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28 March 2016
Tennessee and New York-Based Defense Contractors Agree to Pay $8 Million to Settle False Claims Act Allegations Involving Defective Countermeasure Flares Sold to the U.S. ArmyRead the Press Release
The Department of Justice announced today that Kilgore Flares Company and one of its subcontractors, ESM Group Inc., have agreed to pay a total of $8 million to resolve allegations that they violated the False Claims Act by selling or conspiring to sell defective infrared countermeasure flares to the U.S. Army and, in the case of ESM, knowingly evading customs duties owed to the United States. Tennessee-based Kilgore Flares manufactures and sells electronics and energetic products, such as flares, to the U.S. military. ESM Group, located in New York, manufactures magnesium powder supplied to the chemical, welding and pyrotechnics industries. ESM imported magnesium powder used in the flares from the People’s Republic of China (PRC), which it sold to Kilgore Flares.
“The Department of Justice is committed to ensuring that contractors do not cut corners in manufacturing critical items sold to the U.S. military,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “These settlements also show that the department will aggressively pursue those who avoid paying duties to gain an unfair business advantage over competitors who abide by the rules.”
The U.S. military uses infrared countermeasure flares to divert enemy heat-seeking missiles away from U.S. military aircraft. A primary component of these flares is ultrafine magnesium powder, which combined with other materials, provides ignition and enables the flares to burn at high temperatures and at rates that mimic an aircraft’s engine. Kilgore’s contracts with the army prohibited the use of magnesium powder from foreign countries (except Canada) in order to maintain domestic manufacturing capability in the interest of national defense.
The United States alleged that from July 2003 through May 2005, ESM knowingly misrepresented the content of ultrafine magnesium powder imported from the PRC in order to avoid paying antidumping duties owed to the United States. Antidumping duties protect against foreign companies “dumping” products on the U.S. market at prices below cost. The U.S. Department of Commerce assesses and U.S. Customs and Border Protection (CBP) collects these duties to protect U.S. businesses and level the playing field for domestic products. At the time of the imports alleged in this case, ultrafine magnesium powder from the PRC was subject to a 305 percent antidumping duty.
The government further alleged that from March 2005 through August 2006, Kilgore used the illegally imported Chinese magnesium powder purchased from ESM in the countermeasure flares it sold to the U.S. Army. The Chinese magnesium powder allegedly violated both the requirement for domestically produced powder and engineering specifications required by the contracts.
Kilgore and ESM agreed to pay $6 million and $2 million, respectively, to resolve the government’s allegations.
“Our warfighters– along with everyone who relies upon them, including their families – need to know that the equipment they use is of the highest quality and dependability,” said U.S. Attorney William J. Hochul Jr. of the Western District of New York. “In this case, the magnesium flares made by Kilgore were literally the last line of defense for our brave aviators. Because of today’s resolution, Kilgore will now ensure that similar incidents do not happen in the future.”
Prior to the civil settlements with Kilgore and ESM, five former employees and agents of ESM pleaded guilty to criminal offenses related to the magnesium importation scheme, including ESM’s former president, Charles Wright. The criminal defendants were ordered to pay more than $14 million in restitution.
“These civil settlements demonstrate the continued commitment of the Defense Criminal Investigative Service (DCIS) and our partner agencies to pro-actively identify individuals and groups intent on providing substandard, substituted products to the U.S. military in exchange for unwarranted exorbitant profits,” said Special Agent in Charge Craig W. Rupert of the U.S. Department of Defense Inspector General, DCIS. “Such schemes, perpetrated by dishonest contractors and individuals, place the American Warfighter in danger, erode public confidence and undermine the mission of our military services. The DCIS and its law enforcement partners will continue to tirelessly pursue and investigate procurement fraud allegations in order to safeguard our military members and to shield America’s investment in national defense.”
“The components of U.S. military equipment are held to rigorous standards to ensure our military superiority and the safety of our warfighters,” said Special Agent in Charge James Spero of Homeland Security Investigations (HSI) Buffalo. “When short cuts are taken, lives are put at risk. This settlement ensures that the companies involved are held responsible for their actions and further emphasizes HSI’s commitment to ensuring that the sale and distribution of products used by our military is done with integrity.”
The settlement with ESM resolved a lawsuit filed under the whistleblower provisions of the False Claims Act. The act permits private parties to sue on behalf of the United States those who falsely claim federal funds or, as in this case, those who avoid paying funds owed to the government. The lawsuit was filed by Reade Manufacturing Company, a domestic manufacturer of magnesium powder. The act also allows the whistleblower to receive a share of any funds recovered through the lawsuit. Reade Manufacturing received $400,000 as part of the settlement with ESM.
The settlements with Kilgore and ESM were the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of New York, U.S. Army Criminal Investigation Command, Defense Contract Audit Agency, DCIS, U.S. Immigration and Customs Enforcement’s HSI Buffalo and U.S. Customs and Border Protection. Additional technical support was provided by the Army Sustainment Command at Rock Island Arsenal, Ill. and the Army Research, Development and Engineering Command at Picatinny Arsenal, New Jersey.
The lawsuit against ESM is captioned United States ex rel. Reade Manufacturing Co. v. ESM Group, Inc., Civ. No. 10 - CV - 504-S (W.D.N.Y.). The claims resolved by these settlements are allegations only; there has been no determination of liability except as admitted by the individual defendants in the criminal proceedings.
Tennessee Business Owner Pleads Guilty to Failing to Pay More Than $6.8 Million in Employment TaxesRead the Press Release
A Germantown, Tennessee, resident and business owner pleaded guilty to one count of failing to pay over employment taxes to the Internal Revenue Service (IRS), announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Edward L. Stanton III of the Western District of Tennessee.
“Employers such as Larry Thornton are required by law to withhold taxes from their employees’ wages, hold those funds in trust, and pay over those funds to the IRS,” said Acting Assistant Attorney General Ciraolo. “Willful failure to comply with this requirement is a crime, and prosecution of those responsible remains among the Tax Division’s top priorities. Those individuals who choose to maintain their business and line their pockets with the trust funds of their employees are stealing from the U.S. Treasury – plain and simple and will face heavy consequences including incarceration.”
According to court documents, Larry Thornton, 66, was the majority owner, president and chief executive officer of Software Earnings Inc. (SEI), a Memphis company that produced and installed check processing. Thornton was also the 100 percent owner, CEO and president of First Touch Payment Solutions LLC (First Touch), a Memphis company that provided merchant services for credit card processing. Thornton, as CEO and president of SEI and First Touch, had ultimate and final decision-making authority regarding SEI’s and First Touch’s business activities and had authority to exercise significant control over SEI’s financial affairs. As part of his plea, Thornton admitted that he was responsible for collecting, accounting for and paying over to the IRS federal income taxes and Federal Insurance Contributions Act (FICA) taxes that were withheld from the wages of SEI and First Touch’s employees.
Beginning in the second quarter of 2007, Thornton caused SEI to stop paying over the taxes required to be withheld from SEI’s employees’ paychecks and caused SEI to stop timely filing Employer’s Quarterly Federal Tax Returns, Forms 941, with the IRS. Beginning in the first quarter of 2010, Thornton caused First Touch to stop paying over the taxes required to be withheld from First Touch’s employees’ paychecks and caused First Touch to fail to timely file Forms 941 with the IRS. Between 2007 and 2011, Thornton collected more than $6.8 million in employment taxes from SEI and First Touch employees’ paychecks, but failed to pay those collected taxes over to the IRS. Thornton also failed to pay his companies’ matching share of FICA taxes during those years. During the same years that Thornton failed to comply with his employment tax obligations, he spent over $6.2 million on personal expenses, including house and condominium payments; vehicle, yacht and motorcycle loan payments; personal travel; and start-up funding for his wife’s beauty boutique. As part of the guilty plea, Thornton admitted that his fraudulent conduct caused a tax loss of more than $8.9 million to the IRS.
“Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service on behalf of those employees,” said Special Agent in Charge Tracey D. Montaño of IRS Criminal Investigation. “Employment tax evasion not only results in the loss of tax revenue to the U.S. government, it also results in the loss of future social security or Medicare benefits for the employees. Failure to pay over withheld taxes is a serious offense. IRS Criminal Investigation will vigorously pursue anyone who, at the expense of their hard working employees, collects taxes and uses the proceeds for their own personal gain, rather than to fulfilling their employer obligations.”
Thornton faces a statutory maximum sentence of five years in prison, three years of supervised release, a fine and restitution. Under the terms of the plea agreement, Thornton has agreed to pay more than $10 million in restitution to the IRS. The sentencing is set for July 22.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stanton commended special agents of IRS Criminal Investigation, who investigated the case and Assistant U.S. Attorney Damon Griffin of the Western District of Tennessee and Trial Attorney Robert J. Boudreau of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Statement of United States Attorney Eileen M. Decker on Government Request to Vacate Order Directing Apple to Help Access iPhoneRead the Press Release
The government has asked a United States Magistrate Judge in Riverside, California to vacate her order compelling Apple to assist the FBI in unlocking the iPhone that was used by one of the terrorists who murdered 14 innocent Americans in San Bernardino on December 2nd of last year. Our decision to conclude the litigation was based solely on the fact that, with the recent assistance of a third party, we are now able to unlock that iPhone without compromising any information on the phone.
We sought an order compelling Apple to help unlock the phone to fulfill a solemn commitment to the victims of the San Bernardino shooting – that we will not rest until we have fully pursued every investigative lead related to the vicious attack. Although this step in the investigation is now complete, we will continue to explore every lead, and seek any appropriate legal process, to ensure our investigation collects all of the evidence related to this terrorist attack. The San Bernardino victims deserve nothing less.
St. Lawrence County Felon Pleads Guilty to Possessing Gun, AmmunitionRead the Press Release
PLATTSBURGH, NEW YORK – Clayton T. Brothers, age 40, of Russell, New York, pled guilty on Friday to illegally possessing a firearm and more than 1,000 rounds of steel-penetrating ammunition.
The announcement was made by United States Attorney Richard S. Hartunian; James Spero, Special Agent in Charge for Immigration and Customs Enforcement, Homeland Security Investigations (HSI); New York State Police Superintendent Joseph D’Amico; and Anthony J. Annucci, Acting Commissioner of the New York State Department of Corrections and Community Supervision.
As part of his plea, Brothers admitted to possessing a Sig Sauer 556 pistol, and more than 1,000 rounds of 5.56 mm caliber NATO Lake City XM855 Grain Steel Penetrator ammunition, at his home in St. Lawrence County in April 2014. A prior felony conviction prevents Brothers from possessing firearms and ammunition.
He faces up to 10 years in prison, a fine of up to $250,000, and a term of post-imprisonment supervised release of up to 3 years when he is sentenced on July 25, 2016 by United States District Judge Brenda K. Sannes. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case was investigated by Homeland Security Investigations, the New York State Police, and the New York State Department of Corrections and Community Supervision, and was prosecuted by Assistant U.S. Attorney Douglas Collyer.
Southern Texas Man Pleads Guilty to Drug ConspiracyRead the Press Release
Rey Ramirez, a resident of Pharr, Texas, pled guilty in federal district court on March 22, 2016, to conspiracy to possess with intent to distribute and distribution of cocaine and marijuana, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Ramirez surrendered into custody after the hearing and will be detained pending sentencing, which is scheduled for July 14, 2016, at 1:30 P.M. before the Honorable Nancy J. Rosenstengel. Ramirez faces a mandatory minimum sentence of ten years, up to life imprisonment, followed by a minimum of five years on supervised release, as well as a fine of up to $10,000,000 and a special assessment fee of $100.
Documents filed in court revealed that Ramirez agreed with others to distribute about 2,000 pounds of marijuana in Atlanta, Georgia, Akron, Ohio, and Imperial, Missouri, between March 2014 and July 2014, as well as 21 kilograms of cocaine in Imperial, Missouri in late June 2014. Some of these drugs were destined for distribution in this district.
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 Drug Enforcement Administration and the Internal Revenue Service, Criminal Investigations. This case was prosecuted by Assistant United States Attorney Monica A. Stump.
Rhode Island Man Pleads Guilty to Interstate Travel to have Sex with a MinorRead the Press Release
Contact: Michael J. Conley
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that William McNeill, 23, of Cumberland, Rhode Island, pled guilty today in U.S. District Court to travelling in interstate commerce to engage in sexual conduct with a minor.
According to court documents, in the fall of 2014, McNeill met a 14 year-old girl from Cumberland County online. On about October 18, 2014, following several weeks of communicating with the juvenile in a sexually explicit manner, McNeill travelled from North Carolina to Maine to meet and have sexual relations with her.
McNeill faces up to 30 years in prison and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.The case resulted from a joint investigation between the Naval Criminal Investigative Service and the Bridgton, Maine Police Department.
Project Safe Childhood - Newport Man Pleads Guilty to Child Pornography PossessionRead the Press Release
CONCORD, NEW HAMPSHIRE: Allen Langlois, 49, of Newport, New Hampshire, pled guilty on Monday in United States District Court for the District of New Hampshire to possessing child pornography, announced United States Attorney Emily Gray Rice.
An investigation conducted by the Federal Bureau of Investigation revealed that an individual was accessing a known child pornography website from the defendant’s Newport, New Hampshire residence, for which a federal search warrant was issued. When that warrant was executed in September 2015, hundreds of still images of child pornography were discovered on Langlois’s personal computer.
Langlois is scheduled for sentencing in July 2016. Pursuant to the terms of his plea agreement, he has stipulated to a sentence of 42 months’ imprisonment, followed by an extended period of supervised release. He also faces a fine of up to $250,000.
FBI was assisted in this case by the Police Departments of Newport, Manchester, and Nashua, New Hampshire, as well as the New Hampshire State Police. The case is being prosecuted by Assistant United States Attorney Nick Abramson.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led, in each district, by the United States Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Orlando Woman Indicted for Scheme to Allow Construction Contractors to Conceal the Employment of Undocumented Aliens and Evade Workers’ Compensation and Payroll TaxesRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Orquidea Quezada (48, Orlando) with 49 counts of wire fraud and one count of operating as an unlicensed money transmitter. Each wire fraud count carries a maximum penalty of 20 years in federal prison. The money transmitting count carries a maximum penalty of 5 years’ imprisonment. The indictment also notifies Quezada that the United States intends to seek forfeiture in the amount of $870,000, which is the approximate amount she made from the alleged scheme. Quezada was arrested on Saturday, March 26, 2016, by special agents from U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and taskforce officers from Seminole and Orange Counties.
According to the indictment, between May 2013 and May 2016, Quezada (doing business as Orquicely Construction, LLC) applied for workers’ compensation insurance policies to cover two to seven employees, and an annual payroll of about $100,000. The insurance companies issued the policies for annual premiums based on the payroll information set forth in the applications.
Quezada then “rented” the insurance policies to numerous construction subcontractors who employed hundreds of workers, many of whom were undocumented aliens. To do so, she directed her insurance agent to e-mail the subcontractors a certificate of insurance that implied the insurance would cover their workers. The subcontractors wrote payroll checks to Orquicely Construction for work performed by their employees. Quezada then cashed those checks and paid the subcontractors’ employees in cash, through work crew leaders. Quezada kept five percent of each check as a fee for her services. Between May 2013 and November 2015, Quezada funneled approximately $17.4 million dollars to the subcontractors’ employees through her company.
Neither Orquicely Construction nor the subcontractors deducted state or federal taxes, such as for Medicare and Social Security, from the workers’ pay. The scheme allowed the subcontractors to avoid these taxes and workers’ compensation taxes, and to conceal their employment of undocumented aliens that were working illegally in the United States.
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (Jacksonville and Orlando), the Internal Revenue Service – Criminal Investigation, and the Florida Department of Financial Services, Division of Insurance Fraud. It will be prosecuted by Assistant United States Attorney Arnold B. Corsmeier.
Omaha Man Convicted of Possessing a FirearmRead the Press Release
United States Attorney Deborah R. Gilg announced that Rashad Pettis, age 28, of Omaha, Nebraska, was sentenced today to 15 months in federal prison after pleading guilty on December 14, 2015, to being a felon in possession of a firearm. The Honorable Laurie Smith Camp sentenced Pettis and included an order that he be on supervised release for two years following his release from prison.
On September 16 2015, Omaha Police Officers were in the area of 33rd and Hamilton Streets when they stopped a car for not having a valid license plate. As officers got out of their car they saw the driver of the stopped car bend over as if to hide something. When the officers approached they could see the grip of a handgun. Pettis was the driver. A check of his criminal history revealed a conviction for felony flight to avoid arrest in 2009. It is a violation of federal law for someone who has been convicted of a felony offense to possess a firearm.
The case was investigated by the Omaha Police Department.
Newton County Man Pleads Guilty to AssaultRead the Press Release
Jackson, Miss - Samuel Triplett, 36, of Newton County, Mississippi, pled guilty on Tuesday, March 22, 2016, before U.S. District Judge William H. Barbour, Jr., to assaulting his wife, who is a member of the Mississippi Band of Choctaw Indians, announced U.S. Attorney Gregory K. Davis.
Triplett, a non-Indian, admitted assaulting his wife on lands within the confines of the Conehatta Community. He further admitted in federal court to breaking and entering the Beach Club at Geyser Falls on May 31, 2014. Both the Conehatta Community and the Beach Club are on lands belonging to the Mississippi Band of Choctaw Indians.
Triplett will be sentenced on June 7, 2016, and faces a maximum penalty of 17 years in federal prison.
This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Glenda Haynes.
Newalla Man Sentenced to 10 Years in Prison for Possession of Child PornographyRead the Press Release
Oklahoma City, Oklahoma – CHRISTOPHER MINOR, 32, of Newalla, Oklahoma, was sentenced by United States District Judge David L. Russell to serve 120 months in federal prison for possession of child pornography, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
On September 1, 2015, a federal grand jury indicted Mr. Minor for distribution of child pornography. On October 19, 2015, Mr. Minor pleaded guilty to a one-count Superseding Information charging him with possession of child pornography, the production of which involved the use of a prepubescent minor under the age of 12.
At his sentencing hearing today, Judge Russell sentenced Mr. Minor to serve 120 months in federal prison, followed by eight years of supervised release.
This case is the result of an investigation by Homeland Security Investigations and was prosecuted by Assistant U.S. Attorney Julia E. Barry.
New York Man Pleads Guilty to Conspiracy to Defraud U.S. Defense ContractorsRead the Press Release
ALEXANDRIA, Va. – Solomon Oyesanya, 33, of Brooklyn, New York, pleaded guilty today to a charge of conspiracy to commit wire fraud.
Oyesanya admitted that he was part of a conspiracy, led by two Nigerian nationals, to fraudulently obtain computer hardware and products from contractors and vendors who were approved to do business with the U.S. Government, specifically the U.S. Department of Defense (“U.S. DoD”). To accomplish this scheme, members of the conspiracy created fake U.S. DoD and other U.S. government agency websites and email accounts (sometimes called “spoofed” websites and email accounts) and placed fraudulent government purchase orders with victim contractors and vendors for large quantities of computer hardware and similar products. In furtherance of the conspiracy, Oyesanya, using false identification, picked up or attempted to pick up fraudulently ordered shipments from legitimate carriers to divert the shipments to co-conspirators in Nigeria. The actual and intended losses to the government contractors and vendors targeted by the conspiracy exceeded $1.5 million.
Oludayo Edgal, 32, of West Covina, California, also pleaded guilty on February 4 to a felony arising from this conspiracy.
Oyesanya, who will be sentenced on June 24, and Edgal, who will be sentenced on April 29, each face a maximum penalty of 20 years in prison, respectively. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Jeffery Thorpe, Special Agent in Charge of the Defense Criminal Investigative Service Cyber Field Office; and Kevin Perkins, Special Agent in Charge of the FBI’s Baltimore Field Office, made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorney Kellen S. Dwyer and Special Assistant U.S. Attorneys John D. Filamor and Nima R.T. Binara are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-69.
New York Man Pleads Guilty to Child Sex TraffickingRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 29-year-old Brooklyn, New York man pleaded guilty March 25, 2016 to sex trafficking of a minor before U.S. Magistrate Judge Karoline Mehalchick in Scranton.
According to United States Attorney Peter Smith, the defendant, Clinton Hayden a/k/a “Showtime,” admitted to recruiting, enticing, and transporting two minor females from Luzerne County to Brooklyn to engage in commercial sex acts.
Hayden was charged in an Information filed in December 2015, as a result of an investigation by agents of Homeland Security Investigations and the Pennsylvania State Police.
Hayden admitted that he recruited the minor females, posted photographs of them in advertisements on a website, and transported them to Brooklyn, where they engaged in prostitution at Hayden’s direction.
Hayden faces a mandatory minimum sentence of 10 years in prison and a potential maximum sentence of life in prison. Judge Mehalchick ordered a pre-sentence investigation to be completed, and ordered Hayden to be detained in prison pending sentencing. Hayden will be sentenced by Senior U.S. District Court Judge Richard P. Conaboy at a later date.
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."
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Mt. Vernon Woman Sentenced on Crack Cocaine OffenseRead the Press Release
On March 22, 2016, Tammy R. Whitton, 45, of Mt. Vernon, IL, was sentenced for a crack cocaine offense, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Whitton, who had previously pled guilty to a one-count superseding indictment charging conspiracy to distribute 28 grams or more of crack cocaine, was sentenced to 120 months in federal prison, to be followed by 8 years of supervised release, and fined $300.00. The offense occurred between October 2014 and July 2015, in Williamson and Jackson Counties. Evidence at the plea and sentencing hearings established that Whitton was involved with others in the distribution of crack cocaine in the Marion and Carbondale areas. During the investigation, Whitton sold crack cocaine to confidential sources working for law enforcement. At sentencing, the judge found that Whitton was responsible for the distribution of 133 grams of crack cocaine. Three co-defendants have pled guilty to their roles in the crack cocaine conspiracy and are awaiting sentencing. One co-defendant has pled not guilty and is awaiting trial.
The ongoing investigation is being conducted by the Southern Illinois Enforcement Group, Drug Enforcement Administration, Jackson County Sheriff’s Office, and Carbondale Police Department. The Williamson and Jackson County State’s Attorney’s Offices also assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Montgomery County Man Facing Federal Indictment for Distribtuion of Acetyl Fentanyl Resulting in DeathRead the Press Release
Greenbelt, Maryland – A federal grand jury indicted Justin Larson, age 30, of Gaithersburg, Maryland, today for distribution of acetyl fentanyl, a controlled substance analogue, which resulted in death, and for a narcotics conspiracy.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief J. Thomas Manger of the Montgomery County Police Department; and Montgomery County State’s Attorney John McCarthy.
According to the two count indictment, from May 2014 through March 17, 2016, Larson participated in a conspiracy to distribute acetyl fentanyl, a controlled substance analogue. The indictment alleges that on May 9, 2014, Larson distributed acetyl fentanyl to an individual, resulting in the death of that individual.
Larson faces a mandatory minimum sentence of 20 years and up to life in prison for distribution of acetyl fentanyl with death resulting; and a maximum of 20 years in prison for a narcotics conspiracy. No court appearance is currently scheduled. Larson remains detained on related federal charges.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised HSI Baltimore, the Montgomery County Police Department, and Montgomery County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant United States Attorneys Kelly O’Connell Hayes and Daniel C. Gardner, who are prosecuting the case.
Miami Resident Sentenced to Prison for Stolen Identity Tax Fraud SchemeRead the Press Release
A Miami resident was sentenced to 34 months in prison, followed by three years of supervised release for his participation in a stolen identity tax fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Delany De-Leon Colon, Inspector in Charge, United States Postal Inspection Service (USPIS), Miami Division, made the announcement.
Ronel Junior Lamour, 25, previously pled guilty to one count of possession of fifteen or more counterfeit access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2.
According to court documents, in 2013, Lamour used names, dates of birth and Social Security numbers of other people to file 2012 tax returns. As part of the scheme, Lamour set up bank accounts using unauthorized debit cards in the names of the filers and had the refunds wired into the accounts.
Court documents state that Lamour also fraudulently used debit card account numbers, issued to other persons, to purchase United States Postal Service (USPS) money orders. On two separate occasions, Lamour deposited these USPS money orders into a bank account.
Federal law enforcement conducted an electronic search of Lamour’s cell phone pursuant to a warrant. The phone contained copies of passports, driver’s licenses and Social Security cards of over fifty (50) individuals. This information was forwarded to the IRS Scheme Development Center and twenty-five (25) of those individuals were found to have had false 2012 tax returns filed in their names.
Mr. Ferrer commended the investigative efforts of IRS-CI and the USPIS. The case is being prosecuted by Assistant U.S. Joshua S. Rothstein.
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.
Man Charged for Affinity Fraud Scheme that Promised Hmong HomelandRead the Press Release
United States Attorney Andrew M. Luger today announced a federal criminal complaint charging SENG XIONG, 48, with wire fraud for operating an affinity fraud scheme. XIONG was arrested on Thursday, March 24, 2016, at Los Angeles International Airport, prior to boarding a flight bound for Thailand. XIONG made an initial appearance on Friday, March 25, 2016, before United States Magistrate Judge Jacqueline Chooljian in U.S. District Court in Los Angeles, Calif. XIONG was denied bail and ordered remanded into custody pending removal to the District of Minnesota. A next court date has not yet been scheduled.
“This defendant is charged with targeting ethnic Hmong elders,” said United States Attorney Andrew Luger. “I encourage adults and immigrant families to remain on the lookout for thieves who seek to exploit vulnerable victims. My Office, the FBI, and the Minnesota Financial Crimes Task Force, which is comprised of local and federal law enforcement officers, are all resources to seek out if and when you are concerned about a suspicious investment opportunity.”
According to the criminal complaint and documents filed in court, on September 14, 2015, the Appleton, Wisc., Police Department received a tip that Hmong elders were being directed to deposit $3,000 to $5,000 into a bank account held in the name of SENG XIONG. In exchange for the payments, elders were allegedly promised 10 acres of land, a house and many other benefits in a future country that would be established as a Hmong homeland somewhere in Southeast Asia.
According to the criminal complaint and documents filed in court, on September 28, 2015, law enforcement in Saint Paul, Minn., received information that SENG XIONG was believed to be conducting a fraud scheme through his organizations, “International Fund for Hmong Development,” and “Hmong Tebchaws.” The website for “Hmong Tebchaws,” stated the mission of the organization was to “Pursue Hmong self-ruled (sic) in the mainland of Asia in accordance in international law.” The website also contained links to YouTube videos where more information about the “investment program” was available. Other promises made by “Hmong Tebchaws” included that the organization was working with the White House and United Nations to secure land for the Hmong Homeland, and that China, Japan, Laos, Cambodia and Vietnam have all agreed to acknowledge the Hmong people and have saved a piece of land for the Hmong people.
According to the criminal complaint and documents filed in court, a witness known as “K.X.,” has been following the “Hmong Tebchaws” website. According to the witness, since October 2014 the organization has been posting information on its website and various social media sites and has been hosting conference calls for potential “investors.” K.X. participated in six such calls between April 4, 2015, and September 21, 2015.
According to the criminal complaint and documents filed in court, XIONG was targeting elderly Hmong to make contributions to a future Hmong country that would be created sometime between 2015 and 2030. Different “investment options” were offered, which purported to represent varying levels of return that “founders” would be able to receive on their investments. Investments between $3,000 and $5,000 would guarantee the “investor” and his or her future generations, land, a house, free healthcare, free education, and government financial assistance for people over 65 years of age.
According to the criminal complaint and documents filed in court, “investors” were ultimately provided XIONG’s name and a bank account associated with XIONG to which they could direct funds.
If you or someone you know could be a victim, please contact the Minnesota Financial Crimes Task Force by sending an email to [email protected].This case is the result of an investigation conducted by the Minnesota Financial Crimes Task Force, Saint Paul Police Department, United States Secret Service, Federal Bureau of Investigation and Appleton Police Department.
Special assistance was provided by the United States Attorney’s Offices for the Eastern District of California.
This case is being prosecuted by Assistant United States Attorney Amber M. Brennan.
Defendant Information:SENG XIONG, 48
No known addressCharges:
- Wire fraud, 1 count
Makah Tribal Member Sentenced to Prison for Assault of Police OfficerRead the Press Release
An enrolled Makah Tribal member who fled the Neah Bay jail and then assaulted a Neah Bay Police Officer in an attempt to escape custody was sentenced today in U.S. District Court in Tacoma to 15 months in prison and three years of supervised release, announced U.S. Attorney Annette L. Hayes. BRANDON JOSEPH EATON, 32, escaped from custody on July 15, 2015. The officer who was escorting EATON at the jail chased him down, and with the help of other community members, subdued EATON. EATON bit and hit the officer causing cuts requiring more than a dozen stitches. At sentencing U.S. District Judge Benjamin H. Settle said it is important for others “to know that if an officer gets injured in the line of duty such as this, it will not go without consequence.”
According to records filed in the case, EATON was being escorted back to his cell after making a telephone call when he ran from the police station and refused to stop when ordered by police. The Neah Bay Police Officer chased EATON for a few blocks. When the officer caught up with EATON, the officer was punched in the face and head repeatedly and was bitten on the hand. The officer’s wounds required 19 stitches. As part of his sentence, EATON was ordered to pay $338 in restitution to the officer to compensate him for time off work and additional childcare costs.
In asking for a prison sentence Neah Bay Police Chief Jasper Bruner wrote to the court “This request is not out of revenge or retribution, this is in the hope that he can address the substance abuse and emotional issues that have plagued him. Mr. Eaton has a long standing history with our police department in a negative way.”
The case was investigated by the FBI and the Neah Bay Office of Public Safety. The case was prosecuted by Assistant United States Attorney Ye-Ting Woo.
Leaders of Colombian Drug Trafficking Organization Sentenced to Two Decades in PrisonRead the Press Release
Two leaders of Colombia’s largest and most influential BACRIM (banda criminal or criminal group), CLAN USUGA (formerly referred to as Los Urabeños), were sentenced to 20 and 24 year prison terms for their involvement in a cocaine trafficking conspiracy.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and A.D. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office, made the announcement.
On June 4, 2015, nine defendants, including Oscar David Pulgarin-Ganan, a/k/a “Niño,” a/k/a “Coroso,” and Ramiro Caro-Pineda, a/k/a “Nolasco,” a/k/a “Hugo” were charged in a single-count Indictment, in the Southern District of Florida, for their participation in large-scale drug trafficking organization based out of Colombia (Case No. 15cr20403). Pulgarin-Ganan and Caro-Pineda conspired to traffic large amounts of cocaine from Colombia, through Central America, with the eventual destination being the United States, in violation of Title 21, United States Code, Sections 959 and 960. Pulgarin-Ganan and Caro-Pineda pled guilty to the indictment and were respectively sentenced, in 2016, to 240 and 284 months’ imprisonment.
Pulgarin-Ganan and Caro-Pineda were top-level members of the CLAN USUGA drug trafficking organization. Caro-Pineda oversaw transportation and shipments of all loads owned, controlled, or protected by the criminal group. Pulgarin-Ganan was an owner, manager, and investor in loads with other high-level members of the drug trafficking organization. Pulgarin-Ganan managed multi-ton loads being sent by airplane and go-fast vessels to Central American and eventually being imported into the United States. In addition, Pulgarin-Ganan was in charge of coordinating all CLAN USUGA cocaine loads that arrived in Central America, with the final eventual destination being the United States.
Caro-Pineda was also indicted in the Middle District of Florida, Eastern District of Texas, and Eastern District of New York and pled guilty to each indictment.
These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Ferrer commended the investigative efforts of the DEA. Mr. Ferrer also recognized the U.S. Attorney’s Offices in the Middle District of Florida, Eastern District of Texas, and Eastern District of New York for their collective assistance with the prosecution of CLAN USUGA leaders and high-ranking members. This case is being prosecuted by Assistant U.S. Attorney Michael B. Nadler.
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.
Leaders of Colombian Drug Trafficking Organization Sentenced to Nineteen Years in PrisonRead the Press Release
Two Colombian nationals were each sentenced to more than 19 years in prison for their involvement in an international cocaine trafficking conspiracy.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and A.D. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office, made the announcement.
On July 20, 2010, German Bustos-Alarcon a/k/a “Puma” and Rafael Alvarez-Pineda a/k/a “Chepe,” were charged in a single-count indictment in the Southern District of Florida for their participation in large-scale drug trafficking organization based out of Colombia (Case No. 10cr20554). Bustos-Alarcon and Alvarez-Pineda conspired to traffic large amounts of cocaine from Colombia, through Central America, with the eventual destination being the United States, in violation of Title 21, United States Code, Sections 959 and 960. On March 23, 2015, German Bustos-Alarcon was extradited from Colombia to the Southern District of Florida. On April 29, 2015, Alvarez-Pineda was also extradited from Colombia to the Southern District of Florida. Bustos-Alarcon and Alvarez-Pineda each pled guilty to the indictment and were sentenced to 235 months’ imprisonment.
Bustos-Alarcon and Alvarez-Pineda were members of the Autodefensas Unidas de Colombia (AUC) and were principal lieutenants of AUC Leader Ramiro Vanoy-Murrillo a/k/a “Cuco Vanoy” (Case No. 99-CR-6153-KMM). After the AUC leaders were extradited from Colombia to the United States in May 2008, Bustos-Alarcon and Alvarez-Pineda moved into leadership roles in the area of Caucasia, Colombia. Bustos-Alarcon and Alvarez-Pineda formed a drug trafficking alliance with Colombia’s largest and most influential BACRIM (banda criminal or criminal group), CLAN USUGA (formerly referred to as Los Urabeños). Bustos-Alarcon and Alvarez-Pineda purchased cocaine from laboratories and sold it to members of the CLAN USUGA, who then transported the narcotics to Central America and eventually on to the United States.
These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Ferrer commended the investigative efforts of the DEA. This case is being prosecuted by Assistant U.S. Attorney Michael B. Nadler.
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.
Largest cocaine supplier to Alaska sentenced to 16 years imprisonmentRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced that on Friday, March 25, a Las Vegas man was sentenced by United States District Court Judge Sharon Gleason to serve 16 years in prison for supplying large quantities of cocaine to Alaska and Michigan over the past five years; he was also fined $40,000, and required to forfeit expensive vehicles and over $700,000 in drug proceeds.
Clarence Anthony Hatton, a/k/a “C-Money,” 47, of Las Vegas, previously pled guilty to conspiring with others to distribute cocaine, as well as to launder the proceeds of cocaine trafficking. As part of his guilty plea, Hatton admitted that he conspired to distribute over 50 kilograms of cocaine to both Alaska and Michigan over a three year period, and that he received payment in cash through mail and parcel services. Hatton, who lived in Las Vegas, would obtain large quantities of cocaine from California, where he was from. He then paid employees at Las Vegas McCarran International Airport to take the cocaine into the employee entrance at the airport so that it was not subjected to normal security. The employee would then meet with a traveler to Alaska (or Michigan) in the men’s bathroom in the secure area of the terminal and transfer the cocaine. Typically, ten kilograms were sent at a time, approximately twice a month.
According to Deputy Criminal Chief Frank Russo, who handled the sentencing hearing, the testimony at sentencing indicated that over 250 kilograms of cocaine were sent to Alaska in this manner, and over 100 kilograms of cocaine were sent to Michigan using the same scheme. The evidence submitted to the Court also showed that Hatton had been sending cocaine to Alaska for the past 20 years, and had amassed great wealth in doing so. Within the government’s sentencing memo, Russo pointed out that Hatton was dealing cocaine at the kilogram level back in 1996, and was identified as a source of supply in at least four other major cases prosecuted in Alaska. However, evidence was insufficient to charge Hatton until the current case, which proved what witnesses had been saying about Hatton all along: that he was the organizer of the most prolific cocaine trafficking network ever to be prosecuted in Alaska.
Russo stated that Hatton ran his drug organization as a business, thousands of miles removed from the human misery that his product was causing in Alaska. The sentencing memo alleged that Hatton built comfortable houses in Las Vegas, purchased expensive cars, was a high roller in casinos, and provided for his family on the profits that were mailed back to Las Vegas: “Prior to his incarceration, [Hatton] likely never thought about the fact that each individual twenty dollar bill in a postal box overflowing with them had a story of despair behind it.”
Hatton was required to forfeit the seized proceeds of his drug trafficking activity, over $620,000 in cash and a Mercedes Benz valued at over $80,000. Hatton forfeited an additional $88,700 in cash just prior to sentencing, and Judge Gleason imposed an additional $40,000 fine. Judge Gleason found that Hatton was the leader of the drug conspiracy, and cited the need to deter others from believing that they could profit from trafficking drugs in Alaska as one of the reasons for the sentence imposed.
United States Attorney Karen Loeffler cited the significance of the case from a public safety perspective, not only protecting Alaska’s residents from drug trafficking but also securing the airports: “This case demonstrated that there is a loophole in airport security when it comes to allowing employees unscreened access. It is a loophole that must be scrutinized by all airports.”
Hatton is the latest and most significant in a string of sentencing hearings related to this drug trafficking scheme. To date, the following individuals have been sentenced as part of this case:
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Daren Cole:previously sentenced to 64 months in prison;
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Michael Langdon: previously sentenced to 60 months in prison;
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Antonio Beckwith:previously sentenced to 24 months in prison; and
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Bryan Bledsoe, previously sentenced to 36 months in prison.
This case was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF). In announcing the sentence, U.S. Attorney Loeffler praised the work of the law enforcement agencies involved, including the Drug Enforcement Administration (DEA), the Internal Revenue Service Criminal Investigation (IRS-CI), and the U.S. Postal Inspection Service (USPIS). These agencies were assisted by the FBI Anchorage Safe Streets Task Force, the Anchorage Police Department, the Las Vegas Metropolitan Police Department, the Henderson Police Department, the North Las Vegas Police Department and the Clark County Department of Aviation.
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Jamaican National Pleads Guilty to Airport Drug ConspiracyRead the Press Release
CHARLOTTE, N.C. – Winston Sherif Richards, 40, a citizen of Jamaica, appeared in federal court and pleaded guilty to one count of conspiracy to possess with intent to distribute cocaine, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. Magistrate Judge David S. Cayer presided over today’s plea hearing.
Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Patti Fitzpatrick, Port Director of the U.S. Customs and Border Protection (CBP) Area in Charlotte join U.S. Attorney Rose in making today’s announcement. This investigation is a direct result of HSI’s Airport Drug Interdiction initiative.
According to filed plea documents and today’s plea hearing, on October 24, 2015, Richards flew into Charlotte Douglas International Airport directly from Montego Bay, Jamaica. Upon entering the United States, Richards presented himself to CBP agents at the airport. Richards, who acknowledged packing his own luggage, had in his possession a suitcase and a computer bag. After initial questioning, Richards was sent to secondary inspection. According to filed court documents, at secondary inspection, CBP agents opened Richards’ luggage and discovered an orange-and-grey colored backpack. Agents examined these items and discovered anomalies within the lining of the backpack. Court records show that upon further inspection, the agents discovered two bags of cocaine hidden within the backpack lining, weighing approximately eight-hundred-twenty-two (822) grams with a street value, after sale and distribution, of approximately $100,000.
According to court records, upon discovery of the drugs, Richards was interviewed by HSI agents and gave multiple inconsistent statements about his luggage and eventual destination in the United States. Over the course of interview, Richards told HSI agents that he was hired by a man to bring some “stuff” to the United States and to deliver this bag to an unknown man in New York. In court today, Richards admitted to actively participating to the drug conspiracy.
Richards is currently in federal custody. The charge levied against him carries a maximum prison term of 20 years and a $1,000,000 fine. Richards also faces deportation proceedings upon completion of his prison term, which will be determined by the Court at sentencing. A sentencing date has not been scheduled yet.
In making today’s announcement U.S. Attorney Rose thanked HSI, CBP and the North Carolina Department of Public Safety, Alcohol and Law Enforcement, for their investigation of the case. The prosecution for the government is being handled by Assistant U.S. Attorney Sanjeev Bhasker of the U.S. Attorney’s Office in Charlotte.
Jacksonville Woman Indicted for Sex Trafficking A MinorRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging Lisa C. Glass (38, Jacksonville) with child sex trafficking. If convicted, she faces a mandatory minimum of 10 years, up to life, in federal prison.
According to the indictment, Glass recruited, enticed, harbored, transported, provided, and maintained a juvenile female for the purpose of engaging the girl in commercial sexual activity.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Northeast Florida Human Trafficking Task Force that includes investigators from the Jacksonville Sheriff’s Office and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Mac D. Heavener, III.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Four Conspirators Plead Guilty in $1.4 Million Unemployment Benefit Fraud SchemeRead the Press Release
Baltimore, Maryland – Four defendants pleaded guilty to a wire fraud conspiracy involving a scheme to fraudulently obtain unemployment benefits:
Eric Gonzalez, age 34, of Alexandria, Virginia; Tawana McClain, age 51, of Washington, D.C.; Ferny Alexander Moreno Puente, age 26, of Gaithersburg, Maryland; Wilfredo Torres, age 35, of Alexandria, Virginia
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge John Dolce, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Postal Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service - Washington Division.
“The Office of Inspector General is committed to working with our law enforcement partners to aggressively pursue and hold accountable those who defraud the Department of Labor’s Unemployment Insurance program,” stated John Dolce, Acting Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
According to their plea agreements, from 2012 to 2015, members of the conspiracy caused the Maryland Department of Labor, Licensing and Regulation (DLLR) and the Pennsylvania Department of Labor and Industry (DLI), which administered the unemployment insurance benefit programs in their respective states, to issue unemployment benefits in the names of individuals by submitting false applications for monetary benefits for their own personal use and benefit.
McClain, Moreno Puente, Torres and his half-brother, Gonzalez all pleaded guilty to their participation in the conspiracy. Moreno Puente, Torres and Gonzalez admitted that they agreed to have a co-conspirator file fraudulent unemployment claims in their names. Moreno Puente and Torres also provided the personal identification information and/or addresses of other individuals to file additional false claims in the names of those individuals, and others. McClain, Moreno Puente, Torres and Gonzalez used the fraudulently obtained unemployment insurance benefits prepaid debit cards that were either mailed to them, or provided to them by a co-conspirator, at ATMs or stores in order to withdraw and use the funds. Generally, McClain, Moreno Puente, Torres and Gonzalez kept a portion of the fraudulently obtained funds for themselves and provided the remainder to a co-conspirator. Torres also allowed his business address to be used to file fraudulent unemployment benefit claims and when the unemployment benefits debit cards arrived, he either used them or distributed them to co-conspirators.
Moreno Puente admitted that he personally used at least 14 fraudulently obtained unemployment benefits cards; McClain personally used at least 12 cards; Torres used at least six cards; and Gonzalez used at least five cards. Torres and Gonzalez have each agreed to the entry of an order to pay restitution and forfeiture of $173,185.32; Moreno Puente has agreed to the entry of an order to pay restitution and forfeiture of $268,911; and McClain has agreed to the entry of an order to pay restitution and forfeiture of $205,613. During the course of the conspiracy the actual loss was approximately $1,468,463.80 in fraudulently obtained unemployment insurance benefits.
McClain, Moreno Puente, Torres and Gonzalez, face a maximum sentence of 20 years in prison for conspiracy to commit wire fraud. U.S. District Judge Ellen L. Hollander has scheduled sentencing for McClain and Gonzalez on July 15, 2016, and for Moreno Puente and Torres on July 14, 2016.
Co-conspirators Dulce Oleo, age 38, of the Bronx, New York; Yaw Bempa-Boateng, age 35, of Silver Spring, Maryland; and Carmen Benitez, age 29, of Scranton, Pennsylvania, previously pleaded guilty to their roles in the scheme and await sentencing.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the Department of Labor – OIG and U.S. Postal Inspection Service for their work in the investigation, and praised the Maryland Department of Labor, Licensing and Regulation and the Pennsylvania Department of Labor and Industry for their assistance in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Sean R. Delaney, who is prosecuting the case.
Former Trucking Company Owner Pleads Guilty to Federal Tax EvasionRead the Press Release
TOPEKA, KAN. – The former owner of a trucking company in Kansas City, Kan., pleaded guilty Monday to evading federal income taxes, U.S. Attorney Barry Grissom said.
Clifford C. Copp, 47, Overland Park, Kan., who owned Copp Trucking Co. in Kansas City, Kan., pleaded guilty to one count of tax evasion. In his plea, he admitted he filed reports to the Internal Revenue Service in 2001 indicating the company owed approximately $939,408 in employment taxes for that year. However, the company did not pay the employment taxes due.
In February 2004 Copp was assessed trust fund recovery penalties of $669,037. When the IRS began collection efforts he concealed income. He filed a false statement to the IRS concealing his ownership interest in assets including livestock, life insurance and farm equipment. He also formed Wildcat Limo, LLC, and concealed his ownership interest in the company.
Sentencing will be set for a later time. He faces a maximum penalty of five years in federal prison, restitution, and a fine up to $250,000. Grissom commended the Internal Revenue Service and Assistant U.S. Attorney Chris Oakley for their work on the case.
Former Tallassee Assistant Police Chief Sentenced for Beating Suspect During Interrogation, False Statements to the FBI, and Selling DrugsRead the Press Release
Montgomery, Ala. – Today, former Tallassee, Alabama, Assistant Police Chief, Chris Miles, 41, was sentenced to 41 months in prison for depriving a suspect of his federally protected rights by beating the suspect with a phone book-sized packet of paper during an interrogation and then lying about the incident to an FBI agent investigating the matter. Miles was also sentenced for selling marijuana that he stole from the police evidence room.
Miles’ pleaded guilty on Nov. 17, 2015, to one count of deprivation of civil rights, two counts of false statements and one count of possession with intent to distribute. He was sentenced by U.S. District Judge Myron H. Thompson of the Middle District of Alabama.
According to admissions made during his plea hearing, in April of 2013, while he was on duty as assistant police chief, Miles beat a prisoner who was serving a sentence at Tallassee jail while Miles was interrogating that prisoner about uncharged crimes the prisoner was suspected of having committed. During the questioning, Miles grabbed a thick packet of copy paper and used it to strike the victim multiple times across the victim’s face and head. Miles also repeatedly slapped the victim across the face and head with his hand. His abuse caused the victim to suffer bruising and physical pain. Miles also admitted that earlier in 2013 he stole approximately 16 pounds of marijuana from the police evidence room and later sold it to a known drug dealer.
“Law enforcement leaders serve as role models for their fellow officers, and at all times they must act with integrity, fairness and professionalism,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Justice requires even-handed treatment for all, and without exception, we will aggressively prosecute any officer who beats an inmate, breaks the law and lies to federal investigators.”
“Miles was a maverick, working outside the law,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama. “While we expect interrogations to be thorough, an officer cannot turn an investigation into a punishment. Fortunately, the overwhelming majority of our law enforcement officials act reasonably and within the bounds of the Constitution.”
This case was investigated by the Auburn resident agency of the FBI’s Mobile Field Office, with the assistance of Alabama’s State Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Jerusha T. Adams for the Middle District of Alabama, and Trial Attorney Gabriel Davis of the Civil Rights Division.
Former President of Honduran Soccer Federation Pleads Guilty to Racketeering and Corruption ChargesRead the Press Release
Earlier today in federal court in Brooklyn, New York, Rafael Callejas, the president of the Honduran soccer federation (FENAFUTH) from 2002 to 2015, pleaded guilty to racketeering conspiracy and wire fraud conspiracy in connection with his receipt of bribes in exchange for the awarding of contracts for the media and marketing rights to FIFA World Cup qualifier matches. Callejas, who served as the President of the Republic of Honduras from 1990 to 1994, also agreed to forfeit $650,000. At sentencing, Callejas faces a maximum sentence of 20 years for each count. Today’s plea proceeding took place before U.S. Magistrate Judge Robert M. Levy.
The guilty plea was announced by U.S. Attorney Robert L. Capers for the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez for FBI’s New York Field Office and Acting Special Agent in Charge Anthony J. Orlando for the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Los Angeles Field Office.
According to court filings and facts presented during the plea proceeding, Callejas negotiated and accepted bribes totaling hundreds of thousands of dollars in exchange for his agreement to exercise his influence as the president of FENAFUTH to award contracts to Media World, a Florida sports marketing company, for the media and marketing rights to the Honduran national soccer team’s home World Cup qualifier matches for the 2014, 2018 and 2022 editions of the World Cup. Over a period of years, Media World transmitted these bribes from its U.S. bank accounts, through an intermediary, to the foreign bank accounts of the defendant and a co-conspirator.
The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI’s New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section and the Fraud Section, as well as from INTERPOL Washington.
Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Paul Tuchmann, Nadia Shihata, Keith D. Edelman and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.
The government’s investigation is ongoing.
Former President of Honduran Soccer Federation Pleads Guilty to Racketeering and Corruption ChargesRead the Press Release
Earlier today in federal court in Brooklyn, Rafael Callejas, the president of the Honduran soccer federation (FENAFUTH) from 2002 to 2015, pleaded guilty to racketeering conspiracy and wire fraud conspiracy in connection with his receipt of bribes in exchange for the awarding of contracts for the media and marketing rights to FIFA World Cup qualifier matches. Callejas, who served as the President of the Republic of Honduras from 1990 to 1994, also agreed to forfeit $650,000. At sentencing, Callejas faces a maximum sentence of 20 years for each count. Today’s plea proceeding took place before United States Magistrate Judge Robert M. Levy.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director in Charge, FBI, New York Field Office; and Acting Special Agent in Charge Anthony J. Orlando, IRS Criminal Investigation, Los Angeles Field Office.
According to court filings and facts presented during the plea proceeding, Callejas negotiated and accepted bribes totaling hundreds of thousands of dollars in exchange for his agreement to exercise his influence as the president of FENAFUTH to award contracts to Media World, a Florida sports marketing company, for the media and marketing rights to the Honduran national soccer team’s home World Cup qualifier matches for the 2014, 2018, and 2022 editions of the World Cup. Over a period of years, Media World transmitted these bribes from its U.S. bank accounts, through an intermediary, to the foreign bank accounts of the defendant and a co-conspirator.
The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section, and the Fraud Section, as well as from INTERPOL Washington.
Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Paul Tuchmann, Nadia Shihata, Keith D. Edelman, and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.
The government’s investigation is ongoing.
The Defendant:
RAFAEL CALLEJAS
Age: 72
Nationality: HondurasE.D.N.Y. Docket No. 15 CR 252 (S-1)
Former Insurance Salesman Sentenced for Tax EvasionRead the Press Release
BOSTON – A former insurance salesman was sentenced today in U.S. District Court in Boston for evading taxes in connection with the theft of more than $470,000 that he stole from three clients.
Paul Disidoro, 64, of Georgetown, Mass., was sentenced by U.S. District Judge William G. Young to 18 months in prison, three years of supervised release and restitution of $613,806. In December 2015, Disidoro pleaded guilty to attempting to evade taxes.
For many years, Disidoro operated an insurance business in Massachusetts, and from 2007 through 2010 he also acted as a financial adviser for some clients. During that period, Disidoro stole more than $470,000 from three clients and used the money for his personal benefit, including online gambling. He concealed the income from his tax preparer, and failed to report the embezzled funds on his federal income tax returns. In doing so , Disidoro evaded $144,000 in taxes.
United States Attorney Carmen M. Ortiz; Manny J. Muriel, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Anthony DiPaolo, Chief of Investigations of the Insurance Fraud Bureau of Massachusetts, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit.
Former Insurance Company Service Rep Sentenced for EmbezzlementRead the Press Release
TOPEKA, KAN. – A former insurance company service representative in Topeka was sentenced Monday to a year and a day in federal prison for embezzlement, U.S. Attorney Barry Grissom said. In addition, she was ordered to pay $215,000 in restitution.
Erin Rebecca Thomas, 47, formerly of Topeka, Kan., pleaded guilty to one count of embezzlement. In her plea she admitted the crime took place while she worked for American Home Life Insurance Company.
In her position, she processed death claims, policy loans, beneficiary changes and so on. Between July 2010 to July 2012, she created 22 separate fraudulent transactions. In one instance, she processed the policy of a person who died in 2010. She created a fictitious change of beneficiary request naming herself as beneficiary and had the benefit check deposited in her personal account.
Grissom commended the U.S. Secret Service and U.S. Assistant Attorney Christine Kenney for their work on the case.
Former Fargo Business Owner Sentenced for Failure to Pay over Employment TaxesRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on March 28, 2016, Tammy J Devier, 43, Crary, ND, was sentenced before U. S. District Judge Ralph R. Erickson to serve five (5) years of supervised probation for Willfully Causing the Failure to Pay Over Employment Taxes. Judge Erickson also ordered Devier to serve 12 months of home confinement, pay restitution in the amount of $377,163.34 to the United States, and pay a $25 special assessment to the Crime Victims’ Fund.
Between 2007 and 2010, Devier was the owner of Red Arrow Recruiters, LLC, a Professional Employment Organization which provided various employment and payroll services to businesses. On or about Feb. 1, 2010, Devier failed to pay the 4th quarter of 2009 employment and payroll taxes she had received from the companies she represented to the IRS. Over the course of a two-year period beginning in mid-2008 through 2009, Devier received, from her clients, quarterly taxes for the third and fourth quarters of 2008 and the first, third, and fourth quarters of 2009 in the total amount of $377,163.34, but failed to pay those taxes over to the IRS.
“Professional Employment Operations companies, such as Red Arrow Recruiters, LLC, and TDJ Enterprises, LLC, were hired by employers to assist them with the withholding and collection of taxes from employees and to prepare and file accurate payroll tax returns. Ms. Devier had a duty to prepare correct tax returns and accurately pay over the taxes withheld to the IRS; instead she used her position of power to defraud her clients by not making tax payments or payroll tax deposits to the IRS,” stated Shea Jones, Special Agent in Charge of the St. Paul Field Office IRS Criminal Investigation Division. “The IRS is committed to aggressively investigating those individuals who engage in tax fraud.”
This case was investigated by the Internal Revenue Service, Criminal Investigative Division.
Assistant U. S. Attorney Scott Schneider prosecuted the case.
Former Executive of Stamford Company Admits Insider TradingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that DENNIS W. HAMILTON, 45, of Norwalk, waived his right to indictment and pleaded guilty today in New Haven federal court to one count of securities fraud.
According to court documents and statements made in court, HAMILTON was employed as Vice President of Tax at Harman International Industries, Incorporated (“Harman”) in Stamford. Harman is a publicly-held company whose shares trade on the New York Stock Exchange under the ticker symbol “HAR.” Beginning in 2009, Harman allowed directors, members of its executive committee and certain other insiders to buy or sell Harman securities in the public market only during a declared trading window period. In August 2013, HAMILTON was included on Harman’s insider trading list, and he was subsequently notified when the window in which he could engage in open market purchases of Harman securities was open, and that all trades must be cleared in advance with Harman’s general counsel. On September 27, 2013, HAMILTON and other Harman employees were advised via email that the “window period” within which they may engage in open market purchases or sales of Harman securities had closed.
In October 2013, HAMILTON received material, non-public information about Harman’s financial results for the first quarter for the fiscal year ending 2014, including drafts of Harman’s Form 10-Q filing and an earnings press release. He and other Harman executives also participated in a conference call with Harman’s Audit Committee, during which a draft resolution declaring a quarterly cash dividend on Harman’s common stock was discussed.
On October 30, 2013, HAMILTON, an insider in possession of material, non-public information, purchased 17,000 shares of HAR for between $72.07 and $72.67 per share, through a Charles Schwab account in the name of HAMILTON and his wife. On October 30, 2013, the closing price of HAR was $72.02. On October 31, 2013, Harman announced positive first quarter earnings for fiscal year 2014. On that date, the closing price of HAR was $81.02.
Between October 31, 2013 and November 5, 2013, through his Charles Schwab account, HAMILTON wrote at least 200 covered calls on HAR at a strike price of $70.00 with an expiration date of November 16, 2013 for a premium of $203,366. Through the use of some of these covered calls, HAMILTON realized a gain of $131,958 on the 17,000 shares of HAR he had purchased on October 30, 2013.
HAMILTON was arrested on a criminal complaint on February 5, 2016. He is scheduled to be sentenced by U.S. District Judge Alvin W. Thompson on June 10, 2016, at which time he faces a maximum term of imprisonment of 20 years and a fine of up to $5 million. He is released on bond pending sentencing.
In a parallel action, the Securities and Exchange Commission has filed related civil charges against HAMILTON. (Securities and Exchange Commission v. Dennis Wayne Hamilton, 3:16-cv-00192)
This investigation is being conducted by the Federal Bureau of Investigation with valuable assistance from Harman International Industries. The case is being prosecuted by Assistant U.S. Attorney Heather Cherry.
Former City of Del Rio Employee Sentenced to Federal Prison for EmbezzlementRead the Press Release
This morning, Ernesto Valdez, Jr., a former clerk in the City of Del Rio’s utility department, was sentenced to 21 months in federal prison for embezzling more than $33,000 from the City announced United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs.
In addition to the prison term, United States District Judge Alia Moses ordered that Valdez pay a total of $33,714 restitution to the City of Del Rio, perform 300 hours of community service and be placed on supervised release for a period of three years after completing his prison term.
In March 2013, Valdez pleaded guilty to one count of theft concerning programs receiving federal funds. By pleading guilty, Valdez admitted that from September 2007 to June 2010, he pocketed approximately $17,000 in cash payments made by utility customers. At sentencing, Judge Moses also found that during that same time period, Valdez manipulated the billing account of a relative and thus, is liable for an additional $16,954 in free water services provided to that relative.
Valdez remains on bond pending U.S. Bureau of Prisons facility designation.
This case resulted from an investigation conducted by the Federal Bureau of Investigation with assistance from the Del Rio Police Department. Assistant United States Attorney Todd R. Keagle prosecuted this case on behalf of the Government.
Financial Services Firm Partner Arrested and Charged in Manhattan Federal Court with $95 Million Scheme to Defraud InvestorsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced the arrest and unsealing of a complaint charging ANDREW CASPERSEN, 39, with securities and wire fraud in connection with a scheme to defraud investors of over $95 million. From at least July 2015 through March 2016, CASPERSEN, a partner in the New York office of a multinational financial services firm involved in private equity and alternative asset advisory work, fraudulently solicited investments in securities by falsely representing that he had authority to conduct deals on behalf of his employer with another private equity fund, and that investors’ funds would be invested in a secured loan to an investment firm, when in fact no such security existed and no such investments were made, and which funds CASPERSEN converted to his own use without the authorization of his investors. As a result of the scheme, CASPERSEN converted to his own use approximately $24.6 million from a charitable foundation affiliated with a multinational hedge fund based in New York, and $400,000 from an employee of the hedge fund. Rather than invest his victims’ funds as promised, CASPERSEN used a portion of the $25 million to trade securities in his personal brokerage account, which funds he largely lost as a result of aggressive options trading. In addition, shortly before his arrest, CASPERSEN fraudulently attempted to solicit an additional $20 million investment from the same charitable foundation and a $50 million investment from another multinational private equity firm headquartered in New York. CASPERSEN will be presented today before Magistrate Judge James C. Francis.
In a separate action, the SEC filed civil charges against CASPERSEN.
U.S. Attorney Preet Bharara said: “Andrew Caspersen, a partner at a major financial advisory firm, allegedly scammed his clients into investing tens of millions in sham private equity investments. To advance his $95 million fraud scheme, Caspersen allegedly put on a shameful charade – creating fake email addresses, setting up misleading domain names, and inventing fictional financiers. When confronted by a suspicious client who had invested $25 million, Caspersen had no good answers. He will now have to answer to federal securities and wire fraud charges.”
According to the allegations in the Complaint unsealed in Manhattan federal court:[1]
The Scheme to Defraud Firm-3
In October 2015, CASPERSEN sent an email to an individual (“Individual-1”)[2], in which CASPERSEN described “a new investment” that he had structured and in which he claimed he was personally investing. Individual-1 was employed at a multinational hedge fund headquartered in New York (“Firm-3”), and was responsible for evaluating and recommending investments for a charitable foundation affiliated with the fund (the “Foundation”). Over the course of additional correspondence in the ensuing days, CASPERSEN offered Individual-1 the opportunity to invest in an $80 million credit facility secured by a private equity portfolio, which CASPERSEN’s employer (“Firm-2”) was purportedly creating to facilitate investments in the private equity secondary market by a firm in New York (“Firm-1”). On or about November 5, 2015, the Foundation wired $24.6 million of its own money and $400,000 of Individual-1’s money into an account designated by CASPERSEN (“Account-1”) for purposes of investment in the special purpose vehicle CASPERSEN had created in connection with this proposed transaction. Although CASPERSEN had represented to Individual-1 that CASPERSEN had already raised $30 million for this investment opportunity that he had presented to Individual-1, as of the Foundation’s November 5, 2015, investment, Account-1 had only received a total of $2.51 million in incoming wire transfers since the special purpose vehicle was incorporated.
The next day, November 6, 2015, CASPERSEN wired $17.6 million from Account-1 into CASPERSEN’s own personal brokerage account. Notwithstanding the representations he had made to Individual-1 about what he would do with the Foundation’s investment, CASPERSEN immediately began using the funds to engage in largely unprofitable securities transactions. As of December 31, 2015, CASPERSEN’s brokerage account had a net loss of approximately $25 million for the year. In addition, on November 6, 2015, CASPERSEN wired approximately $8 million from Account-1 to a bank account controlled by Firm-2, for the purpose of covering up an earlier unauthorized wire transfer of the same amount CASPERSEN had diverted for his own use from its intended beneficiary, Firm-2.
On March 1, 2016, CASPERSEN began soliciting Individual-1 for an additional $20 million investment in the same purported deal. CASPERSEN falsely claimed that he intended to have his own family make an additional $5 million investment. When Individual-1 raised questions about the purported signatory for the special purpose vehicle (“Individual-3”), CASPERSEN falsely claimed that Individual-3 worked at Firm-1, even though, in reality, no such person worked at Firm-1. On March 7, 2016, Individual-1 told CASPERSEN that he wanted to speak directly with Individual-3. In response, CASPERSEN sent an email to Individual-1, as well as to an email address containing both the name of Individual-3 and the name of Individual-3’s firm (the “Email Address”) to set up a conference call for later that day. Individual-1 later learned that the domain name for the Email Address had been registered on March 7, just twenty minutes after Individual-1 requested a telephone call with Individual-3, and that the domain name for the Email Address was not the same as the domain name associated with the real Firm-1. Individual-1 also subsequently learned that a representative of Individual-1’s employer had called Firm-1’s New York office and been told that no one with Individual-3’s name worked at Firm-1.
Later on March 7, 2016, Individual-1 spoke by telephone with a person who identified himself as Individual-3. Individual-3 claimed to be a vice president in the New York office of Firm-1. During the call, Individual-1 asked Individual-3 for his telephone number, which Individual-3 refused to provide. After the call, Individual-1 received an email from the Email Address with a telephone number purporting to belong to Individual-3. Later that day, Individual-1 called CASPERSEN and confronted him with what he had learned about Individual-3 (i.e., the discrepancy between the newly created domain name for the Email Address, Firm-1’s real domain name, and that no one with Individual-3’s name worked at Firm-1). CASPERSEN responded that he found the information “strange,” and said he would get to the bottom of it. CASPERSEN called Individual-1 later and confirmed that the domain name of the Email Address had been recently registered, but stated that Individual-3 was actually a former outside administrator for Firm-1 in Guernsey.
Individual-1 then told CASPERSEN that the Foundation wanted its $25 million investment back, plus interest. On March 11, 2016, CASPERSEN told Individual-1 that the Foundation would receive the funds back by the end of the month.
The Foundation ultimately did not invest an additional $20 million with CASPERSEN, but has not received any of the $25 million principal back.
Firm-1, Firm-2, and a private equity firm referenced by CASPERSEN as part of the scheme (“Firm-4”) have confirmed that they had no knowledge of the special purpose vehicle that CASPERSEN had created as part of the scheme, nor did Firm-1, Firm-2, or Firm-4 authorize CASPERSEN to solicit funds on their behalf.
The Scheme to Defraud Firm-5
Beginning in October 2015, CASPERSEN began soliciting another multinational private equity firm (“Firm-5”) for an investment in a purported security similar to the one he had offered Individual-1 and the Foundation. In December 2015, when employees of Firm-5 sought to put their counsel in touch with CASPERSEN’s counsel, CASPERSEN put them off. On March 8, 2016, CASPERSEN sent a promissory note to Firm-5 employees for $50 million with terms nearly identical to those offered the Foundation in November 2015. The next day, CASPERSEN emailed Firm-5 employees and represented that his employer, Firm-2, had arranged a loan facility, and had asked him and two others who purportedly worked at Firm-1 (“Individual 6” and “Individual 7”) to be monitors.
As with the scheme to defraud Individual-1 and the Foundation, Firm-1, Firm-2, and Firm-4 confirmed that they had not authorized CASPERSEN to solicit funds from Firm-5 on their behalf, nor did they agree to participate in an offering of $80 million worth of promissory notes. Firm-1 also neither employed nor was represented by anyone with the names of Individual-6 or Individual-7.
Firm-5 did not ultimately invest $50 million with CASPERSEN.
As of March 18, 2016, Account-1 (where the Foundation and Individual-1 had wired their $25 million investment) had a balance of approximately $40,000.
* * *
CASPERSEN is charged with one count of securities fraud and one count of wire fraud. Each count carries a maximum term of 20 years in prison. The maximum fine on these counts is $5 million, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the Office’s criminal investigators, and thanked the Securities and Exchange Commission for its assistance.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
[2] For ease of reference, the defined terms in this press release mirror the defined terms in the Complaint.
Final member of Culloden heroin-dealing family sentenced to prison on Federal drug chargeRead the Press Release
HUNTINGTON, W.Va. – A Culloden woman who, together with her husband and son, sold heroin from their home in 2014 and 2015 was sentenced today to two years in federal prison, announced Acting United States Attorney Carol Casto. Toni Lynn Cremeans, 41, previously pleaded guilty in December 2015 to distributing heroin.
From early 2014 to May 2015, Toni Cremeans, her husband Sanford Dale Cremeans, and their son, Shawn Cremeans, conspired to sell heroin from their residence at 2246 3rd Street in Culloden. During that time period, Toni Cremeans frequently transported heroin to their residence where she and others would prepare it for distribution.
On December 2, 2014, a confidential informant working with law enforcement contacted Shawn Cremeans to arrange a heroin purchase. The informant traveled to the Cremeans’ residence and met with Shawn and Sanford Cremeans while they waited for Toni Cremeans to arrive with additional heroin. Once Toni Cremeans arrived, the informant paid Shawn Cremeans and received the heroin from Sanford Cremeans. Toni Cremeans admitted that she was responsible for distributing up to 100 grams of heroin during the conspiracy. Sanford and Shawn Cremeans both admitted that they assisted in the sale of heroin from the family residence and were also responsible for the distribution of up to 100 grams of heroin.
Sanford Cremeans was sentenced in January 2016 to three-and-a-half years in federal prison. Shawn Cremeans was sentenced earlier this month to five years of probation.
The Huntington FBI Drug Task Force and the Cabell County Sheriff’s Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecutions. Chief United States District Judge Robert C. Chambers imposed the sentences.
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.
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East St. Louis Resident Pleads Guilty to Firearm OffenseRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today that on March 24, 2016, Antwoine D. Sanders, 38, East St. Louis, IL, pled guilty to an Indictment charging him with the Unlawful Possession of a Firearm by a Previously Convicted Felon. For this offense, Sanders faces a term of imprisonment of not more than ten (10) years, a fine up to $250,000, or both, and a term of supervised release of not more than three (3) years. Sanders also agreed to the forfeiture of the firearm he illegally possessed. Sanders’ sentencing is scheduled for July 26, 2016, in Benton, Illinois. Sanders has been detained since his bond was revoked on March 11, 2016.
The charge arose on May 20, 2015, when Sanders was present at a residence during a parole compliance check of another resident. During a search of the residence, a firearm was found under the mattress in the bedroom Sanders shared. Sanders provided statements regarding the recovered firearm. Investigation revealed that Sanders had been convicted of Burglary in 1997 in St. Clair County, Illinois.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is assigned to Assistant United States Attorney Angela Scott.
Department of Justice resumes program to share federally seized assets with local law enforcementRead the Press Release
WHEELING, WEST VIRGINIA – United States Attorney William J. Ihlenfeld, II, announced today that, effective immediately, Department of Justice Equitable Sharing payments will resume to local and state law enforcement agencies throughout the Northern District of West Virginia.
The Department of Justice Equitable Sharing Program is an initiative through which the Department of Justice distributes an equitable share of forfeited property and proceeds to participating state and local law enforcement agencies that directly participate in an investigation or prosecution that result in a federal forfeiture.
As the result of budget reductions contained in the Bipartisan Budget Act of 2015 and the December 2015 Consolidated Appropriations Act, the Department of Justice announced that Equitable Sharing payments would be deferred beginning on December 21, 2015. Those payments will resume immediately, beginning with payments that were already being processed when the program was suspended.
“With the suspension of the federal equitable sharing program having been lifted today, millions of dollars that were in the pipeline will now be disbursed to law enforcement agencies in Northern West Virginia,” noted Ihlenfeld. “The system has been modified to streamline and speed up the process so that payments can be made as soon as possible, and so that the funds can be used to fight crime in our communities.”
Individuals interested in obtaining additional information about the Department of Justice Equitable Sharing Program are encouraged to visit the Department of Justice website at https://www.justice.gov/criminal-afmls/equitable-sharing-program.
Delaware Real Estate Developer Pleads Guilty to Bank Fraud and Environmental ViolationRead the Press Release
WILMINGTON, Del. - David C. Weiss, Acting United States Attorney for the District of Delaware, announced that Joseph L. Capano, age 73, of Middletown, Delaware, pled guilty today to one count of bank fraud and one count of knowingly violating the Clean Water Act. Capano faces up to 30 years of imprisonment and a $1,000,000 fine for the bank fraud charge, and 3 years of imprisonment and a $250,000 fine for the Clean Water Act charge.
According to the charging document and information provided in open Court, both charges relate to Capano’s conduct during construction of the Riverbend at Old New Castle development off of State Route 9 in New Castle, Delaware (“Riverbend Development”). The Riverbend Development was funded in part by a $1.5 million commercial line of credit from Cecil Bank, headquartered in Elkton Maryland. In October 2007, Capano signed an agreement for a line of credit on behalf of his company Riverbend Community, LLC, wherein and he represented that the purpose of the line of credit was to fund construction and other costs associated with the Riverbend Development. From October 2007 until August 2008, Capano signed and submitted funding requests, referred to as draw requests, to Cecil Bank which contained false representations and statements concerning the reasons for the requests. In reliance on those false representations, Cecil Bank continued to lend Capano money. Capano used some of the funds released by Cecil Bank for his personal use and not for construction of the Riverbend Development. For example, on December 21, 2007, Capano submitted a draw request seeking $300,000 for various Riverbend Development expenses. Instead of using those funds for Riverbend Development expenses, Capano used some of the funds for personal expenses, including approximately $63,000 to pay for a jewelry purchase. As part of his guilty plea, Capano has admitted that he converted at least $146,909.96 in loan proceeds to his personal use.
In addition to his misrepresentations regarding bank loan funds, the information states that Capano knowingly discharged pollutants into wetlands without a permit during the Riverbend Development. Capano directed employees and contractors of his company to perform earthmoving, construction and excavation activities in wetlands areas. Specifically, Capano directed contractors and employees to expand the entrance road to the development, referred to as the causeway, into wetlands subject to federal jurisdiction. Capano also directed contractors and employees to place a water main pipe through the causeway wetlands area, even after the Army Corps of Engineers instructed Capano to stop performing construction in wetland areas and issued Capano a Cease and Desist letter to that effect.
“It is important to the integrity of the land use and development process that all developers operate under the same set of rules. Mr. Capano was determined to make his own rules, and to use whatever means necessary to get the Riverbend Development completed. In so doing, he lied to the bank about the use of project funds and he ignored federal wetland regulations and the directives of the Army Corps of Engineers. Now he stands as a convicted felon.” said Acting U.S. Attorney Weiss.
“Capano committed fraud by using commercial loans from Cecil as a personal piggy bank,” said Christy Goldsmith Romero, Special Inspector General for TARP (SIGTARP). “As managing member of Riverbend Community LLC, he obtained commercial loans from Cecil and then illegally transferred the money to bank accounts of other affiliated companies so he could take the money for his personal use. Cecil received more than $11 million from the taxpayers during the financial crisis, and we will continue to aggressively investigate fraud committed at the expense of taxpayers’ TARP investments. SIGTARP commends Acting U.S. Attorney Weiss and our law enforcement partners for their work.”
This case is the result of a joint investigation conducted by the Federal Bureau of Investigation, the Office of the Special Inspector General for the Troubled Asset Relief Program, and the United States Environmental Protection Agency, Criminal Investigation Division Philadelphia Area Office. The prosecution is being handled by Assistant U.S. Attorney Jennifer K. Welsh.
Culpeper Man Sentenced on Heroin ChargeRead the Press Release
CHARLOTTESVILLE, VIRGINIA – United States Attorney John P. Fishwick announced today the sentencing of a man who was previously convicted of distributing heroin and crack cocaine.
Paul Vincent Brown, 40, of Culpeper, Virginia, previously waived his right to be indicted and pled guilty to an Information charging him with one count of conspiring to distribute and possess with the intent to distribute heroin and crack cocaine.
Today in the United States District Court for the Western District of Virginia in Charlottesville, Brown was sentenced to 120 months incarceration, followed by three years of supervised release. In addition, Brown was sentenced today to an additional 48 months in federal prison for violating the terms of his supervised release from a previous conviction.
“We must continue to be vigilant in our fight against heroin abuse,” United States Attorney John P. Fishwick Jr. said today. “We will continue to work with our local, state and federal law enforcement partners to not only put those in jail who sell this drug, but also support those providers who offer treatment and prevention options to addicts.”
The investigation of the case was conducted by the Drug Enforcement Administration, the Culpeper County Sheriff’s Office and the Culpeper Police Department. Assistant United States Attorney Ronald Huber prosecuted the case for the United States.
Convicted Felon from Fort Worth is Sentenced to 10 Years in Federal Prison on Firearm ConvictionRead the Press Release
FORT WORTH, Texas — A multi-convicted felon, Roderick Johnson, 35, of Fort Worth, Texas, was sentenced this morning by U.S. District Judge Reed O’Connor to 10 years in federal prison, following his conviction at trial in December 2015 on one count of being a felon in possession of a firearm, announced U.S. Attorney John Parker of the Northern District of Texas.
Johnson has been in custody since his arrest in June 2015 when officers with the Fort Worth Police Department responded to a report of a domestic disturbance at a motel room in Fort Worth. A search of that room, where Johnson was staying, revealed a .357 caliber pistol belonging to Johnson under the mattress. Johnson has been convicted of theft and controlled substances felony offenses in Tarrant County in 2004, 2005, 2009, 2011 and 2013.
The case was investigated by the Fort Worth Police Department, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant U.S. Attorney A. Saleem was in charge of the prosecution.
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Connecticut Insurance Salesman Convicted of Tax FraudRead the Press Release
Defendant Attempted to Obstruct IRS with False Tax Returns and Threatening Correspondence
A Newington, Connecticut, insurance salesman was convicted of tax fraud today in the U.S. District Court for the District of Connecticut in Hartford following a seven-day jury trial, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Terry DiMartino, 62, was convicted of one count of corruptly interfering with the due administration of the internal revenue laws, two counts of filing false tax returns and five counts of willfully failing to file tax returns. DiMartino was an insurance salesman for numerous insurance companies located in Connecticut and elsewhere. Despite earning millions of dollars in insurance commissions over the last decade, DiMartino did not file accurate tax returns or pay the taxes owed.
“As we approach the end of the tax return filing season, today’s verdict serves as a clear reminder that willfully failing to file, filing false returns, and attempting to obstruct the Internal Revenue Service (IRS) are crimes and those U.S. taxpayers who engage in such criminal conduct face prosecution, substantial fines and restitution, and prison,” said Acting Assistant Attorney General Ciraolo. “The department is committed to working with its partners in the IRS to enforce our nation’s tax laws by holding offenders such as Mr. DiMartino accountable.”
According to the evidence presented at trial, DiMartino attempted to obstruct the IRS by mailing false documents to the IRS, including three false tax returns for the 2007 tax year, one of which requested a fraudulent $14 million refund. He sent false and threatening correspondence to the IRS in an attempt to defeat the IRS’s assessment, collection and investigative efforts. He submitted false and threatening correspondence to insurance companies that sought to cooperate with the IRS collection activities. DiMartino also set up nominee entities which he used to divert his insurance commissions. He used the nominees to hide and conceal assets to prevent the IRS from collecting on his tax liabilities. DiMartino has not filed an accurate individual income tax return since the 1996 tax year.
“The IRS enforces the nation’s tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belongs to others to include the American taxpayer,” said Special Agent in Charge Manny Muriel, IRS Criminal Investigation. “Taxes are the price we pay for the public goods and services we want; yet Mr. DiMartino tried to undermine and corrupt the tax system when he attempted to steal $14 million in taxpayer money. Furthermore, he tried to intimidate insurance companies that sought to cooperate with the IRS. As the stewards of your tax dollars, the IRS will stand to protect and defend the American taxpayer.”
U.S. District Judge Alvin W. Thompson set sentencing for July 20. DiMartino faces a maximum sentence of three years in prison for the charge of obstructing the IRS, three years in prison for each of the false tax return charges and one year in prison for each count of willfully failing to file tax returns. DiMartino also faces monetary penalties.
Acting Assistant Attorney General Ciraolo commended agents of IRS Criminal Investigation, who investigated the case and Trial Attorneys Erin B. Pulice and Jason M. Scheff of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Charlotte Man Sentenced to Seven Years for Robbing A Bank at GunpointRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced today Jemichael Lovelle Strong, 34, of Charlotte, to seven years in prison, followed by two years of supervised release on firearms charges for robbing a Charlotte-area bank in July 2015, 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 John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Chief Kerr Putney of the Charlotte Mecklenburg Police Department (CMPD).
According to court documents and today’s sentencing hearing, on July 27, 2015, Strong robbed a First Citizen’s Bank branch located at 4325 Randolph Road, in Charlotte, stealing $3,871 in cash. Court records show that Strong walked into the branch, pointed a handgun at a teller and showed her a note that read, “Put 100s, 50s, and 20s in a bag.” Court records indicate that the teller retrieved money from the drawer and attempted to hand it to Strong. Strong pushed his gun more in the teller’s direction, shook his head “no” and pointed his gun back at the teller’s drawer, nodding “yes” when the teller asked Strong if he wanted more money. Court records show after the teller began walking toward Strong’s direction to hand him the cash, he shook his head “no” again, and nodded “yes” when the teller asked him if he wanted a bag for the money. Strong fled the scene after the teller handed him the bank bag containing the cash.
According to court records, law enforcement retrieved Strong’s fingerprints from a bank deposit slip he had used to cover his gun at the time of the robbery. A bank employee also told CMPD officers that she believed Strong had visited the bank on a previous occasion, wearing what looked like a security guard’s uniform. Court records show that on July 31, 2015, CMPD officers arrested Strong at his residence, and recovered a security guard uniform matching the description of the bank employee, which they determined belonged to Strong’s girlfriend. Law enforcement also seized from the residence the handgun that Strong used to carry out the bank robbery.
Strong pleaded guilty in December 2015 to one count of possession of a firearm in furtherance of a crime of violence. He remains in federal custody and will be turned over 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 the FBI’s Safe Streets Task Force and CMPD. The prosecution for the government was handled by Assistant U.S. Attorney George Guise of the U.S. Attorney’s Office in Charlotte.
Carbondale Man Sentenced for Cocaine OffenseRead the Press Release
On March 22, 2016, Ryan L. Gibbs, a/k/a "Blood," 37, of Carbondale, was sentenced for a cocaine offense, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Gibbs, who had previously pled guilty to a one-count indictment charging possession with intent to distribute cocaine, was sentenced to 216 months in federal prison, 3 years of supervised release following the prison sentence, and fined $300.00. Evidence at the plea and sentencing hearings established that, in September 2014, Gibbs was serving a term of home confinement while on parole from the Illinois Department of Corrections for a 2011 felony drug conviction. In addition to home confinement, Gibbs was also subject to electronic monitoring. Agents received information that Gibbs was distributing crack cocaine out of his Carbondale residence. During a September 16, 2014, IDOC parole compliance check, Gibbs was arrested after agents saw him pass a package of drugs off to a relative. Agents recovered over 39 grams of crack cocaine and over 27 grams of cocaine. Gibbs was also in possession of a large amount of U.S. currency. At the time of sentencing, Gibbs had been convicted of seven drug offenses, along with multiple firearm offenses. Gibbs received an enhanced sentence based on his classification as a Career Offender.
The investigation was conducted by the Southern Illinois Enforcement Group, Carbondale Police Department, Jackson County Sheriff’s Office, and Illinois Department of Corrections. The Jackson County State’s Attorney’s Office assisted in the investigation. The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Bangor Resident Pleads Guilty to Maintaining a Drug Involved PremisesRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Daniel Lyons, 42, of Bangor pleaded guilty today U.S. District Court to maintaining a drug involved premises.
According to court records, in 2014, the defendant maintained a residence on Essex Street in Bangor where he allowed dealers to store and sell heroin to customers on a daily basis and for which he was compensated in heroin.
The defendant faces up to 20 years in prison, a $500,000 fine and three years of supervised release.
The case was investigated by the U.S Drug Enforcement Administration and the Maine Drug Enforcement Agency.Bangor Man Sentenced to over 12 Years for Possessing Child Pornography and Violating Release ConditionsRead the Press Release
Contact: Chris Ruge
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Joshua Dunston, 38, of Bangor, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 121 months in prison and a lifetime of supervised release for possessing child pornography and a consecutive term of two years for violating his conditions of supervised release, also followed by a lifetime of supervised release. In addition, the defendant was ordered to pay $13,000 in restitution. He pled guilty on October 29, 2015.
According to court records, from about March 17 to about May 5, 2015, Dunston uploaded multiple images of child pornography to online accounts he controlled, and kept scores of additional images depicting the sexual exploitation of young children on his cell phone. At the time of these acts, Dunston was on supervised release for a 2006 child pornography conviction.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Maine State Police Computer Crimes Unit, the Penobscot County Sheriff’s Office and the Bangor Police Department.
Arizona Man and U.S. Citizen Residing in Germany Sentenced for Sexual AssaultRead the Press Release
Two men were sentenced today in the District of Arizona for the sexual assault of a 17-year-old girl in Landstuhl, Germany, in October 2013.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John S. Leonardo of the District of Arizona, Special Agent James Boerner of the U.S. Army Criminal Investigative Command (CID), Acting Special Agent in Charge Justin Tolomeo of the FBI’s Phoenix Division and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement.
U.S. District Judge David G. Campbell of the District of Arizona sentenced Joseph S. Martin, 20, of Peoria, Arizona, to 96 months in prison, and Christopher J. Heikkila, 21, a U.S. citizen previously residing in Weilerbach, Germany, to 84 months in prison. In September 2015, a jury convicted the men of one count of sexual abuse and one count of abusive sexual contact each.
According to the evidence presented at trial, on or about Oct. 19, 2013, Martin and Heikkila sexually assaulted a 17-year-old girl in Landstuhl while she was incapacitated after they had used social media to specifically target the victim and plan the assault. At the time, Martin and Heikkila were employees of the Army & Air Force Exchange Service on Ramstein Air Force Base in Ramstein, Germany, as well as dependents of civilian employees of the military, according to trial evidence. The Military Extraterritorial Jurisdiction Act gives U.S. federal courts jurisdiction over felonies committed abroad by certain persons employed by or accompanying the U.S. military.
The Army CID and the FBI’s Phoenix Division and Washington Field Office investigated the case. Senior Trial Attorneys Christine Duey and Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP) and Assistant U.S. Attorney Joseph E. Koehler of the District of Arizona prosecuted the case. HRSP Special Counsel Stacey Luck provided substantial assistance.
Alleged Child Pornographer Deemed Danger to the Community and Ordered into CustodyRead the Press Release
HOUSTON – A 42-year-old man residing in Navasota has been detained on charges of production, transportation and possession of child pornography, announced U.S. Attorney Kenneth Magidson.
Law enforcement arrested John Allen Chumley on March 15, 2016, upon the filing of a federal criminal complaint. Today, he appeared before U.S. Magistrate Judge Dena Hanovice Palermo who found probable cause he committed the crime and that he was a danger to the community. He was ordered into custody pending further criminal proceedings.
According to the complaint, Chumley is a long-haul truck driver who transported child pornography across stateliness and even travelled with one of his victims, now a 10-year-old boy. For some time, Chumley had access to this child and allegedly photographed him with Chumley’s cellular telephone in lewd and lascivious poses in Houston and elsewhere. Chumley then distributed these images via the Internet, according to the charges.
At the hearing today, testimony was also presented that alleged Chumley is also suspected of producing child pornography of two prepubescent children in the Houston area, one of whom Chumley also allegedly molested.
If convicted, Chumley faces a minimum of 15 and up to 30 years imprisonment on the production charges, a minimum of five and a maximum of 20 years for transportation of child pornography as well as another 10-year-maximum for possessing the child pornography. All of the charges, upon conviction, also carry a possible $250,000 fine. Upon completion of any prison term imposed, he also faces a minimum of five years and up to life on supervised release and he will be required to register as a sex offender.
The charges are the result of an investigation conducted by the National Center for Missing and Exploited Children and FBI offices in Houston and Springfield, Illinois. Assistant U.S. Attorney Sherri L. Zack of the Southern District of Texas is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
25 March 2016
Whitehorn Woman Admits to Causing over $100,000 in Environmental Damage to Federal LandRead the Press Release
SAN FRANCISCO – Melinda Van Horne pleaded guilty in federal court in San Francisco on Wednesday, March 23, 2016, to depredation against the property of the United States, announced Acting United States Attorney Brian Stretch and Nathan Mendes, Bureau of Land Management Assistant Special Agent-in-Charge.
In pleading guilty, Van Horne admitted to causing over $100,000 in environmental damage to federal lands in the King Range National Conservation Area through her marijuana cultivation operation. As described in the factual basis for the plea agreement, in October 2007, Van Horne purchased a house next to Paradise Ridge in Humboldt County, California. Paradise Ridge is part of a congressionally designated National Conservation Area administered by the Bureau of Land Management. Commercial activity and development are prohibited on the land, which is to be preserved for the enjoyment of future generations. In 2008, Van Horne proposed to trade portions of her private property for the federal conservation land, but the Bureau of Land Management rejected the trade based on the national conservation status of the land. Van Horne nonetheless decided to proceed with her marijuana cultivation operation.
Van Horne admitted that, with her consent and knowledge, and later at her direction, vegetation was stripped from portions of the federally managed conservation area, land was excavated and graded, and eleven greenhouses and other structures were constructed on federal lands. The work was done in order to grow marijuana plants for sale. Van Horne also used facilities that diverted water from the nearby Bridge Creek to water the marijuana plants.
Van Horne further admitted that, in September 2013, when law enforcement executed a search on the property, agents found 1,654 marijuana plants that she had been growing on federal land and in the adjoining garage in the house. Van Horne admitted that she was continuing to use the land although it had been foreclosed upon by the bank. Agents also executed a search warrant at Van Horne’s residence, where she had moved after the foreclosure, and found over 17 kilograms of marijuana at that location.
Van Horne further admitted that the bulldozing and excavation of federal land she orchestrated caused that land to become unstable and to erode into two rivers that provide crucial spawning and rearing habitats for threatened and federally protected salmon and steelhead. Bureau of Land Management engineers estimate the cost to repair the damage at $107,754.01, which Van Horne has agreed to pay as restitution in connection with her guilty plea.
Van Horne, 43, of Whitethorn, Calif., was indicted by a federal Grand Jury on November 17, 2015. She was charged with conspiracy to distribute marijuana, in violation of 21 U.S.C. Section 846; possession with intent to distribute 1,000 or more marijuana plants, in violation of 21 U.S.C. Section 841(a)(1) and 841(b)(1)(A)(vii); possession with intent to distribute marijuana, in violation of 21 U.S.C. Section 841(a)(1) and 841(b)(1)(C); maintaining a place for manufacturing marijuana, in violation of 21 U.S.C. Section 856(a); and depredation against property of the United States, in violation of 18 U.S.C. Section 1361. Under the plea agreement, Van Horne pleaded guilty to the depredation against property of the United States.
Van Horne is currently released on bond. Bail was set at $130,000.
Van Horne’s sentencing hearing is scheduled for June 29, 2016, at 10:00 a.m., before The Honorable Charles R. Breyer, U.S. District Court Judge, in San Francisco. The maximum statutory penalty for depredation against property of the United States in violation of 18 U.S.C. Section 1361 is ten years in prison and a fine of $250,000, or twice the gross gain or loss generated from the operation, plus restitution if appropriate. However, any sentence will 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. Section 3553.
Rita F. Lin is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Theresa Benitez, Rawaty Yim, and Marina Ponomarchuk. The prosecution is the result of a two-year investigation by the Bureau of Land Management and Drug Enforcement Administration.
Virginia Man Sentenced to 42 Months in Prison for Possession of Child PornographyRead the Press Release
WASHINGTON – Donald A. Essex, 68, of Alexandria, Va., was sentenced today to 42 months in prison on a federal charge of possession of child pornography, announced U.S. Attorney Channing D. Phillips, Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Essex pled guilty in September 2015 in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Senior Judge Paul L. Friedman. Upon completion of his prison term, Essex will be placed on five years of supervised release. He also will be required to register as a sex offender for a period of 15 years.
According to the government's evidence, on May 14, 2015, Essex contacted an undercover officer with the FBI's Child Exploitation Task Force, through a social network site. He continued this conversation via instant messaging with the undercover officer, who purported to be the father of an under-aged girl. Essex then began sending approximately a dozen images of child pornography. He also expressed interest in engaging in sexual acts with the under-aged girl. Law enforcement soon identified the defendant and obtained arrest and search warrants.
In a search of Essex’s home at the time of his arrest on May 15, 2015, law enforcement recovered a computer, drives, and other devices. A forensic examination of those devices led to the discovery of images and videos depicting child pornography. Essex pled guilty to knowingly possessing more than 600 images of child pornography. He has been in custody since his arrest.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the sentence, U.S. Attorney Phillips, Assistant Director in Charge Abbate, and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also expressed appreciation for the assistance provided by the Fairfax County, Va., Police Department. Finally, they acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Joyce Arthur and Assistant Andrea L. Hertzfeld, who prosecuted the matter.
U.S. Attorney's Office indicted 126 people for firearms violations last yearRead the Press Release
The United States Attorney’s Office for the Northern District of Ohio indicted 126 people on firearms charges last year.
Broken down by geography in the district, the most people indicted came out of the Cleveland office, with 66. That was followed by the Youngstown office (23), Toledo office (19) and Akron office (18).
“Our office and our law enforcement partners will continue to work collaboratively to target the worst of the worst,” said Acting U.S. Attorney Carole Rendon. “These include people who carry firearms, ammunition and sometimes body armor despite prior felony convictions, or those who help prohibited people to obtain firearms.”
“ATF’s mission is to protect the public and serve our nation by combating violent crime,” said Donald J. Soranno, Special Agent in Charge of the Columbus Field Division. “We will continue our partnership with the U.S. Attorney’s Office and our federal, state, and local partners to strive to make our communities safer through the reduction of gun violence.”
Details of selected cases:
U.S. v. Jackson et. al.: Five men were indicted in federal court for a series of carjackings in Cleveland’s Tremont neighborhood, Kenneth Jackson, Jr., 19, of Cleveland; Tervon’tae Taylor, 22, of Cleveland Heights; D’wan Dillard, Jr., 19, of Cleveland; Antowine Palmer, 23, of Cleveland, and Calvin Rembert, 22, of Cleveland, face charges including carjacking and multiple counts of brandishing a firearm during a crime of violence. Palmer is also charged with being a felon in possession of a firearm. Conduct alleged in the indictment includes six different armed robberies that took place in July and August 2015. Their case is pending.
U.S. v. Jackson: Akira Jackson, of Boardman, was sentenced to more than 15 years in prison for illegally possessing a firearm and body armor. Jackson was arrested in March 2015 after police found a .40 caliber pistol, ammunition and body armor in Jackson’s possession. He was forbidden by law to carry a weapon following multiple prior convictions, including conspiracy to commit manslaughter.
U.S. v. Lumpkin: A former police officer was sentenced to five years in prison after a jury convicted him of illegally selling firearms to people he knew were felons. Kevin R. Lumpkin, of North Olmsted, sold a Hi-Point .45-caliber rifle and a Ruger .380-caliber pistol on different occasions to people he knew were convicted of felonies and therefore forbidden from possessing a firearm. These sales took place between 2011 and 2013, when Lumpkin was a North Randall police officer.
U.S. v. Brooks: James E. Brooks, of Roaming Shores, was indicted on firearms and drug charges for possessing Walther, model P22, .22 Caliber Pistol; a Winchester, model 50, 12 gauge shotgun; and a Winchester, model 120, 12 gauge shotgun in August 2015. Brooks was forbidden from having firearms because of previous felony convictions including drug abuse, burglary, aggravated robbery with a firearm specification, felonious assault, escape, and felonious assault with a firearm specification. He is also charged with distributing crack cocaine and heroin. He is detained while his case is pending.
Operation Brownstone: Four people from the Cleveland area were indicted for federal firearms violations and 30 firearms seized as part of a long-term undercover investigation targeting gun and drug trafficking in Cleveland’s 4th Police District, on the city’s southeast side.
Firearm prosecution statistics for previous years:
2002: 117 indictments
2003: 155 indictments
2004: 184 indictments
2005: 220 indictments
2006: 187 indictments
2007: 191 indictments
2008: 157 indictments
2009: 156 indictments
2010: 166 indictments
2011: 218 indictments
2012: 176 indictments
2013: 207 indictments
2014: 167 indictments