Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Friday 12 February 2016
Chief Executive Officer of International Stock Transfer Sentenced to 42 Months in Prison for Operating $3 Million Securities Fraud SchemeRead the Press Release
Wednesday evening, at the federal courthouse in Brooklyn, Cecil Franklin Speight, was sentenced by the Hon. Roslynn R. Mauskopf to 42 months in prison following his guilty plea to conspiracy to commit mail and securities fraud for defrauding 72 investors of $3.3 million by operating an Internet stock scheme. As part of the sentence, Speight was ordered to pay $3.3 million in restitution to the victims of his fraud and $3.3 million in forfeiture.
Speight owned International Stock Transfer (IST), a registered transfer agent with the United States Securities and Exchange Commission (SEC). According to court filings and facts presented at the sentencing hearing, Speight stole at least $3.3 million from victim investors and used the proceeds to pay personal expenses, including purchases at Mercedes Benz, Nordstrom, Netflix and Groupon.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.
“Rather than transferring capital to issuers, the defendant used the investors’ funds as his own. His victims, from the Eastern District of New York and around the world, were conned into buying bogus securities that were not worth the paper they were printed on. We will continue to pursue those who use our markets to enrich themselves through fraud,” stated United States Attorney Capers. Mr. Capers extended his grateful appreciation to the Federal Bureau of Investigation, the agency responsible for leading the government’s investigation, and thanked the Securities and Exchange Commission for its assistance.
IST was founded by Speight in 2004 with offices in Palm Beach, Florida. Speight used cold callers and fake websites to entice victims into investing their money in allegedly high yield securities purportedly associated with IST. Investors were directed to wire funds into purportedly secure attorney escrow accounts. Once there, Speight typically stole the funds for his own use.
This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Jack Dennehy is in charge of the prosecution, with assistance provided by Assistant United States Attorney Brian D. Morris of the Office’s Civil Division, which is responsible for the forfeiture of assets.
The Defendant:
CECIL FRANKLIN SPEIGHT
Age: 54
West Palm Beach, FLE.D.N.Y. Docket No. 14-CR-379
Cheektowaga Man Charged with Aggravated Identity TheftRead 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 Paul Keener, a/k/a Aaron Silverman, a/k/a Paul Robison, a/k/a Scott Walker, 47, of Cheektowaga, NY, was arrested and charged by criminal complaint with aggravated identity theft and using a passport secured by false statement. The charges carry a mandatory minimum penalty of two years and a maximum penalty of 12 years in prison.
Assistant U.S. Attorney Scott S. Allen, Jr., who is handling the case, stated that according to the complaint, in 1996, the defendant escaped from state custody in Colorado. Soon thereafter, Keener purchased false identification documents associated with a confirmed missing person who has been missing from his family in Virginia since 1993. The defendant purchased the documents from a seller on Craigslist for $300.00.
From 1995 to the present, Keener maintained several aliases supported by false identification documents including U.S. passports and driver’s licenses. Law enforcement officials learned of the defendant’s presence in Western New York in January 2016. Using his aliases and false identification documents, Keener has crossed into Canada, registered to vote, applied for and received federal financial student aid, and has obtained Social Security cards.
The defendant is being held following a detention hearing this morning before U.S. Magistrate Judge Jeremiah J. McCarthy.
The complaint is the result of an investigation by the Diplomatic Security Service, U.S. Department of State, under the direction of William Ferrari, the Social Security Administration, Office of Inspector General, under the direction of Edward J. Ryan, and the United States Marshals Service, under the direction Charles Salina.
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.
California Man Sentenced to 70 Months on Gun and Drug ChargesRead the Press Release
BOISE – Ronald Eugene Bohm, 50, from California, was sentenced yesterday to 70 months in prison followed by four years of supervised release for possessing methamphetamine with the intent to distribute and possessing a machinegun, U.S. Attorney Wendy J. Olson announced. Bohm was indicted by a federal grand jury on August 11, 2015 and entered guilty pleas on December 2, 2015.
According to court records, on July 26, 2015, Meridian Police Officers responded to Bohm’s residence in Meridian, Idaho after receiving complaints about parking violations. At the residence, officers contacted Bohm’s wife and co-defendant, Constance Bohm, and noticed the smell of marijuana from the house. Constance Bohm admitted to the officers that she had marijuana. At the same time, Bohm arrived at the residence with several individuals associated with the Henchman motorcycle club. A drug detection dog was utilized and alerted on Bohm’s saddle bag on his motorcycle. Officers found marijuana and firearms in the saddle bag. Officers then obtained a search warrant from the court to search the residence. Inside the residence, officers found approximately 63 grams of methamphetamine and 176.2 grams of marijuana. Officers also located a digital scale in the master bedroom with amphetamine residue on it and numerous firearms and firearm components including a drop in auto sear, which is a combination of parts designed to convert a semiautomatic firearm into a fully automatic machine gun. Other firearms located in the residence included two AR-15 semiautomatic rifles, five AR-15 receivers, a .22 caliber rifle with a shortened barrel, and a 7.62X54 millimeter rifle with a shortened barrel. None of the AR15 guns had a make, model, or serial number on them. Bohm was the President of the Idaho chapter of the Henchmen Motorcycle Club. As a condition of Bohm’s supervised release he was ordered not to have any contact with individuals identified by local law enforcement agencies as documented gang members nor can he possess any items representing or showing any affiliation with gangs.
The co-defendant, Constance Bohm, is scheduled for sentencing on March 29, 2016.
This case was investigated by the Meridian Police Department and the Treasure Valley Metro Violent Crime Task Force. The Treasure Valley Metro Violent Crime Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole.
The case was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Cahokia Man Sentenced for Conspiracy to Distribute Cocaine and Interstate Travel in Support of RacketeeringRead the Press Release
On February 11, 2016, Ronald Artis, 26, of Cahokia, Illinois, was sentenced in federal court in East St. Louis after having previously pled guilty to Conspiracy to Distribute Controlled Substances and Interstate Travel In Support of Racketeering, James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today. Artis was sentenced to 60 months in federal prison and 4 years of supervised release. In addition, Artis was ordered to pay a $200 fine and a $200 special assessment.
Evidence in support of this prosecution was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Agencies participating in this case include the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Drug Enforcement Administration, the Internal Revenue Service, Criminal Investigations, the United States Marshals Service, the Illinois State Police, and the East St. Louis Police Department. This case was prosecuted by Assistant United States Attorney Donald S. Boyce.
Buffalo Man Sentenced on Drug ChargeRead 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 Terrance Baylor, 42, of Buffalo, NY, who was convicted of possession with intent to distribute crack cocaine and being a felon in possession of a firearm, was sentenced to 60 months in prison by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorney George C. Burgasser, who handled the case, stated that on February 8, 2012, Buffalo Police officers executed a search warrant at the defendant’s Box Street residence. Officers seized 116 grams of crack cocaine and recovered two firearms. As a previously convicted felon, Baylor is prohibited from legally possessing firearms.
The sentencing is the culmination of an investigation by the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Bristol, Tennessee Man Sentenced for Role in Meth ConspiracyRead the Press Release
ABINGDON, VIRGINIA – A Bristol, Tennessee man, previously convicted of methamphetamine charges, was sentenced today in the United States District Court for the Western District of Virginia in Abingdon.
Roy Clyde Newton III, 52, of Bristol, Tenn., pled guilty in October 2015 to one count of conspiring to possess with the intent to distribute methamphetamine. Today in District Court, Newton was sentenced to 37 months of federal incarceration to be followed by three years of supervised release.
“This case is an example of how law enforcement has pushed back against the recent resurgence of methamphetamine cases in the Western District of Virginia,” United States Attorney John P. Fishwick Jr. said today. “We will continue to prosecute those who manufacture and distribute this dangerous substance.”
The investigation of the case was conducted by the Bristol Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Bristol Office of the Drug Enforcement Administration, the Virginia State Police, the Sheriff's Offices of Washington County, Russell County, Tazewell County, and Smyth County, the Commonwealth's Attorney's Offices of Russell County and Tazewell County and the police departments of Abingdon and Lebanon. Special Assistant United States Attorney Kevin Jayne prosecuted the case for the United States.
Asheville, N.C. Man Sentenced to More Than 13 Years in Prison for Armed Robbery of Fast Food RestaurantRead the Press Release
ASHEVILLE, N.C. – On Thursday, February 11, 2016, U.S. District Judge Martin Reidinger sentenced Gordie Leroy Penson, 38, of Asheville, to 161 months in prison for the August 2014 armed robbery of a fast food restaurant, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Judge Reidinger also sentenced Penson to five years of supervised release.
U.S. Attorney Rose is joined in making today’s announcement by C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Tammy Hooper of the Asheville Police Department.
According to filed court documents, evidence presented at Penson’s trial and yesterday’s sentencing hearing, on August 2, 2014, Penson robbed at gunpoint a Bojangle’s restaurant located on Merrimon Avenue in Asheville. Court records show that Penson entered the restaurant at approximately 9:55 in the evening and proceeded to demand money, first from the drive-thru cashier, threatening to shoot her if she did not open the cash drawer. According to court records, Penson then escorted the manager to the store’s safe and fired his gun once when the manager was unable to open the safe on the first attempt. According to court records, Penson fled the restaurant with $1,019 in cash.
A federal jury convicted Penson of one count of Hobbs Act Robbery, one count of unlawful use and carry of a firearm in furtherance of a crime of violence and one count of possession of a firearm by a convicted felon. According to trial evidence and yesterday’s sentencing hearing, Penson has prior convictions in North Carolina for robbery with a dangerous weapon.
Penson has been in federal custody since April 2015. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by ATF and the Asheville Police Department. The case was prosecuted by Assistant United States Attorney John Pritchard of the U.S. Attorney’s Office in Asheville.
Armed Heroin Trafficker Sentenced to More Than 7 Years in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that MIGUEL DIAZ, also known as “Smooth,” 35, of Hartford, was sentenced yesterday by U.S. District Judge Vanessa L. Bryant in Hartford to 90 months of imprisonment, followed by three years of supervised release, for possessing heroin with the intent to distribute and possessing a firearm in furtherance of a drug trafficking offense.
According to court documents and statements made in court, in May 2015, DIAZ led Hartford police on a high-speed pursuit, during which he threw a bag containing more than 300 wax paper sleeves of heroin from his car. DIAZ drove through lanes of opposing traffic, maneuvered recklessly and nearly collided with several cars, forcing officers to stop the pursuit. Officers apprehended DIAZ a short time later at his Hartford residence. A search of DIAZ’s person revealed approximately $2,400 in cash, and a search of his apartment yielded additional heroin, packaging material, a loaded 9mm Hi-Point Model C-9 handgun and 9mm ammunition.
DIAZ has been detained since his arrest. He pleaded guilty on November 18, 2015.
DIAZ has 16 prior convictions, including convictions for weapons and drug offenses.
This case was investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department. The FBI Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction.
This case was prosecuted by Assistant U.S. Attorneys Michael J. Gustafson and Gabriel J. Vidoni.
Arlington, Texas, Businessman Sentenced to Statutory Maximum of 36 Months in Federal Prison and Fined $250,000 for Omitting Nearly $5 MIllion in Income on Filed Tax ReturnRead the Press Release
FORT WORTH, Texas — An Arlington, Texas, businessman has been sentenced to the statutory maximum sentence following his guilty plea in August 2015 to a federal felony tax offense, announced U.S. Attorney John Parker of the Northern District of Texas.
Avan Nguyen, according to the factual resume filed in the case, operates Nava Material Goods, Inc., a wholesale business for beauty and/or nail salon products in Arlington, Texas. He was sentenced this week by U.S. District Judge John McBryde to the statutory maximum sentence of three years in federal prison, and he was also ordered to pay a $250,000 fine. He must surrender to the Bureau of Prisons on March 1, 2016.
Nguyen pleaded guilty to an Information charging aiding and assisting in the preparation and presentation of a false and fraudulent return, statement or other document. According to the plea agreement filed in the case, Nguyen agreed to forfeit $1.1 million that the government seized from his bank accounts and business in 2013. As noted in court during the sentencing hearing, Nguyen made full restitution of approximately $337,864 to the IRS prior to sentencing.
According to the factual resume filed in the case, in 2012, Nguyen aided and assisted in the preparation and presentation of Nava Material Good Inc.’s U.S. Corporate Income Tax Return (Form 1120) for 2011. When filing that return, Nguyen aided and assisted another by willfully omitting approximately $4,910,697.60 of income on the return.
IRS Criminal Investigation was in charge of the investigation. Assistant U.S. Attorney Brian Poe prosecuted the case.
# # #
An editorial from U.S. Attorney William Hochul regarding young people and technology for your considerationRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051Another week has passed, and three more defendants have been charged by this Office with producing or receiving child pornography. A 14 year old girl murdered in Virginia. These and other cases share the common trait of alleged predators luring and manipulating children over social media.
It’s common to see teenagers attached to their cell phones throughout the day. Everyone knows that today’s device is a powerful internet access tool capable of connecting users to others throughout the world. Most seriously underestimate the frequency with which their children are exposed to sexually explicit texts and photographs.
According to one university study, 20 to 30% of teens will send or receive sexually explicit texts. 70% of teen-age girls will be asked to send a naked picture. As our investigations demonstrate, such requests come from both peers and predators seeking contact with vulnerable youth.
Neither denial nor ignorance provide any protection for children caught-up in a perfect storm of technology and vulnerability. Rather, safety lies in constant parent/child communication, and adult education and familiarity with computer applications, teen-age realities, and even language.
As internet dangers have multiplied, parents today must be as conversant in discussing “bytes and bits” as they are in discussing the “birds and bees.” Kids are warned to avoid strangers, but they also need to know that strangers lurk online and online messages and photographs can be preserved forever. Not hitting “send” is the best defense against future regret.
I urge parents to take full advantage of parental controls to monitor usage, media activity, and who your child is contacting. Learn to detect vault applications and icons used to conceal explicit videos and photographs.
Finally, know the common social media sites and terminology used. Some are shocked when they discover what the code words and symbols being used by their children really mean.
Being a teenager can be exciting and difficult. Today’s technology and social media enhance both realities. By becoming a technology expert, parents and adults help children navigate these challenges before our Office gets involved.
Alleged Con Man Charged with Impersonating a Psychiatrist and Prescribing Medications to Dozens of Patients in ChicagoRead the Press Release
CHICAGO — An alleged con man has been charged in federal court with holding himself out as a psychiatrist and fraudulently prescribing medications to a nine-year-old child and dozens of others.
SCOTT C. REDMAN, 36, used the identity of an Illinois physician to see patients and prescribe medications at a clinic on Chicago’s Near North Side, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. The real physician is a resident at a different Illinois medical facility.
Redman used the physician’s name to prescribe 71 prescriptions to 44 individuals from Dec. 10, 2015, to Jan. 30, 2016, according to the complaint. The purported patients included a nine-year-old child, who was prescribed a 30-day supply of Vyvanse, which treats attention deficit hyperactivity disorder, the complaint states.
Redman, formerly of Hammond, Ind., was arrested Wednesday. The complaint charges him with intentionally using a fictitious registration number in the name of another person to distribute and dispense a controlled substance. The charge is punishable by up to four years in prison.
Redman appeared yesterday before U.S. Magistrate Judge Jeffrey Cole and was ordered held in federal custody. A detention hearing is scheduled for Feb. 16, 2016, at 10:00 a.m.
According to the complaint, Redman maintained office hours at the clinic to treat his supposed patients. A purported profile of Redman on the clinic’s website contained the name of the real physician, alongside a photograph of Redman and fraudulent biographical and educational information, according to the complaint.
In addition to the Vyvanse, Redman prescribed other controlled substances, including Adderall, Clonazepam and Zolpidem Tartrate, the complaint states.
The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Katie M. Durick.
Abilene Man Sentenced to 121 Months in Federal Prison for Possessing Prepubescent Child PornographyRead the Press Release
ABILENE, Texas — Michael Cleo Ivy, 37, of Abilene, Texas, was sentenced on Thursday, February 11, by Chief U.S. District Judge Jorge A. Solis to 121 months in federal prison, following his guilty plea in July 2015 to an indictment charging one count of possession of prepubescent child pornography, announced U.S. Attorney John Parker of the Northern District of Texas.
Following sentencing, Judge Solis remanded Ivy, who had been on bond, to the custody of the U.S. Marshal.
According to documents filed in his case, Ivy used the computer at his residence to search for images and videos of child pornography, and in the course of those searches, he also located, downloaded, and viewed numerous images and videos constituting child pornography. Some of those images involved prepubescent minors.
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.”
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Abilene Police Department investigated the case. Assistant U.S. Attorney Steven M. Sucsy was in charge of the prosecution.
# # #
Thursday 11 February 2016
Wilson Man Sentenced for Heroin and Crack Conspiracy and Firearm OffenseRead the Press Release
GREENVILLE – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court yesterday Senior United States District Judge Malcolm J. Howard, sentenced CLAUDE KING, 42, of Wilson, North Carolina, to 171 months’ imprisonment followed by 5 years’ supervised release.
September 14, 2015, KING pleaded guilty to Conspiracy to Distribute and Possess with Intent to Distribute a Quantity of Heroin and Cocaine Base (Crack) and Possession of a Firearm in Furtherance of a Drug Trafficking Offense.
The investigation of KING began in 2013 for heroin and crack distribution. In September 2013, KING was arrested as he returned from New York with 50 grams of heroin. A search warrant was executed and a firearm was found at his home.
KING is responsible for the distribution of kilogram quantities of heroin in Wilson, Pitt, Beaufort, and Dare counties.
The criminal investigation of this case was conducted by the Drug Enforcement Administration, Wilson Police Department, Greenville Police Department, Beaufort County Sheriff’s Office, and Dare County Sheriff’s Office. Assistant United States Attorney Jennifer Wells handled the prosecution on behalf of the Eastern District of North Carolina.
Veterans Affairs Official Sentenced for Accepting Gifts in Relation to His Job DutiesRead the Press Release
SACRAMENTO, Calif. —Anthony Castaneda, 45, of Oakdale in Stanislaus County, was sentenced today by Judge Morrison C. England Jr. to serve five months of house arrest and two years of probation for receipt of a gratuity by a public official, United States Attorney Benjamin B. Wagner announced.
According to court documents, while working as a contracting official at the Department of Veterans Affairs, Castaneda was in a position to influence the award of construction contracts at VA facilities, including the VA hospital at the former Mather Field in Sacramento. In 2010, Castaneda received from a construction contractor a prepaid vacation package at a theme park worth approximately $2,250. Castaneda and his family traveled to the theme park for five days in October 2010. At the time that he accepted that gift, Castaneda was in a position to influence the award of construction contracts by making recommendations about which contractors should be given VA business. Court records also show that Castaneda received a second vacation package from the same contractor, worth approximately $1,440, in 2008.
In addition to his period of house arrest, Castaneda was ordered to forfeit the value of the 2010 vacation package and to pay a $2,000 fine.
The contractor in question has been charged separately in federal court in San Jose: United States v. Herrera, case number 5:14-cr-219. He pleaded guilty and on December 16, 2015, was sentenced to three years’ probation.
This case was the product of an investigation by the Veterans Affairs Office of Inspector General and the Federal Bureau of Investigation. Assistant United States Attorney Matthew G. Morris prosecuted the case.
United States Announces Approximately $10 Million Settlement with Four Physicians and Two Compounding PharmaciesRead the Press Release
Jacksonville, FL – United States Attorney A. Lee Bentley, III announces that two compounding pharmacies - WELLHealth and Topical Specialists, as well as four physicians - Manish Bansal, Mehul Parekh, Marisol Arcila, and Syed Asad, have agreed to pay the government a total of approximately $10 million to resolve allegations involving TRICARE, the military’s healthcare program.
The United States contends that Topical Specialists was created by the pharmacist for WELLHealth and four physicians - Bansal, Parekh, Arcila, and Asad. It was meant to be a standalone pharmacy, but was unable to obtain separate contracts with the government healthcare programs. Instead, Topical Specialists simply sent all of its prescriptions to WELLHealth, which in turn submitted these prescriptions to the federal government.
The United States alleges that Bansal, Parekh, Arcila, and Asad had an incentive to refer prescriptions to their pharmacy, as steering costly prescriptions to Topical Specialists resulted in lucrative revenue streams for the doctors. The United States contends that these four physicians wrote hundreds of prescriptions for pain and scar creams. After speaking with patients, the government contends that these prescriptions were often not used by patients, despite the tremendous cost to the government. While the pharmacies billed the federal government tens of thousands of dollars for these creams, the cost to actually compound them was often 4-5% of the submitted cost. Records reviewed by the government showed that the pharmacy was making up to 90% profit for each cream submitted to the TRICARE program. This profit was then disbursed to the doctors who wrote the prescriptions. In some cases, the four physicians recruited other doctors to write prescriptions – promising to share revenue with them. The government alleges that in some cases, the doctors who wrote prescriptions to Topical Specialists and WELLHealth received up to 40% of the reimbursement.
At one point, certain defendants suggested that payments to physicians for these prescriptions were legitimate because these physicians were engaged in a “research study” to monitor the clinical effectiveness of these creams. No patient contacted by the government knew that they were enrolled in a research study, and no research findings were ever published.
Roughly 40% of the prescriptions submitted by WELLHealth and Topical Specialists were written by these four physicians. Bansal is a cardiologist at Baptist Hospital. Arcila is a pain management physician at Premier Spine & Pain Center. Asad is a neurologist at Universal Neurological Care. Parekh is a general practice physician at Baptist Hospital. All four received hundreds of thousands of dollars in reimbursements.
“The United States Attorney’s Office is committed to fighting healthcare fraud wherever it may occur,” said U.S. Attorney Bentley. “Those who defraud the TRICARE program are stealing funds that should be used to provide quality healthcare to military families. We will continue to use every weapon at our disposal to stamp out this fraud and recover misappropriated funds.”
Today’s settlement involved false claims submitted to the TRICARE program. This case was developed as part of a broader effort to identify and target unscrupulous compounding pharmacies. The United States Attorney’s Office for the Middle District of Florida has been focusing efforts on pharmacies that abuse the TRICARE program and defraud the government. Since March 2015, the district has collected more than $50 million in recoveries related to compounding pharmacies.
"The Defense Criminal Investigative Service is committed to protecting the integrity of TRICARE, the U.S. military health care program, so that it continues to provide quality medical care to America's Warfighters and their families, while ensuring that health care facilities and providers comply with Federal laws and regulations," said John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service - Southeast Field Office. "Through joint investigations with our law enforcement partners, DCIS will fully pursue both civil remedies to recover taxpayer dollars and criminal prosecutions to bring violators to justice."
"I applaud the Department of Justice and the U.S. Attorney for the Middle District of Florida for holding these pharmacies and physicians accountable for their actions," said Vice Admiral Raquel Bono, director of the Defense Health Agency. "Their egregious actions targeted American service members, veterans and their families, and in many cases offered them products with little or no substantiated evidence that they would improve health outcomes. The Defense Health Agency will continue working closely with the Justice Department and other state and federal agencies to investigate all those who participated in these nefarious, fraudulent practices."
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered more than $27.1 billion through False Claims Act cases, with more than $17.1 billion of that amount recovered in cases involving fraud against federal health care programs.
Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, including the conduct described in this case, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
These cases were investigated by Health and Human Services Office of Inspector General (HHS/OIG), Office of Personnel Management (OPM), the Department of Veterans Affairs Office of Inspector General (VA/OIG), Defense Criminal Investigative Services (DCIS), and the Federal Bureau of Investigation (FBI) and were prosecuted by Assistant United States Attorney Jason Mehta.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Un Hombre de Elk Grove Arrestado y Acusado de Defraudar Inmigrantes Indocumentados en una Estafa de Adopción de AdultosRead the Press Release
SACRAMENTO, Calif. — Helaman Hansen, de 63 años de edad, y residente de Elk Grove fue arrestado hoy después de que un gran jurado federal dictara una acusación formal de 13 cargos inculpándolo de conspirar para cometer fraude por correo y fraude por telegrama, 11 cargos de fraude por correo y uno cargo de fraude por telegrama para operar un programa de adopción de adultos fraudulento que se dirigía a personas indocumentadas, ha anunciado el Procurador Federal Benjamín B. Wagner.
Según los documentos del tribunal, entre los meses de octubre de 2012 y enero de 2016, Hansen y otras personas utilizaron varias entidades como la organización Americans Helping America (AHA) para vender afiliaciones a miembros de comunidades de inmigrantes para lo que él llamaba un “Programa de Migración.” Un distintivo central del programa era el reclamo fraudulento de que los inmigrantes adultos podrían conseguir la ciudadanía americana si eran legalmente adoptados por un ciudadano americano y después de cumplir con una lista de cometidos adicionales. Al principio, las afiliaciones eran vendidas por una cuota anual de $150 dólares, pero esa cuota aumentó gradualmente hasta que eventualmente alcanzó la elevada cifra de $10,000 dólares.
Según la acusación formal, ni una sola persona obtuvo la ciudadanía aunque algunas de las víctimas habían completado la fase de adopción del “Programa de Migración.” Tan pronto como octubre de 2012, Hansen había sido informado por los Servicios de Ciudadanía e Inmigración que aquellas personas indocumentadas adoptadas después de cumplir los 16 años no podrían obtener la ciudadanía de la manera en la que lo estaba promoviendo Hansen. A pesar de ello, Hansen y sus co-conspiradores indujeron a aproximadamente 500 víctimas a pagar más de $500,000 dólares en cuotas para hacerse socios del programa fraudulento.
Este caso es el producto de una investigación llevada a cabo por la Oficina Federal de Investigaciones (FBI) y de las Investigaciones para la Seguridad Nacional (HSI) del Servicio del Orden Público de Inmigración y Aduanas de los Estados Unidos (ICE). El Procurador Federal Auxiliar André M. Espinosa está procesando el caso.
Si es declarado culpable, Hansen se enfrentaría a una pena máxima establecida por la ley de 20 años de prisión y una multa de $250,000 dólares. No obstante, cualquier sentencia sería determinada según la discreción del tribunal después de considerar cualquier factor establecido por la ley aplicable y las Normas para Sentenciar Federales. Los cargos son solo alegaciones; el demandado es presunto inocente hasta y a menos de que sea encontrado culpable sin duda razonable.
Se urge a las víctimas a llamar al FBI al 916-977-2479.
U.S. Attorney's Office issues warning about IRS phone scamsRead the Press Release
CHARLESTON, W.Va. – Several West Virginians have contacted the United States Attorney’s Office about robocalls fraudulently claiming to be from the Internal Revenue Service (IRS) and demanding immediate payment, announced Acting United States Attorney Carol Casto. These calls are not from the IRS, and are merely another scam carried out by criminals. The robocalls often contain aggressive language, insist on payment within an hour of the call, and threaten punishment if back taxes are not paid.
“These IRS phone scams can happen any time, not just around tax season, and people need to be wary. Criminals will use any trick to swindle honest people out of their hard-earned money, including phone calls to the home.” said Acting United States Attorney Casto. “We will continue working with the IRS to hold these criminals accountable and help West Virginians protect their personal and financial information.”
Be aware that many of these IRS phone scams use intimidating or bullying language to get payment for back taxes. The IRS will not contact you to demand immediate payment, and will not call you prior to sending a bill by mail. The IRS will also not demand that you pay your taxes a certain way or ask for credit card numbers over the phone. Most importantly, a legitimate call from the IRS will not threaten to have police arrest you for not paying.
Remember, if you think you owe taxes, call the IRS at 800-829-1040 and IRS workers can provide assistance. If you get one of these scam phone calls, you can contact the Treasury Inspector General for Tax Administration to report the call at 800-366-4484 or online at www.treasury.gov/tigta/contact_report_scam.shtml.
-
Follow us on Twitter: SDWVNews
-
Two Men Sentenced in Bradford County “Bath Salts” CasesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Kurt Smith, age 50, formerly of Wyalusing, Pennsylvania, was sentenced today and Patrick Russell, age 50, of LeRaysville, Pennsylvania, was sentenced February 10, 2016, by U.S. District Court Judge Edwin M. Kosik in Scranton, for drug related offenses.
According to United States Attorney Peter Smith, Judge Kosik sentenced Smith to 24 months imprisonment for conspiracy to distribute and possession with intent to distribute Alpha-PVP, commonly known as “bath salts.” Smith imported two kilograms of the substance from sources of supply in China by placing orders over the internet. The bath salts were then distributed by Smith and other individuals in Bradford County. Smith has since moved to Kentucky.
Smith was initially charged in a Criminal Information on August 25, 2015 and pled guilty on September 8, 2015.
Russell was sentenced to 31 months imprisonment for his involvement in the conspiracy to distribute and possession with intent to distribute “bath salts.” Russell was directly involved in the importation and distribution of at least 500 grams of bath salts.
Russell was initially charged in an Indictment on December 10, 2013 and pled guilty on April 14, 2015.
The cases were investigated by Drug Enforcement Administration (DEA), the Pennsylvania State Police, and the Athens Borough Police Department and were prosecuted by Assistant U.S. Attorney Todd K. Hinkley.
# # #
Two Indicted in Fresno for Drugs and Firearms OffensesRead the Press Release
FRESNO, Calif. — A federal grand jury returned two indictments today charging two individuals with drug trafficking offenses and one with an additional firearms charge, United States Attorney Benjamin B. Wagner announced.
In the first indictment, Michael Paul Lopez, 32, of Fresno, was charged with with being a felon in possession of a firearm and ammunition and with possession of a controlled substance with the intent to distribute. According to court documents, on January 12, 2016, Lopez, a previously convicted felon, was in possession of a Raven Arms MP .25-caliber handgun that was loaded with .25-caliber ammunition. He was also in possession of methamphetamine.
This case is the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. It was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat gun and gang crime. At the core of PSN is increased federal prosecution to incapacitate chronic violent offenders as well as to communicate a credible deterrent threat to potential gun offenders.
In the second indictment, the federal grand jury returned a two-count indictment against Ivan Vizcarra, 28, of Los Angeles, charging him with federal drug trafficking offenses. According to court documents, on November 19, 2015, Vizcarra was arrested by the Fresno Police Department after he attempted to deliver 12 pounds of methamphetamine.
This case is the product of an investigation by the Drug Enforcement Administration and the Fresno Police Department. Assistant United States Attorney Daniel J. Griffin is prosecuting both cases.
If convicted, both defendants face a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Twelve Methamphetamine Traffickers Sentenced to PrisonRead the Press Release
STATESVILLE, N.C. – U.S. District Judge Richard L. Voorhees handed down prison terms ranging from 21 to 120 months to 12 methamphetamine traffickers, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE’s Homeland Security Investigations (HSI) in Atlanta and the Carolinas; Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; and C. J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division
The 12 defendants sentenced today and yesterday in U.S. District Court in Statesville are:
-
Chang Cheng Vang, 20, of Hickory, NC, was sentenced to 120 months, followed by 5 years of supervised release. (5:15-cr-38)
-
Christopher Dwayne Helton, 31, of Connelly Springs, NC, was sentenced to 120 months, followed by 5 years of supervised release. (5:15-cr-25)
-
Shannon Marie Williams Greene, 37, of Hickory, NC, was sentenced to 105 months, followed by 3 years of supervised release. (5:15-cr-49)
-
Moises Valdovinos, 33, of Mexico, was sentenced to 97 months, followed by 5 years of supervised release. (5:14-cr-66)
-
Adrian Demarcus Perkins, 21, of Montezuma, GA, was sentenced to 97 months, followed by 3 years of supervised release. (5:15-cr-53)
-
Juan Jesus Santellan, 24, of Hickory, NC, was sentenced to 78 months, followed by 3 years of supervised release. (5:15-cr-47)
-
Bobby James Testerman, 31, of Jefferson, NC, was sentenced to 60 months, followed by 4 years of supervised release. (5:15-cr-42)
-
Jamie Martinez-Benitez, 27 of Mexico, was sentenced to 60 months, followed by 4 years of supervised release. (5:15-cr-62)
-
Travis Layden Bare, 39, of West Jefferson, was sentenced to 60 months, followed by 4 years of supervised release. (5:15-cr-52)
-
Anthony Ray Mauney, 30, of Maiden, NC, was sentenced to 51 months, followed by 5 years of supervised release. (5:15-cr-40)
-
Jose Luis Zavala, 20, of Hickory, NC, was sentenced to 46 months, followed by 3 years of supervised release. (5:14-cr-60)
-
Gerardo Espino Albarran, 25, of Mexico, was sentenced to 21 months, followed by 1 year of supervised release. (5:14-cr-66)
The sentencings are the result of two parallel and coordinated Organized Crime Drug Enforcement Task Force (OCDETF) investigations, codenamed “Dixie Crystal” and “Lay Low,” handled by HSI, DEA, and ATF, with the assistance of the North Carolina State Bureau of Investigation, North Carolina State Highway Patrol, Alexander County Sheriff’s Office, Alleghany County Sheriff’s Office, Ashe County Sheriff’s Office, Boone Police Department, Caldwell County Sheriff’s Office, Catawba County Sheriff’s Office, Hickory Police Department, Iredell County Sheriff’s Office, Lenoir Police Department, Lincoln County Sheriff’s Office, Mooresville Police Department, Pineville Police Department, Statesville Police Department, Burke County Task Force, and other law enforcement agencies throughout North Carolina and Texas, Georgia, and Tennessee.
According to court documents, to date, more than 80 individuals have been convicted as a result of the two related investigations. Court records show that the drug trafficking organizations involved have trafficked methamphetamine worth millions of dollars. Over the course of the investigation, law enforcement seized more than 10 kilograms of crystal methamphetamine, $100,000 in U.S. currency and other assets, and numerous firearms.
OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
In making today’s announcement U.S. Attorney Rose thanked all the law enforcement agencies for their investigative efforts. The prosecution is being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.
-
Three brothers charged with operating $4 million food stamp fraud conspiracy from their Cleveland storeRead the Press Release
A six-count indictment was filed in federal court charging three brothers for their roles in a $4 million food stamp fraud conspiracy operated through their Cleveland business, law enforcement officials said.
Mohammad H. Mohammad, 52 of Parma; Omar H. Mohammad, 49, of Parma, and Rashid H. Mohammad, 53, of Strongsville, are each charged with one count of conspiracy to commit food stamp fraud, one count of food stamp fraud and one count of unlawful redemption of food stamps. Mohammad Mohammad also faces three additional counts of engaging in financial transactions with proceeds from specified unlawful activity.
The Mohammads and others conspired to commit more than $4 million in food stamp fraud through the use of their business, Holyland Imported Goods, located at 11717 Lorain Avenue. This took place between 2003 and 2015, according to the indictment.
The investigation revealed the defendants and others used their business to exchange customer food stamps for cash and other unauthorized items. The defendants also engaged in a pattern of purchasing customer food stamp cards and using them at other grocery locations to purchase inventory for Holyland, according to the indictment.
The indictment also seeks to recover $4 million, including nearly $900,000 that has been seized from various bank accounts.
“For more than a decade, these defendants have been cheating the taxpayers by illegally accepting food stamp cards they knew didn’t belong to the card holder, and accepting food stamps for prohibited items, including tobacco and prepared food for resale at restaurants,” said Acting U.S. Attorney Carole S. Rendon. “We will continue to prosecute violations of the food stamp program, which is designed to help the most vulnerable in our community, not enrich those who prey on them.”
“This investigation and prosecution should send a strong zero-tolerance message to those individuals who attempt to defraud U.S. Department of Agriculture programs,” said Anthony V. Mohatt, Special Agent in Charge, USDA-OIG-Investigations. “It should also serve as a warning to all that fraud will be vigorously investigated and prosecuted by the USDA-OIG, the U.S. Attorney's Office, and all its federal, state, and local partners that have a stake in ensuring that fraud is eliminated from taxpayer funded programs.”
“The Supplemental Nutrition Assistance Program was designed to help the men, women and children of Cleveland with the purchase of eligible items, not to be used for the purchase of unauthorized items or to be exchanged for cash,” said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “IRS Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes where individuals attempt to conceal the true source of their money.”
“The Mohammad’s engaged in millions of dollars of fraud targeting federal government food assistance programs in order to line their pockets,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office. “Driven by their greed, they showed a complete disregard for those who were truly in need.”
This case is being prosecuted by Assistant U.S. Attorneys Christos N. Georgalis, M. Kendra Klump and Phillip J. Tripi after an investigation by agents of the United States Department of Agriculture, Office of Inspector General-Investigations, the Internal Revenue Service – Criminal Investigations, the Federal Bureau of Investigation, Ohio Department of Public Safety and the Lakewood Police Department.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Tax Return Preparer Arrested on Fraud and Theft ChargesRead the Press Release
PHILADELPHIA - Martin W. Kennedy, 68, of Coatesville, PA, was arrested today on charges of preparing false tax returns and theft of government property, announced United States Attorney Zane David Memeger.
According to an indictment filed February 9, 2016, Kennedy, an employee of the Department of Veterans Affairs’ Hospital located in Coatesville, PA, prepared approximately 176 federal income tax returns for other individuals, including his co-workers, during the years 2010 through 2013, which fraudulently sought tax refunds of approximately $610,526. It is further alleged that the tax returns that Kennedy prepared contained false financial information regarding the filers’ Schedule C Business Expenses and the filers’ Schedule a Medical Expenses, Charitable Deductions and phantom losses from the sale of business property. In addition to charging his co-workers a fee for preparing their tax returns, Kennedy allegedly stole a portion of the refunds that he generated for his clients by having a portion of the tax refunds deposited into his personal bank account. To accomplish his alleged theft, Kennedy prepared, without the filers’ knowledge, IRS Form 8888 requesting that a portion of the refund be deposited into a bank account controlled by Kennedy with the remaining amount of the refund deposited into the filers’ account.
If convicted of all counts, Kennedy faces a substantial period of incarceration, a possible fine, restitution to the IRS, a period of supervised release, and a $1,400 special assessment.
The case was investigated by the Office of Inspector General for Department of Veterans Affairs and IRS Criminal Investigations. It is being prosecuted by Assistant United States Attorney Floyd J. Miller.
St. Croix Man Pleads Guilty to Wire FraudRead the Press Release
St. Croix, USVI – On Thursday, February 11, 2016, Miguel Esperanza-Vazquez, 60, pleaded guilty in federal court to wire fraud, United States Attorney Ronald W. Sharpe announced.
According to the plea agreement filed with the court, on May 12, 2013, Esperanza-Vazquez, caused a money order to be transmitted from Texas to the Virgin Islands as part of an illegal scheme in which the defendant purported to be able to influence an undocumented immigrant’s residency status. The parties agreed that the total loss to the victim was $14,999.
Esperanza-Vasquez faces a maximum of 20 years in prison and a $250,000 fine. A sentencing date has been set for June 15, 2016.
The case is the result of months of investigative work by the IRS-Criminal Investigation, the U.S. Department of Homeland Security Office of the Inspector General, the U.S. Immigration and Customs Enforcement Office of Professional Responsibility, and the Federal Bureau of Investigations. The case is being prosecuted by Assistant U.S. Attorney Christian Stringer.
Southern California Man Charged with Bank Fraud, Wire Fraud, and Theft or Embezzlement of Pension Funds in Marin and San Mateo CountiesRead the Press Release
SAN FRANCISCO –A federal grand jury indicted Alan Weissman with bank fraud, wire fraud, theft or embezzlement from an employee pension benefit plan, and making false statements in documents required by the Employee Retirement Income Security Act (ERISA), announced Acting United States Attorney Brian J. Stretch and the Employee Benefits Security Administration of the Department of Labor
Weissman, 70, of Rancho Palos Verdes, Calif., allegedly served as a professional trustee of pension plans. According to the indictment, from September 2010 to November 2011, he used his position as trustee of two plans to funnel money into his own bank accounts and the accounts of a business he controlled. ERISA is the federal statute governing most pension plans. Under ERISA, a trustee of a plan is responsible for safeguarding pension plan assets and ensuring that they are invested prudently and in conformity with the directives of the trust agreement, and is prohibited from self-dealing. Nevertheless, according to the indictment, Weissman made hundreds of thousands of dollars of payments to himself and his business without the authorization or knowledge of the pension funds, the plan sponsors, or participants. The payments also allegedly violated the plans’ trust agreements, Weissman’s fiduciary obligations, and the ERISA statute.
The indictment further alleges that Weissman attempted to hide the fact that he stole the money. In part, Weissman accomplished this by falsely telling representatives of the pension plan that the entity holding the funds had been “hacked” and that, as a result, he had not been able to produce account statements. In addition, the indictment alleges that Weissman (1) altered and forged account statements and other documents to give the appearance that the money he converted was not missing from the accounts, (2) falsely reported to an auditor that some of the stolen funds were actually paid as investment fees, and (3) falsely stated at a deposition that some of the funds were moved from one account to another so as to earn “a higher rate of return.”
Weissman is charged with five counts of bank fraud, in violation of 18 U.S.C. § 1344; six counts of wire fraud, in violation of 18 U.S.C. § 1343; two counts of theft or embezzlement from an employee benefit plan, in violation of 18 U.S.C. § 664; and one count of making false statements and concealment of facts in relation to documents required by ERISA, in violation of 18 U.S.C. § 1027.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the maximum statutory penalty for bank fraud is 30 years’ imprisonment and a fine of $1,000,000 or twice the gross gain or loss resulting from the offense. The maximum statutory penalty for each count of wire fraud is 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss resulting from the offense. The maximum statutory penalty for each count in violation of 18 U.S.C. § 664 and 18 U.S.C. § 1027 is 5 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss resulting from the offense. Additional periods of supervised release and restitution also apply. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Benjamin Kingsley is prosecuting the case with assistance from Jessica Meegan. The prosecution is the result of an investigation by the San Francisco Regional Office of the Employee Benefits Security Administration of the Department of Labor.
South Charleston woman pleads guilty to Federal heroin crimeRead the Press Release
CHARLESTON, W.Va. – A South Charleston woman pleaded guilty today to possession with intent to distribute heroin, announced Acting United States Attorney Carol Casto. Sarah Elizabeth Myers, 28, entered her guilty plea in federal court to the drug charge.
Myers admitted that on May 15, 2015, she traveled to Columbus to pick up a supply of heroin. When she returned to West Virginia, law enforcement stopped her for speeding. During the stop, officers found over 100 grams of heroin hidden in the rear passenger side door panel. Myers admitted it was her intent to distribute the heroin in the Charleston area.
Myers faces up to 20 years in federal prison and a $1 million fine when she is sentenced on May 9, 2016.
The case against Myers was investigated by the South Charleston Police Department and members of the Drug Enforcement Agency Task Force. Assistant United States Attorney Timothy D. Boggess is in charge of the prosecution. The hearing was held before United States District Judge John T. Copenhaver, Jr.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
-
Follow us on Twitter: SDWVNews
-
Seven Hills man indicted for distributing oxycodone, other pillsRead the Press Release
An 11-count indictment was filed in federal court charging a Seven Hills man for conspiring to distribute oxycodone and other pills, Acting U.S. Attorney Carole Rendon said.
Alfonso C. Yunis, 42, was indicted on one count of conspiracy to possess with intent to distribute oxycodone, two counts of distribution of oxycodone, two counts of using U.S. mail to facilitate a felony and six counts for distribution of controlled substances, including Alprazolam, testosterone, amphetamines, oxycodone, Diazepam, and others. These actions took place between Sept. 9 and Oct. 26, 2015, according to the indictment.
This case is being prosecuted by Assistant U.S. Attorney Marisa Darden following an investigation by United States Postal Inspection Service
If convicted, the defendant's sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violation.
An indictment only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Sentencings for February 5 - February 9, 2016Read the Press Release
Kenneth J. Canero, 39, of Buffalo, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on February 9, 2016, for conspiracy to distribute 500 grams of a mixture or substance containing a detectable amount of methamphetamine. Canero was arrested in Gillette, Wyoming. He received 60 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $200.00 fine and a $100.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Gabriel Tena-Bencomo, aka Gabriel Gutierrez, 29, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on February 8, 2016, for illegal re-entry of a previously deported alien into the United States. Tena-Bencomo was arrested in Jackson, Wyoming. He received 13 months imprisonment, to be followed by two years of supervised release, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Josue Tzompa-Ramirez, 30, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on February 8, 2016, for illegal re-entry of a previously deported alien into the United States. Tzompa-Ramirez was arrested in Jackson, Wyoming. He received 13 months imprisonment, to be followed by two years of supervised release, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Michael D. Backes, 39, of Gillette, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on February 5, 2016, for conspiracy to distribute 500 grams of a mixture or substance containing a detectable amount of methamphetamine. Backes was arrested in Cheyenne, Wyoming. He received 120 months imprisonment, to be followed by five years of
supervised release, and was ordered to pay a $500.00 fine and a $100.00 special assessment. This case results from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the Wyoming Division of Criminal Investigation and the U.S. Drug Enforcement Administration. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Second Texas Woman Sentenced in Credit Card Fraud SchemeRead the Press Release
BOISE – Charmaine Danelle Montgomery, 23, of Fort Worth, Texas, was sentenced today in United States District Court to 30 months in prison, followed by three years of supervised release for perpetrating a credit card fraud scheme that targeted local retailers in June 2015, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Montgomery to pay $15,904.08 in restitution. Montgomery pleaded guilty on December 1, 2015.
According to the plea agreement, Montgomery admitted to traveling to the District of Idaho, along with her co-defendant, Brooke Darby, for the purpose of making fraudulent purchases of gift cards and merchandise from retail stores, using stolen credit card numbers encoded onto stock gift cards. Montgomery admitted to obtaining the stock debit cards encoded with unauthorized credit card numbers, and making purchases at retail stores on June 23 and June 24, 2015. In all, Montgomery admitted that she and Darby purchased approximately $13,095.90 in gift cards and merchandise with the fraudulently encoded gift cards. Upon their arrest, Darby and Montgomery were found in possession of approximately 250 gift cards encoded with unauthorized credit card numbers.
Co-defendant Darby also pleaded guilty and was sentenced on January 25, 2016, to 28 months in prison and three years of supervised release. She was also ordered to pay restitution.
The case was investigated by the United States Secret Service and the Boise Police Department.
Scottsbluff Man Sentenced for Theft of Government FundsRead the Press Release
United States Attorney Deborah R. Gilg announced that Frank A. Sanchez, Jr., 42, formerly of Scottsbluff, Nebraska, was sentenced today in Lincoln, Nebraska, to 90 days of home confinement by United States District Judge John M. Gerrard, for theft of government funds. Along with the home confinement, Sanchez was ordered to make restitution in the amount of $92,064.00, perform 150 hours of community service and to serve a term of five years on supervised release.
Frank Sanchez, Jr., was employed by Burlington Northern Santa Fe (BNSF) from August of 2004 through July of 2007, before filing for a Railroad Retirement Disability Annuity in November , 2007. The disability was based on numerous medical conditions and, after review, the U. S. Railroad Retirement Board (RRB) approved his claim and Sanchez began receiving an annuity.
In June of 2009, Sanchez completed a “Continuing Disability Report” at the request of the RRB. On that form, Sanchez stated there had been no change in his condition and that he had not returned to work. Sanchez then signed and submitted that report to the RRB. In April of 2012, Sanchez was again asked to complete a “Continuing Disability Report”. He failed to return the form to the RRB and he was notified in May of 2012 that his benefits would be discontinued.
Upon further investigation, the RRB discovered that Sanchez had indeed returned to work in August of 2009 and was currently employed again by BNSF. Once contacted, Sanchez admitted to receiving the disability annuity, provided a statement admitting his actions to the investigators, and demonstrated a willingness to make restitution in full. Sanchez’s disability annuity was officially discontinued in August of 2009. Computations by investigators determined that during the period he was receiving the disability annuity he fraudulently received $92,064.00.
The case was investigated by the Office of the Inspector General of the Railroad Retirement Board.
Sandy Springs Man Sentenced to Prison for Impersonating a U.S. MarshalRead the Press Release
ATLANTA - John Letcher Edens has been sentenced to one year in federal prison for impersonating a United States Marshal.
“Edens misrepresented that he was a U.S. Marshal to gain sensitive personal information to use in his skip tracing business,” said U.S. Attorney John Horn. “He abused the trust that is placed in law enforcement to make exigent requests for phone location data. Instead of using the data to rescue kidnapped children, he used it to repossess cars.”
“When someone fraudulently represents themselves as a deputy U.S. Marshal – or any law enforcement officer – the consequences can be serious. Eden was able to gain access to non-public information, which allowed him to harass one victim. His crimes had the potential to damage the trust that the U.S. Marshals Service has worked long and hard to establish with the public, private companies and fellow law enforcement agencies”, said U.S. Marshal Beverly Harvard.
According to U.S. Attorney John Horn, the charges and other information presented in court: In October and November, 2014, Edens falsely claimed to be a Deputy U.S. Marshal and submitted exigent request forms to a cellular phone provider in order to obtain location information about private citizens. Edens then used that private location information for his business as a skip tracer, in which he located individuals for the purpose of repossessing their vehicles. Precise location information is provided by cellular phone companies to law enforcement with a search warrant, or when exigent circumstances require the disclosure of such information before a search warrant may be obtained.
When submitting the exigent request forms, Edens fraudulently represented that children had been kidnapped and were in immediate danger in order to trick the cellular provider into providing private citizens’ location information without a search warrant. In one instance, Edens even harassed a victim.
On May 6, 2015, a grand jury charged Edens, 56, of Sandy Springs, Georgia, with seven counts of false impersonation of a U.S. Officer. Edens pleaded guilty to six of the seven counts on September 24, 2015. On February 10, 2016, U.S. District Judge Eleanor L. Ross Sentenced Edens to one year and one day, and ordered him to serve three years of supervised release and pay a special assessment of $600.
This case was investigated by the United States Marshals Service.
Assistant United States Attorney Jolee Porter prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Rufus Phelps Ordered Detained Pending Trial on Federal Firearms ChargeRead the Press Release
ALBUQUERQUE – This morning a U.S. Magistrate Judge found probable cause to support a criminal complaint charging Rufus Phelps, 25, of Albuquerque, N.M., with being a felon in possession of a firearm and ammunition. Phelps was ordered detained pending trial.
Phelps was arrested by the U.S. Marshals Service on Feb. 5, 2016, on the federal criminal complaint which alleged that he unlawfully possessed a firearm and ammunition on Feb. 4, 2016, in Bernalillo County, N.M. According to the federal criminal complaint, Phelps was arrested on state charges on Feb. 4, 2016, after Albuquerque Police Department (APD) officers observed Phelps in a parked car and recognized him from previous encounters. The officers arrested Phelps after a warrant check revealed that there was an outstanding warrant for his arrest.
At the time of his arrest by APD, Phelps allegedly possessed a loaded firearm and a “golf ball size amount of methamphetamine.” At the time, Phelps was prohibited from possessing firearms or ammunition because he previously had been convicted for the unlawful taking of a motor vehicle.
If convicted of the federal offense against him, Phelps faces a maximum sentence of ten years in federal prison. The charges against Phelps are merely accusations and he is presumed innocent unless found guilty in a court of law.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department, with assistance from the U.S. Marshals Service. Assistant U.S. Attorney Eva M. Fontanez is prosecuting the case.
The case is being prosecuted as part of the federal “worst of the worst” anti-violence initiative. 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 felony 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 rates, on a per capita basis, are amongst 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, under this initiative.
Removed Alien Pleads Guilty to Immigration ViolationRead the Press Release
PITTSBURGH - An individual found by the U.S. Department of Homeland Security, pleaded guilty in federal court to a charge of Illegal Reentry after Deportation, United States Attorney David J. Hickton announced today.
Marcial Machado-Orrellano, 29, a citizen of Honduras pleaded guilty to one count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that Machado-Orrellano, an alien, who was previously removed from the United States by U.S. Immigration and Customs Enforcement on April 21, 2003, Sept. 1, 2004, and July 2, 2009, was taken into custody on May 28, 2015, by Immigration and Customs Enforcement, Homeland Security Investigations.
Judge Hornak scheduled sentencing for June 10, 2016 at 9:30 a.m. The law provides for a maximum total sentence of twenty years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The Homeland Security Investigation conducted the investigation that led to the prosecution of Machado-Orrellano.
Readout of Attorney General Lynch's Meeting with Major County Sheriffs' AssociationRead the Press Release
Today, Attorney General Loretta E. Lynch met with representatives from the Major County Sheriffs’ Association (MCSA) at their Winter Meeting at the JW Marriott Hotel, in Washington, D.C. The meeting began with a moment of silence led by Sandra Hutchens, President of the MCSA, in honor of law enforcement officials killed in the line of duty, including Harford County, Maryland Senior Sheriff’s Deputies Mark Logsdon and Patrick Dailey, who were killed yesterday.
Attorney General Lynch remarked that yesterday’s tragic events highlighted the dangers public safety officers face every day – and the courage and commitment they routinely demonstrate in the fulfilment of their duties. She thanked the sheriffs and their deputies for their hard work, acknowledging the difficulty of their jobs and the immense sacrifices they have made for the people they serve.
During the meeting, Attorney General Lynch also discussed challenges facing law enforcement officials today, such as countering violent extremism, treatment of mental health issues, and challenges presented by technology. She noted with appreciation the work that MCSA had done with the Stepping Up Initiative, which exemplifies goals identified in the final report of the President’s Task Force on 21st Century Policing.
The MCSA is a professional law enforcement association of elected sheriffs representing counties or parishes with populations of 500,000 or more. MCSA is dedicated to preserving the highest integrity in law enforcement and the elected office of the Sheriff. The association identifies and works to address challenges facing law enforcement. It also pursues the development of innovative education along with prevention and enforcement strategies and programs.
Property Manager at Section 8 Apartment Complex Arrested for Embezzling Government FundsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development - Office of Inspector General (“HUD-OIG”), announced the unsealing of a Complaint against the property manager, CARL IMMICH, for engaging in fraudulent schemes to embezzle funds from Harriet Tubman Terrace Apartments (“Tubman Terrace”), a Section 8 housing complex in Poughkeepsie, New York. IMMICH was arrested today and presented in White Plains federal court before United States Magistrate Judge Judith C. McCarthy. As alleged, IMMICH fraudulently obtained hundreds of thousands of dollars belonging to Tubman Terrace.
U.S. Attorney Preet Bharara said: “As alleged, Carl Immich stole federal taxpayer dollars intended to subsidize housing costs for lower income individuals. I commend the work of HUD-OIG in safeguarding the people’s money and policing those who seek to pocket it for themselves.”
HUD-OIG Special Agent in Charge Christina Scaringi said: “The arrest and charges today of Carl Immich serve to remind the taxpayer that law enforcement will continue to pursue corruption, in all forms, especially those that impact the integrity of HUD-assisted housing. Mr. Immich’s charges disclosed today prove our continuing resolve to root out crime in all forms, especially when the funds involved should have been used to help the neediest families.”
According to the allegations in the criminal complaint (the “Complaint”) unsealed today in White Plains federal court[1]:
Tubman Terrace is a large low-income apartment complex in Poughkeepsie, New York. The rental payments for nearly all of the apartments are subsidized by HUD pursuant to Section 8 of the United States Housing Act of 1937, 42 U.S.C. § 1437f. From in or about June 2010 through in or about November 2014, HUD provided approximately $150,000 to $160,000 each month to Tubman Terrace.
Since in or about 2009, Tubman Terrace has been managed by a management company, of which IMMICH is the principal and sole owner. In that capacity, IMMICH has served as the management agent and property manager of Tubman Terrace since in or about 2009.
From at least in or about December 2010 until at least in or about March 2015, IMMICH fraudulently obtained hundreds of thousands of dollars belonging to Tubman Terrace, which were paid to him or used for personal expenditures. IMMICH did so through at least three different schemes: (1) he used credit cards intended for Tubman Terrace business expenses for personal expenses, which were then paid through Tubman Terrace’s operating bank account; (2) he obtained check payments from the Tubman Terrace operating bank account to cover other personal expenses; and (3) he obtained payroll checks for himself and his daughter reflecting no work or other entitlement by them to such salary.
* * *
IMMICH, 53, of Rhinebeck, New York, is charged with one count of embezzling government property, and one count of theft of property from programs receiving government funds, each of which carries a maximum sentence of 10 years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as the judge will determine any sentence imposed on the defendant.
Mr. Bharara praised the outstanding investigative work of HUD-OIG.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Lauren Schorr and Benjamin Allee are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Pharmaceutical Executive Defrauds Investors Out of Millions by Selling Fake Stock in Medical Research CompanyRead the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738 and Aaron Arnzen (619) 546-8384
NEWS RELEASE SUMMARY – February 11, 2016
SAN DIEGO – Oceanside businessman Greg Ruehle today admitted swindling more than 160 people out of investments totaling nearly $2 million.
As part of his plea to securities fraud charges, Ruehle admitted being hired by local medical research firm ICB International, Inc., to identify investors who could fund their research. Instead, Ruehle collected millions of dollars from investors and used the money for his own gambling and other personal expenses. Ruehle disguised and concealed his fraud by issuing the investors fake stock certificates and failing to report the purported “investment” to the company.
In a parallel action, the Securities and Exchange Commission today announced civil charges against Ruehle. For further information, please see http://www.sec.gov/news/pressrelease/2016-28.html.
Ruehle, who lives in Oceanside, targeted investors both locally and from his hometown in Minnesota. In 2015, some of the investors asked for proof that their money was being used at ICBI. In response, Ruehle sent them a letter on what appeared to be company letterhead, and purportedly signed by the company’s CEO. In fact, the letter was a forgery, which was borne out by the fact that Ruehle misspelled the CEO’s name. ICBI remained unaware of these “investors,” and never received a penny of their $1.9 million investments.
San Diego-based ICBI’s mission is to develop technologies to transport therapeutic treatments through the blood-brain barrier to treat neuro-degenerative diseases like Parkinson’s and Alzheimer’s disease. According to ICBI’s website, the company develops techniques for early diagnosis, monitoring of disease progression, and increased therapeutic efficacy of drugs for neuro-degenerative diseases and various cancers that currently cannot be reached by drugs.
Ruehle’s plea agreement requires that he forfeit the $1.9 million in proceeds and pay restitution to the victim investors.
In addition to the securities fraud charges, Ruehle pleaded guilty to possession of a stolen firearm. In his plea, Ruehle admitted that he owned three stolen firearms, including two semi-automatic pistols and a revolver. He has agreed to forfeit these weapons and another revolver to federal law enforcement.
“Business professionals who use their knowledge of industries and securities to prey on unsuspecting lay investors undermine the public’s confidence and ability to participate in the markets,” said U.S. Attorney Laura E. Duffy. “As this case demonstrates, they also jeopardize innovation and the success of small businesses. This type of egregious securities fraud is simply unacceptable.”
“Mr. Ruehle engaged in a pattern of lies and deceitful acts while violating the trust of family, friends, and associates,” said FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is committed to investigating and seeking the prosecution of those who steal money through fraudulent investment schemes.”
“Firearms must be obtained through proper procedures by eligible recipients.” said ATF Special Agent in Charge Eric D. Harden. “This investigation is a reminder that the illegal use of firearms permeates all spectrums of crime.”
Ruehle’s sentencing is set for May 2, 2016 at 9:30 before U.S. District Judge Michael M. Anello.
This investigation was started with a call to the FBI. The FBI encourages the public to report fraudulent investment schemes to the FBI at telephone number 1-800-CALL FBI (1-800-225-5324).
DEFENDANT Case Number 16cr0231-MMA
Greg Ruehle Age: 64 Oceanside, CA
CHARGES
Securities Fraud, in violation of 15 U.S.C. §§ 78j, 78ff
Maximum Penalties: 20 years’ imprisonment, $5,000,000 fine, $100 special assessment, restitution.
Possession of stolen firearms, in violation of 18 U.S.C. § 922(j)
Maximum Penalties: 10 years’ imprisonment, $250,000 fine, $100 special assessment.
AGENCIES
Federal Bureau of Investigation
Bureau of Alcohol, Tobacco, Firearms, and Explosives
Petaluma Slaughterhouse Owner Sentenced to 12 Months and One Day of Imprisonment for Conspiring to Distribute Adulterated MeatRead the Press Release
SAN FRANCISCO – Jesse “Babe” Amaral, Jr., owner of the now-defunct Petaluma slaughterhouse Rancho Feeding Corporation, was sentenced today to 12 months and one day of imprisonment for leading a conspiracy to distribute adulterated, misbranded, and uninspected meat, announced Acting United States Attorney Brian J. Stretch and Special Agent in Charge of the Western Region of the U.S. Department of Agriculture (USDA), Office of Inspector General, Investigations, Lori Chan.
Amaral, 78, of Petaluma, was indicted on August 14, 2014, in connection with two separate schemes: the first scheme involved a conspiracy to distribute adulterated, misbranded, and uninspected meat while the second scheme involved defrauding farmers with false invoicing.
With respect to the first scheme, Amaral was indicted along with Rancho employees Eugene Corda, 66, of Petaluma, and Felix Cabrera, 56, of Santa Rosa, with distribution of adulterated, misbranded, and uninspected meat, in violation of the Federal Meat Inspection Act (FMIA), 21 U.S.C. §§ 610(c) & 676(a), conspiracy to commit the same, in violation of 18 U.S.C. § 371, and conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349. For his part in the scheme, a fourth defendant, Robert Singleton, 79, owner of Petaluma-based Rancho Veal Corporation, was charged in a separate information on August 18, 2014, with one count of distributing adulterated, misbranded, and uninspected meat in violation of the FMIA.
Amaral pleaded guilty to the conspiracy charge on February 18, 2015. In connection with his guilty plea, Amaral admitted that from 2012 through January 10, 2014, he directed Rancho employees to process cattle for human consumption that had been condemned by the USDA veterinarian. Amaral also admitted he sought to circumvent inspection procedures for certain cattle exhibiting symptoms of cancer eye and to process these cancer eye cattle for human consumption without full inspection. Cabrera, Rancho’s “kill floor” supervisor, also pleaded guilty to the conspiracy charge. Corda, Rancho’s yardman, pleaded guilty to one of the underlying distribution counts. Singleton pleaded guilty to the information, admitting that he participated in a scheme by which Rancho employees were instructed to carve “USDA Condemned” stamps out of cattle carcasses, to conceal from USDA inspection cows showing signs of cancer eye by switching the diseased heads with healthy heads, and to process the adulterated and uninspected carcasses for human consumption.
With respect to the second scheme, Amaral was indicted for mail fraud, in violation of 18 U.S.C. § 1341, and conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349. As part of his plea agreement, Amaral admitted that he caused Rancho to submit fraudulent cattle invoices to farmers between at least 2012 and January 2014. Singleton, as part of his plea agreement, also admitted participating in this scheme.
The sentence was handed down by the Honorable Charles R. Breyer, U.S. District Judge. In addition to the prison term, Judge Breyer sentenced Amaral to two years’ supervised release, one of which will be served in a residential re-entry facility. Judge Breyer concluded that Amaral had reached out of court settlements with nearly all of his fraud victims, and ordered restitution to the remaining two victims. Amaral was ordered to surrender by March 25, 2016, to begin serving his sentence.
The sentencing hearings for Singleton and Corda are set for March 2, 2016, and the sentencing hearing for Cabrera is set for March 23, 2016. The sentencings will be held before Judge Breyer.
Assistant U.S. Attorney Hartley M.K. West is prosecuting this case with the assistance of Rosario Calderon and Bridget Kilkenny. The prosecution is the result of an investigation by agents of the USDA’s Office of Inspector General, Investigations and USDA’s Food Safety Inspection Service, Office of Investigation, Enforcement and Audit, Compliance and Investigations.
Perry County Man Sentenced on Explosives and Firearm ChargesRead the Press Release
A Perry County man was sentenced on February 10, 2016, to federal prison on explosives and firearms charges, James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today.
Samuel L. Dunson, 19, of DuQuoin, IL, was sentenced to 52 months in federal prison, to be followed by two years’ supervised release, and fined $300. Dunson had previously pleaded guilty to three counts in a federal indictment which charged (Count 1) on August 5, 2015, around 5:00 a.m., in Perry County, Illinois, Dunson did knowingly possess a destructive device, described as an Improvised Explosive Incendiary Device, which had not been registered in the National Firearms Registration and Transfer Record, and, (Count) 2 on August 5, 2015, around 5:30 a.m., in Perry County, Illinois, Dunson did knowingly possess a destructive device, further described as an Improvised Explosive Incendiary Device, which had not been registered, and, (Count 3) on August 5, 2015, in Perry County, Illinois, Dunson did knowingly possess a firearm, that is, a weapon made from a Revelation model 350M shotgun, with a barrel length of less than 18 inches, commonly referred to as a sawed-off shotgun, which had not been registered.
The investigation in this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the DuQuoin, IL Police Department, and the Illinois State Police Department.
The case is being handled by Assistant United States Attorney George Norwood.
Pennsylvania Man Sentenced to Two Years for Interstate StalkingRead the Press Release
Contact: Darcie N. McElwee
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Makwan Jaff, 36, of Mechanicsburg, Pennsylvania, was sentenced yesterday in U.S. District Court by Judge Nancy Torresen to two years in prison and three years of supervised release which will include up to one year of home confinement for interstate stalking. He pled guilty on September 29, 2015.
According to the criminal complaint affidavit and evidence introduced at the plea hearing, Jaff previously attended medical school in Basseterre, Saint Kitts and Nevis (“St. Kitts”). Between February 11, 2014 and June 25, 2014, with the intent to harass or intimidate a female former medical school classmate, Jaff created about five Facebook accounts in the victim’s name (or variations of her name with added words, such as “slut” and “whore”) and put pictures of her in them without her knowledge or permission. Once the Facebook accounts were deleted by the victim, Jaff sent threatening email and Facebook private messages to her and her immediate family. During these communications from St. Kitts, Jaff threatened to harm the victim and another classmate who were attending school in Scarborough, Maine from May 2014 until June 2014.
During some of the communication sent to the victim while she was in Maine, Jaff threatened: “Let me tell you what I am gonna do when I get home; rent a car first thing and come to [M]ain[e]….It is only a 24 hours drive...I won’t stop believe me I will f**k your world upside down!...I will turn your life in to a living hell…I will not go away I will f**k with you for the rest of your f**ken life…Keep thinking I am playing game till I hit where it f**ken hurts!”Jaff’s conduct caused substantial emotional distress to the victim and her immediate family. Jaff also sent hundreds of email messages to the classmate about the victim, many of which were similarly threatening and harassing.
The investigation was conducted by the Federal Bureau of Investigation.
Payroll Administrator Sentenced for Tax Evasion Scheme for Diverting Employees’ Wage Payments into her Personal Bank Account and Not Reporting the Money to the IRSRead the Press Release
A payroll administrator was sentenced to 42 months in prison, followed by three years of supervised release for her participation in a tax evasion scheme where she diverted employees’ wage payments into bank accounts under her control and failed to report the money as gross income to the Internal Revenue Service (IRS).
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Rodolfo Llanes, Chief, Miami Police Department (MPD), made the announcement.
Marilyn McDaniel, 67, of Garner, North Carolina, previously pled guilty to one count of attempting to evade or defeat tax, in violation of Title 26, United States Code, Section 7201.
According to court documents, McDaniel was the payroll administrator for a company and her sole responsibility was to report the employee hours and pay to the company’s payroll service provider. In early 2010, a former employee contacted the company’s accountant regarding a letter from the IRS indicating that the individual worked at the company in 2008 and that the individual failed to pay taxes on that income. The company’s payroll records revealed that in 2008 there were wage payments being made to the employee, but the wage payments were not deposited into the employee’s account. Instead, the wages were deposited into McDaniel’s personal bank account.
In addition, the company’s payroll records also showed that McDaniel had submitted false wage reports on behalf of sixteen other former employees and that approximately $1.7 million in wage payments in the names of those former employees were diverted from the company’s bank accounts into accounts controlled by McDaniel and her daughter. The company’s employees did not give McDaniel permission to have checks issued in their names or have those checks deposited into her personal bank account.
McDaniel did not report or pay taxes on the stolen money that was diverted from the company into her and her daughter’s account, as she failed to file an individual tax return with the IRS for calendar year 2009. In total, McDaniel’s total tax due and owing is $547,792.14.
Mr. Ferrer commended the investigative efforts of IRS-CI, Miami Police Department and Miami-Dade State Attorney’s Office. This case is being prosecuted by Assistant U.S. Attorney Maurice A. Johnson.
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.
Pawankumar Jain Pleads Guilty to Unlawfully Dispensing Prescription Painkillers and Health Care FraudRead the Press Release
ALBUQUERQUE – Pawankumar Jain, 63, a physician whose license has been revoked, entered a guilty plea this morning in federal court in Las Cruces, N.M., to unlawfully dispensing controlled substances and health care fraud. The guilty plea was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division, and Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division.
Jain initially was charged in a 111-count indictment filed in April 2014. The indictment charged Jain with 61 counts of unlawfully dispensing controlled substances and 50 counts of healthcare fraud. A 138-count second superseding indictment filed in June 2015 added new charges for a total of 79 unlawful dispensing charges and 59 healthcare fraud charges. The superseding indictment alleged that Jain committed the offenses charged between April 2009 and June 2010, in Doña Ana County, N.M. During that time, Jain was a licensed physician with a neurology subspecialty who operated a pain management medical practice in Las Cruces. Jain’s medical license was suspended in June 2012, and subsequently revoked in Dec. 2012 by the New Mexico Medical Board.
The 79 dispensing counts in the superseding indictment charged Jain with unlawfully dispensing prescription painkillers, primarily Oxycodone and methadone, to patients outside the usual course of medical practice and without a legitimate medical purpose. The 59 healthcare fraud counts alleged that Jain engaged in a scheme to defraud two federal health care benefit programs, Medicare and Medicaid, by submitting claims for payment for prescription medications he dispensed to patients outside the usual course of medical practice and without legitimate medical purpose. The superseding indictment included allegations that Jain’s criminal conduct resulted in the deaths of four patients.
Today Jain pled guilty to one count of unlawfully dispensing a controlled substance and one count of health care fraud. In his plea agreement, Jain acknowledged that from June 2007 through Feb. 2012, he was a licensed physician who practiced medicine in Las Cruces, and operated a “high volume practice, which included ‘pain management’ treatment for many patients.”
In his treatment of one patient identified as “M.E.B.,” Jain admitted conducting “cursory exams and [that he] did not document a therapeutic benefit from the narcotics he was prescribing for her.” Jain’s plea agreement states that he last saw M.E.B. as a patient on Nov. 25, 2009 when he “conducted a superficial exam … [and] wrote two prescriptions, each for 270 tablets of methadone 10 mg, one dated November 25, 2009, and the second dated December 23, 2009. M.E.B. filled each of these prescriptions, which were issued outside the usual course of medical practice and without a legitimate medical purpose. . . . Two days after she filled the second prescription, M.E.B. died on December 25, 2009.”
Jain also admitted committing health care fraud in connection with his treatment of M.E.B. Jain’s plea agreement states that he knew M.E.B. was insured by Medicare and that claims to cover the costs of the medication he prescribed for her would be submitted to Medicare for payment, which was in keeping with his scheme to defraud Medicare. It further states that each of the two prescriptions Jain wrote for M.E.B. on Nov. 25, 2009, were submitted to Medicare for payment, which was consistent with his intent.
Jain has been in federal custody since April 2014, and remains detained pending his sentencing hearing, which has yet to be scheduled. Under the terms of his plea agreement, Jain will be sentenced to a prison term within the range of 42 to 108 months followed by a term of supervised release to be determined by the court.
“This guilty plea should put health care providers who operate pill mills on notice that the authority to prescribe highly addictive controlled substances comes with accountability and responsibility. Doctors take an oath to ‘first, do no harm.’ To fulfill that oath, health care providers who prescribe opioid painkillers must be vigilant not only in their prescribing practices but also in the follow-up care they provide to their patients. Failure to do so can result in addiction and even death for their patients,” said U.S. Attorney Damon P. Martinez. “This guilty plea comes at a time when the abuse of opioid painkillers, such as Oxycodone, has become a national epidemic that is having a devastating impact on New Mexicans, and the efforts of the DEA and FBI in investigating this case must be commended. This case demonstrates that law enforcement can and will act forcefully with respect to those who supply drugs – including doctors.”
“Dr. Jain was entrusted with the care and well-being of patients in our community. Tragically, he took advantage of that trust and endangered the lives of his own patients,” said DEA Special Agent in Charge Will Glaspy. “Prescription drug abuse is a leading cause of heroin addiction and overdose deaths in the United States which has taken over 44,000 lives in the past year. Physicians are generally part of the solution to our medical concerns. Sadly, Dr. Jain was part of the problem.”
“Doctors who over-prescribe opioid pain medication contribute to a national epidemic of drug overdoses that annually kills thousands of people from every background and income level.
While this plea won't repair the damage done to the victims or their families, it will hopefully head off future tragedies by making some doctors think twice before recklessly prescribing pain-killers. If that happens, then all the hard work that went into this case will have been worth it,” said FBI Special Agent in Charge Terry Wade. “I thank the FBI Special Agents and support staff who worked closely with the DEA, New Mexico Medical Board and New Mexico Board of Pharmacy on this case, and I congratulate the U.S. Attorney’s Office for a successful prosecution.”
This case was investigated by the DEA’s Tactical Diversion Team in El Paso, Texas and the FBI’s Healthcare Fraud Unit with assistance from the New Mexico Medical Board and the New Mexico Board of Pharmacy. The case is being prosecuted by Assistant U.S. Attorneys Sarah M. Davenport and Richard C. Williams of the U.S. Attorney’s Las Cruces Branch Office.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting individuals who participate in drug diversion schemes, pill mills, rogue clinics and pharmacies, and prescription drug rings for investigation and prosecution is a priority of the HOPE Initiative.
Pakistani Citizen Admits Laundering Millions from Massive Computer Hacking and Telecommunications Fraud SchemeRead the Press Release
NEWARK, N.J. – A Pakistani citizen today admitted laundering over $19.6 million on behalf of the perpetrators of a massive international computer hacking and telecommunications fraud scheme, U.S. Attorney Paul J. Fishman announced.
Muhammad Sohail Qasmani, 47, formerly of Bangkok, Thailand, pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of conspiracy to commit wire fraud. He remains detained without bail.
“Thanks to the hard work of the prosecutors and agents on this case, Qasmani acknowledged his role in an international scheme that hijacked the telephone networks of U.S. companies and ran up millions in bogus charges,” U.S. Attorney Fishman said. “Today, he admitted moving over $19 million in illicit proceeds across 10 countries and ensuring the dialers and hackers who perpetuated the scheme received their cut.”
“The successful investigation of Qasmani is a testament to the dedication, hard work, and commitment of the men and women of the FBI, the Enforcement and Removal Operations of the U.S. Customs and Border Protection, and the State Department," said FBI-Newark Acting Special Agent in Charge Andrew Campi.
According to documents filed in this and related cases and statements made in court:
This massive international telecommunications fraud scheme, allegedly led by Noor Aziz, 53, of Karachi, Pakistan, involved unauthorized access to the computer systems – commonly known as PBX systems – that ran the internal telephone networks of numerous businesses and organizations in the United States. Foreign-based hackers targeted the telephone systems of the victim corporations and placed calls to those systems in an attempt to identify unused telephone extensions. Once the hackers identified unused extensions, they illegally reprogrammed the telephone systems so that they could be used to make unlimited long distance calls, all of which were ultimately charged back to the victim corporations.
The hacked telephone systems were then used to make calls to premium telephone numbers – such as purported chat lines, adult entertainment, and psychic hotlines – that generated revenue based on the calls’ duration and were set up and controlled by Aziz. In actuality, the numbers provided no actual services. Telephone company representatives who suspected fraudulent activity and called the numbers heard recordings of fake rings, fake password prompts, fake voicemail messages, music, or dead air on continuous loops.
In 2008, Qasmani, who operated a money laundering and smuggling business in Thailand, agreed to launder proceeds of the scheme for Aziz. In furtherance of the conspiracy, Qasmani established multiple bank accounts to receive the money generated by the illicit telephone traffic. Qasmani also paid the hackers and dialers who worked for Aziz to keep the scheme going.
Specifically, over nearly four years, Qasmani initiated money transfers to approximately 650 unique transferees, located in at least 10 countries, including the Philippines, India, Pakistan, Malaysia, China, the United Arab Emirates, Saudi Arabia, Indonesia, Thailand, and Italy. Qasmani moved a total of approximately $19.6 million in fraud proceeds from November 2008 through Dec. 31, 2012. Qasmani kept laundering the money even after Aziz was arrested in connection with this scheme and later released by foreign authorities.
On Dec. 22, 2014, Special Agents of the FBI arrested Qasmani at Los Angeles International Airport after he arrived on a flight from Bangkok.
The count of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for May 17, 2016.
Aziz was charged by indictment on June 20, 2012 and remains a fugitive. For more information, visit the FBI Cyber’s Most Wanted list. The charges and allegations against him are merely accusations, and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Campi, with the investigation leading to today’s guilty plea. He also thanked special agents with U.S. Immigration and Customs Enforcement's (ICE) Enforcement and Removal Operations (ERO) and U.S. Customs and Border Protection for their assistance in this case.
The government is represented by Assistant U.S. Attorney L. Judson Welle of the U.S. Attorney’s Office National Security Unit in Newark.
16-041 ###
Defense Counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark
Owner of Several ‘Clean and Sober’ Residential Facilities in Snohomish County Arrested for Drug TraffickingRead the Press Release
Investigators with the Drug Enforcement Administration (DEA) and the Seattle Police Department (SPD) arrested the operator of a number of ‘clean and sober’ residential facilities on February 9, 2016, following an investigation that revealed the man was dealing illegal drugs, announced U.S. Attorney Annette L. Hayes. TIMOTHY REHBERG, 50, of Everett was arrested Tuesday following a three-month investigation. In a search of the office at the primary I.C. Clean People Recovery Housing, Incorporated facility in the 2900 block of Everett Avenue in Everett, authorities located approximately one pound of crystal methamphetamine, a quarter pound of heroin, small quantities of marijuana, oxycodone and methadone, and a .38 caliber revolver. REHBERG will make his initial appearance on the criminal complaint in Seattle at 2:00 PM this afternoon. He remains in custody pending a detention hearing.
According to charging documents in Snohomish County, REHBERG came to the attention of law enforcement in December 2015, when a witness identified him as someone selling methamphetamine, heroin, and marijuana. Further investigation confirmed REHBERG’s identity and his occupation as the owner and operator of a chain of clean and sober housing facilities under the name ‘I.C. Clean People Recovery Housing.’ The person working with law enforcement made four purchases of illegal drugs, including methamphetamine, heroin, and marijuana, from REHBERG. REHBERG is prohibited from possessing firearms due to prior felony convictions as well as an active protection order from a domestic partner.
The federal charges will be filed at the initial appearance this afternoon. The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The investigation was led by the DEA and SPD with assistance from Health and Human Services, Office of the Inspector General (HHS-OIG), the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the Washington State Attorney General’s Office.
O'Fallon Woman Sentenced for Healthcare FraudRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today, that Ann Marie Sheppard, 55, of O’Fallon, Illinois, was sentenced on February 10, 2016, in the U.S. District Court in East Saint Louis, Illinois, on the charges that she engaged in a scheme to steal from a health care program and that she committed two related mail frauds. The district court sentenced Sheppard to five years of probation with the first six months to be served in home detention. She is also ordered to pay $34,168.33 in restitution to the Home Services Program and a $300.00 special assessment.
Court records indicate that Sheppard submitted false and fraudulent bills in relation to her alleged performance of personal assistant services in the Home Services Program, a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. Sheppard falsely billed the program between June 30, 2013 and April 30, 2015, when she purportedly rendered personal assistant services to a customer when, in fact, she had not. For example, she billed for home services when she was actually in Costa Rica and then again when she was on a cruise in the Caribbean Sea. As a result, Sheppard improperly billed hours of services and obtained $34,168.33 in payments for services not performed.
The investigation was conducted by the U.S. Department of Health and Human Services - Office of Inspector General, the Illinois State Police - Medicaid Fraud Control Bureau, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney William E. Coonan.
If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services, Office of Inspector General, or you may call 1.800.447.8477.New York Man Sentenced for Passport FraudRead the Press Release
CONCORD, NEW HAMPSHIRE – United States Attorney Emily Gray Rice announced today that Jeffrey Slamow, of Lynbrook, NY, was sentenced to three years’ probation after pleading guilty to a one-count Indictment alleging that he filed a false affidavit in connection with the fraudulent passport application of another individual.
On June 22, 2011 Slamow intentionally filed a false Sworn Affidavit of Identifying Witness (U.S. State Department form DS-71) supporting the fraudulent passport application of a friend. Slamow’s friend was not a citizen or national of the United States and could not obtain a passport in his own identity. The friend submitted a passport application using the identity information of another person known to Slamow. The Sworn Affidavit of Identifying Witness that was executed by Slamow was false because Slamow knew the applicant was not a citizen of the United States and knew the applicant’s true name was not that listed on the application.
Slamow pled guilty to the charge on November 4, 2015.
The case was investigated by the U.S. State Department Diplomatic Security Service. This case was prosecuted by Assistant U.S. Attorney Alfred Rubega.
New Orleans Woman Pleads Guilty to Defrauding Gulf Coast Claims FacilityRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CHANDORELL MILES, age 33, of New Orleans, pled guilty today to conspiracy to commit wire fraud relating to fraudulent applications she made to the Gulf Coast Claims Facility (GCCF) for financial assistance in the aftermath of the Deepwater Horizon oil spill in the Gulf of Mexico.
According to court documents, the GCCF made disaster assistance money available to individuals and businesses affected by the oil spill resulting from the Deepwater Horizon explosion. The GCCF required individuals to verify loss of income. Beginning in or about September 2010, MILES, assisted by her co-conspirators who posed as claimants, completed claim forms with false representations, created false and fraudulent documentation to support the claim forms, and wired all of the aforementioned documents to the GCCF’s office in Dublin, Ohio. The representations in the claim forms included false representations that the claimants were employed at different businesses in the New Orleans metropolitan area at the time of the oil spill. The false documentation included earnings statements falsely purporting to be from the employers. Based on these false representations, the GCCF paid MILES and her co-conspirators emergency benefits totaling approximately $406,400.00.
MILES faces a maximum term of imprisonment of five years, a fine of $250,000 and three years of supervised release following any term of imprisonment. U.S. District Judge Nannette Jolivette Brown set sentencing for April 21, 2016.
This case was brought as part of this District’s partnership with the National Center for Disaster Fraud (NCDF), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected] or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
U.S. Attorney Polite praised the work of the United States Secret Service, New Orleans Field Office in investigating this matter. Assistant United States Attorney Loan AMimi@ Nguyen is in charge of the prosecution.
New Jersey Man Sentenced to Federal Prison for Fraud Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Michael Silva, 25, of West Orange, N.J., was sentenced today in federal court in Albuquerque, N.M., to 18 months in prison followed by three years of supervised release for his conviction on fraudulent use of counterfeit access devices charges.
Silva was arrested on Sept. 11, 2015, on a 15-count indictment charging him with one count of conspiracy to commit aggravated identity theft, 11 counts of access devise fraud, and two counts of aggravated identity theft. The indictment alleged that from March 7, 2015 through April 21, 2015, Silva conspired with others to commit access device fraud and aggravated identity theft in Bernalillo, Sandoval and Santa Fe Counties, N.M.
According to the indictment, Silva participated in a conspiracy to use electronic devices known as “skimmers” on Automatic Teller Machines (ATM) to record information encoded on bank cards inserted into ATMs by legitimate bank customers. The “skimmers” permitted Silva and his coconspirators to record Personal Identification Number (PIN) codes and magnetic data recorded from bank cards to create fraudulent bank cards. They then used the fraudulent bank cards to access the bank accounts of legitimate bank customers.
On Nov. 12, 2015, Silva entered a guilty plea to two counts of access device fraud. In entering the guilty plea, Silva admitted that in April 2015, he possessed electronic devices that could be used to unlawfully obtain bank account information and PIN codes from innocent users at ATMs. Silva admitted using the electronic devices known as “skimmers” to obtain PIN codes and to create fraudulent bank cards. Silva further admitted that on April 19, 2015, he used two counterfeit bank cards at the ATM at First Financial Credit Union on San Mateo Blvd. in Albuquerque to withdraw a total of $600.00 in cash from bank accounts without permission from the account holders.
This case was investigated by the Albuquerque office of Homeland Security Investigations and the Albuquerque Police Department. Assistant U.S. Attorney Jonathon M. Gerson prosecuted the case.
New Haven Man Indicted for Attempting to Entice a Minor for Illicit SexRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a New Haven, Mo., man has been indicted by a federal grand jury for attempting to entice a minor under the age of 17 (actually an undercover law enforcement officer) to engage in illicit sex.
Jason M. Strubberg, 26, of New Haven, was charged in an indictment returned by a federal grand jury in Jefferson City, Mo., on Wednesday, Feb. 10, 2016. The federal indictment replaces a criminal complaint that was filed against Stubberg on Jan. 19, 2016, which charged him with the same offense.
According to an affidavit filed in support of the original criminal complaint, a detective with the Boone County, Mo., Sheriff’s Department posted an undercover online advertisement on Jan. 6, 2016, as part of an investigation to seek out potential sexual predators. Strubberg allegedly responded with several e-mails the same day. The decoy provided Strubberg with a phone number and told him she was looking for someone to help with her 14-year-old daughter’s respect issues.
Strubberg allegedly told the decoy he was a dominant person and agreed to help the decoy with her 14-year-old daughter as long as the decoy would sign a contract giving him permission to do so. Strubberg was sent two images of the decoy’s daughter, who he believed to be 14 years of age. Over the course of the next two days, the affidavit says, Strubberg described his plans for sexual conduct, including deviate sexual intercourse with the decoy’s daughter. Strubberg allegedly advised he would use ropes and other restraints if need be in order to prevent the decoy’s daughter from moving while he engaged in sexual conduct with her. Furthermore, the affidavit says, Strubberg sent a contract to the decoy by text message and asked her to print and sign the contract granting him permission to engage in sexual conduct with the decoy’s daughter.
After further e-mail correspondence, the affidavit says, Strubberg asked the decoy and her daughter to meet in person so that he could spend the day with them engaging in sexual conduct. On Jan. 8, 2016, Strubberg arrived at the meeting place and was arrested.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge 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 Anthony P. Gonzalez. It was investigated by the Boone County, Mo., Sheriff’s Department and the FBI.
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."
Nevada Rancher Cliven Bundy Arrested and Charged with Felony Crimes Related to 2014 Attempted Cattle ImpoundmentRead the Press Release
LAS VEGAS, Nev. – Nevada rancher Cliven Bundy was arrested yesterday evening in Portland, Ore., and faces multiple felony charges filed in the District of Nevada related to the attempted cattle impoundment operation conducted by federal law enforcement officers near Bunkerville, Nev. in April 2014, according to U.S. Attorney Daniel G. Bogden for the District of Nevada.
Bundy, 69, of Bunkerville, Nev., is charged in a criminal complaint with conspiracy to commit an offense against the United States, assault on a federal law enforcement officer, using and carrying a firearm in relation to a crime of violence, obstruction of the administration of justice, and interference with commerce by extortion. Bundy is scheduled for an initial court appearance at 1:30 p.m. today in Portland.
The 32-page complaint alleges that on or about April 12, 2014, Bundy and his co-conspirators organized and led a massive armed assault against federal law enforcement officers who were attempting to execute federal court orders to remove cattle from the federal public lands in Bunkerville, Nev.
If convicted, Bundy faces up to five years in prison on the conspiracy charge, up to 20 years in prison on the assault on a federal law enforcement officer and interference with commerce by extortion charges, up to 10 years in prison on the obstruction of justice charge, and a mandatory minimum consecutive of seven years in prison on the use and carry of a firearm in relation to a crime of violence charge, as well as fines of up to $250,000 per count.
The case is being investigated by the FBI and the Bureau of Land Management.
The public is reminded that a criminal complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Morgan Stanley Agrees to Pay $2.6 Billion Penalty in Connection with Its Sale of Residential Mortgage Backed SecuritiesRead the Press Release
The Justice Department today announced that Morgan Stanley will pay a $2.6 billion penalty to resolve claims related to Morgan Stanley’s marketing, sale and issuance of residential mortgage-backed securities (RMBS). This settlement constitutes the largest component of the set of resolutions with Morgan Stanley entered by members of the RMBS Working Group, which have totaled approximately $5 billion. As part of the agreement, Morgan Stanley acknowledged in writing that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its RMBS and about its due diligence practices. Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in RMBS issued by Morgan Stanley in 2006 and 2007.
“Today’s settlement holds Morgan Stanley appropriately accountable for misleading investors about the subprime mortgage loans underlying the securities it sold,” said Acting Associate Attorney General Stuart F. Delery. “The Department of Justice will not tolerate those who seek financial gain through deceptive or unfair means, and we will take appropriately aggressive action against financial institutions that knowingly engage in improper investment practices.”
“Those who contributed to the financial crisis of 2008 cannot evade responsibility for their misconduct,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This resolution demonstrates once again that the Financial Institutions Reform, Recovery and Enforcement Act is a powerful weapon for combatting financial fraud and that the department will not hesitate to use it to hold accountable those who violate the law.”
An RMBS is a type of security comprised of a pool of mortgage loans created by banks and other financial institutions. The expected performance and price of an RMBS is determined by a number of factors, including the characteristics of the borrowers and the value of the properties underlying the RMBS. Morgan Stanley was one of the institutions that issued RMBS during the period leading up to the economic crisis in 2007 and 2008.
As acknowledged by Morgan Stanley in a detailed statement of facts that is a part of this agreement (and is quoted below), the company made representations to prospective investors about the characteristics of the subprime mortgage loans underlying its RMBS – representations with which it did not comply:
- In particular, Morgan Stanley told investors that it did not securitize underwater loans (loans that exceeded the value of the property). However, Morgan Stanley did not disclose to investors that in April 2006 it had expanded its “risk tolerance” in evaluating loans in order to purchase and securitize “everything possible.” As Morgan Stanley’s manager of valuation due diligence told an employee in 2006, “please do not mention the ‘slightly higher risk tolerance’ in these communications. We are running under the radar and do not want to document these types of things.” As a result, Morgan Stanley ignored information – including broker’s price opinions (BPOs), which are estimates of a property’s value from an independent real estate broker – indicating that thousands of securitized loans were underwater, with combined-loan-to-value ratios over 100 percent. From January 2006 through mid-2007, Morgan Stanley acknowledged that “Morgan Stanley securitized nearly 9,000 loans with BPO values resulting in [combined loan to value] ratios over 100 percent.”
- Morgan Stanley also told investors that it did not securitize loans that failed to meet originators’ guidelines unless those loans had compensating factors. Morgan Stanley’s offering documents “represented that ‘[the mortgage loans originated or acquired by [the originator] were done so in accordance with the underwriting guidelines established by [the originator]’ but that ‘on a case-by-case-basis, exceptions to the [underwriting guidelines] are made where compensating factors exist.’” Morgan Stanley has now acknowledged, however, that “Morgan Stanley did not disclose to securitization investors that employees of Morgan Stanley received information that, in certain instances, loans that did not comply with underwriting guidelines and lacked adequate compensating factors . . . were included in the RMBS sold and marketed to investors.” So, in fact, “Morgan Stanley . . . securitized certain loans that neither comported with the originators’ underwriting guidelines nor had adequate compensating factors.”
- Likewise, “Morgan Stanley also prepared presentation materials . . . that it used in discussions with potential investors that described the due diligence process for reviewing pools of loans prior to securitization,” but “certain of Morgan Stanley’s actual due diligence practices did not conform to the description of the process set forth” in those materials.
- For example, Morgan Stanley obtained BPOs for a percentage of loans in a pool. Morgan Stanley stated in these presentation materials that it excluded any loan with a BPO value exhibiting an “unacceptable negative variance from the original appraisal,” when in fact “Morgan Stanley never rejected a loan based solely on the BPO results.”
- Through these undisclosed practices, Morgan Stanley increased the percentage of mortgage loans it purchased for its RMBS, notwithstanding its awareness about “deteriorating appraisal quality” and “sloppy underwriting” by the sellers of these loans. The bank has now acknowledged that “Morgan Stanley was aware of problematic lending practices of the subprime originators from which it purchased mortgage loans.” However, it “did not increase its credit-and-compliance due diligence samples, in part, because it did not want to harm its relationship with its largest subprime originators.” Indeed, Morgan Stanley’s manager of credit-and-compliance due diligence was admonished to “stop fighting and begin recognizing the point that we need monthly volume from our biggest trading partners and that . . . the client [an originator] does not have to sell to Morgan Stanley.”
“In today’s agreement, Morgan Stanley acknowledges it sold billions of dollars in subprime RMBS certificates in 2006 and 2007 while making false promises about the mortgage loans backing those certificates,” said Acting U.S. Attorney Brian J. Stretch of the Northern District of California. “Morgan Stanley touted the quality of the lenders with which it did business and the due diligence process it used to screen out bad loans. All the while, Morgan Stanley knew that in reality, many of the loans backing its securities were toxic. Abuses in the mortgage-backed securities industry such as these helped bring about the most devastating financial crisis in our lifetime. Our office is committed to dedicating the resources necessary to hold those who engage in such reckless actions responsible for their conduct.”
The $2.6 billion civil monetary penalty resolves claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). FIRREA authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. The settlement expressly preserves the government’s ability to bring criminal charges against Morgan Stanley, and likewise does not release any individuals from potential criminal or civil liability. In addition, as part of the settlement, Morgan Stanley promised to cooperate fully with any ongoing investigations related to the conduct covered by the agreement.
In conjunction with today’s announcement of the federal government’s settlement with Morgan Stanley, the states of New York and Illinois – also members of the RMBS Working Group – have announced settlements with Morgan Stanley for $550 million and $22.5 million, respectively, arising from its sale of RMBS. Among other resolutions, Morgan Stanley previously paid $225 million to resolve claims brought by the National Credit Union Administration arising from losses related to corporate credit unions’ purchases of RMBS; $1.25 billion to resolve claims by Federal Housing Finance Agency (FHFA) for Morgan Stanley’s alleged violations of federal and state securities laws and common law fraud in connection with RMBS purchased by Fannie Mae and Freddie Mac; and $86.95 million to resolve federal and state securities laws claims brought by the Federal Deposit Insurance Corporation as receiver on behalf of failed financial institutions. Morgan Stanley also previously entered into a consent decree with the U.S. Securities and Exchange Commission (SEC) to pay $275 million to resolve certain RMBS claims. With today’s announcement, Morgan Stanley will have paid nearly $5 billion to members of the RMBS Working Group in connection with its sale of RMBS.
Today’s settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered billions of dollars arising from misconduct related to the financial crisis. The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together attorneys, investigators, analysts and staff from multiple state and federal agencies, including the Department of Justice, U.S. Attorneys’ Offices, the FBI, the SEC, the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA Office of Inspector General (OIG), the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s OIG, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and multiple state Attorneys General offices around the country. The RMBS Working Group is led by Director Joshua Wilkenfeld and five co-chairs: Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Director Andrew Ceresney of the SEC’s Division of Enforcement, U.S. Attorney John Walsh of the District of Colorado and New York Attorney General Eric Schneiderman.
“The securitization of defective mortgages and the billions of dollars that were lost as a result caused such a hardship to our economy, the housing industry and our nation as a whole that we are still feeling the effects years after,” said Deputy Inspector General for Investigations Rene Febles of FHFA-OIG. “Morgan Stanley is responsible for their role, which caused enormous losses to investors. This settlement is one step in recovering from those losses. We are proud to work with the RMBS Working Group and the U.S. Department of Justice on this and all RMBS matters.”
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Northern District of California, with investigative support from FHFA-OIG and the Special Inspector General for the Troubled Asset Relief Program.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov
Morgan Stanley Agrees to Pay $2.6 Billion Penalty in Connection with Its Sale of Residential Mortgage Backed SecuritiesRead the Press Release
WASHINGTON – The Justice Department today announced that Morgan Stanley will pay a $2.6 billion penalty to resolve claims related to Morgan Stanley’s marketing, sale and issuance of residential mortgage-backed securities (RMBS). This settlement constitutes the largest component of the set of resolutions with Morgan Stanley entered by members of the RMBS Working Group, which have totaled approximately $5 billion. As part of the agreement, Morgan Stanley acknowledged in writing that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its RMBS, and about its due diligence practices. Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in RMBS issued by Morgan Stanley in 2006 and 2007.
“Today’s settlement holds Morgan Stanley appropriately accountable for misleading investors about the subprime mortgage loans underlying the securities it sold,” said Acting Associate Attorney General Stuart F. Delery. “The Department of Justice will not tolerate those who seek financial gain through deceptive or unfair means, and we will take appropriately aggressive action against financial institutions that knowingly engage in improper investment practices.”
“Those who contributed to the financial crisis of 2008 cannot evade responsibility for their misconduct,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This resolution demonstrates once again that the Financial Institutions Reform, Recovery and Enforcement Act is a powerful weapon for combatting financial fraud and that the department will not hesitate to use it to hold accountable those who violate the law.”
An RMBS is a type of security comprised of a pool of mortgage loans created by banks and other financial institutions. The expected performance and price of an RMBS is determined by a number of factors, including the characteristics of the borrowers and the value of the properties underlying the RMBS. Morgan Stanley was one of the institutions that issued RMBS during the period leading up to the economic crisis in 2007 and 2008.
As acknowledged by Morgan Stanley in a detailed statement of facts that is a part of this agreement (and is quoted below), the company made representations to prospective investors about the characteristics of the subprime mortgage loans underlying its RMBS – representations with which it did not comply:
- In particular, Morgan Stanley told investors that it did not securitize underwater loans (loans that exceeded the value of the property). However, Morgan Stanley did not disclose to investors that in April 2006 it had expanded its “risk tolerance” in evaluating loans in order to purchase and securitize “everything possible.” As Morgan Stanley’s manager of valuation due diligence told an employee in 2006, “please do not mention the ‘slightly higher risk tolerance’ in these communications. We are running under the radar and do not want to document these types of things.” As a result, Morgan Stanley ignored information – including broker’s price opinions (BPOs), which are estimates of a property’s value from an independent real estate broker – indicating that thousands of securitized loans were underwater, with combined-loan-to-value ratios over 100 percent. From January 2006 through mid-2007, Morgan Stanley acknowledged that “Morgan Stanley securitized nearly 9,000 loans with BPO values resulting in [combined loan to value] ratios over 100 percent.”
- Morgan Stanley also told investors that it did not securitize loans that failed to meet originators’ guidelines unless those loans had compensating factors. Morgan Stanley’s offering documents “represented that ‘[the mortgage loans originated or acquired by [the originator] were done so in accordance with the underwriting guidelines established by [the originator]’ but that ‘on a case-by-case-basis, exceptions to the [underwriting guidelines] are made where compensating factors exist.’” Morgan Stanley has now acknowledged, however, that “Morgan Stanley did not disclose to securitization investors that employees of Morgan Stanley received information that, in certain instances, loans that did not comply with underwriting guidelines and lacked adequate compensating factors . . . were included in the RMBS sold and marketed to investors.” So, in fact, “Morgan Stanley . . . securitized certain loans that neither comported with the originators’ underwriting guidelines nor had adequate compensating factors.”
- Likewise, “Morgan Stanley also prepared presentation materials . . . that it used in discussions with potential investors that described the due diligence process for reviewing pools of loans prior to securitization,” but “certain of Morgan Stanley’s actual due diligence practices did not conform to the description of the process set forth” in those materials.
- For example, Morgan Stanley obtained BPOs for a percentage of loans in a pool. Morgan Stanley stated in these presentation materials that it excluded any loan with a BPO value exhibiting an “unacceptable negative variance from the original appraisal,” when in fact “Morgan Stanley never rejected a loan based solely on the BPO results.”
- Through these undisclosed practices, Morgan Stanley increased the percentage of mortgage loans it purchased for its RMBS, notwithstanding its awareness about “deteriorating appraisal quality” and “sloppy underwriting” by the sellers of these loans. The bank has now acknowledged that “Morgan Stanley was aware of problematic lending practices of the subprime originators from which it purchased mortgage loans.” However, it “did not increase its credit-and-compliance due diligence samples, in part, because it did not want to harm its relationship with its largest subprime originators.” Indeed, Morgan Stanley’s manager of credit-and-compliance due diligence was admonished to “stop fighting and begin recognizing the point that we need monthly volume from our biggest trading partners and that . . . the client [an originator] does not have to sell to Morgan Stanley.”
“In today’s agreement, Morgan Stanley acknowledges it sold billions of dollars in subprime RMBS certificates in 2006 and 2007 while making false promises about the mortgage loans backing those certificates,” said Acting U.S. Attorney Brian J. Stretch of the Northern District of California. “Morgan Stanley touted the quality of the lenders with which it did business and the due diligence process it used to screen out bad loans. All the while, Morgan Stanley knew that in reality, many of the loans backing its securities were toxic. Abuses in the mortgage-backed securities industry such as these helped bring about the most devastating financial crisis in our lifetime. Our office is committed to dedicating the resources necessary to hold those who engage in such reckless actions responsible for their conduct.”
The $2.6 billion civil monetary penalty resolves claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). FIRREA authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. The settlement expressly preserves the government’s ability to bring criminal charges against Morgan Stanley, and likewise does not release any individuals from potential criminal or civil liability. In addition, as part of the settlement, Morgan Stanley promised to cooperate fully with any ongoing investigations related to the conduct covered by the agreement.
In conjunction with today’s announcement of the federal government’s settlement with Morgan Stanley, the states of New York and Illinois – also members of the RMBS Working Group – have announced settlements with Morgan Stanley for $550 million and $22.5 million, respectively, arising from its sale of RMBS. Among other resolutions, Morgan Stanley previously paid $225 million to resolve claims brought by the National Credit Union Administration arising from losses related to corporate credit unions’ purchases of RMBS; $1.25 billion to resolve claims by Federal Housing Finance Agency (FHFA) for Morgan Stanley’s alleged violations of federal and state securities laws and common law fraud in connection with RMBS purchased by Fannie Mae and Freddie Mac; and $86.95 million to resolve federal and state securities laws claims brought by the Federal Deposit Insurance Corporation as receiver on behalf of failed financial institutions. Morgan Stanley also previously entered into a consent decree with the U.S. Securities and Exchange Commission (SEC) to pay $275 million to resolve certain RMBS claims. With today’s announcement, Morgan Stanley will have paid nearly $5 billion to members of the RMBS Working Group in connection with its sale of RMBS.
Today’s settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered billions of dollars arising from misconduct related to the financial crisis. The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together attorneys, investigators, analysts and staff from multiple state and federal agencies, including the Department of Justice, U.S. Attorneys’ Offices, the FBI, the SEC, the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA Office of Inspector General (OIG), the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s OIG, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and multiple state Attorneys General offices around the country. The RMBS Working Group is led by Director Joshua Wilkenfeld and five co-chairs: Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Director Andrew Ceresney of the SEC’s Division of Enforcement, U.S. Attorney John Walsh of the District of Colorado and New York Attorney General Eric Schneiderman.
“The securitization of defective mortgages and the billions of dollars that were lost as a result caused such a hardship to our economy, the housing industry and our nation as a whole that we are still feeling the effects years after,” said Deputy Inspector General for Investigations Rene Febles of FHFA-OIG. “Morgan Stanley is responsible for their role, which caused enormous losses to investors. This settlement is one step in recovering from those losses. We are proud to work with the RMBS Working Group and the U.S. Department of Justice on this and all RMBS matters.”
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Northern District of California, with investigative support from FHFA-OIG.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov