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1 April 2016
New Haven Man Sentenced to 41 Months in Prison for Illegally Possessing and Selling Sawed-Off ShotgunRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that CURTIS GIBBS, 32, of New Haven, was sentenced yesterday by Senior U.S. District Judge Alfred V. Covello in Hartford to 41 months of imprisonment, followed by three years of supervised release, for illegally possessing a sawed-off shotgun.
According to court documents and statements made in court, in January 2014, the ATF and New Haven Police Department received information that GIBBS was in possession of a sawed-off shotgun and a .380 caliber pistol and was looking to sell the firearms for $350. In a meeting with an individual who expressed interest in purchasing the firearms, GIBBS noted that the purchaser be careful because the shotgun “had a body attached to it.”
On February 3, 2014, the purchaser and GIBBS completed the transaction for the sawed-off shotgun and pistol. The pistol that was sold at that time turned out to be a starter’s pistol.
GIBBS has several prior felony convictions, including convictions for weapon in a motor vehicle and assault.
GIBBS has been detained since his arrest on April 23, 2014. On April 7, 2015, he pleaded guilty to one count of possession of a firearm by a previously convicted felon.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven Police Department. The case was prosecuted by Assistant U.S. Attorney Robert M. Spector.
Neosho Man Indicted for Producing Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Neosho, Mo., man has been indicted by a federal grand jury for producing child pornography.
James Lyndon McFadin, Jr., 32, of Neosho, was charged in a seven-count indictment returned by a federal grand jury in Springfield, Mo., on March 29, 2016. McFadin was arrested this morning and remains in federal custody pending a detention hearing next week.
The federal indictment alleges that McFadin used six children – three females and two males, who ranged in age from approximately 5 to 16 years old – to produce child pornography between Jan. 1 and Dec. 19, 2015.
McFadin is also charged with one count of receiving and distributing child pornography over the Internet from Jan. 1 to Dec. 19, 2015.
The indictment also contains a forfeiture allegation, which would require McFadin to forfeit to the government any property used to commit the alleged offenses, including an HTC cell phone and an Asus laptop computer.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI, the Southwest Missouri Cyber Crime Task Force and the Neosho, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Moro Man Sentenced for Role in Staged Bank RobberyRead the Press Release
Eugene Babcock, 58, of Moro, IL, was sentenced yesterday in the United States District Court for the Southern District of Illinois to 28 months in federal prison, 3 years of supervised release, and ordered to pay remaining restitution in the amount of $165,862 (Babcock had returned $115,000 prior to his plea of guilty), on charges stemming from a staged bank robbery at Liberty Bank in Bethalto, Illinois, that occurred on December 13, 2014.
Evidence showed that on December 13, 2014, Liebheit, a bank manager at Liberty Bank, called police to report a bank robbery, indicating that a masked individual forced him into the bank at gun point prior to the bank opening. He gave a description of the suspect’s vehicle as being a tan station wagon or crossover style vehicle. He stated that he was forced to give the individual over $280,000 from the bank’s vault.
Further investigation revealed that Liebheit’s truck was used as a getaway vehicle and Liebheit was involved in the planning of the staged bank robbery. The masked individual was identified as Babcock. Liebheit recruited Babcock to orchestrate the robbery with an agreement that they would split the proceeds afterwards.
The case was investigated by the Federal Bureau of Investigation and the Bethalto Police Department. The case is assigned to Assistant United States Attorney Laura V. Reppert.
Monmouth County Man Gets 87 Months in Prison for Intent to Distribute over 150 Grams of MethamphetamineRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 87 months in prison for possessing 162 grams of methamphetamine with intent to distribute, U.S. Attorney Paul J. Fishman announced.
Theodore Santaguida, 42, of Ocean Township, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with possessing with intent to distribute methamphetamine. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
On Dec. 23, 2014, a task force of FBI and Ocean Township law enforcement executed a federal search warrant at Santaguida’s apartment, and seized 162 grams of methamphetamine.
In addition to the prison term, Judge Cooper sentenced Santaguida to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked officers of the Ocean Township Police Department under the direction of Chief of Police Steven R. Peters for their assistance.
The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Scott Krasny Esq., West Trenton, New JerseyMine operator sentenced for polluting Alaska RiverRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that James Slade, of Calgary, Canada, was sentenced to 12 months in prison for violating the federal Clean Water Act. Slade was convicted of two Clean Water Act crimes for discharging polluted wastewater into the Salmon River as a result of his operation of the Platinum Creek Mine located in western Alaska. Slade was ordered to serve a one-year term of supervision after he is released from prison. The Court concluded he did not have the ability to pay a fine.
Evidence at trial showed that the polluted discharges from the mine were hundreds of times over the legal limits set in the National Pollution Discharge Elimination System water quality permit issued for the mine. The Clean Water Act violations occurred during the 2010 and 2011 mining seasons, and were shown to be repetitive and ongoing. At the sentencing hearing, the United States presented evidence from a contaminants biologist who took samples of the turbid wastewater being discharged from the mine into the Salmon River in September 2011. Laboratory analysis conducted on the samples showed that the wastewater from the mine contained toxic levels of metals, including aluminum and copper that can be deadly to fish and aquatic life in the river.
Prior to imposing the sentence, U.S. District Judge Sharon L. Gleason noted that Slade made a choice to continue the mining production going even after the turbidity levels in the river were off the charts.
The Salmon River is located in Western Alaska, running past the Platinum Creek Mine and emptying into Kuskokwim Bay. It passes through the Togiak National Wildlife Refuge before entering the bay, and all five species of Alaska Salmon spawn in the river. Evidence admitted at trial showed a flow of up to 1200 gallons per minute of wastewater was discharged from the mine’s processing plant into one or more settling ponds that were not lined, and that did not contain the wastewater. Instead, the wastewater flowed out of the ponds and into the Salmon River, turning it from crystal clear to dirty brown. More than one million gallons of wastewater was therefore discharged each day the plant operated.
“The public must be able to rely upon companies and their executive to follow the laws that our nation has adopted to protect our rivers and oceans from harmful pollution,” said First Assistant U.S. Attorney Kevin Feldis. “Mr. Slade and XS Platinum did not follow these laws. Mr. Slade placed profits above the environment and above the law for his own self-interest. The mine operators said they were going to do one thing when they submitted their Mine Plan of Operations, and they ended up doing something very different that polluted a Salmon River in Alaska. Mr. Slade was the Chief Operating Officer and the man in charge at the mine. His sentence reflects the seriousness of the crime as demonstrated by all the evidence that was gathered thanks to the good work of the EPA, BLM, and all their state and federal partners.”
“Illegal pollution from industrial operations like mining can severely impact the health of Alaska waterways and fish species, like Pacific salmon,” said Ted Owens, Assistant Special Agent in Charge for the U.S. Environmental Protection Agency. “This sentence of incarceration shows that EPA is serious about holding people who knowingly break our critically important clean water laws to account.”
Slade was the Chief Operating Officer for XS Platinum, the company that owned the mining claims, and he is the third manager or senior executive of that company to be convicted in this case. Robert Pate, who was employed as the mine manager previously pled guilty to violating the Clean Water Act, along with James Staeheli, the prior processing plant manager, who also pled guilty to a Clean Water Act crime. All three individuals worked for the now defunct XS Platinum, Inc. That company was registered in name only in Delaware, and was 100 percent owned by an offshore company. Two other senior executives from XS Platinum, both Australian citizens, were also indicted but have refused to return to the United States to stand trial on the charges.
First Assistant U.S. Attorney Kevin Feldis prosecuted the case along with Senior Trial Attorney Chris Costantini from the Department of Justice’s Environmental Crimes Section. The investigation was conducted by the U.S. Department of Interior Bureau of Land Management Office of Law Enforcement and Security and the U.S. Environmental Protection Agency Criminal Investigation Division.
Mexican National Sentenced for Possession of Child PornographyRead the Press Release
LAREDO, Texas – Leobel Fuentes-Piedras, 22, of Puebla, Mexico, has been ordered to prison following his conviction of possession of child pornography, announced U.S. Attorney Kenneth Magidson. Fuentes-Piedras pleaded guilty Dec. 11, 2014.
Today, U.S. District Judge George P. Kazen, who accepted the guilty plea, handed Clark a sentence of 84 months in federal prison to be immediately followed by a 15-year-term of supervised release. He will also be required to register as a sex offender.In May 2014, the Texas Attorney General’s Office received information from Facebook that possible Child pornography was being uploaded to a Facebook account. The IP address was verified and law enforcement executed a search warrant at the identified location. At that time, law enforcement seized computer devices and interviewed Fuentes-Piedras.
He admitted to uploading child pornography through his computer and iPhone to Facebook accounts so he could access them from anywhere. Forensics analysis ultimately identified 54 shared files were consistent with child pornography.
Fuentes-Piedras will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Homeland Security Investigations and the Webb County Sheriff’s Office conducted the investigation.
The arrest of Fuentes-Piedras was a result of Operation Child Guardian, which was launched by the Webb County Sheriff’s Office in 2009. The success of these investigations have put dozens of suspected child predators behind bars.This case, prosecuted by Assistant U.S. Attorney Christopher S. Coker, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Mexican National Sentenced for Illegally Reentering U.S.Read the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Mexican national, who had previously been deported after shooting at a police officer, has been sentenced in federal court for illegally reentering the United States.
Francisco Ortega-Montalvo, 36, a citizen of Mexico residing in Platte City, Mo., was sentenced by U.S. District Judge Beth Phillips on Thursday, March 31, 2016, to four years and three months in federal prison without parole.
On Nov. 4, 2015, Ortega-Montalvo was convicted at trial of illegally reentering the United States after having been deported following his felony conviction for shooting at a police officer.
Ortega-Montalvo was convicted in Arkansas state court in 2001 of aggravated assault and sentenced to 54 months in the Arkansas Department of Corrections. He was deported and removed from the United States in 2013 and permanently barred from entering, attempting to enter, or being in the United States at any time, due to his conviction.
Ortega-Montalvo was arrested at his residence on Dec. 10, 2014.
This case was prosecuted by Assistant U.S. Attorney Brent Venneman. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Mexican National Indicted for Transferring False Social Security CardsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that VIDAL OROSCO-BARRIOS, age 29, was charged today in a four-count indictment for transferring false Social Security Cards in violation of Title 18, United States Code, Section 1028(a)(2).
According to the indictment, OROSCO-BARRIOS sold counterfeit Social Security Cards on four separate occasions to confidential informants working with the Department of Homeland Security.
If convicted, OROSCO-BARRIOS faces a maximum term of imprisonment of fifteen years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U. S. Attorney Spiro G. Latsis is in charge of the prosecution.
Local Woman Sentenced to Prison for Wire Fraud, Identity Theft, and Filing False Tax ReturnsRead the Press Release
PENSACOLA, FLORIDA – Candace B. McLeod, 32, of Holt, Florida, was sentenced yesterday to 75 months in federal prison after pleading guilty to wire fraud, aggravated identity theft, and filing false tax returns. The sentence was announced by Christopher P. Canova, Acting U.S. Attorney for the Northern District of Florida.
Between 2009 and 2013, McLeod embezzled over $1 million from her employer, a family-owned business in Destin. McLeod worked as a bookkeeper, and she stole money by making unauthorized online payments to pay her credit cards with employer funds, using corporate credit cards for unauthorized personal purchases, and issuing extra checks to herself from corporate accounts by fraudulently using the signature of the general manager. She used her position to create false documentation and to manipulate accounting records to cover up her scheme. McLeod also failed to report the embezzled money as income on her income tax returns.
This case resulted from a joint investigation by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation, and the Okaloosa County Sheriff’s Office. Assistant U.S. Attorney Alicia H. Kim prosecuted the case.
The U.S. Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the U.S. Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Local Drug Dealers Plead GuiltyRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Jeffrey Nielsen Zaccanti (29, Tampa) and Sadena Ann Raynor (36, Tampa) have pleaded guilty to conspiracy to distribute crack cocaine and distributing crack cocaine, respectively. Zaccanti faces a mandatory minimum penalty of 5 years, up to a maximum penalty of 40 years in federal prison. Raynor faces a maximum penalty of 20 years’ imprisonment.
According to the plea agreements, on three separate occasions in January 2016, Zaccanti and Raynor sold crack cocaine to an undercover detective from the Hillsborough County Sheriff’s Office. The transactions occurred in the parking lot of a Tampa apartment complex. On each occasion, Raynor arranged the transaction, and then either Zaccanti or Raynor completed the transaction with the undercover detective.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Hillsborough County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Taylor G. Stout.
This is another case prosecuted as a part of the Department of Justice’s Project Safe Neighborhoods (PSN) Comprehensive Anti-Gang Initiative (CAGI). The program’s objective is to reduce criminal gangs, violent crime, illegal drugs, and guns through combined enforcement, prosecution, prevention, and re-entry efforts.
Lincoln Man Sentenced for Receiving Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Gerry Lee Peirce, 55, of Lincoln, Nebraska, was sentenced today in Lincoln, Nebraska, to 70 months in prison by United States District Judge John M. Gerrard, for receiving child pornography. After his release from prison, Peirce will also be required to register as a sex offender and complete 7 years of supervised release.
On September 9, 2014, a Task Force Officer operating in an undercover capacity, encountered a user, later determined to be Peirce, in a website chat room where Peirce had posted a link that led to a storage account containing child exploitation material. When law enforcement clicked on the link, they observed a total of 165 files in the account, 113 of which contained child pornography.
After identifying the subscriber information, officers executed a search warrant on the residence of Peirce. Peirce confessed to accessing child porn through the Internet and then distributing the links of the child porn sites and files to others.
In all, investigators found 69 videos of child porn on the computer, along with other images of child erotica that had been received and distributed.
This case was investigated by the Federal Bureau of Investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Lawrence Elementary School Classroom Assistant Charged with Opioid Distribution CrimeRead the Press Release
BOSTON – A 4th grade classroom assistant in a Lawrence school was arrested yesterday afternoon and charged in connection with an undercover operation involving cocaine and oxycodone pills in the greater Boston area.
Reynaldo Sanchez, 25, of Lawrence, was charged in a criminal complaint with one count of attempted possession and intent to distribute oxycodone. Sanchez was released on conditions after an appearance today in U.S. District Court in Boston.
As alleged in the criminal complaint, in August 2015, federal agents began investigating Sanchez for his involvement in a narcotics and money laundering organization operating in the Boston area. During the investigation, Sanchez arranged to purchase from undercover federal agents 10 – 15 kilograms of cocaine for a price of $33,000 per kilogram. The complaint further alleges that between March 29, 2016, and March 31, 2016, Sanchez sought to purchase what he believed were 11,000 oxycodone pills for $13 per pill from an undercover agent posing as a drug courier. At the time of his arrest, Sanchez was carrying a duffle bag containing $48,000.
The charging statute provides for a sentence of no greater than 20 years in prison, a lifetime 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; Matthew J. Etre, Special Agent in Charge of the Homeland Security Investigations, Boston Field Office; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement. Assistance was also provided by the Middlesex County District Attorney’s Office, Massachusetts Bay Transportation Authority Police; and the Lawrence, Franklin, Wareham and Dartmouth Police Departments. The case is being prosecuted by Assistant U.S. Attorney Carlos A. López of Ortiz’s Narcotics and Money Laundering Unit.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Kent Man Who Stole Identity to Work while Collecting Disability Sentenced to PrisonRead the Press Release
A Kent, Washington man whose disability fraud scheme kept a homeless Denver man from getting assistance was sentenced in U.S. District Court in Seattle to 33 months in prison and $200,118 in restitution, announced U.S. Attorney Annette L. Hayes. RICHARD ALAN DYSON, 62, stole the identity of a homeless man in Denver, Colorado and from 1999 to 2015 used the identity to work in construction while still collecting disability benefits in his own name. When the Colorado man tried to get public assistance he was initially disqualified because of the work history attributed to him in Washington State due to DYSON’s identity theft. At yesterday’s sentencing hearing U.S. District Judge Ricardo S. Martinez also imposed three years of supervised release.
“This defendant did not just steal from a government program. He kept a disabled man from getting the Social Security benefits to which he was entitled,” said U.S. Attorney Annette L. Hayes. “The prison sentence imposed in this case sends a clear message that identity theft does real harm and will not be tolerated.”
According to records in the case, DYSON applied for and was granted Social Security Disability in 1992, claiming he was unable to work due to a mental disability. He collected monthly disability payments until his arrest in 2015. In 1999, DYSON began earning income and reporting wages in Washington State under the name and Social Security number of a Colorado man. Between 2007 and 2014, DYSON collected 99 weeks of unemployment benefits using the Colorado man’s name and Social Security number. DYSON lived a completely separate, working life as the Colorado man. DYSON maintained membership in a labor union, completed training courses, paid dues, and held union membership cards, all in the Colorado man’s name. In all, he inhabited the stolen identity for nearly fifteen years, always careful to keep his two personas separate to further his scheme.
Writing to the court, prosecutors noted the fraud was uncovered when the Colorado victim applied for assistance. “This investigation was initiated when a disabled, homeless man in Colorado applied for the critical public welfare benefits needed for survival, only to be denied because his record showed he was working regularly in Washington State. Defendant’s misappropriation of (the victim’s) identification not only cheated the system as a whole, it specifically harmed (the victim) and deprived him of help he required….The victim’s vulnerability and life on the margin of society may have allowed Defendant’s scheme to go on as long as it did, but the impact of his offense is very real….”
The case was investigated by the Social Security Administration Office of Inspector General (SSA-OIG) and is being prosecuted by Special Assistant United States Attorney Benjamin Diggs. Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court.
Justice Department Warns Public to Beware of Fraudulent Tax Return Preparers and Tax Scheme Promoters, Urges Taxpayers to Pay Federal Income Taxes on Time and in FullRead the Press Release
Washington – With tax season in full swing, the Justice Department urged the public today to avoid dishonest tax-return preparers who fleece their customers and illegally drain the U.S. Treasury. Noting that every taxpayer is ultimately responsible for the contents of his or her own return, Acting Assistant Attorney General Caroline D. Ciraolo of the Tax Division also warned the public to be wary of anyone who guarantees a refund or who claims to sell a sure-fire way to reduce your taxes.
Dishonest Return Preparers Cost Their Clients and the United States
U.S. taxpayers filed approximately 150 million returns in 2014. According to statistics available from the Treasury Inspector General for Tax Administration, the Internal Revenue Service (IRS) identified more than 2.1 million of those returns that claimed fraudulent refunds totaling more than $15.7 billion. As in past years, the IRS has designated return preparer fraud as one of 2016’s “Dirty Dozen” tax scams to avoid during return filing season. In 2015, the Tax Division permanently shut down more than 35 fraudulent tax-return preparers located all over the United States. The defendants in those cases spanned the spectrum from large-scale return preparation franchises to small, independent return preparers.
“Every year, thousands of federal income tax returns are prepared by people who care much more about making a quick buck than about preparing accurate returns,” said Acting Assistant Attorney General Ciraolo. “Most tax return preparers are honest. But some preparers who charge clients a percentage of their tax refund intentionally prepare false returns to increase their clients’ refund, and thus their own fees. Likewise, some preparers who charge by the form will intentionally prepare incorrect forms that their clients don’t need in order to increase their compensation. Taxpayers might think that they’re getting a good deal on their taxes, or that as long as someone else prepares the return, they’re not responsible. They’re wrong. Taxpayers who have their return prepared incorrectly are required to pay the tax they owe, or pay back the refund they weren’t entitled to get. These clients might also owe interest and penalties, which can be substantial. Fortunately, there are red flags that taxpayers can look for and avoid when choosing a return preparer.”
Your refund should never be deposited directly into a preparer’s bank account.
In United States v. Elton L. Barnes, No. 2:14-cv-05621 (C.D. Cal.), the court barred a return preparer who caused other people’s tax returns to be deposited to bank accounts in his name.
Never sign a blank return or a blank form, or sign a return or a form without reading it first.
By law, a return preparer must provide a client with a completed copy of the return no later than the time the customer is asked to sign the return. In United States v. Syed N. Ahmed et al., No. 2:15-cv-11461 (E.D. Mich.), the United States alleged that the defendants’ Liberty Tax Service franchises asked customers to sign blank forms that stated that the customers had non-existent businesses, which were then used to maximize the customer’s refund. Although the defendants did not admit to the allegations in the complaint, they agreed to an order from a federal court permanently shutting down the stores.
Don’t use a preparer who mischaracterizes your expenses.
In United States v. Lawrence Preston Siegel, No. 3:15-00643 (S.D. Cal.), the defendant prepared returns that falsely characterized personal purchases as deductible expenses. For instance, one customer’s return deducted purchases at Tiffany & Co., Louis Vuitton, and Royal Caribbean Cruise Lines as “medical expenses.” The court permanently barred Siegel from preparing tax returns or providing tax advice for compensation.
Do not use a preparer who fabricates business expenses or deductions, or who claims bogus credits to which you are not entitled, such as the Earned Income Tax Credit, the child care credit, or the education credit.
One of the most common dishonest return-preparation practices is to prepare returns that include non-existent businesses, sometimes based on a client’s hobbies. In 2015, for example, federal courts shut down tax return preparers in Kahului, Hawaii; Appleton, Wisconsin; and Chicago, Illinois, who fabricated supposed “businesses” for their clients. Federal courts have also ordered return preparers in Miami, Florida, and Memphis, Tennessee to submit to third-party monitoring at their own expense to make sure they are not preparing returns with fraudulent “businesses.”
Some other fraudulent schemes and practices that have been stopped through injunction orders entered by federal courts throughout the country include:
Fabricating fake Form W-2 (Wage and Tax Statement) information;
Claiming bogus education and first-time homebuyer credits;
Claiming phony child and dependent care credits or residential energy credits;
Claiming fraudulent fuel tax credits;
Falsely exempting foreign earned income;
Inflating unreimbursed employee business expense deductions; and
Fraudulently inflating or decreasing a client’s income or deductions to maximize the Earned Income Tax Credit.
In January 2016, a federal court in Orlando, Florida entered a preliminary injunction against Jason Stinson, who ran a series of tax return preparer storefronts under the name “Nation Tax Services,” requiring him to shut down the stores pending resolution of the case. As part of its explanation for why it was ordering Stinson’s stores to shut down in the middle of the case, the court said that Stinson’s business “exposes . . . [his] customers to individual tax liability. Both the Government and Stinson’s customers will suffer irreparable harm if an injunction is not granted. Moreover, it is in the public’s best interest to protect vulnerable customers from the inaccurate preparation of their taxes, not to deplete Government resources, and to maintain the public trust in the tax system.” The case is United States v. Jason Stinson et al., No. 6:14-cv-1534 (M.D. Fla.).
The IRS advises taxpayers who ask a tax professional to prepare their return to be careful in the professional they select. The IRS offers some basic tips and guidelines to assist taxpayers in choosing a reputable tax professional and is also offering taxpayers a number of instructional YouTube videos to help them prepare their own taxes for the upcoming filing season. Several options, including free assistance with preparation and electronic filing for the elderly and individuals making $50,000 or less, are available to help taxpayers prepare for the current tax season and receive their refunds as easily as possible.
Tax Division Sues to Shut Down Promoters of Fraudulent Tax Schemes
In addition to return preparers who deliberately falsify returns, the Tax Division targets those who peddle schemes that purportedly reduce taxes—but in fact rely on false statements or financial sleight-of-hand.
In United States v. Wayne Reeves et al., No. 12-cv-1916 (D. Nev.), the court found that defendants Wayne Reeves and Diane Vaoga advised their clients “to set up sham trusts and have their wages directed into accounts for those trusts as a way to improperly reduce their tax liability.” They advised their clients that the income the clients received from the trusts was “nontaxable and did not need to be reported on tax returns.” The court further found that Reeves prepared tax returns that “willfully attempted to understate his clients’ correct tax liabilities,” and that Vaoga assisted him in doing so. In January 2015, the court permanently barred both Reeves and Vaoga from preparing returns or giving tax advice to others.
In November 2015, the Tax Division sued to shut down an alleged tax scheme based on a purported solar energy generation facility in Utah. The case is United States v. RaPower-3 LLC et al., No. 2:15-cv-00828 (D. Utah). The United States’ complaint alleges that the defendants purportedly sell “solar thermal lenses” to customers, and tell their customers that they are entitled to claim depreciation expenses and the solar energy credit for the lenses—even though the defendants allegedly know or have reason to know that their customers are not in the business of producing and selling solar energy and that the defendants’ purported solar energy facilities do not actually produce solar energy in a manner that meets the Internal Revenue Code’s requirements for claiming the credit.
And in the same month, in United States v. James Tarpey et al., No. 2:15-cv-00072 (D. Mont.), the Tax Division sued to shut down an alleged timeshare donation scheme. According to the United States’ complaint in that case, the defendants have their customers give rights in a timeshare to “Donate for a Cause,” a tax-exempt entity operated by Tarpey. The complaint alleges that the customers receive an appraisal that grossly overvalues the donated timeshare rights and use that appraisal to claim a large charitable donation deduction, even when the true market value of the timeshare right is a small fraction of the appraised value.
“The Tax Division is committed to stopping those who promote fraudulent tax shelters and other schemes or who prepare false returns,” Acting Assistant Attorney General Ciraolo said. “Along with our colleagues at the IRS, we will find dishonest preparers and fraudulent tax-scheme promoters and work to shut them down. We will hold accountable those who willfully assist taxpayers to file false returns. And in appropriate cases, we will prosecute them. But everyone can help stop fraud and protect our public finances. Pay attention to your tax return and make sure that it’s right. If you think that a tax return preparer is deliberately preparing incorrect returns, or you suspect someone is selling a phony tax-loss scheme, report that person to the IRS.”
The IRS website has information about how to report a dishonest return preparer, as well as information about how to report other types of tax fraud. The Justice Department’s website has a list of tax-return preparers and tax-scheme promoters whom the courts have shut down.
In addition to the civil enforcement through injunctions that stop their illegal actions, many return preparers and promoters also face prosecution. Examples of those investigations can be found for fiscal years 2014 and 2015.
Joplin Man Sentenced to 20 Years for Drugs, Firearm after Ramming into Police VehicleRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Joplin, Mo., man was sentenced in federal court following an investigation in which he rammed into a police vehicle.
Michael L. Watson, 38, of Joplin, was sentenced by U.S. District Judge Roseann Ketchmark on Thursday, March 31, 2016, to 20 years in federal prison without parole. Watson was sentenced as an armed career offender due to his prior felony convictions.
On Aug. 27, 2015, Watson pleaded guilty to possessing methamphetamine with the intent to distribute and to possessing a firearm in furtherance of a drug-trafficking crime.
Watson was arrested on April 10, 2015, when a Joplin police officer contacted a vehicle that Watson was driving. The officer initially stopped a man walking out of the Sunrise Inn motel at 3600 Rangeline, and the man indicated that he was with the four occupants of a Nissan Sentra that was parked nearby. During the conversation, Watson, the driver, drove the Sentra with the three other occupants away from the motel. The officer returned to his patrol vehicle and began to back up in order to follow the Sentra. The Sentra collided with the passenger side of the patrol vehicle at a high rate of speed, which caused significant damage.
Watson got out of the car and fled on foot with the officer in pursuit. Watson stumbled and fell to the ground after he jumped over a fence. The officer caught up with him and, while Watson was on the ground, saw the loaded Ruger 9mm semi-automatic pistol in a holster on Watson’s right side. The officer also found a hard case in Watson’s left front pocket that contained 39.43 grams of methamphetamine and drug paraphernalia.
Watson has prior felony convictions for assaulting a law enforcement officer, possession of a controlled substance, possession of a chemical with intent to create a controlled substance, possession of drug paraphernalia, and resisting a lawful stop.
This case was prosecuted by Assistant U.S. Attorney Nhan D. Nguyen. It was investigated by the Joplin, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Jesse Emerson and Wife Eugenia Emerson of Springfield Sentenced for Distribution of Synthetic Drugs from China and Heroin OffensesRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Jesse Emerson, 36, of Springfield, Vermont was sentenced today to 55 months in federal prison based on his conviction of conspiracy to distribute alpha-pyrrolidinopentiophenone (a-PVP) over an eight-month period in 2014 and 2015. Chief Judge Christina Reiss also ordered that Emerson serve a five-year period of supervised release following his incarceration. On March 21, 2016, Emerson’s wife, Eugenia Emerson, 35, was sentenced to 49 months in prison and three years of supervised release based on her conviction of conspiracy to distribute a-PVP and possession with intent to distribute heroin.
According to court records, on February 1, 2014, the Vermont State Police stopped Ms. Emerson on I-91 as she was returning from picking up heroin in Hartford, Connecticut. Emerson was traveling with her two minor children at the time of the car stop. Troopers conducted a consent search of the vehicle, finding approximately 690 bags of heroin hidden under a seat. Emerson subsequently admitted to agents that in 2013 and 2014 she had been involved in heroin trafficking with a group of individuals known as the “Jersey Boys.” Ms. Emerson acknowledged making a dozen trips during that time period, which resulted in the transportation of approximately 28,000 bags of heroin from New Jersey to Vermont.
Within months of the February 1, 2014 car stop, Emerson became involved in a conspiracy with her husband and others to import a-PVP, a synthetic drug commonly known as “bath salts,” for distribution in the Springfield, Vermont area. The scheme involved the Emersons ordering a-PVP on-line from a supplier in China. The Emersons and others wired payment to the Chinese supplier, who would in turn ship kilogram quantities of the drug directly to addresses in the Springfield area. Once the a-PVP arrived in Springfield, Jesse Emerson and an associate distributed it in neighboring Vermont and New Hampshire communities. The Emersons were responsible for the importation of approximately 12 kilograms of a-PVP to Vermont.
On February 4, 2015, a confidential informant purchased 100 bags of heroin from Ms. Emerson. Law enforcement executed federal search warrants for Emerson’s Bellows Falls home and her Lincoln Navigator on February 6, 2015, where they recovered a Ruger pistol, numerous cell phones and laptop computers, drug paraphernalia, empty heroin bags, and documentation related to bath salts shipments. A simultaneous search warrant at Jesse Emerson’s residence yielded drug paraphernalia, several laptop computers, a rifle, a 9mm pistol, a shotgun, and a muzzleloader. The Emersons were arrested on February 6, 2015 and have remained detained since that time.
This matter was investigated by the Federal Bureau of Investigation, the Vermont Drug Task Force, the Springfield Police Department, the Department of Homeland Security, and the United States Postal Inspection Service, with assistance from U.S. Customs and Border Protection.
Assistant U.S. Attorney Kevin J. Doyle handled the prosecution for the government. Jesse Emerson was represented by David J. Williams, Esq., and Eugenia Emerson was represented by Richard R. Goldborough, Esq.
Indictment Unsealed Charging New Orleans Resident with Heroin and Money Laundering ConspiraciesRead the Press Release
U.S. Attorney Kenneth A. Polite announced a two-count Indictment was unsealed yesterday that charges CORNELL PENDLETON, age 52, of New Orleans, with violations of federal drug and money laundering statutes, announced U. S. Attorney Kenneth Allen Polite, Jr. According to Count One in the Indictment, PENDLETON conspired with others to distribute and possess with intent to distribute one kilogram or more of heroin. According to Count Two, PENDLETON conspired with others to conduct financial transactions knowing that the transactions were designed to conceal the proceeds of an unlawful drug business.
PENDLETON was arrested on March 22, 2016. At the time of his arrest, agents from the Drug Enforcement Administration executed seizure warrants on assets tied to PENDLETON’s illegal drug and money laundering conspiracies. To date, law enforcement has seized from PENDLETON approximately $1 million in bank accounts and cashier’s checks.
If convicted of the heroin conspiracy, PENDLETON faces a minimum sentence of ten years in prison, a maximum life sentence, a fine of not more than $10,000,000, and a minimum of five years of supervised release. If convicted of the money laundering conspiracy, PENDLETON faces a maximum sentence of twenty years in prison, a fine of not more than $500,000, and not more than three years of supervised release.
U.S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendants must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in investigating this matter. Assistant United States Attorneys Brandon S. Long and Michael B. Redmann are in charge of the prosecution.
ICE seeks public's help in locating badge counterfeiter believed to be in GermanyRead the Press Release
In July 2013, a man was watching a movie at a theatre in Michigan, wearing body armor and carrying a firearm. When approached by police, he presented a counterfeit Central Intelligence Agency (CIA) badge and credentials.
In January 2014, a man attempted to gain access to the secure area of Reagan National Airport using a counterfeit CIA badge, but was prevented from doing so after Transportation Security Administration officers noticed inconsistencies with the man’s statements and credentials.
In August 2015, a man was indicted for impersonating a federal law enforcement agent. He used a counterfeit Homeland Security Investigations (HSI) badge and credentials to enter the Naval Nuclear Training Command in South Carolina while armed with a Sig Sauer pistol.All three of these situations have one thing in common; the badges and credentials originated from a German-based company called Master Equipment.
Master Equipment is operated by 34-year-old Roberto Craciunica, a Romanian man believed to be residing in Germany. Craciunica was indicted in October 2015 in the Eastern District of Virginia for a variety of charges related to manufacturing and distributing counterfeit badges, including trafficking in counterfeit goods; smuggling; and possession, sale or transportation of false seals. Interpol has also issued a Red Notice for Craciunica’s arrest.
From January 2010 to September 2015, Craciunica’s company, Master Equipment, manufactured and distributed counterfeit U.S. law enforcement badges from HSI, the CIA and the Federal Bureau of Investigation without authorization. Craciunica sold these badges through websites like www.badge-police.com and www.master-equipment.org. Craciunica and his co-conspirators instructed buyers to pay for the counterfeit badges by sending funds through Western Union and Paypal. They then shipped the counterfeit badges from Kaarst, Germany, to buyers in the United States. Individuals utilized the badges and credentials to impersonate federal agents and officers of the U.S. government, and in some situations, attempted to gain access to restricted areas.
As part of this investigation, HSI Washington, D.C., special agents seized counterfeit badges and seals purchased from Web domains operated by Master Equipment and Craciunica.
The Washington Metropolitan Airport Authority, the U.S. Marshals Service for the Eastern District of Virginia and the U.S. Marshals Service Headquarters Tactical Operations Division assisted with the investigation.
Houston Psychiatrist Sentenced to 144 Months in Prison for Role in $158 Million Medicare Fraud SchemeRead the Press Release
A Houston psychiatrist was sentenced today to 144 months in prison for her role in a $158 million Medicare fraud scheme involving false claims for mental health treatment.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Dallas Region, Special Agent in Charge D. Richard Goss of the Internal Revenue Service-Criminal Investigation (IRS-CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Sharon Iglehart, 58, a former attending psychiatrist at Riverside General Hospital (Riverside) of Houston, was sentenced by U.S. District Judge Ewing Werlein Jr. of the Southern District of Texas. Judge Werlein also ordered Iglehart to pay $6,363,528.82 in restitution and to forfeit the same amount.
On Sept. 10, 2015, following a seven-day trial, a jury convicted Iglehart of one count of conspiracy to commit health care fraud, one count of health care fraud and three counts of making false statements relating to health care matters.
According to evidence presented at trial, from 2006 until June 2012, Iglehart and others engaged in a scheme to defraud Medicare by submitting through Riverside approximately $158 million in false and fraudulent claims to Medicare for partial hospitalization program (PHP) services, an intensive outpatient treatment for severe mental illness. The evidence presented at trial showed that the Medicare beneficiaries for whom Riverside billed Medicare did not receive PHP services. In fact, evidence proved that most of the Medicare beneficiaries rarely saw a psychiatrist and did not receive intensive psychiatric treatment at all.
In addition, evidence presented at trial showed that Iglehart personally billed Medicare for individual psychotherapy and other treatment purportedly provided to patients at Riverside locations – treatment that she never provided. Further, Iglehart falsified the medical records of patients at Riverside’s inpatient facility to make it appear as if she provided psychiatric treatment when she did not, the evidence showed.
To date, 12 other individuals have been convicted based on their roles in this scheme, including Earnest Gibson III, 71, of Houston, the former president of Riverside; Earnest Gibson IV, 38, of Pearland, Texas, the operator of one of Riverside’s PHP satellite locations; Regina Askew, 50, of Houston, a group home owner and patient file auditor; and Robert Crane, 59, of Spring, Texas, a patient recruiter, who were all convicted after a jury trial in October 2014. Earnest Gibson III was sentenced to 45 years in prison; Earnest Gibson IV was sentenced to 20 years in prison; Askew was sentenced to 12 years in prison; and Crane has not yet been sentenced. Mohammad Khan, 66, of Houston, an assistant administrator at the hospital, who managed many of the hospital’s PHPs, pleaded guilty and was sentenced to 40 years in prison.
The FBI, HHS-OIG, IRS-CI and the MFCU investigated the case with assistance from the Railroad Retirement Board’s Office of Inspector General and the Office of Personnel Management’s Office of Inspector General. The case 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 for the Southern District of Texas. Assistant Chiefs Laura M.K. Cordova and Ashlee C. McFarlane of the Fraud Section are prosecuting the case.
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 Team (HEAT), go to: www.stopmedicarefraud.gov.
Honolulu Man Sentenced to Life Without ParoleRead the Press Release
HONOLULU –Gilbert Lee Medina, 52, of Honolulu, was sentenced to life in prison in federal court yesterday by Senior District Judge Helen Gillmor for conspiring to distribute and possess with intent to distribute methamphetamine. There is no parole under current federal criminal law. Medina’s two prior drug felony convictions in California made imposition of the life sentence mandatory. A jury found Medina guilty of the conspiracy in December 2015, and also found him guilty of unlawfully possessing a firearm and attempting to enter a secure area of the Honolulu International Airport by fraud or false pretenses.
According to the evidence presented at trial, Medina was at the center of a large scale methamphetamine trafficking conspiracy that spanned at least 12 months from April 2012 to April 2013, and was responsible for well over 20 pounds of methamphetamine being brought from California to Hawaii. Medina received the large quantity of methamphetamine from several different sources and was responsible for distributing the methamphetamine to other members of the conspiracy in Hawaii.
The evidence presented at trial also established that Medina unlawfully possessed a firearm on his boat docked at the Ala Wai harbor. Evidence produced in court established that Medina attempted to use a false identification at the Honolulu International Airport in an effort to flee from Hawaii in May 2013, which led to the additional criminal offense for attempting to enter the secured area of the airport by presenting the false identification. Transportation Security Administration (TSA) officials did not permit Medina to get past the security, and ultimately he was arrested.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said, "This sentence is a stern warning that those individuals who repeatedly participate in drug trafficking risk being severely punished for their criminal conduct."
Michael Carney, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Honolulu, and United States Attorney Nakakuni observed that, "Methamphetamine is a vicious drug that destroys lives, devastates our communities and seriously compromises the public’s safety." Acting SAIC Carney said, "The sentence in this case is fitting of the serious crimes committed by the defendant, and HSI along with its federal, state and local law enforcement partners are committed to combatting the serious threat methamphetamine presents to the well-being of our communities."
The investigation which resulted in the charges in the case was conducted by HSI, with assistance from the United States Postal Inspection Service, the Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. TSA at Honolulu International Airport also contributed significantly to the investigation. Assistant U.S. Attorney Tony R. Roberts handled the prosecution.
Grant County, WV man pleads guilty to prescription painkiller traffickingRead the Press Release
ELKINS, WEST VIRGINIA – Nelson Joseph Boucher, 33, of Cabins, West Virginia, pled guilty to prescription painkiller trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Boucher sold hydrocodone in August 2014 in Grant County, West Virginia. He pled guilty today to “Distribution of Hydrocodone.” 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 Stephen Warner prosecuted the case on behalf of the government. The Potomac Highlands Drug and Violent Crime Task Force investigated.U.S. Magistrate Judge Michael John Aloi presided.
Fort Thompson Man Charged with Aggravated Sexual Abuse and Abusive Sexual Contact of a ChildRead the Press Release
United States Attorney Randolph J. Seiler announced that a Fort Thompson, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Abuse of a Child and Abusive Sexual Contact of a Child by Force.
Caleb Lewis Thompson, age 31, was indicted on March 15, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on March 24, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is a mandatory minimum of 30 years in custody and/or a $750,000 fine, 5 years of supervised release, and $300 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between August 1, 2013, and May 31, 2015, Thompson knowingly engaged in, and attempted to engage in a sexual act with a minor female, as well as knowingly caused, and attempted to cause another minor female to engage in sexual contact.
The charges are merely accusations and Thompson is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Crow Creek Agency. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Thompson was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Former Viridian Elementary Principal Found Guilty of Child Exploitation ChargeRead the Press Release
SHERMAN, Texas — A 47-year-old Carrollton, Texas man has been found guilty of child exploitation charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Oscar Figueroa was indicted by a federal grand jury on July 15, 2015 and charged with coercion and enticement of minors. Figueroa was found guilty today following a four day trial before U.S. District Judge Amos L. Mazzant.
According to the indictment, on July 7, 2015, law enforcement officers became aware of a Craigslist advertisement posted by a person identified as Figueroa seeking a young male for sexual activity. An undercover officer posing as a 16-year-old boy contacted Figueroa and began exchanging text messages. Figueroa instructed the undercover officer to meet him at a particular place within the AMC Theatres at Stonebriar Centre. Frisco PD Officers arrived at the theatre and discovered Figueroa, who directed an undercover officer to a bathroom for sexual activity. During the trial, attorneys for the United States introduced Figueroa’s text messages with the undercover agent, his interview with law enforcement, Craigslist ads he posted, and the contents of his cellular phone.
Figueroa was arrested on July 10, 2015 and remains in custody. Figueroa faces a minimum of 10 years, and up to life, in federal prison at sentencing. A sentencing date has not been set.
This case is being prosecuted as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by Homeland Security Investigations (HSI) and the Frisco Police Department and prosecuted by Assistant U.S. Attorneys Marisa Miller and Jay Combs.
Former NYS Deputy Secretary of State Indicted for Perjury, Failing to Pay RestitutionRead the Press Release
ALBANY, NEW YORK – Joseph Felix Strevell, age 54, of Castleton, New York, was arraigned today on an indictment accusing him of lying under oath to conceal his failure to pay restitution to New York State.
The announcement was made by U.S. Attorney Richard S. Hartunian, New York State Police Superintendent Joseph A. D’Amico, and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation.
U.S. Attorney Richard S. Hartunian said: "Restitution is a mandatory obligation that no convicted felon should be able to walk away from. Joseph Strevell tried to shirk his restitution obligation and when my office took his deposition to find out about his ability to pay, he repeatedly lied under oath to an Assistant United States Attorney to cover his tracks. As a result, he has been indicted for perjury."
New York State Police Superintendent Joseph A. D’Amico said: "We will show no mercy for convicted criminals who fail to fulfill the obligations of their sentences, and this case proves that trying to cover your tracks by lying to law enforcement never works. I want to thank the State Police Special Investigations Unit, and our partners at the U.S. Attorney’s Office and the FBI, for their persistence in this case."
The charges in the indictment are merely accusations. The defendant is presumed innocent until proven guilty.
From 1997 to 1999, Strevell served as a Deputy Secretary of State for the State of New York. He left that position to serve as the head of the state-funded Institute for Entrepreneurship. In 2007, Strevell was convicted in federal court of defrauding New York State while leading the Institute. In March 2009, the United States District Court for the Northern District of New York entered judgment against Strevell on this conviction, requiring him to pay $111,500 in restitution to his victim, New York State. The judgment required Strevell to pay restitution at a minimum rate of $100 per month or 10 percent of his gross monthly earnings, whichever was greater, and to pay full restitution immediately if at any time he had the resources to do so.
In December 2014, the U.S. Attorney’s Office deposed Strevell under oath to determine whether he was complying with his restitution obligation. According to the indictment, when questioned about how he was able to make a $75,440 down payment on a lease with an option to purchase a 138.55-acre horse farm in Rensselaer County in April and May 2013, Strevell falsely testified that his mother and aunt provided the majority of the funds used to make the down payment. In fact, according to the indictment, neither Strevell’s mother nor aunt contributed toward the down payment.
According to the indictment, Strevell also lied during that deposition about whether he had paid for his daughter’s wedding in May 2014. Strevell falsely testified that he contributed only "a couple thousand dollars" toward wedding expenses, but, according to the indictment, Strevell paid for most of the wedding, ultimately contributing more than $30,000 toward wedding expenses by paying at least one wedding vendor directly and transferring tens of thousands of dollars from his business to his daughter.
The indictment also alleges that Strevell failed to pay restitution each month as required by the 2009 judgment.
Strevell faces five felony counts of perjury and one misdemeanor count of defaulting on his restitution obligation. If convicted of perjury, Strevell faces a maximum of 5 years in prison, a $250,000 fine, and 3 years of post-imprisonment supervised release. If convicted on the misdemeanor charge, Strevell faces a maximum of one year in prison. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
Strevell was arraigned today in Albany, New York, before United States Magistrate Judge Christian F. Hummel, and released pending a trial before United States District Court Judge Gary L. Sharpe.
This case is being investigated by the New York State Police and the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorneys Jeffrey C. Coffman and Michael Barnett.
Former Loan Officer Sentenced to Prison for Role in $45 Million Mortgage Fraud SchemeRead the Press Release
Contact Person: Dean Secor (843) 727-4381
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that Steven F. Weiss, age 67, of Virginia Beach, Virginia was sentenced on Wednesday in federal court in Charleston, South Carolina for Conspiracy to Commit Mail Fraud, Wire Fraud, and Bank Fraud, a violation of 18 U.S.C. § 371. U.S. District Judge Richard M. Gergel sentenced Weiss to 30 months in federal prison. Judge Gergel also ordered Weiss to serve three years of supervised release after he is released from prison (the first twelve months under electronic monitoring) and to pay restitution in the amount of $4,961,732.
Evidence presented at Weiss’ change of plea hearing established that he participated in a mortgage fraud conspiracy that utilized real estate and mortgage businesses operated in Summerville, South Carolina under the names North American Mortgage Group, LLC; Realty Executives of Coastal Carolina; and New Freedom Enterprises, LLC.
The scheme involved more than 70 properties, approximately $45 million of mortgage loans, and a loss of more than $23 million suffered by financial institutions. The properties were located in Charleston, Johns Island, Ladson, Mount Pleasant, Summerville, Edisto Island, St. Helena Island, Garden City, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Lake Keowee, and Tybee Island, Georgia.
Weiss worked as a loan officer for North American Mortgage Group, LLC. He was directly involved with at least 13 of the properties involved in the scheme, and the losses associated with those 13 properties totaled $4,961,732.
Two defendants previously pleaded guilty in connection with the scheme and are awaiting sentencing. Scott M. Wickersham, 36, of Summerville, pleaded guilty to one count of Conspiracy to Commit Mail Fraud, Wire Fraud, and Bank Fraud, in violation of Title 18, United States Code, Section 1349, and two counts of Willfully Making and Subscribing a False Tax Return, in violation of Title 26, United States Code, Section 7206(1). Kelly Martin, 34, of Moncks Corner pleaded guilty to one count of Conspiracy to Commit Mail Fraud, Wire Fraud, and Bank Fraud, in violation of Title 18, United States Code, Section 371.
Two other defendants were indicted in December in connection with the scheme and their cases are pending.
The case was investigated by agents of the Federal Bureau of Investigation (FBI) and the Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant United States Attorney Dean H. Secor of the Charleston office prosecuted the case.
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Foreign National Pleads Guilty in Mail Fraud SchemeRead the Press Release
A foreign national pled guilty to orchestrating an international mail fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Delany De-Leon Colon, Acting Inspector in Charge, United States Postal Inspection Service (USPIS), Miami Division, made the announcement.
Cristian Mariano Pardo, 30, and Jorge Gabriel Barca, 33, both of Buenos Aires, Argentina, were indicted in West Palm Beach on a single count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1341 and fifteen counts of mail fraud, in violation of Title 18, United States Code, Sections 1349. Barca has not been arrested and remains a fugitive. Pardo pled guilty to the conspiracy to commit mail fraud and a single count of mail fraud. Pardo faces up to 20 years in prison on each of the two counts of conviction, plus $250,000 in fines and mandatory restitution as to each charge.
According to the indictment and court records, between September 2008 and September 2015, Pardo and Barca operated telemarketing call centers or “boiler rooms,” in Argentina that targeted Spanish-speaking consumers residing in the United States. The defendants obtained the names of these consumers from lead lists which they had purchased in Argentina. The lists included names of consumers who had previously made online or direct mail purchases of various items, including items sold on Spanish language television, such as English classes.
The telemarketers, acting at the direction of the defendants, would call Spanish-speaking U.S. residents to tell them that they would be receiving a small parcel in the mail that the consumers had ordered. The callers would state that if the consumers failed to pay for the cost on delivery (C.O.D.) package – typically a charge of $500 - they would be subject to lawsuits, expensive attorney’s fees and court costs, arrest, deportation, and/or have their credit ruined.
In truth, these consumers had not ordered any merchandise, and only paid the $500 demanded for the C.O.D. because of the numerous threats made by the boiler room callers.
When consumers refused delivery of a package sent by the defendants’ companies, they frequently were contacted again by the Argentinian telemarketers, who often identified themselves as attorneys. The callers reiterated that the consumers had agreed to receive the products and pay for them, and again threatened the consumers if they refused to accept the packages, including threats of lawsuits, expensive court and attorney’s fees, arrest, deportation, and that the consumer’s credit would be ruined.
As a result of these threats, numerous consumers paid an average of $500 for products of nominal value that they in fact had never ordered, fearing the consequences of failing to do so. In order to avoid detection and the filing of consumer complaints, Pardo and Barca changed the names of their companies frequently, and at one point moved the operation from West Palm Beach to Los Angeles, CA. During the course of the conspiracy, Pardo and Barca, through their companies, collected proceeds from the targeted consumers of over $1 million.
Mr. Ferrer commended the investigative efforts of USPIS. This case is being prosecuted by Assistant U.S. Attorney Lauren Jorgensen.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Federal Jury Returns Guilty Verdicts in Wichita Massage Parlor Prostitution CaseRead the Press Release
KANSAS CITY, KAN. - A federal jury today returned guilty verdicts on all counts against a Wichita man in a massage parlor prostitution case, U.S. Attorney Barry Grissom said.
They found defendant Kay Tee, 51, Wichita, Kan., guilty on one count of attempting to entice a person to cross state lines to engage in prostitution, one count of using a telephone in furtherance of prostitution and one count of money laundering.
During trial, prosecutors presented evidence that Tee was arrested May 28, 2015, at the airport in Wichita when he drove there to pick up a person he believed was buying a Wichita massage parlor. In fact, the person Tee had talked with several times on the phone was one of two undercover informants working with federal investigators.
Tee tried to collect fees from both undercover informants – one posing as a buyer and the other as a seller – in return for helping to arrange the sale. He also offered to provide additional services including filing city paperwork and doing taxes for the massage parlor. Tee talked with the agents about the fact employees of the massage parlor would be performing sex services for customers.
Sentencing is set for July 13. He faces a maximum penalty of 20 years and a fine up to $250,000 on the money laundering charge, a maximum penalty of five years and a fine up to $250,000 on the phone charge, and a maximum penalty of 20 years and a fine up to $250,000 on the enticement charge. Grissom commended the Wichita Police Department, Homeland Security Investigations and Assistant U.S. Attorney Jason Hart for their work on the case.
Federal Jury Convicts York Resident of Heroin Trafficking ConspiracyRead the Press Release
HARRISBURG - The United States Attorney's Office for the Middle District Pennsylvania announced today that Andrew Alexander, age 31, York, Pennsylvania, was convicted yesterday of conspiring to trafficking heroin. The three-day trial was held before U.S. District Court Judge Yvette Kane.
According to United States Attorney Peter Smith, the jury returned with the verdict of guilty after approximately three hours of deliberation. The charge carries a maximum punishment of twenty years in prison. The jury found Alexander not guilty of the charge of drug possession with intent to distribute.
The case arose from a search warrant executed on a home in March 2013 by York City Police. During the search, police found 35 grams of crack cocaine, cocaine, and heroin. Most of the heroin – 900 bags – was found floating in a toilet.
Police officers and occupants of the home testified at trial. According to the witnesses, when Alexander heard police at the front door, he ran to the bathroom and tried to flush the heroin down the toilet.
Veronica Rivera and Andrew Gonzalez were also charged with drug trafficking crimes for their role in drugs found in this house. Both pled guilty to conspiracy to distribute drugs and are awaiting sentencing.
Police found, in the pants pocket of Alexander, what was described by witnesses as a “drug owe” sheet. Names on the sheet correspond to subjects prosecuted in the U.S. Attorney’s Office’s recent “Southside” racketeering prosecution, which has resulted in 21 convictions or guilty pleas to date.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the York City Police Department. The case was prosecuted by Assistant United States Attorneys Michael A. Consiglio and Scott Ford.
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.
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Federal Jury Convicts International Drug Trafficker of Failing to Appear for His 1999 SentencingRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury yesterday found Ralph Georg Toni Martin, a/k/a Mirko Dominic Martin, (46, Würzburg, Germany) guilty of failure to appear for his sentencing in a federal drug case, after being released on bail by order of the Court. He faces a maximum penalty of 10 years in federal prison, consecutive to a federal prison sentence of over 8 years that Martin has already been ordered to serve by the Court in his underlying drug case. A sentencing hearing is scheduled for June 22, 2016.
Martin was indicted on December 16, 2015.
According to evidence presented at trial, on August 31, 1998, Martin was arrested by the Drug Enforcement Administration for his role in an international MDMA (Ecstasy) ring that imported MDMA into the United States from Europe, and distributed the drugs in the Orlando area. After Martin’s arrest, the Court ordered his release on bail, with the standard release condition that he appear at any and all future proceedings in his case. On October 15, 1998, at a hearing before the Court, Martin pleaded guilty to conspiracy to possess with intent to distribute MDMA, importation of MDMA, and conspiracy to commit money laundering. He was then advised of a sentencing date of January 20, 1999. Martin did not appear for his sentencing and was a fugitive from justice for over 16 years. During this period, he was able to avoid apprehension by law enforcement, living in California and New Jersey.
On September 18, 2015, Martin was arrested by local law enforcement in Bayonne, New Jersey. Martin has already been sentenced to 97 months for the charges to which he pled guilty in 1998.
This case was investigated by the United States Marshals Service, with assistance from the Orange County Sheriff’s Office and the Bayonne, New Jersey Police Department. It is being prosecuted by Assistant United States Attorneys Andrew C. Searle and Sean Shecter.
Fairmont man pleads guilty to participating in interstate heroin trafficking operationRead the Press Release
CLARKSBURG, WEST VIRGINIA – Daniel Ross Sims, 27, of Fairmont, West Virginia, pled guilty to heroin trafficking today in federal court, admitting that he participated in a Detroit to Morgantown heroin trafficking network, United States Attorney William J. Ihlenfeld, II, announced.
Sims was charged along with thirteen other individuals in February 2016 when a series of three federal indictments interrupted a Detroit, Michigan to Morgantown, West Virginia heroin trafficking scheme. Specifically, Sims sold heroin in late 2014 near West Virginia University in Monongalia County, West Virginia.Sims pled guilty today to “Distribution of Heroin within 1,000 feet of a Protected Location.” He faces between one and forty years in prison and a fine of up to $2,000,000. 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.
Escapee Sentenced to Federal Prison for Austin Bank RobberiesRead the Press Release
In Austin this morning, 38-year-old Brian Anthony Whitford was sentenced to 160 months in federal prison for robbing two Austin banks last year after escaping from a half-way house announced United States Attorney Richard Durbin, Jr., FBI Special Agent in Charge Christopher Combs, San Antonio Division, and United States Marshal Robert Almonte.
In addition to the prison term, United States District Judge Sam Sparks ordered that Whitford pay $3,703.00 restitution to Compass Bank and be placed on supervised release for a period of three years after completing his prison term.
In December 2015, Whitford pleaded guilty to two counts of bank robbery. By pleading guilty, Whitford admitted that on April 13, 2015, he escaped from a halfway house in Del Valle, TX, where he was completing his federal sentence for robbing two Austin banks in April 2010. On the same day of his escape, Whitford attempted to rob a Wells Fargo Bank branch located on Guadalupe Street and then successfully robbed a Compass Bank branch located on South Congress Avenue.
Authorities arrested Whitford on April 15, 2016, in San Antonio.
This joint investigation was conducted by the FBI and the United States Marshals Service with assistance from the Austin and San Antonio Police Departments. Assistant United States Attorney Ashley Hoff and Gregg Sofer prosecuted this case on behalf of the Government.
Eagle Butte Man Charged with Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Gaylen Paul Sampson, a/k/a Thurman Paul Sampson, age 41, was indicted on March 15, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on March 30, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between April 14, 2013, and April 23, 2013, Sampson, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under Federal Law, failed to register and update his registration.
The charge is merely an accusation and Sampson is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Sampson was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Drug Conspiracy Indictment UnsealedRead the Press Release
PHILADELPHIA - Donti Hunter, a/k/a Donte Hunter, a/k/a Pumpkin, a/k/a P, 37, and Jaekhon Cook, a/k/a Jae Khahn Cook, 23, both of Philadelphia, PA, were charged by Indictment, unsealed today, in a drug conspiracy, announced United States Attorney Zane David Memeger. The charges include conspiracy to distribute 28 grams or more of cocaine base, distribution of 28 grams or more of cocaine base, distribution of 28 grams or more of cocaine base within 1,000 feet of a public school, and aiding and abetting, in relation to distribution of more than 28 grams of cocaine base (“crack”). The case also involves the seizure of approximately 21 grams of cocaine base (“crack”), cash and narcotics packaging and paraphernalia from a home on the 800 block of Preston Street in Philadelphia.
If convicted, Hunter faces a mandatory minimum of 10 years in prison with a maximum possible sentence of life, at least 16 years of supervised release, a possible fine, and a $700 special assessment; Cook faces a mandatory minimum of five years in prison with a maximum possible sentence of life, at least eight years of supervised release, a possible fine, and a $700 special assessment.
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department. It is being prosecuted by Assistant United States Attorney Arlene Fisk.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Don't be Fooled by ScammersRead the Press Release
PORTLAND, Ore. - This April Fool’s Day, don’t get fooled by scammers pretending to be from the FBI, Internal Revenue Service (IRS), U.S. Marshals Service, or any other federal agency.
Law enforcement officials are aware of a recent wave of scam attempts. Callers identify themselves as a federal officer and typically instruct people to wire “settlement” money to avoid arrest. These phone calls are fraudulent. Federal agencies do not call or email individuals, threatening them to send money.
There are many versions of this government impersonation scam, but they are all variations of the same tactic. The type of scam has been around for years and targets people across the nation. In 2016 reports have streamed in to law enforcement about attempts to scam residents throughout the country.
If you have been targeted by government-impersonating scammers, the sooner you report it, the better are the chances that law enforcement will be successful in their investigation. Here’s how to report specific scam attempts:
FBI Impersonation
Scams impersonating the FBI have been around for years and continue today—sometimes citing current FBI Director James Comey or a local field office Special Agent in Charge. The FBI first warned the public in 2008 that “the fraudulent e-mails give the appearance of legitimacy due to the usage of pictures of the FBI Director, seal, letterhead, and/or banners.”
FBI Impersonation: Call your local FBI office Portland Division: 503-224-4181
IRS Impersonation
Earlier this month, the Treasury Inspector General for Tax Administration (TIGTA) warned that criminals continue to impersonate IRS agents, resulting in reports of more than one million fraudulent contacts since October 2013 and more than 5,500 victims who have collectively lost approximately $29 million.
IRS Impersonation: Fill out the “IRS Impersonation scam” form on TIGTA’s website: https://www.treasury.gov/tigta/contact_report_scam.shtml
Jacqueline Siegel - (503) 265-3525
TIGTA
U.S. Marshals Impersonation and Jury Service Scam
Earlier this week, the United States Courts warned that scammers are now more sophisticated, using official-sounding call centers and citing designated court hearing times. The U.S. Marshals Service has also received complaints of specific officer names or badge numbers being cited by scammers.
Marshal Impersonation: Call your local U.S. Marshals Service office: In Oregon: 503-326-2209
In addition, all types of fraud schemes and scams can always be reported to the Internet Crime Complaint Center (IC3) at www.ic3.gov. The following information is helpful to report:
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Header information from e-mail messages;
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Identifiers for the perpetrator(e.g., name, Web site, bank account, e-mail addresses);
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Details on how, why, and when you believe you were defrauded;
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Actual and attempted loss amounts;
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Details about the government impersonation; and
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Other relevant information you believe is necessary to support your complaint.
Filing a complaint through IC3’s website allows analysts from the FBI to identify leads and patterns from the hundreds of complaints that are received daily. The sheer volume of complaints allows that information to come into view among disparate pieces, which can lead to stronger cases and help zero in on the major sources of criminal activity. The IC3 then refers the complaints, along with their analyses, to the relevant law enforcement agency for follow-up.
The public can learn about other common scams by visiting http://www.fbi.gov/scams-safety/frauds-from-a-to-z, and learn about ways to reduce their risk of being scammed: http://www.fbi.gov/scams-safety/fraud/internet_fraud.
If you receive a scam phone call, you may also contact the FCC - Federal Communications Commission at the number and website below:
FCC Consumer Center: 1-888-225-5322
FCCWebsite;
https://consumercomplaints.fcc.gov/hc/en-us
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Dominican Man Sentenced to 24 Months for Illegal Reentry After DeportationRead the Press Release
CONCORD, NEW HAMPSHIRE –United States Attorney Emily Gray Rice announced that Onix Abreu, of the Dominican Republic, was sentenced to twenty four months in federal prison, after pleading guilty to illegally reentering the United States after having been previously deported.
On June 15, 2015, the New Hampshire State Police were contacted concerning an individual attempting to obtain a New Hampshire driver’s license at the Salem, New Hampshire office of the New Hampshire Department of Motor Vehicles. The State Police found that the defendant was presenting a birth certificate purportedly issued in Puerto Rico, a social security card, and a driver’s license issued in Pennsylvania to support his application. The State Police sought the assistance of ICE-ERO Deportation Officers. Upon arrival, the ICE-ERO officers questioned the defendant who admitted he was Onix Abreu and that he had been previously deported. Abreu was taken into ICE custody and transported to the Manchester ICE office where a full set of fingerprint impressions were taken. Abreu’s fingerprints matched those contained in the Department of Homeland Security’s Automated Biometric Identification System (IDENT) and to the FBI’s Integrated Automated Fingerprint Identification System (IAFIS) for fingerprints taken from the defendant on the occasion of his previous deportation. Abreu was deported from Alexandria, Louisiana to the Dominican Republic in 2005.
Abreu pled guilty to the charge on September 22, 2015.
The case was investigated by the New Hampshire State Police and the Department of Homeland Security and prosecuted by Assistant U.S. Attorney Alfred Rubega.
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Chief Financial Officer of Furniture Company Pleads Guilty to $18 Million Accounting Fraud Against Bank and Gas City, IndianaRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that NORMAN D’SOUZA, the former chief financial officer and vice president of finance of a New Jersey-based furniture wholesaler and retailer (“Company-1”) and an Indiana-based furniture manufacturer affiliated with Company-1 (“Company-2”), pled guilty today to participating in a fraudulent scheme to obtain $17 million in loans from a commercial bank based in New York, New York (the “Bank”) and $1 million in municipal loans from Gas City, Indiana (the “City”), by making false statements and providing false and fraudulent documents concerning the Companies’ financial condition. D’SOUZA pled guilty before U.S. District Judge Ronnie Abrams.
U.S. Attorney Preet Bharara said: “As he admitted in court today, Norman D’Souza repeatedly misrepresented the financial condition of two companies to deceive a bank and a municipality into lending the companies $18 million dollars, which was never repaid. Together with our partners at the FBI, we will continue to aggressively pursue accounting frauds like this one, which caused millions of dollars in losses.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “The charges that D'Souza pleaded guilty to are an example of how accounting frauds can lead to large financial losses to banks. Financial fraudsters believe their schemes, whether complex or unsophisticated, will persist undetected. However, when the numbers don't add up, the FBI will unravel the scheme and root out who is responsible.”
According to the allegations contained in the Information to which D’SOUZA pled guilty and statements made during D’SOUZA’s plea proceeding:
From in or about 2011 until in or about September 2014, Company-1, through D’SOUZA and others, fraudulently induced the Bank into lending Company-1 millions of dollars by repeatedly making false and misleading statements about Company-1’s financial condition. D’SOUZA falsely inflated Company-1’s sales and accounts receivable on “borrowing base certificates” and in financial statements that D’SOUZA provided to the Bank pursuant to loan agreements. D’SOUZA used those falsely inflated sales and accounts receivable to mislead the Bank about Company-1’s true financial performance, which enabled Company-1 to secure and draw down a $17 million revolving credit facility from the Bank. Company-1 ultimately defaulted on the loans issued by the Bank in September 2014. At that time, the outstanding balance of the loans was approximately $16.99 million.
Separately, in 2012, the City offered loans and other financial incentives to Company-2 in return for Company-2’s agreement to operate a furniture factory in the City and employ local residents. Among other things, D’SOUZA falsely inflated Company-2’s sales figures in financial statements provided to the City. The false financial statements misled the City about Company-2’s true financial performance and enabled Company-2 to secure and draw down more than $1 million in loans from the City. Company-2 ultimately defaulted on the loans issued by the City in September 2014. At that time, the outstanding balance of the loans was $1 million.
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D’SOUZA, 50, of Monmouth Junction, New Jersey, pled guilty to one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison, and one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. D’SOUZA is scheduled to be sentenced on July 22, 2016, before Judge Abrams.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Edward A. Imperatore is in charge of the prosecution.
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Chicago Doctor Indicted for Falsifying Medical Certifications to Help Applicants Bypass U.S. Citizenship Testing RequirementsRead the Press Release
CHICAGO — A Chicago physician and a member of her staff have been indicted for falsifying medical certifications to help applicants bypass tests for U.S. citizenship.
DR. JASMINKA KOSTIC and NIKKI POZDOL fraudulently diagnosed the applicants as physically or mentally impaired, which purportedly rendered them unable to demonstrate the required knowledge of U.S. history and the English language, according to an indictment returned yesterday in U.S. District Court in Chicago. A medical certification of impairment allows individuals to seek a waiver from the civics and English-language tests required for naturalized U.S. citizenship.
Dr. Kostic, 59, of Chicago, and Pozdol, 47, of Chicago, are each charged with one count of knowingly making false statements in a document submitted to the U.S. Citizenship and Immigration Services. Dr. Kostic is also charged with one count of attempted unlawful procurement of citizenship or naturalization. Both charges are punishable by a maximum sentence of ten years in prison.
An arraignment date in federal court in Chicago has not yet been scheduled.
Dr. Kostic is a licensed physician who maintains a medical practice on the North Side of Chicago. Pozdol worked in Dr. Kostic’s office. According to the indictment, Dr. Kostic and Pozdol falsely certified that an applicant was unable to demonstrate the ability to read, write and speak English, and unable to answer questions regarding U.S. history and civics – even in a language understood by the applicant. The certification also provided a false length of time in which a medical examination was allegedly rendered to the applicant, and a false description of the clinical methods used to diagnose the purported impairments, according to the indictment.
Dr. Kostic and Pozdol fraudulently certified the impairment results as true and correct in U.S. Citizenship and Immigration Services Form N-648, titled “Medical Certification for Disability Exceptions,” the indictment states. The false N-648 would have allowed the individual to request a physical or mental impairment exception to the civics and English-language tests required for U.S. citizenship, according to the indictment.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James M. Gibbons, Acting Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant United States Attorney Devlin Su.
Indictment
Cherry Creek Man Charged with Sexual Abuse of a MinorRead the Press Release
United States Attorney Randolph J. Seiler announced that a Cherry Creek, South Dakota, man has been indicted by a federal grand jury for Sexual Abuse of a Minor.
Sylvan Larrabee, age 23, was indicted on March 15, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on March 30, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 30 years in custody and/or a $500,000 fine, up to life of supervised release, and $200 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between March 1, 2015, and May 29, 2015, Larrabee knowingly caused and attempted to cause a minor female to engage in sexual acts.
The charges are merely accusations and Larrabee is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe and the Federal Bureau of Investigation. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Larrabee was released on bond. A trial date has not been set.
Chelsea Man Indicted for Massachusetts and Puerto Rico Cocaine Distribution SchemeRead the Press Release
BOSTON – A Chelsea resident was arrested today in connection with distributing cocaine in Massachusetts and Puerto Rico.
Jose Ramirez-Baez, 39, was indicted on one count of conspiracy to distribute and possess with the intent to distribute 500 grams or more of cocaine, two counts of attempted possession with the intent to distribute 500 grams or more of cocaine, and three counts of money laundering.
According to the indictment, from June 2014 to March 2016, Ramirez-Baez conspired to possess and distribute cocaine in Chelsea, Everett and Puerto Rico. He also allegedly possessed with intent to distribute heroin in Massachusetts in December 2015 and January 2016. According to the indictment, on three occasions between Sept. 28, 2015 and Nov. 12, 2015, Ramirez-Baez deposited a total of $18,700 in an account bearing the name J&Y Landscaping at a Bank of America branch in Medford. Ramirez-Baez deposited the money in an effort to conceal the fact that it was derived from proceeds of narcotics trafficking.
The narcotics charges provide a sentence of no greater than 40 years in prison, a minimum of four years and up to a lifetime of supervised release and a fine of $5 million on each count. The charge of money laundering provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $500,000 on each count. 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; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Manny J. Muriel, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Eric Rosen of Ortiz’s Narcotics and Money Laundering Unit.
The details contained in the Indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Cedar Rapids Man Sentenced to 20 Years for Heroin and Fentanyl Conspiracy Resulting in Four Injuries, Two DeathsRead the Press Release
A man who conspired to distribute heroin and fentanyl that led to multiple overdoses and deaths was sentenced today to 20 years in federal prison.
DeShaun Anderson, age 43, from Cedar Rapids, Iowa, received the prison term after a September 23, 2015 guilty plea to one count of conspiracy to distribute heroin and fentanyl resulting in serious bodily injury and death.
At the September plea hearing, Anderson admitted he conspired with others to distribute heroin and another powerful opiate, fentanyl, in Cedar Rapids. Anderson admitted that, on four occasions, users suffered serious bodily injury as a result of using the substances either he or his co-conspirators distributed. He also admitted that two individuals died as a result of using substances distributed by the co-conspirators. All of the deaths and overdose injuries admitted by Anderson occurred between late February and mid-April of 2015. Court documents reflect that, between January and April 2015, at least four other individuals lost consciousness, but did not suffer serious injuries, after using drugs distributed by Anderson or his co-conspirators.
Anderson was sentenced in Cedar Rapids by United States District Court Judge Leonard T. Strand. Anderson was sentenced to 240 months’ imprisonment. A special assessment of $100 was imposed, and he was ordered to make $12,371 in restitution. He must also serve a 4-year term of supervised release after the prison term. There is no parole in the federal system.
Anderson is being held in the United States Marshals’ custody until he can be transported to a federal prison.
The case was investigated by the Cedar Rapids Police Department and the Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Cedar Rapids Police Department; the Linn County Sheriff's Office; the Marion Police Department; the Iowa City Police Department; and the Iowa Division of Narcotics Enforcement, and prosecuted by Assistant United States Attorney Dan Chatham.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-00046-LRR.
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Carlsbad Man Arrested on Federal Arson ChargeRead the Press Release
ALBUQUERQUE – Travis Hayslip, 36, of Carlsbad, N.M., made his initial appearance today in federal court in Las Cruces, N.M., on a criminal complaint charging him with arson. Hayslip remains in custody pending a preliminary hearing and a detention hearing which have yet to be scheduled.
Hayslip was arrested on March 31, 2016, by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) on a federal arson charge. According to the criminal complaint, on March 9, 2016, a fire was ignited and caused an estimated $2 million in damages to the Quality Inn, a hotel that was under construction at 4106 National Parks Highway in Carlsbad in Eddy County, N.M. The complaint alleges that Hayslip walked through a part of the hotel that was under construction and allegedly lit a piece of debris with a lighter.
If convicted of the crime charged in the criminal complaint, Hayslip faces a maximum of life in federal prison. Charges in criminal complaints are merely accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
Special Agents from the Las Cruces office and the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives and members of ATF’s National Response Team worked jointly with the Carlsbad Fire Department, the Carlsbad Police Department, the Pecos Valley Drug Task Force, the Office of New Mexico Fire Marshal, the Office of the New Mexico State Fire Investigator, and Gilbert Police Department K9 Handler, to follow leads, investigate the fire scene, interview witnesses and suspects, and analyze available surveillance footage. Assistant U.S. Attorney Marisa Lizarraga of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
Canadian Man Arraigned on Drug Charges Following Extradition to United States in Case Involving Largest Seizure of Cocaine in District HistoryRead 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 Harinder Dhaliwal, 44, was arraigned this afternoon before U.S. Magistrate Judge H. Kenneth Schroeder. Dhaliwal was indicted by a federal grand jury in February 2014 along with co-defendants Alvin Randhawa and Gursharan Singh on charges of conspiracy to possess with intent to distribute, and to distribute, cocaine and marijuana, conspiracy to export cocaine, attempt to export cocaine, conspiracy to import marijuana, and possession of cocaine with intent to distribute. The charges carry a mandatory minimum sentence of 10 years in prison, a maximum of life, and a $10,000,000 fine.
Assistant U.S. Attorney Timothy C. Lynch, who is handling the case, stated that according to the indictment, between 2007 and May 2011, Dhaliwal conspired with others to smuggle cocaine into Canada from the United States and marijuana into the United States from Canada via several international bridges located including ones in the Buffalo-Niagara region. Investigators believe that approximately 2,000 kilograms of cocaine were trafficked during the course of the conspiracy.Also charged in the conspiracy were Ravinder Arora, Michael Bagri and Parminder Sidhu. All three defendants have been convicted.
Dhaliwal pleaded not guilty at his arraignment and is being detained pending trial. Extradition proceedings are underway to bring Alvin Randhawa and Gursharan Singh, who are also in Canada, to the Western District of New York.
Today’s arraignment is the result of an investigation by Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, Officers from the United States Customs and Border Protection, under the direction of Rose Hilmey, Acting Director of Field Operations, the Peel Regional Police Department, under the direction of Chief Jennifer Evans, the Canada Border Services Agency, under the direction of Rick Comerford, Regional Director General, Southern Ontario Region and the Toronto Police, under the direction of Chief William Blair.The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Baton Rouge Man Convicted of Possessing with the Intent to Distribute HeroinRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that DARYL D. WALKER, age 42, of Baton Rouge, Louisiana, has pled guilty to possession with intent to distribute heroin in violation of Title 18, United States Code, Section 841, and possession of a sawed-off shotgun in violation of Title 26, United States Code, Section 5861(d), as contained in a Superseding Bill of Information filed in early March.
During a March 29, 2016, hearing, WALKER entered his pleas in Court before Chief U.S. District Judge Brian A. Jackson. According to the stipulated factual basis that was presented to the Court in connection with WALKER’S guilty pleas on March 22, 2015, WALKER obtained 6,000 heroin pills in Baton Rouge, Louisiana. WALKER admitted that he took possession of the heroin pills with the intent to distribute them. WALKER was identified as a potential heroin dealer as part of a substantial heroin-trafficking and money laundering conspiracy investigation conducted by the U.S. Drug Enforcement Tactical Diversion Squad, Internal Revenue Service Criminal Investigation Division, and Bureau of Alcohol, Tobacco, Firearms, and Explosives, with assistance from the Louisiana State Police, East Baton Rouge Parish Sheriff’s Office, Iberville Parish Sheriff’s Office, Baton Rouge Police Department, and the Plaquemine Police Department. DEA aerial surveillance confirmed the delivery of the heroin to WALKER by Aaron Lambert, a co-defendant in the case. In addition to the heroin plea, WALKER also admitted that, at the time of his arrest on November 24, 2015, he possessed a sawed-off shotgun in his Baton Rouge residence.
As a result of his pleas, WALKER is facing a sentence that includes, among other things, a term of up to 50 years imprisonment. At the conclusion of the plea hearing, the Court accepted WALKER’s guilty pleas and remanded him to the custody of the United States Marshal. His sentencing hearing is scheduled for August 4, 2016.
U.S. Attorney Green stated: “My office, together with our federal, state, and local partners, will continue efforts to eliminate drug trafficking and the significant harmful effects on our community resulting from heroin distribution and use. I greatly appreciate the hardworking team of federal, state, parish, and city law enforcement agencies that allowed for the successful identification, arrest, and conviction of a heroin dealer.”
Eric L. Watson, the Assistant Special Agent-in-Charge of the New Orleans Field Division of the U.S. Drug Enforcement Administration stated: “The collaborative efforts of several law enforcement agencies have been successful in dismantling this drug trafficking organization.” These drug trafficking organizations continue to spread poison in our communities making our schools, churches and neighborhoods unsafe. The DEA will continue to attack these organizations using all conventional and unconventional methods to improve our quality of life.
This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana and the U.S. Drug Enforcement Administration. The case is being prosecuted by Assistant United States Attorney Paul L. Pugliese.
Amherst Man Re-Sentenced in Watermark Ponzi SchemeRead 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 Ian Campbell Gent, 73, of Amherst, NY, who was convicted in February 2011 following a jury trial of mail fraud and conspiracy charges in connection with the $6,000,000 Watermark Ponzi scheme, was resentenced to six years in prison by Chief U.S. District Judge William M. Skretny. The defendant appealed his original conviction and sentence. The conviction was upheld but a question was raised about Gent’s sentencing. The defendant was re-sentenced based on the fact that he joined the company a year into the scheme. Gent requested of a “time served” sentence which was rejected by Judge Skretny who instead imposed a 72 month sentence.
Assistant U.S. Attorney Gretchen L. Wylegala, who handled the case, stated that the defendant was hired by Guy Gane, who was convicted and sentenced to 13 years in jail in 2011, to assist him at Watermark M-One Financial Services. The company was shut down in May 2008 as a result of action by the United States Postal Inspection Service and the Securities and Exchange Commission. Gent, along with co-defendant James Lagona, were found guilty following a jury trial of participating in a scheme which began in early 2006, when Gane and his employees began selling "debentures" to trusting clients, claiming to be using the money to invest in waterfront real estate. Gane promised a 10% return after a year to his investors. However, no investments were made, and Gane used new investor funds to pay off the earlier investors. A total of 94 victims suffered losses of over $6,000,000. Lagona was sentenced to nine years in prison.
The sentencing is the culmination of an investigation on the part of Special Agents of the United States Postal Inspection Service, under the direction of Shelly Binkowski, Inspector in Charge, U.S. Postal Inspection Service, Boston Division, and Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle Kitchen, Special Agent in Charge of the New York Field Office.
Albuquerque Man Pleads Guilty to Federal Firearms ChargeRead the Press Release
ALBUQUERQUE – Marcos Barela, 28, of Albuquerque, N.M., pleaded guilty today in federal court to violating the federal firearms laws under a plea agreement with the U.S. Attorney’s Office.
Barela was charged by federal indictment on Oct. 7, 2015, with unlawfully possessing a firearm and ammunition on May 4, 2015, in Bernalillo County, N.M. According to the indictment, Barela was prohibited from possessing firearms or ammunition because of his prior criminal history which includes felony convictions for embezzlement, robbery, conspiracy to commit robbery, possession of a controlled substance, battery on a peace officer, arson and criminal damage to property.
Barela was arrested on a warrant for a state probation violation on May 4, 2015. He was arrested on the federal indictment Jan. 21, 2016, after he was transferred to federal custody from state custody.
During today’s proceedings, Barela pled guilty to the indictment and admitted that on May 4, 2015, he was in possession of a loaded firearm which he handled and placed in in the back pocket of his pants upon his arrest by law enforcement.
At sentencing, Barela faces a statutory maximum penalty of ten years in federal prison. He remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque offices of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the DEA with assistance from the 2nd Judicial District Attorney’s Office and the Probation and Parole Division of the New Mexico Corrections Department.
Assistant U.S. Attorney David M. Walsh is prosecuting the case under a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rate, on a per capita basis, is one of the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, N.M., under this initiative.
Alabama Resident Pleads Guilty for Role in Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Filed More Than 335 False Tax Returns Seeking Over $400,000 in Tax Refunds and Attempted to Threaten Witness
A Montgomery County, Alabama resident pleaded guilty today to one count of wire fraud and one count of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck, Jr. of the Middle District of Alabama.
According to court documents, James Vernon Battle, 30, used stolen personal identification information to prepare and file at least 335 false federal income tax returns for tax years 2013 and 2014 that fraudulently claimed more than $400,000 in tax refunds. Battle obtained the stolen personal identification information from Wendy Huff. Huff worked at two loan companies in Montgomery, Alabama. Battle directed the Internal Revenue Service (IRS) to issue the requested refunds via prepaid debit cards and U.S. Treasury checks. Those prepaid debit cards and checks were sent to various addresses in Montgomery, including Huff’s residence. Battle also brought several U.S. Treasury checks to Huff’s workplace where she used her position to cash them. Huff returned half of the proceeds to Battle and kept the balance for herself.
Battle faces a statutory maximum sentence of 20 years in prison for the wire fraud charge and a mandatory minimum sentence of two years in prison for the aggravated identity theft charge, which will be in addition to any other term of imprisonment he receives. He also faces substantial monetary penalties and restitution.
Wendy Huff previously pleaded guilty and is scheduled to be sentenced on July 14. A sentencing date has not been scheduled for Battle.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation and the U.S. Secret Service, who investigated the case, and Trial Attorneys Michael C. Boteler and Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
31 March 2016
“Sovereign Citizens” Sentenced to Prison for Tax FraudRead the Press Release
Contact Person: Jim May (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles stated that Jefford Henry, Jeffrey Henry, Linda Marie Henry, Makeshia Glover and Bobby McGuire, were sentenced today in federal court in Columbia, South Carolina, for conspiracy to commit wire, mail and bank fraud, a violation of 18 U.S.C. § 1349, wire fraud, a violation of 18 U.S.C. § 1343, mail fraud, a violation of 18 U.S.C. § 1341, and money laundering, a violation of 18 U.S.C. § 1956. United States District Judge Mary Geiger Lewis of Columbia sentenced Jefford Henry to 108 months, Jeffrey Henry to 121 months, Linda Marie Henry to 87 months, Makeshia Glover to 87 months and Bobby McGuire to 46 months.
Evidence presented at the trial established that the defendants are members of the sovereign citizen group, the Moorish Nation. The defendants stole approximate 2 million dollars from the IRS and attempted to steal over 12 million dollars by submitting fraudulent tax returns. Evidence established that once the money was deposited, the defendants shared in the proceeds, buying automobiles and property. The defendants claimed that their belief structure allowed them to steal from the IRS - an argument that the Government refuted and the jury rejected. Because the defendants have continued to file frivolous and nonsensical demands with the court, they were taken into custody immediately after the sentence was pronounced.
The case was investigated by agents of the FBI and IRS CID. Assistant United States Attorneys Jim May and DeWayne Pearson of the Columbia office prosecuted the case.
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“Pill Mill” Distributor Pleads Guilty to Conspiracy to Distribute OxycodoneRead the Press Release
Baltimore, Maryland - Walter Moffett, age 51, of Chestertown, Maryland pleaded guilty today to his participation in a drug conspiracy in connection with the operation of purported pain management clinics that were actually “pill mills.” Eight co-conspirators previously pleaded guilty to the same charge.
The guilty pleas was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Chief Gary Gardner of the Howard County Police Department; Charles County Sheriff Troy Berry; St. Mary’s County Sheriff Tim Cameron; Chief Hank Stawinski of the Prince George’s County Police Department; Calvert County Sheriff Mike Evans; Chief Cathy L. Lanier of the Metropolitan Police Department; Commissioner Kevin Davis of the Baltimore Police Department; Chief James W. Johnson of the Baltimore County Police Department; and Colonel W. Steven Flaherty, Superintendent of the Virginia State Police.
“Pharmaceutical pills can be just as harmful as illegal drugs when they are used without proper medical supervision and without valid medical need,” said U.S. Attorney Rod J. Rosenstein. “Abuse of oxycodone is one of our most significant drug enforcement challenges, and it contributes to the epidemic of heroin overdose deaths.”
“Last year, DEA and its partners combined their resources to identify these drug dealers who cunningly attempted to bypass the Maryland Prescription Drug Monitoring Program (CRISP). The result of these efforts was the dismantling of a drug trafficking organization that was making a toxic profit off of addiction. These “runners” and “distributors” were allowing a countless number of highly addictive prescription opioids to hit the streets of Maryland, Delaware, Washington, DC, and Virginia,” said Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division. “The DEA wants to thank our law enforcement partners for their unwavering commitment to eradicating these drug dealers, who are destroying lives and making enormous profits from the diversion of pain medication.”
According to court documents, “pill mills,” routinely engage in the practice of prescribing and dispensing controlled substances - primarily oxycodone - outside the scope of professional practice and without a legitimate medical purpose. The owners kept the profits from the pill mill operations and from the sales of oxycodone in cash. According to the indictments, the owners recruited “distributors” and “runners” to visit their clinics so that they would profit from the cash fees charged for an office visit. Runners are recruited - usually by a distributor - to enter pill mill clinics with fictitious complaints of pain in order to obtain prescriptions for oxycodone and other controlled substances. Typically, runners filled the prescription and gave the oxycodone tablets they received to the distributor. Runners were typically paid in either cash or oxycodone tablets for their services. The distributors then generally sold the pills for a profit.
According to his plea agreement, since at least 2014, Moffett conspired with other individuals to distribute oxycodone. During the course of the conspiracy, Moffett obtained large quantities of oxycodone 30 mg pills by visiting pain clinics, including PG Wellness Center, in Oxon Hill, Maryland, and A Plus Pain Center, in Washington, DC, and getting prescriptions from the doctors working there. Moffett also worked with others to go to the clinics to obtain prescriptions for oxycodone, also without a medical need. Those individuals then filled the prescriptions at various pharmacies in the Maryland, Delaware, Washington, D.C., and Virginia areas and provided the pills to Moffett and other conspirators. Moffett, who was an addict, took some of the pills himself and sold the remaining pills to co-conspirators for a profit. Those co-conspirators then re-sold the oxycodone pills for up to $30 per pill.
Obtaining and filling the prescriptions for oxycodone required a significant amount of coordination between Moffett and his co-conspirators. For example, they had to ensure that individuals were not caught getting oxycodone prescriptions from multiple clinics at the same time. The Maryland Prescription Drug Monitoring Program (known as CRISP) allowed practitioners to report all narcotic prescriptions so that other practitioners could make sure that patients were not obtaining multiple prescriptions. Moffett and other members of the conspiracy regularly sought to circumvent the limitations imposed by CRISP and other states’ prescription drug monitoring programs. During the course of the conspiracy, investigators overheard Moffett discussing with others conspirators the details of his and others’ visits to the clinics, filling the prescriptions, and distributing the pills.
During Moffett’s participation in the conspiracy at least 340,000 mgs of oxycodone were distributed.
U.S. District Judge Marvin J. Garbis scheduled sentencing for Moffett on August 12, 2016 at 10:00 a.m.
Co-defendants Danielle Silberstein, age 32, of Waldorf; Peter Snyder, age 35, of Ocean City, Maryland; Robert Long, age 35, of Mechanicsville, Maryland; Jamie Davis, age 29, of LaPlata, Maryland; Ronald Tennyson, age 33, of Mechanicsville; Terrell Downing, age 26, of New Carrollton, Maryland; and John Fields, age 67, of Temple Hills, Maryland, previously pleaded guilty to the conspiracy and are awaiting sentencing. Ronald Rust, age 45, of Alexandria, Virginia, also pleaded guilty and was sentenced to two years in prison. Co-defendant Melissa Catlett, age 39, of King George, Virginia passed away before her case was adjudicated.
United States Attorney Rod J. Rosenstein praised the DEA Tactical Diversion Squads from Baltimore and Washington DC., HHS-Office of Inspector General, Howard County Police Department, Charles County Sheriff’s Office, St. Mary’s County Sheriff’s Office, Prince George’s County Police Department, Calvert County Sheriff’s Office, Metropolitan Police Department, Baltimore County Police Department, Baltimore City Police Department, and Virginia State Police for their work in this pharmaceutical investigation. Mr. Rosenstein thanked Assistant United States Attorneys Kenneth S. Clark and Joshua Ferrentino, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Woman Who Took Minor Child She Met During Online X-Box 360 Gaming from Texas to Wisconsin to Engage in Sexual Activity is Sentenced to 10 Years in Federal PrisonRead the Press Release
DALLAS — A woman who pleaded guilty to federal offenses stemming from her taking a minor child, whom she met during online gaming, from Texas to Wisconsin, where she sexually assaulted him, was sentenced today to a lengthy federal prison sentence, announced U.S. Attorney John Parker of the Northern District of Texas.
Jennifer Lynn Dougherty, 34, was sentenced by U.S. District Judge Ed Kinkeade to serve a total of 120 months in federal prison. Dougherty pleaded guilty in December 2015 to an indictment charging two counts of traveling in interstate commerce – from Wisconsin to Texas – with the intent to engage in criminal sexual activity. She also pleaded guilty to one count of transportation of a minor in interstate commerce – from Texas to Wisconsin – with intent to engage in criminal sexual activity. She has been in custody since her arrest in September 2015 on a related federal criminal complaint.
According to the affidavit filed with that complaint, after being notified of a missing minor child by the child’s parents, the Garland Police Department contacted the National Crime Information Center (NCIC) and entered the victim into the database as a missing juvenile. A review of the minor child’s X-Box 360 gaming system by detectives with the Garland Police Department revealed recent chat communications, sexual in nature, with a particular user, later identified as Dougherty.
On Wednesday, September 16, 2015, officers with the Dallas Police Department assigned to the Dallas Love Field airport, contacted NCIC advising they had located an individual matching the child’s description, in the company of an adult female, at the airport. Upon receipt of this information, officers with the Garland Police Department went to the Dallas Love Field airport and retrieved the missing child and adult female.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI and the Garland Police Department investigated the case. Assistant U.S. Attorney Camille Sparks was in charge of the prosecution.
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Winnebago Man Sentenced for Assault with A KnifeRead the Press Release
United States Attorney Deborah R. Gilg announced today that Mitchell Lee DeCora, age 28, of Winnebago, Nebraska was sentenced for his conviction of assault with a dangerous weapon. Senior United States District Court Judge Joseph F. Bataillon sentenced DeCora to 27 months of imprisonment to be followed by three years of supervised release.
On October 1, 2015, DeCora was at a residence on the Winnebago Indian Reservation drinking with the victim and several other persons. DeCora suddenly pulled out a knife and held it to the throat of the victim. Thereafter, DeCora punched the victim in the face and knocked him to the ground causing minor injuries.
This case was investigated by the Bureau of Indian Affairs and the Federal Bureau of Investigation.