendon, Acting U.S. Attorney for the Northern District of Ohio, and Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Allen D. Miles, 58, of Little Rock, Arkansas, is scheduled to be sentenced June 13. He was convicted of one count of conspiracy to commit wire fraud, 10 counts of wire fraud and three counts of aggravated identity theft.
Miles, acting with Zinara Highsmith, engaged in a false tax refund scheme in which approximately 2,750 false income tax returns were filed, claiming false income tax refunds of approximately $4.8 million.
Miles obtained personal identification information from congregants and others by telling them that he could help them obtain money from an alleged government stimulus fund program. Miles did not tell congregants that income tax returns were going to be filed on their behalf. After he obtained the information, Miles forwarded it to Highsmith, and then Highsmith and others created the false income tax returns that generated refunds based on certain credits for which the taxpayers did not qualify, like the American Opportunity Credit, Making Work Pay Credit, and Earned Income Credit, according to trial testimony and court documents.
For each refund, Miles collected a $125 commission and Highsmith received $275; the taxpayers received the balance. Miles received approximately $300,000 for his efforts in the refund scam, which operated between March and July 2011, according to trial testiony and court records.
"This defendant traveled the country defrauding people and the goverment," Rendon said. "He took advantage of their religious faith and their faith in the government to enrich himself."
"Misusing his position of trust as a minister, Mr. Miles perpetuated an elaborate scheme driven by insatiable greed and a blatant disregard for the tremendous damage inflicted on innocent victims. The jurors have spoken and Mr. Miles is being held accountable for his criminal actions," Enstrom said. "Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law. IRS Criminal Investigation, along with the United States Attorney's Office, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes."
Highsmith has pleaded guilty to her role in the conspiracy and is scheduled to be sentenced later this year.
This case is being prosecuted by Assistant U.S. Attorneys Michael L. Collyer and Carmen Henderson, following an investigation by the Internal Revenue Service – Criminal Investigations.
Three Brockton Men Charged with Distributing FentanylRead the Press Release
BOSTON – Three men, two of whom were arrested this morning, were charged in U.S. District Court in Boston for trafficking fentanyl in the Brockton area. The third defendant was already in state custody. In addition, 36 grams of fentanyl and a firearm were recovered following the execution of a federal search warrant.
Luis DaCosta, 21, aka “Jesse” and “Slu;” Gilvan Monteiro, 25, aka “G;” and Edson Gomes, 19, aka “E” and “Evil,” were charged in a complaint with one count of conspiracy to possess fentanyl with intent to distribute. DaCosta and Gomes were arrested today. Monteiro was already in state custody on unrelated matters. DaCosta and Gomes were detained pending a detention hearing scheduled for April 15, 2016.
As alleged in the complaint, from December 2015 to March 2016, the defendants sold fentanyl on numerous occasions in the Brockton area, and several times the drug was seized by law enforcement from the defendants’ associates. In addition, on Feb. 11, 2016, law enforcement seized a loaded Smith and Wesson .40 caliber handgun from an associate of Gomes’s during a vehicle stop.
Documents filed in court today also allege that the defendants have violent histories and gang associations. Monteiro has a lengthy criminal record which includes narcotics and firearms offenses and assault and battery with a dangerous weapon. According to the affidavit, law enforcement seized fentanyl from Monteiro’s customers on numerous occasions. Gomes, who also has a violent criminal history, is alleged to have engaged in gang-related shootings and a car chase with police as recently as December 2015. According to the affidavit, DaCosta was recently released on bail after he allegedly shot a person in Rhode Island on March 19, 2016. DaCosta also allegedly sold fentanyl to a person that overdosed in February 2016.
Gomes was arrested without incident in Brockton. DaCosta was arrested at the Roadway Inn on Belmont Street, also in Brockton. During the execution of a federal search warrant at the Roadway Inn, officers recovered a firearm, approximately 36 grams of suspected fentanyl and related drug paraphernalia. A woman also present in the Roadway Inn was arrested on state firearms and drug charges.
This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states. A recent surge in overdose deaths has been attributed in part to the addition of Fentanyl to heroin. Fentanyl is a powerful synthetic opiate that is 50 to 100 times more potent than morphine and, when added to heroin, creates a toxic mixture substantially more potent, and more dangerous, than heroin alone.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Plymouth County District Attorney Timothy Cruz; and Brockton Police Chief John Crowley, made the announcement today. The case was investigated by the Massachusetts State Police assigned to the Plymouth Country District Attorney’s Office, MSP CAT Team, MSP Gang Unit, the New England High Intensity Drug Trafficking Area (HIDTA), and Brockton Police Department. The case is being prosecuted by Assistant U.S. Attorney Glenn A. MacKinlay of Ortiz’s Organized Crime and Gang Unit.
The details contained in the complaints are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Stockton Man Charged with Sex Trafficking a MinorRead the Press Release
SACRAMENTO, Calif. — Ricky Lee Richardson Jr., 39, of Stockton, was arrested on Monday, April 4, 2016, charged with sex trafficking of a minor and possession of child pornography, United States Attorney Benjamin B. Wagner announced.
A two-count indictment, unsealed after his arrest, was returned by a federal grand jury in Sacramento on March 31, 2016. According to court documents, between November 2011 and March 2012, Richardson transported, harbored, and maintained a minor victim, knowing that the minor would be caused to engage in prostitution. Richardson also possessed images of child pornography.
This case is the product of an investigation by the Federal Bureau of Investigation with assistance from the Stockton Police Department. Assistant United States Attorney Brian A. Fogerty is prosecuting the case.
Richardson is scheduled to be arraigned today before United States Magistrate Judge Carolyn Delaney.
If convicted of sex trafficking of a minor, Richardson faces a minimum of 10 years in prison and a maximum statutory penalty of life in prison. The possession of child pornography charge carries a maximum statutory penalty of 10 years in prison. Both charges carry a maximum fine of $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Scranton Man Pleads Guilty to Federal Heroin Trafficking OffenseRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Scranton man pleaded guilty today to a federal heroin distribution conspiracy charge before Senior United States District Court Judge A. Richard Caputo in Wilkes-Barre.
According to United States Attorney Peter Smith, Camilo Andujar, aka “Melo,” age 24, was indicted by a grand jury in October 2015 and pleaded guilty pursuant to a plea agreement filed by the government.
The charges stemmed from an investigation in which police made a purchase of heroin from Andujar and then obtained a search warrant for a residence located on Electric Street in Scranton, where Andujar lived. Police seized approximately 91 grams of heroin, equivalent to more than 3,100 individual retail bags of heroin. Police also seized a coffee bean grinder filled with heroin, $5,950 in cash, heroin packaging materials and drug paraphernalia.
The investigation was conducted by the Scranton Police Department, Special Investigations Division, Lackawanna County District Attorney’s Office and the Drug Enforcement Administration (DEA). The case is being prosecuted by Assistant United States Attorney Robert J. O’Hara.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is up to forty years in prison, 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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San Gabriel Valley Man Sentenced to Federal Prison in Stolen Identity Tax Refund Scheme which Fraudulently Sought $2.6 MillionRead the Press Release
LOS ANGELES – A Hacienda Heights man already serving a 27-month prison term for fraudulently seeking tax refunds has been sentenced in a second case to an additional two years in federal prison for his role in another scheme that used stolen identities to seek more than $2.6 million in false tax returns from the Internal Revenue Service.
Adel Cotton, 63, was sentenced to 51 months in federal prison by United States District Court Judge Michael W. Fitzgerald, who ordered that 27 months be served concurrently with the prior case.
In addition to the prison term, Judge Fitzgerald ordered Adel Cotton to pay $725,294 in restitution to the IRS.
Adel Cotton pleaded guilty in January to one count of conspiracy to defraud the United States by obtaining the payment of false claims, namely tax refunds.
Adel Cotton’s son and co-defendant – Heber Cotton, 39, of Los Angeles – pleaded guilty in November to one count of conspiracy to defraud the United States. Heber Cotton is scheduled to be sentenced by Judge Fitzgerald on June 6, at which time he will face a statutory maximum sentence of 10 years in federal prison.
According to Adel Cotton’s plea agreement, beginning in December 2008 and continuing through March 2010, the Cottons caused at least 275 fraudulent income tax returns to be filed with the IRS. Those fraudulent returns sought income tax refunds totaling more than $2.6 million.
As part of the scheme, Adel Cotton obtained names and Social Security numbers of individuals without their knowledge and consent. Adel Cotton, with the help of others, prepared false Forms W-2 (IRS Wage and Tax Statements) in the names of the identity theft victims that reported false employment and income information, as well as false tax withholding amounts. Using the falsified information reported on the Forms W-2, Adel Cotton and others prepared fraudulent individual income tax returns claiming false tax refunds. The tax returns were filed without the knowledge or consent of the identity theft victims.
“This case is the latest involving stolen identity refund fraud, which victimizes both the United States and the individuals who have had their identities stolen,” said United States Attorney Eileen M. Decker. “Individual victims of this type of fraud typically have to devote significant time and resources recovering their tax refund and protecting their identities from future fraud.”
In his plea agreement, Adel Cotton admitted that he and his son directed the IRS to mail the fraudulent refunds to addresses they controlled. The defendants then worked with two unidentified co-conspirators to deposit the refund checks using bank accounts opened in the names of the identity theft victims.
In the prior case, Adel Cotton was one of 53 people convicted in relation to the “Old Quest” tax refund scheme that fraudulently sought more than $250 million in tax refunds (see: http://go.usa.gov/ceGNJ).
The investigation into Adel and Heber Cotton was conducted by IRS Criminal Investigation and the Federal Bureau of Investigation.
Retired Judge, Attorney and Psychologist Indicted in $600 Million Social Security Fraud SchemeRead the Press Release
Thousands of Kentucky Claimants Improperly Received Disability Benefits
A retired administrative law judge, a lawyer and a psychologist were charged in a federal indictment unsealed today for their roles in a scheme to fraudulently obtain more than $600 million in federal disability payments for thousands of claimants.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Howard S. Marshall of the FBI’s Louisville, Kentucky, Field Division; Special Agent in Charge Tracey D. Montaño of Internal Revenue Service Criminal Investigations (IRS-CI) Nashville, Tennessee, Field Office; and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.
David Black Daugherty, 81, of Myrtle Beach, South Carolina; Eric Christopher Conn, 55, and Alfred Bradley Adkins, 44, both of Pikeville, Kentucky, were charged in an 18-count indictment returned on April 1, 2016, in the U.S. District Court for the Eastern District of Kentucky. The indictment was unsealed upon Conn’s arrest and initial court appearance today before U.S. Magistrate Judge Robert E. Wier of the Eastern District of Kentucky. Conn was detained pending his detention hearing, which is scheduled for April 7, 2016.
The indictment charges all three defendants with one count of conspiracy to commit mail and wire fraud. In addition, Conn is charged with three counts of mail fraud, three counts of wire fraud, two counts of obstruction, two counts of false statements, one count of conspiracy to commit money laundering, four counts of money laundering, and one count of conspiracy to structure payments. Adkins is charged with one count of mail fraud, one count of wire fraud, and one count of false statements. Daugherty also is charged with two counts of mail fraud, two counts of wire fraud, and one count of conspiracy to commit money laundering.
“The defendants are charged with designing an intricate scheme, using their expertise and positions of authority, to fraudulently induce payment of $600 million in federal disability and healthcare benefits,” said Assistant Attorney General Caldwell. “While Social Security disability programs are designed to support the disabled, the defendants allegedly used it to enrich themselves. Today’s arrests demonstrate, however, that the Criminal Division will root out greed and corruption wherever they may be found.”
“The Social Security Administration Office of the Inspector General is committed to pursuing those who violate the public trust by conspiring to misrepresent disabling conditions to defraud not only Social Security, but all American taxpayers,” said Special Agent in Charge McGill. “We will continue to uphold the integrity of Social Security’s disability programs, which are a lifeline for so many Americans and their families. I would like to thank the Department of Justice’s Criminal Division, and in particular, the division’s Fraud Section, for their willingness to take on this case and their diligent efforts to ensure these individuals will be held accountable for their actions.”
“As I stated just a few days ago when announcing charges against Kentucky Deputy Attorney General Timothy Longmeyer, the Louisville FBI is committed to cleaning up Kentucky,” said Special Agent in Charge Marshall. “The allegations against these defendants is yet another example of Kentucky’s historical willingness to accept corruption as the status quo. Although cleaning up Kentucky is a long and difficult process, today’s announcement is another step toward ending public corruption and taking back the commonwealth from those who corrupt it.”
“IRS-Criminal Investigation is committed to unraveling complex fraud and money laundering schemes,” said Special Agent in Charge Montaño. “The allegations in this case describe a gross abuse of a system that was established to provide assistance to those truly in need. The defendants are alleged to have conspired to use their positions, to corrupt the system for their own personal gain, at the expense of the American taxpayers who fund the Social Security system. We are proud to work with our law enforcement partners to investigate and prosecute individuals who attempt to enrich themselves by fraudulent means.”
“This scheme allegedly enrolled ineligible people in Medicare and Medicaid,” said Special Agent in Charge Jackson. “We are working with our law enforcement partners to protect these government health care programs funded by our taxpayer dollars.”
The indictment alleges that from October 2004 to Feb. 13, 2012, Conn, Daugherty and Adkins conspired to defraud the government by, among other things, submitting false and fraudulent medical documentation to the SSA in order to have the SSA pay claimants’ retroactive disability benefits, continue to pay claimants’ disability benefits in the future, award Medicare and Medicaid benefits to claimants and pay Conn’s attorney fees. According to the indictment, the conspirators intended that the SSA disburse more than $600 million in disability benefits in more than 2,000 cases to claimants in Kentucky and elsewhere, irrespective of the claimants’ actual entitlement to benefits. Conn, Adkins and Daugherty allegedly received more than $5 million during the nearly eight-year scheme.
According to the indictment, Conn is an attorney whose firm in Floyd County has focused for the past 20 years primarily on representing individuals seeking Social Security disability benefits; Adkins is a clinical psychologist who performed medical evaluations for Conn from 2004 through 2011; and Daugherty is a former SSA administrative law judge who began working with the SSA in 1990 and was assigned to the Office of Disability and Adjudication Review hearing office in Huntington, West Virginia, which maintained a satellite office in Prestonsburg, Kentucky, and handled the claims of Kentucky claimants who requested hearings. Daugherty, who retired in July 2011, was responsible for deciding whether claimants were disabled and entitled to benefits.
As part of the scheme, Conn allegedly filed disability applications with the Prestonsburg Field Office, irrespective of the claimants’ residence in an effort to ultimately bring the cases before the Huntington Hearing Office, where Daugherty either self-assigned or directed others to assign those cases to himself. Daugherty allegedly solicited Conn to submit falsified medical evidence so that Daugherty could issue fully favorable decisions. Adkins and others performed pretextual physical and mental evaluations on claimants, the indictment alleges. They routinely prepared and signed evaluation reports indicating that claimants had limitations considered disabling by the SSA, irrespective of claimants’ actual physical or mental conditions, according to the indictment.
According to the indictment, once the law enforcement investigation began, Conn allegedly threatened to retaliate against another person’s livelihood when that person provided truthful information to a law enforcement officer about the scheme. Conn also allegedly destroyed and directed others to destroy evidence, including federal reports, a computer tower and other electronic hardware and media located at his law firm.
An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The SSA-OIG, the FBI, IRS-CI and HHS-OIG investigated the case. Trial Attorney Dustin M. Davis and Special Trial Attorney Trey Alford of the Criminal Division’s Fraud Section and Trial Attorney Kristen M. Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section are prosecuting the case.
Polk County Man Charged in Mortgage Fraud SchemeRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Stevie McDonald (41, Winter Haven) with multiple counts of bank fraud and a conspiracy to commit bank fraud. If convicted on all counts, he faces a maximum penalty of 30 years in federal prison for each count. The indictment also notifies the defendant that the United States is seeking a money judgment in the amount of $509,221, the approximate loss amount that the financial institutions sustained in this case.
According to the indictment, McDonald participated in a conspiracy to defraud federally insured financial institutions in connection with multiple residential mortgage loans made by JP Morgan Chase Bank and Washington Mutual Bank. Along with others, McDonald was involved in the submission of false and fraudulent information to the lenders, which induced the lenders to make the mortgage loans. Subsequently, the recipients of these loans defaulted on those mortgages and the banks sustained losses of approximately $509,221.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Jay L. Hoffer.
Paden City, WV man sentenced for unlawful possession of firearmsRead the Press Release
WHEELING, WEST VIRGINIA – Kevin Ray Morgan, 40, of Paden City, West Virginia, was sentenced today to 27 months in prison for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.
Morgan, who has a previous felony conviction in Tyler County, was discovered in unlawful possession of two firearms in October 2015 in Tyler County. Morgan was convicted of “Failure to Appear” in the Circuit Court of Tyler County. He pled guilty in February 2016 to one count of “Felon in Possession of a Firearm.”
Assistant U.S. Attorney David Perri prosecuted the case on behalf of the government. The Tyler County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge John Preston Bailey presided.
Owner of Detroit Home Health Care Agency Sentenced to 57 Months in Prison for His Role in $3.4 Million Health Care Fraud SchemeRead the Press Release
The owner and operator of a Detroit-area home health care agency was sentenced to 57 months in prison today for his participation in a $3.4 million health care fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Region made the announcement.
Mohammad Rafiq, 49, of West Bloomfield, Michigan, was sentenced by U.S. District Judge George Caram Steeh of the Eastern District of Michigan, who also ordered Rafiq to pay $3,471,906.02 in restitution and to forfeit the same amount.
According to his plea agreement, Rafiq was the owner and operator of Perfect Home Health Care (Perfect), a home health care agency that purported to provide home health care and physical therapy services to eligible Medicare beneficiaries in the greater Detroit metropolitan area. According to admissions made as part of his plea agreement, Rafiq paid physicians and recruiters to refer Medicare beneficiaries to Perfect and sign medical documents falsely certifying that they required home health care. Rafiq also directed patient recruiters and Perfect employees to pay cash kickbacks to Medicare beneficiaries in exchange for signing multiple blank physical therapy records, he admitted.
Between February 2009 and November 2013, Medicare paid Perfect approximately $3.4 million as a result of these false and fraudulent claims, Rafiq admitted.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan. This case is being prosecuted by Trial Attorney Elizabeth Young and Special Trial Attorney Katie R. Fink of the Fraud Section and Assistant U.S. Attorney Katherine Wagner of the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
New York man pleads guilty to unlawful cigarette smugglingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Abrahim Yahya Kassim, 28, of Richmond Hill, New York, pled guilty in federal court today to unlawful cigarette smuggling, United States Attorney William J. Ihlenfeld, II, announced.
Kassim participated in a cigarette smuggling operation designed to transport large quantities of cigarettes across state lines for redistribution and sale. The cigarettes were acquired in Virginia, where the tax rate for cigarettes is one of the lowest in the nation, and sold in New York, which has one of the nation’s highest tax rates. The cigarettes were possessed and transported in West Virginia.
Kassim pled guilty today to one count of “Conspiracy to Traffic in Contraband Cigarettes.” He faces up to five years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorneys Michael Stein and Shawn Adkins prosecuted the case on behalf of the government. Homeland Security Investigations, the Frederick County, Virginia Sheriff’s Office, the Virginia Office of Attorney General, the Alcohol and Tobacco Tax and Trade Bureau, the West Virginia State Police, the New York Department of Taxation and Finance, the Federal Bureau of Investigation, and the Internal Revenue Service - Criminal Investigation led the inquiry.
U.S. Magistrate Judge Robert W. Trumble presided.
New York Man Sentenced to Prison for Rushing Airline CockpitRead the Press Release
ALEXANDRIA, Va. – David Patrick Diaz, 36, of Poughkeepsie, New York, was sentenced today to nine months in prison and three years of supervised release for interference with flight crew members and attendants. Diaz was also ordered to complete mental health and substance abuse treatment programs, and pay restitution to United Airlines in the amount of $22,151.77.
Diaz pleaded guilty on Jan. 15, 2016. According to court documents, Diaz admitted to shouting threatening statements as he charged the cockpit of a United Airlines flight shortly after it took off from Dulles International Airport in March 2015. After being tackled by a group of passengers, Diaz said the word, “Jihad,” and he also said that there was something in the belly of the plane. The passengers and flight attendants were able to restrain Diaz until the plane returned safely to Dulles.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Anthony J. Trenga. Assistant U.S. Attorneys Tyler McGaughey and Jonathan Fahey prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-324.
New York Man Pleads Guilty to Failure to Register as a Sex OffenderRead the Press Release
Contact: Halsey B. Frank
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Thomas P. Cortez, of College Point, New York and Portland, Maine, pleaded guilty today in U.S. District Court to failing to register as a sex offender.
According to court documents, Cortez was convicted in Maine in 1989 of unlawful sexual contact with a minor under 14 years old. As a result, Cortez is required to register as a sex offender for life. In 1996, Cortez was living in New York when it instituted a sex offender registry. Between about 1996 and about March of 2003, Cortez was registered in New York. In 2003, Cortez gave New York notice that he was moving back to Maine. Between 2006 and 2015, Cortez registered in Maine. After March 2015, Cortez moved to College Point, New York, where he lived with his father and stepmother. He did not inform Maine that he had moved to New York and he did not register in New York. In December of 2015, Cortez was arrested in New York and told arresting officers, among other things, that he had been living in New York for about eight months.
Cortez faces up to 10 years in jail and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by U.S. Marshals Service, the U.S. Postal Inspection Service, the Maine Department of Health and Human Services, the Maine and New York Sex Offender Registries, and the Portland Police Department.
New Orleans Man Charged with Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CLARK JAMES PELLEGRIN, JR., age 40, of New Orleans, has been charged in a one-count Bill of Information with wire fraud.
PELLEGRIN is charged with engaging in a multi-year scheme involving creditors on whose behalf he collected overdue debts from debtors. The scheme charges that PELLEGRIN negotiated with debtors even though he had no authority to negotiate and made collections from debtors on behalf of twenty-three different creditors in the approximate amount of $243,980, which funds he converted to his own use, instead of paying the creditors.
If convicted, PELLEGRIN faces a possible maximum sentence of twenty years imprisonment on the single count.
U.S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Postal Inspection Service. Assistant U.S. Attorney Patrice Harris Sullivan is in charge of the prosecution.
Nebraska Men Sentenced for Conspiracy to Commit Mail FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that on April 4, 2016, Jeffery Negus, of Omaha, Nebraska, age 55, and Gregory Negus of Omaha, Nebraska, age 60, were sentenced for conspiracy to commit mail fraud. The Honorable Chief Judge Laurie Smith Camp sentenced both men to a 4 year term of probation. Both men were also ordered to make restitution in the amount of $708,743.21.
An investigation conducted by the United States Department of Labor determined that from 2007 through 2011, Jeffery Negus and Gregory Negus operated businesses in the District of Nebraska identified as Negus-Sons, Inc and Netal, Inc. These businesses entered into federally-funded prevailing wage construction contracts for work on several construction projects in the District of Nebraska. Negus-Sons, Inc and Netal, Inc. accepted payments of approximately $4.9 million dollars relating to the federally-funded construction projects for which prevailing wage fringe benefit contributions were to be paid to employee benefit plans.
The United States Department of Labor determined that Jeffery Negus and Gregory Negus fraudulently diverted, for their own use and the use of Negus-Sons, Inc and Netal, Inc., fringe benefit contributions relating to the federally-funded prevailing wage construction contracts in the approximate amount of $708,741.56, which payments were supposed to go to employee benefit plans. As part of the scheme, Jeffery Negus and Gregory Negus used the United States mail to submit hundreds of certified reports to governmental agencies, which falsely represented that the fringe benefit contributions were being made to the employee benefit plans.
This case was investigated by the United States Department of Labor.
National Crime Victims’ Rights Week Event Set for April 10 in CharlottesvilleRead the Press Release
CHARLOTTESVILLE, VIRGINIA – The Jefferson Area Victim Assistance Coalition will host a Community Day on Sunday, April 10 from 1 to 4 p.m. at the Ntelos Wireless Pavilion on the downtown mall in Charlottesville to commemorate National Crime Victims’ Rights Week (April 10-16).
“Protecting the rights and dignity of the victims of crimes is as important a part of the administration of justice as any other aspect of an investigation or prosecution,” United States Attorney John P. Fishwick Jr. said today. “The United States Attorney’s Office strives to work in cooperation with all of our local, state and federal law enforcement and service provider partners to ensure the victims of crimes are treated with respect, dignity and have their rights protected at all times.”
The Community Day, which is free and open to the public, has been planned as a family friendly, interactive event with demonstrations and information available from dozens of local agencies. There will be plenty for kids to see and do, including police motorcycles, fire trucks, police cars, and demonstrations by local K9 Officers and therapy dogs. Many of the local agencies will have plenty of giveaways for the kids.
In addition, there will information available for parents, including DNA and fingerprinting kits available, anti-bullying information, tips on home safeguarding, self-defense and how to avoid falling victim to a scam.
The Jefferson Area Victim Assistance Coalition consists of members form the Albemarle Co. Victim/Witness Program, Charlottesville Victim/Witness Program, Fluvanna County Victim/Witness Program, Greene County Victim/Witness Program, Homeland Security Victim/Witness Program, Louisa County Victim/Witness Program, Sexual Assault Resource Agency, University of Virginia Victim/Witness Program and the United States Attorney’s Office Victim/Witness Program.
Local Agencies participating in Sunday’s event include: the Jefferson Area Victim Assistance Coalition, Charlottesville Fire Department, Charlottesville Police Department, Fluvanna County Sheriff’s Office, Charlottesville Sheriff, Offender Aid and Restoration, Shelter for Help in Emergency, Sexual Assault Resource Agency, The Women’s Agency, The Women’s Initiative, Louisa Sheriff’s Office, United States Attorney’s Office for the Western District of Virginia, Homeland Security Investigations, Foothills Child Advocacy Center, Help Save the Next Girl, CVLAS/SAAF, Albemarle County Police Department, Albemarle County DSS, UVA Police Department and the Charlottesville Albemarle Rescue Squad.