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23 March 2016
Texas Man Sentenced for Obstructing Federal Hate Crime InvestigationRead the Press Release
Carlos Garcia, 29, was sentenced to 48 months in prison for making false statements in connection to the March 8, 2012, assault of a gay African-American man in Corpus Christi, Texas, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Garcia pleaded guilty in January 2016, to one count of false statements to law enforcement. The sentence was imposed yesterday by U.S. District Judge Hayden Head of the Southern District of Texas. Garcia will also serve three years of supervised release following completion of the prison term.
During his plea hearing, Garcia admitted that he made false statements to the FBI regarding the assault of a gay African-American man. Garcia denied being present during the assault, when in fact he participated in a portion of the assault.
Garcia is the third and last person to plead guilty in connection to the hate crime. Co-defendants Jimmy Garza Jr. and Ramiro Serrata Jr. were previously sentenced for their roles in the assault, each receiving 15 year sentences for their conduct.
During their pleas, Garza and Serrata admitted that they engaged in a protracted assault of a gay, African-American man because of his race and sexual orientation. Garza and Serrata admitted that they punched and kicked the man and assaulted him with various weapons, including a frying pan, a mug, a sock filled with batteries, a broom and a belt. Garza also poured bleach onto the victim’s face and into his eyes, and Garza struck the victim in the head with a handgun.
“This defendant lied about the facts of this terrible crime that violated our society’s most basic standards of human decency and dignity,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Department of Justice will continue to aggressively prosecute anyone who tries to obstruct justice by lying to law enforcement or covering up criminal activity.”
“Individuals who participate in hate crimes will continue to be the focus of federal criminal investigations in this district and this case illustrates that point,” said U.S. Attorney Magidson. “We simply will not tolerate the actions of anyone associated with these types of crimes, whether an active participant or one that seeks to hinder our efforts by lying, misleading or otherwise providing false information to law enforcement. This office will continue to ensure everyone is ultimately held accountable for their actions in federal court.”
This case was investigated by the FBI’s Corpus Christi Resident Agency with assistance from the Corpus Christi Police Department. It is being prosecuted by Trial Attorneys Jared Fishman and Nicholas Durham of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Ruben Perez of the Southern District of Texas.
Surinamese Man Found Guilty in Manhattan Federal Court of Conspiring to Import CocaineRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that EDMUND QUINCY MUNTSLAG, a citizen of Suriname, was found guilty yesterday in Manhattan federal court of conspiring to import cocaine into the United States. The four-day jury trial was held before U.S. District Judge Shira A. Scheindlin.
Manhattan U.S. Attorney Preet Bharara said: “As a unanimous jury found, Edmund Muntslag conspired to create a drug route for hundreds of kilograms of cocaine from his home country of Suriname to the streets of New York City. Thanks to the outstanding work of the Drug Enforcement Administration, Muntslag and his co-defendant, Dino Bouterse, will no longer be plotting to smuggle cocaine into the United States, but rather answering for their crimes in a federal prison.”
According to the allegations contained in the Indictment, other documents publicly filed in Manhattan federal court, and the evidence introduced at trial:
In 2013, MUNSTLAG, along with co-defendant Dino Bouterse, the son of the President of Suriname who declared himself the head of that country’s Counterterrorism Unit, conspired to sell hundreds of kilograms of cocaine to a purported Mexican cartel for importation to the U.S. In furtherance of this conspiracy, Bouterse supplied to individuals that he and MUNTSLAG believed to be representatives of the cartel, but who in fact were confidential sources working at the direction and under the supervision of the Drug Enforcement Administration (“DEA”), with genuine Surinamese passports bearing false identification information.
Approximately three weeks later, MUNTSLAG received $60,000 in cash as a payment to allow a 10-kilogram “test load” of cocaine to pass through the airport in Paramaribo, Suriname, where it was to be loaded onto a commercial airline flight concealed inside luggage. Thereafter, MUNTSLAG worked with corrupt airport employees in Suriname to send the 10-kilogram test load to Port-of-Spain, Trinidad and Tobago, from where MUNTSLAG and Bouterse believed it would be further transported and sold by the purported cartel in New York, New York. MUNTSLAG and Bouterse expected to receive proceeds from the sale of the cocaine in New York, and also expected to send additional, 100-kilogram cocaine shipments to the purported cartel using a similar method upon the successful completion of the test load.
The cocaine was seized by Trinidadian law enforcement officers, in coordination with agents of the DEA, in Port-of-Spain on July 27, 2013. MUNTSLAG was arrested in Port-of-Spain on August 29, 2013, and Bouterse was arrested in Panama City, Panama, on August 29, 2013.
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MUNTSLAG, 32, of Suriname, was convicted of conspiring to import five kilograms or more of cocaine into the United States, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. The minimum and 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. MUNTSLAG is scheduled to be sentenced on June 28, 2016, at 4:30 p.m.
On August 29, 2014, Bouterse, 43, also of Suriname, pled guilty to attempting to provide material support to Hezbollah, a Foreign Terrorist Organization; using and carrying a firearm or during and in relation to a drug-trafficking crime; and conspiring to import five kilograms or more of cocaine into the United States. On March 10, 2015, Bouterse was sentenced principally to a term of 195 months in prison.
Mr. Bharara praised the outstanding efforts of the Special Operations Division of the DEA. Mr. Bharara also thanked the DEA’s Miami Field Division, Panama City Country Office, Port-of-Spain Country Office, and Bogota Country Office; the Government of Trinidad and Tobago; and the U.S. Department of Justice’s Office of International Affairs.
This case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael D. Lockard and Andrew DeFilippis are in charge of the prosecution.
Superseding Indictment Charges Owner of Trucking Business with FraudRead the Press Release
PHILADELPHIA - A superseding indictment was filed today charging Volodymyr Kurylo, a/k/a “Volodya” a/k/a “Vova,” 35, of Richboro, PA, and Vitalii Vitiuk, 28, of Philadelphia, PA, with one count of conspiracy to defraud the United States and one count of conspiracy to produce an identification document without lawful authority, announced United States Attorney Zane David Memeger.
Volodymyr Kurylo operated VN Trucking, which, among other things, provided truck driver training. Vitalii Vitiuk worked for Kurylo. PennDOT requires that applicants for a Pennsylvania Commercial Driver’s License (CDL) provide proof of residency. According to the indictment, between June 2014 and September 2015, the defendants conspired to provide false residency documents to VN Trucking students who resided outside of Pennsylvania. For example, it is alleged that Kurylo obtained genuine utility bills and then had those bills falsified to indicate that the bill was in the student’s name and that the student resided at the Pennsylvania address. Kurylo also allegedly fabricated a false lease document for two CDL students who did not reside in Pennsylvania.
It is further alleged that between February 2015 and December 2015, Kurylo operated VN Trucking in violation of a January 2015 Federal Motor Carrier Safety Administration order that VN Trucking cease operations. Kurylo, it is alleged, continued to dispatch trucks and drivers to transport property using VN trucks, conducting the business of VN Trucking at its offices in Bensalem, Pennsylvania, and by using other motor carriers to conceal the operations of VN Trucking.
If convicted, defendant Kurylo faces a maximum sentence of 20 years in prison and defendant Vitiuk faces a maximum sentence of 15 years in prison.
The case was investigated by the U.S. Department of Transportation, Office of Inspector General and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Frank A. Labor III and Michael T. Donovan.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Spartanburg Woman Pleads Guilty to Treasury Check ConspiracyRead the Press Release
Contact Person: Bill Watkins (864) 282-2100
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Brandy D. Page, age 38, of Spartanburg, pled guilty today in federal court in Anderson, to conspiracy to pass Treasury checks of the United States bearing falsely made or forged endorsements, a violation of Title 18, United States Code, Section 371. United States District Timothy M. Cain, of Anderson accepted the plea and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that Page obtained Treasury checks by filing false tax returns and from other sources. She then would create a fraudulent power of attorney form giving her authority to cash the check that falsely purported to be executed by the payee listed on the Treasury check. Law enforcement estimates that Page cashed over $200,000 in Treasury checks in this manner before her scheme was discovered.
Law enforcement discovered the scheme in March 2014 when the Greer Police Department received a complaint from a Georgia man that someone had stolen and cashed his Treasury check in the Greer Wal-Mart. The driver’s license number and date of birth written on the check came back to Page. The Internal Revenue Service assisted local authorities and uncovered the breadth of Page’s scheme.
Mr. Nettles stated the maximum penalty Page can receive is a fine of $250,000 and/or imprisonment for 5 years, plus a special assessment of $100.
The case was investigated by agents of the Greer Police Department and the Internal Revenue Service. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
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Respironics to Pay $34.8 Million for Allegedly Causing False Claims to Medicare, Medicaid and Tricare Related to the Sale of Masks Designed to Treat Sleep ApneaRead the Press Release
Respironics Inc., based in Murrysville, Pennsylvania, has agreed to pay $34.8 million to resolve alleged False Claims Act violations for paying kickbacks in the form of free call center services to durable medical equipment (DME) suppliers that bought its masks for patients with sleep apnea, the Department of Justice announced today.
“The payment of illegal remuneration in any form to induce patient referrals threatens public confidence in the health care system,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Americans deserve to know that when they are prescribed a device to treat a serious health care problem, the supplier’s judgment has not been compromised by illegal payments from equipment manufacturers.
The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute are also false claims under the False Claims Act.
The United States alleged that Respironics violated the Anti-Kickback Statute and the False Claims Act by providing free services to DME suppliers to induce them to purchase Respironics masks that treat sleep apnea. Respironics allegedly provided DME companies with call center services to meet their patients’ resupply needs at no charge as long as the patients were using masks that Respironics manufactured; otherwise, the DME companies would have to pay a monthly fee based on the number of patients who used masks manufactured by a competitor of Respironics. The government alleged that the conduct began in April 2012 and continued until November 2015.
“This office has made a substantial commitment to combating fraud,” said U.S. Attorney Bill Nettles of the District of South Carolina. “Our commitment has made this district one of the leaders on behalf of whistleblowers. We hope that those who commit fraud will recognize that it is our goal to make the consequences more than just the cost of doing business.”
Respironics will pay roughly $34.14 million to the federal government and roughly $660,000 to various state governments based on their participation in the Medicaid program.
The settlement resolves a lawsuit originally brought by Dr. Gibran Ameer, who has worked for different DME companies, under the qui tam provisions of the False Claims Act. The Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under the civil settlement announced today, Dr. Ameer will receive $5.38 million out of the federal share of the recovery.
“Medical equipment manufacturers that boost profits by providing kickbacks to suppliers will be held accountable for their improper conduct,” said Special Agent in Charge Derrick L. Jackson of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to investigate such business arrangements, which threaten the integrity of federal health care programs.”
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.
This settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the District of South Carolina, and HHS Office of Counsel to the Inspector General and Office of Investigations and the National Association of Medicaid Fraud Control Units.
The lawsuit is captioned United States et al. ex rel. Dr. Gibran Ameer v. Philips Electronics North America, et al., Case No. 2:14-cv-2077-PMD (D.S.C.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Respironics to Pay $34.8 Million for Allegedly Causing False Claims to Medicare, Medicaid and Tricare Related to the Sale of Masks Designed to Treat Sleep ApneaRead the Press Release
Contact Person: Public Affairs (202) 514-2007
WASHINGTON – Respironics Inc., based in Murrysville, Pennsylvania, has agreed to pay $34.8 million to resolve alleged False Claims Act violations for paying kickbacks in the form of free call center services to durable medical equipment (DME) suppliers that bought its masks for patients with sleep apnea, the Department of Justice announced today.
“The payment of illegal remuneration in any form to induce patient referrals threatens public confidence in the health care system,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Americans deserve to know that when they are prescribed a device to treat a serious health care problem, the supplier’s judgment has not been compromised by illegal payments from equipment manufacturers.”
The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute are also false claims under the False Claims Act.
The United States alleged that Respironics violated the Anti-Kickback Statute and the False Claims Act by providing free services to DME suppliers to induce them to purchase Respironics masks that treat sleep apnea. Respironics allegedly provided DME companies with call center services to meet their patients’ resupply needs at no charge as long as the patients were using masks that Respironics manufactured; otherwise, the DME companies would have to pay a monthly fee based on the number of patients who used masks manufactured by a competitor of Respironics. The government alleged that the conduct began in April 2012 and continued until November 2015.
“This office has made a substantial commitment to combating fraud,” said U.S. Attorney Bill Nettles of the District of South Carolina. “Our commitment has made this district one of the leaders on behalf of whistleblowers. We hope that those who commit fraud will recognize that it is our goal to make the consequences more than just the cost of doing business.”
Respironics will pay roughly $34.14 million to the federal government and roughly $660,000 to various state governments based on their participation in the Medicaid program.
The settlement resolves a lawsuit originally brought by Dr. Gibran Ameer, who has worked for different DME companies, under the qui tam provisions of the False Claims Act. The Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under the civil settlement announced today, Dr. Ameer will receive $5.38 million out of the federal share of the recovery.
“Medical equipment manufacturers that boost profits by providing kickbacks to suppliers will be held accountable for their improper conduct,” said Special Agent in Charge Derrick L. Jackson of the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to investigate such business arrangements, which threaten the integrity of federal health care programs.”
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.
This settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the District of South Carolina, and HHS Office of Counsel to the Inspector General and Office of Investigations and the National Association of Medicaid Fraud Control Units.
The lawsuit is captioned United States et al. ex rel. Dr. Gibran Ameer v. Philips Electronics North America, et al., Case No. 2:14-cv-2077-PMD (D.S.C.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
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Project Safe Childhood - Massachusetts Man Sentenced for Aiding and Abetting the Transportation of an Individual for ProstitutionRead the Press Release
CONCORD, NEW HAMPSHIRE: Hansel German, 25, of Boston, Massachusetts, was sentenced in the United States District Court for the District of New Hampshire on Monday, March 21, 2016 on one count of aiding and abetting the transportation of an individual in interstate commerce for prostitution, and one count of possessing heroin with the intent to distribute it, announced U.S. Attorney Emily Gray Rice. The Court imposed a sentence of 8 years’ imprisonment, to be followed by an extended period of supervised release.
In February of 2014, Homeland Security Investigations, Manchester, New Hampshire, and the Salem, New Hampshire Police Department, with the assistance of the Boston Police Department, rescued a fifteen-year-old female who was engaging in prostitution from a Salem hotel room. Upon further investigation, authorities identified multiple individuals – including German – who were involved in the scheme to transport the female from Boston, Massachusetts to Salem, New Hampshire for prostitution.
The case was investigated by Homeland Security Investigations (Manchester, NH) and the Salem Police Department, in conjunction with the police departments of Boston, Massachusetts and Manchester, New Hampshire, as well as the New Hampshire Internet Crimes Against Children Task Force (NH ICAC). This case is being prosecuted by Assistant United States Attorneys Nick Abramson and Helen Fitzgibbon.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led 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, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Project Safe Childhood - Goffstown Man Pleads Guilty to Child Pornography PossessionRead the Press Release
CONCORD, NEW HAMPSHIRE: Richard Sullivan, 23, of Goffstown, New Hampshire, pled guilty on Tuesday in United States District Court for the District of New Hampshire to possessing child pornography, announced United States Attorney Emily Gray Rice.
A joint investigation by the police departments of Goffstown, Bedford, and Hampton, New Hampshire, in conjunction with Homeland Security Investigations Manchester (HSI) and the New Hampshire Crimes Against Children Task Force (NH ICAC), led to the seizure of electronic devices from Sullivan’s Goffstown residence, several of which were found to contain images of child pornography.
Sullivan is scheduled for sentencing in June 2016. The statutory maximum prison term for the crime charged is 10 years, a term of at least 5 years of supervised release, and a fine of up to $250,000. The court will sentence Sullivan after it has had an opportunity to review a presentence report prepared by the United States Probation & Pretrial Services Office.
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 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, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Portland Man Sentenced to over 12 Years on Armed Bank Robbery and Gun ChargesRead the Press Release
Contact: Jamie Guerrette
Assistant United States Attorney
Tel: (207) 780-3257
Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Francis J. Ready, 59, of Portland, was sentenced today in U.S. District Court by Judge D. Brock Hornby to 147 months in prison and five years of supervised release for armed bank robbery and using a firearm during the commission of a crime of violence.The charges arose out of the armed bank robberies of TD Bank in Portland on October 3, 2015 and of Bangor Savings Bank (“BSB”) in Portland on October 12, 2015. In both instances, the defendant used a firearm to rob the banks. He absconded with $2,846 from TD Bank and with $14,189 from BSB. Following the BSB robbery, he was apprehended by a Portland Police officer in a nearby parking area and found to be in possession of a silver Harrington and Richardson revolver.
The investigation was conducted by the Portland Police Department and the Southern Maine Gang Task Force comprised of agents and officers from the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Drug Enforcement Administration; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and the Portland, South Portland, and Lewiston Police Departments.Perry County Couple Convicted of Fraud SchemeRead the Press Release
LONDON — A Perry County couple who owned several trucking companies has been convicted of defrauding and extorting their customers.
On March 18, 2016, a federal jury in London rendered a guilty verdict convicting 49 year-old Elliott Campbell and his wife, Melinda, age 39, of charges related to wire fraud and extortion. Elliott Campbell was convicted of six counts of wire fraud, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit extortion. Melinda Campbell was found guilty of five counts of wire fraud, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit extortion. The jury rendered its verdict after two days of deliberation, following three days of trial.
The evidence at trial established that, from 2010 until 2012, the Campbells operated trucking companies and contracted with shipping brokers throughout the country to transport cargo freight. According to the evidence, the Campbells induced shipping brokers to enter into contracts with special conditions, which stipulated that payment would occur after delivery. Once the pair obtained the cargo freight, however, they failed to fulfill the specified conditions of delivery and then held the cargo hostage, by demanding payment prior to delivery. In response to complaints from shipping brokers, the Campbells created new companies and used false names, in order to continue their fraudulent scheme.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Howard Marshall, Special Agent in Charge, Federal Bureau of Investigation; and Thomas J. Ullom, Regional Special Agent-in-Charge, U.S. Department of Transportation Office of Inspector General, jointly announced the conviction.
The Campbells are scheduled to be sentenced on June 14, 2016. They face a maximum of 20 years on each wire fraud count, and for the extortion offense. They face a maximum of five years for the wire fraud conspiracy. However, any sentence would be imposed only after the Court has considered the U.S. Sentencing Guidelines and the applicable statutes.
Pasco Man Sentenced to Prison for Cross BurningRead the Press Release
Tampa, FL – U.S. Attorney A. Lee Bentley, III announced today that Pascual Carlos Pietri, 53, of Port Richey, Florida, was sentenced to 37 months in prison by U.S. District Judge Susan C. Bucklew of the Middle District of Florida for his role in a 2012 cross burning. He pleaded guilty on June 30, 2015, to one count of conspiring with others to threaten, intimidate and interfere with an interracial couple’s enjoyment of their housing rights.
“Cross burning remains a vicious symbol of hatred,” said U.S. Attorney Bentley. “All American families have the right to live where they choose, undisturbed by such racist threats. This prosecution sends a clear message that we will not tolerate hate crimes in our community.”
“Those who violently threaten others because of racial differences tear at the very fabric of our diverse American society,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The laws that protect our society leave no place for hate crimes.”
According to court documents, on Oct. 31, 2012, Pietri was living with another individual on Seward Drive in Port Richey in a predominantly white community. After an interracial couple moved next door, Pietri heard other neighbors make racial slurs and derogatory statements about African-Americans in general, and specifically the African-American neighbor.
On Halloween night, Pietri attended a party at a neighbor’s house, where several Seward Drive residents decided to burn a cross in the African-American man’s yard to intimidate him. Using wood and tools from the host of the Halloween party, Pietri’s co-conspirators constructed a wooden cross and obtained gasoline to pour on the cross. Pietri and a co-conspirator then carried the cross to the victims’ front yard, leaned it against their mailbox and set the cross on fire. Pietri and the co-conspirators burned the cross in the victims’ yard in an effort to intimidate the interracial couple.
This case was investigated by the FBI. It was prosecuted by Assistant U.S. Attorneys Josephine W. Thomas and Simon A. Gaugush of the Middle District of Florida, and Trial Attorney William E. Nolan of the Civil Rights Division’s Criminal Section.
Pasco County, Florida, Man Sentenced to Prison for Cross BurningRead the Press Release
The Justice Department announced that Pascual Carlos Pietri, 53, of Port Richey, Florida, was sentenced to 37 months in prison by U.S. District Judge Susan C. Bucklew of the Middle District of Florida for his role in a 2012 cross burning. He pleaded guilty on June 30, 2015, to one count of conspiring with others to threaten, intimidate and interfere with an interracial couple’s enjoyment of their housing rights.
“Those who violently threaten others because of racial differences tear at the very fabric of our diverse American society,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The laws that protect our society leave no place for hate crimes.”
“Cross burning remains a vicious symbol of hatred,” said U.S. Attorney A. Lee Bentley III. “All American families have the right to live where they choose, undisturbed by such racist threats. This prosecution sends a clear message that we will not tolerate hate crimes in our community.”
According to court documents, on Oct. 31, 2012, Pietri was living with another individual on Seward Drive in Port Richey in a predominantly white community. After an interracial couple moved next door, Pietri heard other neighbors make racial slurs and derogatory statements about African-Americans in general, and specifically the African-American neighbor.
On Halloween night, Pietri attended a party at a neighbor’s house, where several Seward Drive residents decided to burn a cross in the African-American man’s yard to intimidate him. Using wood and tools from the host of the Halloween party, Pietri’s co-conspirators constructed a wooden cross and obtained gasoline to pour on the cross. Pietri and a co-conspirator then carried the cross to the victims’ front yard, leaned it against their mailbox and set the cross on fire. Pietri and the co-conspirators burned the cross in the victims’ yard in an effort to intimidate the interracial couple.
This case was investigated by the FBI. It was prosecuted by Assistant U.S. Attorneys Josephine W. Thomas and Simon A. Gaugush of the Middle District of Florida, and Trial Attorney William E. Nolan of the Civil Rights Division’s Criminal Section.
Partner at New York Accounting Firm Sentenced in Manhattan Federal Court for Multimillion-Dollar Accounting Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MARC WIESELTHIER, a certified public accountant and former partner at a New York accounting firm (the “Firm”), was sentenced today to 27 months in prison for participating in a scheme to obtain millions of dollars in loans by making false statements and providing false and fraudulent documents to two commercial banks based in New York (the “Banks”) concerning the financial condition of a Florida-based cosmetics company (the “Company”) that was a client of WIESELTHIER. WIESELTHIER pled guilty on November 18, 2015, before U.S. Magistrate Judge Debra Freeman. Today’s sentence was imposed by U.S. District Judge Lewis A. Kaplan.
Manhattan U.S. Attorney Preet Bharara said: “Outside auditors are responsible for ensuring their clients’ financial statements are accurate. Marc Wieselthier, a partner at a New York accounting firm, admitted to falsely certifying a company’s financial statements, knowing that it would deceive two New York banks into making multimillion-dollar loans.”
According to the allegations contained in the information to which WIESELTHIER pled guilty, other documents filed in Manhattan federal court, and statements made in court proceedings:
WIESELTHIER was a licensed certified public accountant at the Firm. From 2009 through at least November 2015, WIESELTHIER was a partner at the Firm. The Company and its chief executive officer (“CEO”) were clients of WIESELTHIER, who performed, among other things, year-end audits of financial statements for the Company.
From 2007 through 2014, the Company, through its officers and WIESLTHIER, fraudulently induced the Banks into lending the Company millions of dollars by repeatedly making, and causing to be made, materially false and misleading statements about the Company’s financial condition. Specifically, the Company falsely inflated its sales and accounts receivable on “borrowing base certificates” and in financial statements audited by WIESELTHIER, which were provided to the Banks pursuant to loan agreements between the Banks and the Company. The Company used those falsely inflated sales and accounts receivable to mislead the Banks about the Company’s true financial performance in order to secure and draw down millions of dollars in revolving loans from the Banks that the Company would not otherwise have been entitled to receive.
As part of the scheme, on an annual basis, WIESELTHIER knowingly issued unqualified audit reports known as “clean opinions” falsely certifying that the Company’s financial statements fairly, and in all material respects, reflected the true financial condition of the Company and were in conformity with generally accepted accounting principles (“GAAP”). In truth and in fact, at the time that WIESELTHIER issued those “clean opinions,” WIESELTHIER knew that the Company’s financial statements overstated the Company’s accounts receivable and understood that the Banks would rely upon those false financial statements in loaning money to the Company. WIESELTHIER hid his accounting work for the Company from his own partners and associates at the Firm in an apparent effort to conceal the fraud.
In March 2014, the Company defaulted on the loans at issue. At that time, the Company’s outstanding balance on the loans was more than $4.8 million.
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In addition to his prison term, WIESELTHIER, 57, of Plainview, New York, was sentenced to three years of supervised release, and ordered to pay forfeiture of $166,000 and restitution of $4,888,460.35.
Three other defendants in this matter, Thomas Thompson, the sales manager of the Company, Jay Sosonko, the CFO of the Company, and Emanuel Cohen, the CEO of the Company, previously pled guilty for their roles in the fraudulent scheme, and are scheduled to be sentenced on March 24, 2016, April 14, 2016, and June 1, 2016, respectively.
Mr. Bharara praised the investigative work of the FBI.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Edward A. Imperatore is in charge of the prosecution.
Parolee Detained on Firearm, MDMA Trafficking ChargesRead the Press Release
PROVIDENCE, R.I. – A West Warwick resident, currently on parole after having been convicted and sentenced in Rhode Island state court in October 2008 on felony assault, robbery and firearm charges, was ordered detained in federal custody today for allegedly possessing and trafficking the synthetic drug MDMA, and for being a felon in possession of firearms.
Devon Mello, 26, of West Warwick, arrested earlier today by members of the ATF Task Force, with the assistance of the West Warwick Police Department and the DEA, was ordered detained in federal custody following his initial appearance before U.S. District Court Magistrate Judge Lincoln D. Almond on a criminal complaint charging him with three counts of distribution of methylenedioxymethamphetamine (MDMA), one count of possession with the intent to distribute MDMA, and two counts of being a felon in possession of a firearm.
Mello’s arrest and criminal complaint are announced by United States Attorney Peter F. Neronha, Daniel J. Kumor, Special Agent in Charge of the Boston Field Division of ATF, and West Warwick Police Chief Colonel Richard G. Silva.
According to court documents, on February 26, 2016, an ATF special agent acting in an undercover capacity, allegedly met with Mello in a parking lot near his residence to discuss interest in committing armed robberies. Mello allegedly informed the agent that he not only was in possession of a firearm on his person, but that he had access to other firearms, including an AR-15 assault rifle and a shotgun. Prior to leaving Mello’s company, the agent allegedly purchased from Mello 2.7 grams of MDMA in exchange for $80.
On March 1, 2016, after having exchange numerous text messages with Mello during the two previous days, the undercover agent allegedly met with Mello in a parking lot near Mello’s residence to discuss the purchase of firearms. Prior to the end of the meeting, the undercover agent allegedly purchased 9.8 grams of MDMA from Mello for $270. Mello allegedly instructed the agent to stay in touch with him to learn about the status of obtaining firearms.
On March 4, 2016, as allegedly instructed by Mello in a text message the day before, the agent met with Mello in a parking lot near Mello’s residence during which time Mello allegedly provided the agent with a shotgun and ammunition in exchange for $400. They allegedly met again on March 10, 2016, in a parking lot near Mello’s home, to allegedly discuss the purchase of additional firearms. Prior to the end of that meeting, the agent allegedly purchased from Mello 8.35 grams of MDMA in exchange for $225.
Earlier today, Mello was detained by ATF agents as ATF agents, members of the ATF Task Force, and West Warwick Police conducted a federal court authorized search of Mello’s residence. The search resulted in the seizure of approximately 28 grams of MDMA, a 9mm firearm, $270 in cash and various items used in the packaging and distribution of MDMA and other drugs.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
According to court documents, on October 16, 2008, Mello was convicted in Rhode Island state court on first degree robbery and conspiracy charges, and was sentenced to 15 years - 10 years to serve and the remainder suspended - and 5 years of probation. On the same date, Mello was convicted on two counts of felony assault and two counts of discharge of a firearm during a crime of violence, and was sentenced to a concurrent sentence of 20 years of incarceration - 15 years to serve and 5 years suspended - and 5 years of probation. Mello has been on parole since the fall of 2015.
At the time of his arrest, Mello, who was subject to home confinement, was wearing a GPS electronic monitoring ankle bracelet.
The case in federal court is being prosecuted by Assistant U.S. Attorney Milind M. Shah.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The ATF Task Force consists of agents and officers from Providence, Cranston and Central Falls Police Departments, Providence Fire Department Arson Squad, and the Rhode Island Department of Correction's Special Investigations Unit.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI Devon Mello Complaint & Affidavit
Pair Pleads Guilty in Connection to Thefts from Appomattox Gun StoreRead the Press Release
LYNCHBURG, VIRGINIA – Two months after a federally licensed firearms dealer in Appomattox, Virginia was burglarized and 56 guns were stolen, two of the men who took part in the break-in, have pled guilty in Federal court to related charges, United States Attorney John P. Fishwick Jr. announced today.
In separate hearings today in the United States District Court for the Western District of Virginia in Lynchburg, Dequan Montez Kelso, 22, and Kwamane Jarrae McCoy, 22, both of Appomattox, Virginia, each pled guilty to one count of being a previously convicted felon illegally in possession of a firearm.
“Keeping illegal guns out of the hands of prohibited users is a priority of the United States Attorney’s Office,” United States Attorney John P. Fishwick Jr. said today. “In order to keep our communities safe, we must continue to work with our partners in law enforcement to find these guns and get them off the streets. I am grateful to the ATF for putting up a $10,000 reward in this case and am hopeful it will lead to the recovery of some of these firearms.”
“Today's guilty pleas are due in large part to the teamwork of Appomattox County deputies, commanded by Sherriff Barry Letterman, the Virginia State Police including their dive team, the Western District of Virginia U.S Attorney's Office, the ATF Roanoke Field Office agents and our state and local partners,” said ATF Washington Field Division Special Agent in Charge Michael Boxler. “The ATF Washington Field Division remains committed to investigating thefts from firearms dealers and working with the firearms industry to prevent them.”
According to evidence presented at previous hearings by Assistant United States Attorney Andrew Bassford, in January 2016, TNT Outfitters in Appomattox, Virginia was burglarized by four, masked individuals in the middle of the night. These individuals stole 56 firearms. Following a thorough investigation by the ATF, Virginia State Police and the Appomattox County Sheriff’s Office, McCoy and Kelso were identified as being involved in the burglary and were soon located and found to be in possession of some of the stolen firearms. They were subsequently arrested and today admitted their involvement in the incident.
Many of the stolen firearms, including a Glock 17, HiPoint C9, Smith and Wesson M&P 9 Pro, Remington Model 700 Shotgun and a Ruger Mini 14 .223 Rifle remain missing. The Bureau of Alcohol, Tobacco, Firearms and Explosives have offered a $10,000 reward to anyone with knowledge of the whereabouts of these missing firearms. Anyone with information can contact the ATF at 1-800-283-4867.
The investigation of the case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Virginia State Police and the Appomattox Sheriff’s Office. Assistant United States Attorney Andrew Bassford prosecuted the case for the United States.
Notice of Court ProceedingsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
COLUMBIA, SOUTH CAROLINA – United States Attorney Bill Nettles stated that United States District Judge Joseph F. Anderson will hold a hearing in the case of United States v. HW Group, Case No. 3:16-po-2.
WHEN: Thursday, March 24, 2016, at 2 pm WHERE: Matthew J. Perry, Jr., Courthouse
901 Richland Street, Courtroom V
Columbia, SC 29201#####
New York Man Indicted in $17 Million Microcap Stock Manipulation SchemeRead the Press Release
NEWARK, N.J. – A federal grand jury today indicted the owner of a registered broker-dealer in New York for orchestrating a stock market manipulation scheme that artificially inflated the stock price of two publicly traded companies, U.S. Attorney Paul J. Fishman announced.
Guy Gentile, 39, of Putnam Valley, New York, is charged by indictment with one count of conspiracy to commit securities fraud and one count of securities fraud.
According to the indictment:
From April 2007 through June 2008, Gentile and others allegedly engaged in an extensive “pump-and-dump” stock manipulation scheme to fraudulently inflate the prices of shares of certain companies in order to later sell those shares at artificially inflated prices. Gentile was the founder and owner of a registered broker-dealer based in New York. The scheme involved two public companies: Raven Gold Corporation (RVNG) and Kentucky USA Energy Inc. (KYUS).
Gentile and his conspirators first obtained control over large blocks of the free trading shares of the two target companies. They allegedly “pumped” the price of those shares by engaging in manipulative trading of the stocks and disseminating misleading promotional materials touting the stocks and encouraging others to purchase them. After pumping the stocks, Gentile and his conspirators “dumped” them, selling large volumes of the stock to investors. The companies’ stock prices then dropped, causing the victims of the scheme to suffer losses. The alleged stock manipulation scheme generated approximately $17.2 million in gross trading proceeds.
The conspiracy count with which Gentile is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine.
The charges and allegations in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
The U.S. Securities and Exchange Commission (SEC) is filing a civil complaint against Gentile today.
On May 27 and 28, 2015, Itamar Cohen, 53, and Michael Taxon, 52, stock promoters from Ontario, Canada, each pleaded guilty before U.S. District Judge Jose L. Linares to one-count informations charging them with conspiracy to commit securities fraud for their involvement in the scheme.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s indictment. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Andrew Calamari, for its assistance in this matter.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Joseph Tacopina Esq. and Chad Siegel Esq., New York
New York Entrepreneur Admits Defrauding Investors in Scheme That Allegedly Caused More Than $3 Million in LossesRead the Press Release
NEWARK, N.J. - A New York man today admitted executing a more than two-year scheme in which he defrauded multiple victims who believed they were investing in businesses that offered a popular fitness training program, U.S. Attorney Paul J. Fishman announced.
Joshua Bryce Newman, 36, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of wire fraud.
According to documents filed in this case and statements made in court:
Newman was a self-styled entrepreneur who engaged in a variety of business ventures, including venture capital work, a film production company, and, more recently, in businesses offering a popular fitness training program. By 2011 and 2012, Newman found himself with mounting legal and financial troubles largely as a result of judgments and liens filed against him and his film production company, Cyan Pictures, relating to their failed film project that was meant to produce and distribute a film about the New York Yankees entitled “Keeper of the Pinstripes.”
From 2012, Newman made material misrepresentations to solicit investments and loans purportedly for various fitness business ventures he was working on, when his true intent was to use the money for his own purposes, including repaying others who had invested in one of his prior projects.
Newman often supplied his victims with doctored or bogus documentation in order to obtain the investment capital and loans. He then lulled his victims into believing that their investment money was safe or that he was in a position to repay their loans by making further misrepresentations and supplying them with additional phony documents. The false documents he used included doctored operating agreements, false statements of ownership percentages held by various individuals, and bogus Schedule K-1s purporting to show the amount of annual partnership gains or losses reported to the IRS.
Newman also misrepresented to his potential partners, purported investors, and lenders in one of his business ventures that he had raised millions of dollars in funding for the project, when he knew that no such funds had been raised.
When investors raised concerns about their investments, Newman typically gave them false assurances and agreed to return the funds. In reality, he often had no funds to return, and so he would make various excuses, including that he had sent wires that had been delayed in the banking system, when no such wire had been sent. He often stalled for time by giving his victims checks drawn on accounts with insufficient funds to cover the amount of the checks.
On at least one occasion, Newman sent a picture of the purported wire transfer order for $165,000 to an investor who had threatened legal action and told the investor that the funds were on the way, even though Newman knew that no such funds had been or would be furnished to the investor.
The information filed today alleges that Newman defrauded approximately 30 victims of approximately $3.1 million.
The wire fraud count to which Newman pleaded guilty carries a maximum potential sentence of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for July 19, 2016.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Paul A. Murphy, Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.
Defense counsel: Priya Chaudhry Esq., New York; Eric Kanefsky Esq., Newark
Montana U.S. Attorney's Office and Missoula Police Department Host Regional Law Enforcement Training on Sex TraffickingRead the Press Release
MISSOULA – The U.S. Attorney’s Office for the District of Montana and the Missoula Police Department will host a two-day training titled “Sex Trafficking: Investigation and Prosecution.” The Mansfield Center at the University of Montana, the Montana DOJ Children’s Justice Center, FBI’s Montana Regional Violent Crime Task Force and the Montana Human Trafficking Task Force have also collaborated on the event. The training will take place at the University of Montana March 23-24, 2016, and is open to registered law enforcement personnel. Attendees come from Idaho, Montana, Utah, and Washington.
The training is designed to help law enforcement personnel gain a comprehensive understanding of the crime of sex trafficking, recognize common indicators to identify victims, and learn effective techniques for victim interviews and investigative strategies. A primary goal of the training is to promote law enforcement awareness and provide tools and techniques for the successful prosecution of sex trafficking that law enforcement personnel can take back to their communities.
This training is one of several held this year in Montana that reflect the Office’s focus on the issue of sex trafficking. Similar trainings hosted by the U.S. Attorney’s Office and the FBI were held earlier this year on three Montana Indian Reservations for the benefit of law enforcement officers working in Indian Country. Following this training, the U.S. Attorney’s Office will have collaborated in the training of more than 300 law enforcement personnel from multiple jurisdictions.
“This training reflects our shared commitment to eradicating the scourge of sex-trafficking that plagues communities regionally, nationally, and internationally,” said U.S. Attorney for the District of Montana Mike Cotter. “Human trafficking is a crime that occurs in the shadows, in the margins of our country and around the world. It is not just a federal matter; it is a matter that needs to be tackled with all available resources: by federal, state, tribal and local law enforcement along with our community and faith based organizations.”
“This training is a product of the long-standing collaborative relationship between the Missoula Police Department, the U.S. Attorney’s Office, and the FBI,” said Missoula Police Chief Mike Brady. “Our Department has been working with the Federal Government on this issue for some time. This training gives us the opportunity to share the results of that collaboration with the regional law enforcement community.”
The training is closed the public and the press.
Monongahela Man Accused of Creating and Mailing False Court DocumentsRead the Press Release
PITTSBURGH -- A Washington County resident has been indicted by a federal grand jury in Pittsburgh on charges of mail fraud and forging and counterfeiting a Seal of a Court of the U.S., United States Attorney David J. Hickton announced today.
The three-count indictment returned yesterday named Steven P. Grados, 51, of Monongahela, Pa.
According to the indictment, Grados created false documents that consisted of a Memorandum opinion and Court Order and mailed them to the Pennsylvania State Employees Retirement System offices in Harrisburg in order to deceive that office into discontinuing paying a portion of his State Police pension to his former spouse.
The law provides for a maximum total sentence of up to 20 years on each count of mail fraud and five years on the single count for forging the signature of a federal judge, a fine of up to $250,000 on each of the three counts, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Miami Businessman Pleads Guilty to Foreign Bribery and Fraud Charges in Connection with Venezuela Bribery SchemeRead the Press Release
HOUSTON - The owner of multiple U.S.-based energy companies has pleaded guilty to foreign bribery and fraud charges for his role in a scheme to corruptly secure energy contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA).
U.S. Attorney Kenneth Magidson made the announcement along with Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Special Agent in Charge Sean McElroy of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Houston and Special Agent in Charge Rick Goss of Internal Revenue Service-Criminal Investigation’s Houston Field Office (IRS-CI).
Abraham Jose Shiera Bastidas (Shiera), 52, of Coral Gables, Florida, pleaded guilty yesterday in federal court before U.S. District Judge Gray H. Miller to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and commit wire fraud and one count of violating the FCPA. Sentencing is scheduled for July 8, 2016. Four others charged in relation to the case had previously entered guilty pleas, including three foreign officials.
“The five convictions announced today hold to account bribe payors as well as the corrupt foreign officials who laundered the bribe money through the United States,” said Caldwell. “These individual prosecutions are the result of a tenacious and coordinated effort by our prosecutors and agents to unravel a complex web of bribes paid to Venezuelan officials. And they demonstrate our commitment to building cases from the ground up, instead of counting on companies and other wrongdoers to self-disclose their crimes.”
“The pleas of guilty in this case are the result of the strict enforcement of the FCPA in this district,” said Magidson. “Bribery under this law is a serious federal crime that undermines commercial and political relations around the world. This case is an example of our reach to expose this criminal conduct.”
Shiera was arrested in Miami on Dec. 16, 2015, after a federal grand jury returned an 18-count indictment against him and Roberto Enrique Rincon Fernandez (Rincon), 55, of The Woodlands.
According to admissions made in connection with Shiera’s plea, Shiera and Rincon worked together to submit bids to provide equipment and services to PDVSA through their various companies. Shiera admitted that beginning in 2009, he and Rincon agreed to pay bribes and other things of value to PDVSA purchasing analysts to ensure his and Rincon’s companies were placed on PDVSA bidding panels, which enabled the companies to win lucrative energy contracts with PDVSA. Shiera also made bribe payments to other PDVSA officials in order to ensure his companies were placed on PDVSA-approved vendor lists and given payment priority so that they would get paid ahead of other PDVSA vendors with outstanding invoices, he admitted.
“The corruption of foreign officials through bribery has a damaging impact on the stability of trade, industries and even nations,” said McElroy. “HSI and our partners will tirelessly investigate anyone who cultivates the corruption of officials abroad and bribe their way to financial gain.”
“Bribery and corruption undermines honest, free enterprise and creates an atmosphere of back room dealing that impairs the ability for honest businesses to compete,” said Goss. “IRS-CI tirelessly untangles the web of illicit transactions that lead to corrupt individuals being held accountable.”
Judge Miller also unsealed charges yesterday against four other individuals charged in connection with the investigation. In January 2016, Moises Abraham Millan Escobar (Millan), 32, of Katy, pleaded guilty under seal to one count of conspiracy to violate the FCPA for his role in the PDVSA bribery scheme. Milan was Shiera’s former employee. In December 2015, three former PDVSA officials, Jose Luis Ramos Castillo (Ramos), 38; Christian Javier Maldonado Barillas (Maldonado), 39; and Alfonzo Eliezer Gravina Munoz (Gravina), 53, all from Katy, each pleaded guilty under seal to conspiracy to commit money laundering. As part of their guilty pleas, Ramos, Maldonado and Gravina each admitted that while employed by PDVSA or its wholly owned subsidiaries or affiliates, they accepted bribes from Shiera and Rincon in exchange for taking certain actions to assist companies owned by Shiera and Rincon in winning energy contracts with PDVSA. Ramos, Maldonado and Gravina also admitted they conspired with Shiera and Rincon to launder the proceeds of the bribery scheme. Gravina also pleaded guilty to making false statements on his 2010 federal income tax return by failing to report the bribe payments he received from Shiera, Rincon and others. As part of their plea agreements, Shiera, Millan, Ramos, Maldonado and Gravina all agreed to forfeit proceeds of their criminal activity.
The indictment as to Rincon remains pending. He is charged with one count of conspiracy to violate the FCPA and commit wire fraud, one count of conspiracy to commit money laundering and seven counts of money laundering. Rincon is also charged with four counts of violating the FCPA. He was ordered detained pending trial following a detention hearing held on Dec. 18, 2015, before U.S. Magistrate Judge Nancy K. Johnson of the Southern District of Texas. The charges contained in the indictment are merely accusations, and Rincon is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
ICE-HSI and IRS-CI are conducting the ongoing investigation with assistance from the FBI. Deputy Chief John Pearson and Assistant U.S. Attorney Robert S. Johnson are prosecuting the case along with Trial Attorneys Aisling O’Shea and Jeremy R. Sanders of the Criminal Division’s Fraud Section. Assistant U.S. Attorneys Kristine Rollinson and Vincent Carroll are handling the forfeiture aspects of the case.
The Criminal Division’s Office of International Affairs also provided assistance.
Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Miami Businessman Pleads Guilty to Foreign Bribery and Fraud Charges in Connection with Venezuela Bribery SchemeRead the Press Release
The owner of multiple U.S.-based energy companies pleaded guilty yesterday to foreign bribery and fraud charges for his role in a scheme to corruptly secure energy contracts from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA).
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Acting Special Agent in Charge Sean McElroy of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Houston and Special Agent in Charge Rick Goss of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Houston Field Office made the announcement.
Abraham Jose Shiera Bastidas (Shiera), 52, of Coral Gables, Florida, pleaded guilty yesterday in federal court before U.S. District Judge Gray H. Miller of the Southern District of Texas in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and commit wire fraud and one count of violating the FCPA. Sentencing is scheduled for July 8, 2016. Four others charged in relation to the case have pleaded guilty, including three foreign officials.
“The five convictions announced today hold to account bribe payors as well as the corrupt foreign officials who laundered the bribe money through the United States,” said Assistant Attorney General Caldwell. “These individual prosecutions are the result of a tenacious and coordinated effort by our prosecutors and agents to unravel a complex web of bribes paid to Venezuelan officials. And they demonstrate our commitment to building cases from the ground up, instead of counting on companies and other wrongdoers to self-disclose their crimes.”
“The pleas of guilty in this case are the result of the strict enforcement of the FCPA in this district,” said U.S. Attorney Magidson. “Bribery under this law is a serious federal crime that undermines commercial and political relations around the world. This case is an example of our reach to expose this criminal conduct.”
Shiera was arrested in Miami on Dec. 16, 2015, after a federal grand jury returned an 18-count indictment against him and Roberto Enrique Rincon Fernandez (Rincon), 55, of The Woodlands, Texas. According to admissions made in connection with Shiera’s plea, Shiera and Rincon worked together to submit bids to provide equipment and services to PDVSA through their various companies. Shiera admitted that beginning in 2009, he and Rincon agreed to pay bribes and other things of value to PDVSA purchasing analysts to ensure that his and Rincon’s companies were placed on PDVSA bidding panels, which enabled the companies to win lucrative energy contracts with PDVSA. Shiera also made bribe payments to other PDVSA officials in order to ensure that his companies were placed on PDVSA-approved vendor lists and given payment priority so that they would get paid ahead of other PDVSA vendors with outstanding invoices, he admitted.
“The corruption of foreign officials through bribery has a damaging impact on the stability of trade, industries and even nations,” said Acting Special Agent in Charge McElroy. “HSI and our partners will tirelessly investigate anyone who cultivates the corruption of officials abroad and bribe their way to financial gain.”
“Bribery and corruption undermines honest, free enterprise and creates an atmosphere of back room dealing that impairs the ability for honest businesses to compete,” said Special Agent in Charge Goss. “IRS-CI tirelessly untangles the web of illicit transactions that lead to corrupt individuals being held accountable.”
Judge Miller also unsealed charges yesterday against four other individuals charged in connection with the investigation. In January 2016, Moises Abraham Millan Escobar (Millan), 32, of Katy, Texas, pleaded guilty under seal to one count of conspiracy to violate the FCPA for his role in the PDVSA bribery scheme. Millan was Shiera’s former employee. In December 2015, three former PDVSA officials, Jose Luis Ramos Castillo (Ramos), 38; Christian Javier Maldonado Barillas (Maldonado), 39; and Alfonzo Eliezer Gravina Munoz (Gravina), 53, all from Katy, each pleaded guilty under seal to conspiracy to commit money laundering. As part of their guilty pleas, Ramos, Maldonado and Gravina each admitted that while employed by PDVSA or its wholly owned subsidiaries or affiliates, they accepted bribes from Shiera and Rincon in exchange for taking certain actions to assist companies owned by Shiera and Rincon in winning energy contracts with PDVSA. Ramos, Maldonado and Gravina also admitted that they conspired with Shiera and Rincon to launder the proceeds of the bribery scheme. Gravina also pleaded guilty to making false statements on his 2010 federal income tax return by failing to report the bribe payments he received from Shiera, Rincon and others. As part of their plea agreements, Shiera, Millan, Ramos, Maldonado and Gravina all agreed to forfeit proceeds of their criminal activity.
The charges against Rincon remain pending. He is charged with one count of conspiracy to violate the FCPA and commit wire fraud, one count of conspiracy to commit money laundering, seven counts of money laundering and four counts of violating the FCPA. Rincon was ordered detained pending trial following a detention hearing held on Dec. 18, 2015, before U.S. Magistrate Judge Nancy K. Johnson of the Southern District of Texas. The charges contained in the indictment are merely accusations, and Rincon is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
ICE-HSI and IRS-CI are conducting the ongoing investigation with assistance from the FBI. Trial Attorneys Aisling O’Shea and Jeremy R. Sanders of the Criminal Division’s Fraud Section and Deputy Chief John Pearson and Assistant U.S. Attorney Robert S. Johnson of the Southern District of Texas are prosecuting the case. Assistant U.S. Attorneys Kristine Rollinson and Vincent Carroll of the Southern District of Texas are handling the forfeiture aspects of the case.
The Criminal Division’s Office of International Affairs also provided assistance.
Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Mexican Businessman Sentenced to Federal Prison for Role in Los Zetas Money Laundering Scheme and BriberyRead the Press Release
In Austin, 55-year-old Veracruz, Mexico businessman Francisco Antonio Colorado-Cessa (aka “Pancho”), was sentenced to 20 years in federal prison for laundering Los Zetas drug proceeds and attempting to bribe a federal judge announced United States Attorney Richard L. Durbin, Jr., FBI Special Agent in Charge Christopher Combs and Internal Revenue Service Criminal Investigation Special Agent in Charge William Cotter.
In addition to the prison term, U.S. District Judge Donald E. Walter ordered that Colorado-Cessa forfeit to the U.S. Government $60 million in U.S. Currency and property—proceeds seized by authorities involved in the money laundering scheme—including two planes and five bank accounts.
In December 2015, a federal jury in Austin convicted Colorado-Cessa, the owner of ADT Petroservicios, an oil services company in Mexico doing business with the Mexican National Oil Company PEMEX, of one count of conspiracy to commit money laundering. The conspiracy charge centered on a scheme to launder millions of dollars in Los Zetas drug distribution proceeds through purchasing, training, breeding and racing American quarter horses in the United States. Testimony during that trial revealed a shell game by Colorado Cessa, a close associate of the Zetas drug cartel’s top leaders including Miguel Angel Trevino Morales (aka “Z-40”), Oscar Omar Trevino Morales (aka “Z-42”), and others involving straw purchasers and transactions worth millions of dollars in New Mexico, Oklahoma, California and Texas to disguise the source of the drug money and make the proceeds from the sale of quarter horses or their race winnings appear legitimate.
Over 400 quarter horses seized by federal authorities in June 2012 as part of the above mentioned money laundering operation have been sold for approximately $12 million. One of the seized horses, Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, TX, in October 2009, sold at an auction for a record $1.7 million in November 2013.
In January 2016, a separate federal jury found Colorado-Cessa guilty of one count of conspiracy to bribe a public official and one substantive count of bribery, by offer or promise, of a public official. Evidence during trial revealed that Colorado-Cessa and others conspired in 2013 to pay a $1.2 million bribe to a federal judge in order to secure a reduced sentence for Colorado-Cessa in the above-mentioned money laundering case. According to court records, at no time before or during this investigation was the federal judge involved in the alleged criminal activity.
“Today’s resentencing of Francisco Colorado-Cessa to 20 years in prison is confirmation that the American public is steadfast in their conviction that he was properly found guilty of money laundering and bribery the first time,” said IRS Criminal Investigation Special Agent in Charge William Cotter, San Antonio Field Office. “Even with a second trial, the jury quickly came to the same conclusion – guilty. IRS Criminal Investigation was proud to be part of the law enforcement team that brought this criminal to justice.”
“The sentence handed down today ends years of litigation, and imposes significant punishment upon the defendant. The FBI appreciates the hard work and dedication of all the prosecutors and agents who have handled this important case, which demonstrates our collective commitment to protect the United States from the violence and corruption associated with Mexican drug cartels,” stated FBI Special Agent in Charge Christopher Combs, San Antonio Division.
This investigation was conducted by agents with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Drug Enforcement Administration with assistance from the United States Marshals Service, Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) and U.S. Border Patrol. Other judicial districts involved in this matter include the Western District of Oklahoma, Central District of California, Southern District of Texas, District of New Mexico and the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC).
Mercer County, New Jersey, Man Sentenced to More Than 15 Years in Prison for Series of Armed RobberiesRead the Press Release
TRENTON, N.J. - A Mercer County, New Jersey, man was sentenced today to 188 months in prison for committing four armed robberies of commercial establishments in Mercer county, U.S. Attorney Paul J. Fishman announced.
Samuel Matias Cruz, 36, formerly of Trenton, New Jersey, previously pleaded guilty to an information charging him with one count of conspiracy to commit Hobbs Act robberies. U.S. District Judge Michael A. Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Between September 2012 and March 2013, Cruz and his conspirators planned and executed a number of violent armed robberies of various commercial establishments in the Trenton area, including gas stations, restaurants, travel agencies and money-remitting businesses. In several robberies, Cruz and others brandished firearms and physically restrained victims with plastic zip ties before absconding with large quantities of money taken from the respective establishments’ cash drawers and registers.
On one occasion in December 2012, Cruz and two conspirators robbed the Sabor Latino Bar in Trenton. During this robbery, the men held five individuals who were then present in the bar at gunpoint and subsequently restrained them by tying their hands with plastic zip ties. Cruz and the other conspirators then stole approximately $12,000 from the bar’s cash register, as well as approximately $2,000 in cash and jewelry from the bar’s patrons.
Subsequently, on Dec. 29, 2012, Cruz helped plan and execute the robbery of the Woodrow Wilson Service Plaza Sunoco Gas Station on the New Jersey Turnpike, located in Hamilton Township, New Jersey. During that robbery, Cruz and another conspirator entered the station carrying handguns and physically restrained a Sunoco employee with plastic zip ties. The men stole approximately $26,000 from the station’s cash register before fleeing the location.
In addition to the prison term, Judge Shipp sentenced Cruz to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky; the Mercer County Prosecutor’s Office, under the direction of Acting Prosecutor Angelo J. Onofri; and the Burlington County Prosecutor’s Office, under the direction of Prosecutor Robert D. Bernardi, with the investigation leading to today’s sentencing. He also thanked officers from the N.J. State Police, under the direction of Col. Rick Fuentes, the Trenton Police Department, under the direction of Director Ernest Parrey, Jr., and the Westampton Police Department, under the direction of Police Chief Joseph Otto, for their roles in the case.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Adalgiza A. Nunez, Newark, NJ
Medical Device Company Employee Charged with Accepting $75,000 Bribe for Securing Contract with His CompanyRead the Press Release
NEWARK, N.J. – A Monroe, New York, man, was charged today with accepting a $75,000 bribe for his assistance in securing a contract between a metallurgical technology company and his employer, a medical device company in New Jersey, U.S. Attorney Paul J. Fishman announced.
Daniel Lawyrnowicz, 46, is charged by complaint with violating the Federal Travel Act for accepting $75,000 from the technology Company in consideration for his assistance in obtaining the contract. Lawyrnowicz is expected to appear later today before U.S. Magistrate Judge James B. Clark III in Newark federal court.
According to documents filed in this case and statements made in court:
On Dec. 22, 2015, an individual representing the technology company made a consensually recorded call to Lawyrnowicz during which the representative said he was nervous about a purported upcoming government audit of his company, and he raised concerns about the $75,000 payment to Lawyrnowicz.
Representative: “I am more worried about that 75k in cash that eh you know that we gave you, I don’t know if that ever comes up, or we deny it right, obviously.”
Lawrynowicz: “Yeah, yeah . . . when is that happening?”
Representative: “It’s ongoing, they called us to say they are auditing us and they just showed up. . .”
Lawrynowicz: “Let’s get a story together so that ah you know it all has legs and a tail.”
The count of violating the Federal Travel Act carries a maximum potential punishment of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s charge.
The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office of the District of New Jersey, including creating a stand-alone Health Care and Government Fraud Unit, which handles both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Peter Till Esq., Springfield, New Jersey
Massachusetts Man Sentenced in Manhattan Federal Court to 151 Months in Prison for Trafficking of Cocaine, Heroin, and Oxycodone PillsRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced today that HECTOR SANTILLAN, a/k/a “Bane,” a/k/a “Bene,” a/k/a “Liro,” was sentenced in Manhattan federal court to 151 months in prison for conspiring to distribute cocaine, heroin, and oxycodone pills, and possessing with intent to distribute cocaine. He was convicted in November 2015 following a five-day jury trial before U.S. District Judge Robert W. Sweet. SANTILLAN was sentenced today before Judge Sweet.
U.S. Attorney Bharara stated: “Hector Santillan was convicted by a jury of serious drug trafficking crimes. Heroin and prescription pill abuse is ravaging our neighborhoods, and those like Santillan who peddle these drugs are fueling this national epidemic.”
According to the evidence presented at trial and documents filed in the case:
From in or about the summer of 2012, up to and including February 12, 2013, SANTILLAN sold cocaine, heroin, and oxycodone pills as a member of a drug trafficking organization spanning the east coast of the United States. On February 12, 2013, SANTILLAN and a co-conspirator travelled from Massachusetts to the Washington Heights neighborhood of Manhattan, where SANTILLAN purchased four kilograms of cocaine. As they turned around to return to Massachusetts, their car was pulled over by a Westchester County Police officer for a traffic violation. A search of the car later revealed the cocaine in a compartment hidden under the seat on which SANTILLAN was sitting. The evidence at trial also showed that SANTILLAN owned an assault rifle, and in concert with other co-conspirators, SANTILLAN used his assault rifle to make a credible threat to use violence against an individual he believed was planning to rob the organization of drugs and drug proceeds.
SANTILLAN, 38, of Methuen, Massachusetts, was sentenced to 151 months in prison, to be followed by four years of supervised release, and a $200 special assessment.
United States Attorney Bharara praised the investigative work of the Drug Enforcement Administration and the Westchester County Department of Public Safety.
The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Kristy J. Greenberg and Noah D. Solowiejczyk are in charge of the prosecution.
Martin County Man Convicted of Bank and Mail FraudRead the Press Release
A Martin County man was convicted yesterday, following a federal jury trial, on charges stemming from his harassment of police officers and the obstruction of civil lawsuits, during the course of extensive bank and mail fraud schemes.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Mark Alan Yoder, 55, of Hobe Sound, was charged by indictment with five counts of bank fraud, in violation of Title 18, United States Code, Section 1344; and four counts of mail fraud, in violation of Title 18, United States Code, Section 1341. Yoder was convicted on all counts of the indictment and faces a statutory maximum sentence of up to 30 years in prison and/or a $1,000,000 fine. A sentencing date has not yet been scheduled. Sentencing will be imposed by Senior United States District Judge Paul C. Huck in Fort Pierce.
According to trial testimony and court documents, Yoder carried out bank and mail fraud schemes. On October 18, 2010, Yoder received a traffic citation, for driving without a seat belt, from a Tequesta Police Department Officer. Yoder objected to the ticket, demanded to speak to a supervisor and denied the officer had any authority for the stop. The officer’s supervisor arrived on the scene to provide assistance. Beginning in the months following the traffic stop and into early 2011, Yoder sent, by mail, a succession of fraudulent formal demands and notices, claiming the two police officers and the Tequesta Police Department each owed him $150,000 in damages. Yoder also sent similar demands for large damage payments to officers and executives of the bank that was foreclosing upon his home. Not long after the final judgment of foreclosure was entered in the state court, Yoder filed a fraudulent mechanic’s lien against the bank’s property, falsely claiming that he was owed thousands of dollars for his maintenance of the home prior to the foreclosure. Yoder renewed the fraudulent mechanic’s lien, with successive filings, in 2014 and 2015.
Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer also thanked the Martin County Sheriff’s Office, the Tequesta Police Department, and the Office of the Clerk of the Circuit Court for Martin County, Florida, for their assistance with this investigation. The case was prosecuted by Assistant U.S. Attorneys Theodore Cooperstein and Kerry Baron.
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.
Marlborough Man Pleads Guilty to Heroin and Firearms ChargesRead the Press Release
CONCORD, NEW HAMPSHIRE: Robert Ervin, 20, of Marlborough, New Hampshire, pled guilty in the United States District Court for the District of New Hampshire to distributing heroin, possessing heroin with the intent to distribute it, and possessing a firearm as a regular user of heroin, announced United States Attorney Emily Gray Rice.
On October 8, 2015, law enforcement officers from the Keene, New Hampshire Police Department, Homeland Security Investigations (HSI), the New Hampshire State Police, and the Attorney General’s Drug Task Force observed Ervin engaging in what appeared to be a suspicious hand-to-hand transaction in Keene, New Hampshire. When approached by the officers, Ervin admitted that he had just sold a quantity of heroin. A search of his person and vehicle revealed the presence of additional heroin and a loaded firearm.
Ervin is scheduled to be sentenced in June 2016. The statutory maximum prison term for the crimes charged is 20 years, a term of supervised release of at least 3 years, and a fine of up to $500,000. The court will sentence Ervin after it has had an opportunity to review a presentence report prepared by the United States Probation & Pretrial Services Office.
The case was investigated by law enforcement from Homeland Security Investigations (HSI), the Keene, New Hampshire Police Department, the New Hampshire State Police, the Attorney General’s Drug Task Force, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant United States Attorney Nick Abramson.
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Marion County, WV man pleads guilty to possessing child pornographyRead the Press Release
CLARKSBURG, WEST VIRGINIA – Michael P. Lough, 28, of Fairmont, West Virginia, pled guilty today to possession of child pornography, United States Attorney William J. Ihlenfeld, II, announced.Lough utilized an internet based website to access images of child pornography. In July 2015, using online surveillance and investigatory techniques, authorities discovered Lough to be in possession of various images of child pornography.
Lough pled guilty today to an Information charging him with one count of “Possession of Child Pornography.” He faces up to 20 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Sarah Montoro prosecuted the case on behalf of the government. The Federal Bureau of Investigation led the inquiry.
U.S. Magistrate Judge Michael John Aloi presided.
Mandeville Postal Worker Sentenced for TheftRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ANGELA MITCHELL, age 40, of Mandeville, was sentenced today for Theft of Mail.
U.S. District Court Judge Susie Morgan sentenced MITCHELL to two years’ probation and ordered MITCHELL to pay restitution in the amount of $4,050.90.
According to court records, as a result of a complaint from the Postmaster of the
Mandeville Post Office, the Office of Inspector General for the United States Postal Service (“Postal OIG”) initiated an investigation into MITCHELL, an employee of the Postal Service assigned to the Mandeville Post Office. It was determined that MITCHELL had stolen a credit card from a post office box and used the stolen card on three occasions without authorization, resulting in approximately $460 in fraudulent charges. Additionally, investigators determined that MITCHELL had embezzled $3,591 from the Post Office.
U.S. Attorney Polite praised the work of the U.S. Postal Inspection Service, Office of Inspector General. The prosecution of this case is being handled by Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba.
Logan County, Kentucky, Tax Return Preparers Charged with Preparing False Tax ReturnsRead the Press Release
Falsified taxpayer education expenses resulting in education credits on prepared tax returns
BOWLING GREEN, Ky. – Logan County, Kentucky, tax preparers appeared in United States District Court this morning, before Magistrate Judge H. Brent Brennenstuhl, charged with conspiring to defraud the United States through preparing false tax returns and aiding in the preparation of the false returns, announced United States Attorney John E. Kuhn, Jr.
Defendants Tara L. Mitchell and Mechelle Blankenship were charged last week in a 21 count grand jury indictment that was unsealed Monday, March 21, 2016. According to the charges, the defendants worked together at Triple J Tax, a tax return preparation office located in Russellville, Kentucky. Mitchell managed the office and in 2012, hired and trained defendant Blankenship to prepare tax returns.
Between March 2012, and November 2014, the defendants allegedly prepared electronically filed U.S. Individual Income Tax Returns, on behalf of themselves and clients of Triple J Tax, which stated that the taxpayers had incurred educational expenses, when they had not, and thus falsely claimed education-related credit, to which the taxpayers were not entitled.
Further, the defendants are separately charged, in counts 2-21, with aiding in the preparation of false returns.
If convicted at trial, Blankenship could be sentenced to up to 41 years in prison, fined $1,450,000 and required to serve a 3 year period of supervised release. Mitchell could be sentenced up to 29 years in prison, fined $1,050,000 and required to serve a 3 year period of supervised release.
Assistant United States Attorney Amanda E. Gregory is prosecuting the case. The Internal Revenue Service (IRS) Criminal Investigation office is conducting the investigation.
Local Doctor Convicted of Defrauding Medicare of $2.9 MillionRead the Press Release
HOUSTON – A federal jury in Houston has found two Houston men guilty of engaging in a conspiracy to defraud Medicare of $2.9 million, announced U.S. Attorney Kenneth Magidson. Dr. Leonard Kibert, 65, and Tsolak “Mike” Gevorgyan, 30, were found guilty of conspiracy and health care fraud. Kibert was also found guilty of money laundering, while Gevorgyan was convicted of paying kickbacks to marketers in return for bringing patients to the fraudulent clinic. The jury deliberated for approximately seven hours before finding both guilty as charged following 14 days of trial.
The fraudulent Medicare billing was for diagnostic testing at the New Life Sleeping & Allergy Disorder Center located on Chenevert Street in Houston, which either was never performed or was not medically necessary. Kibert owned New Life and Gevorgyan managed the clinic.
Gevorgyan paid recruiters/marketers to bring patients to the clinic.
The defendants face a maximum penalty of 10 years imprisonment for the conspiracy and each of 37 health care fraud convictions. Gevorgyan faces a maximum of five years imprisonment for the conspiracy to pay and receive kickbacks and each of the four counts of paying and receiving of kickbacks, while Kibert faces up to 10 years imprisonment for each of the three money laundering counts. All convictions also carry a possible $250,000 fine. Kibert and Gevorgyan were allowed to remain free on bond pending their sentencing.
U.S. District Judge Keith P. Ellison presided over the trial and has set sentencing for Aug. 30, 2016.
The criminal charges are the result of a joint investigation conducted by agents of the FBI, U.S. Department of Health and Human Services, Office of Inspector General, the Internal Revenue Service, Criminal Investigations and the Medicaid Fraud Control Unit of the Texas Attorney General's Office. This case will be prosecuted by Assistant United States Attorney Al Balboni and Special Assistant United States Attorney Rodolfo Ramirez.
Leaders of Lorenzana Drug Trafficking Organization Convicted on International Narcotics Trafficking ChargesRead the Press Release
Eliu Elixander Lorenzana-Cordon and Waldemar Lorenzana-Cordon, leaders of a Guatemala-based international drug trafficking organization responsible for importing multi-ton quantities of cocaine into the United States, were convicted on international narcotics trafficking charges in the District of Columbia following a four-week trial.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced the conviction.
“For well over a decade, the defendants led a major Central American drug trafficking organization responsible for importing tons of cocaine into the United States,” said Assistant Attorney General Caldwell. “This verdict sends a powerful message that the United States and its partners will pursue and obtain justice against international drug traffickers.”
“Eliu and Waldemar Lorenzana-Cordon’s crimes have destroyed families and communities,” said Acting Deputy Administrator Riley. “Their organization fed a pipeline of drugs ultimately sold on American streets, fostering violence and drug addiction. Their conviction marks the end of their criminal reign and the beginning of their life behind bars.”
Eliu, 43, and Waldemar, 49, were each convicted on one count of conspiring to unlawfully import and distribute cocaine into the United States. The defendants were arrested in Guatemala after their indictment on this conspiracy charge and then extradited to the United States.
According to evidence presented at trial, the Lorenzana-Cordons were leaders of an international drug trafficking organization with close ties to the Sinaloa Cartel. Evidence at trial demonstrated that between 1996 and 2009, the defendants and their co-conspirators received, stored and distributed multi-ton quantities of cocaine from Colombia at their properties in Zacapa, Guatemala, for importation into Mexico and then ultimately into the United States.
On April 27, 2010, the Department of Treasury’s Office of Foreign Asset Control designated both defendants as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act due to their significant roles in international narcotics trafficking and their ties to the Sinaloa Cartel, according to evidence presented at trial.
The Drug Enforcement Administration’s 959/Bilateral Investigations Unit and Guatemala City Country Office led the investigation, which was part of the Organized Crime Drug Enforcement Task Force. Trial Attorneys Michael Lang, Stephen Sola and Emily Cohen of the Criminal Division’s Narcotic and Dangerous Drug Section are prosecuting the case. The Criminal Division’s Office of International Affairs provided substantial assistance. The Chicago Police Department and the governments of El Salvador and Panama provided support and assistance in this prosecution. The Justice Department in particular wishes to convey its gratitude to the government of Guatemala for its steadfast commitment, collaboration and assistance in the investigation, extradition and prosecution of this case.
Laurel Man Sentenced to 10 Years in Prison for Cocaine Distribution and Money Laundering ConspiraciesRead the Press Release
Baltimore, Maryland – U.S. District Judge Paul W. Grimm sentenced Mahmood Hussain, age 31, of Laurel, Maryland today to 10 years in prison, followed by four years of supervised release, for conspiracy to possess with intent to distribute cocaine, and for conspiracy to commit money laundering.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Chief Hank Stawinski of the Prince George’s County Police Department; Acting Chief Stanley Johnson, of the Maryland National Capital Park Police, Prince George’s County Division; Chief Antonio DeVaul of the Maryland National Capital Park Police, Montgomery County Division; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, from at least April 2013 through November 2013, Hussain conspired with Marvin Taaff and others to distribute powder and crack cocaine. In addition to supplying crack cocaine purchased by a confidential informant, Hussain was overheard by law enforcement discussing the delivery of drugs, the amount of drugs, locations to conduct the transactions, and money involved in the purchase of drugs. For example, in one conversation Hussain and Taaff discuss a batch of cocaine that Taaff received from Hussain that was of poor quality. Hussain subsequently coordinated with Taaff and was observed by law enforcement retrieving the cocaine to return to Hussain’s supplier so that Taaff could get a refund. Hussain was also overheard telling Taaff that he needed to get a gun because someone stole $1,000 from him.
In addition, Hussain deposited money into a bank account, as directed by Taaff, for the purchase of drugs. The bank account was held in the name of a recruited individual, who withdrew the money as directed by another co-conspirator.
On December 5, 2013, search warrants were executed at locations in Prince George’s County, Montgomery County and Tucson, Arizona, in connection with the conspiracy. At Hussain’s residence, law enforcement recovered drug packaging materials and drug paraphernalia, approximately $1,261 in cash and approximately $1,200 in counterfeit currency, as well as 9.3 grams of crack cocaine.
Hussain admitted that during his participation in the conspiracy, at least 500 grams of powder cocaine and 28 grams of crack cocaine were distributed; and at least $91,261 was furnished in exchange for drugs.
Marvin Anthony Taaff, age 29, of Takoma Park, Maryland, previously pleaded guilty to his role in the conspiracy and is scheduled to be sentenced on April 4, 2016
United States Attorney Rod J. Rosenstein praised the ATF, Prince George’s County Police Department, Maryland-National Capital Park Police and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Deborah A. Johnston and Lindsay Eyler Kaplan, who prosecuted the case.
Justice Department Obtains $130,000 Settlement in Lawsuit Against Indiana Mobile Home Park for Discriminating Against Families with ChildrenRead the Press Release
The Justice Department announced that the corporate owner and agent of Gentle Manor Estates have agreed to pay $130,000 to settle a Justice Department lawsuit alleging familial status discrimination. The settlement must still be approved by the U.S. District Court for the Northern District of Indiana.
The lawsuit, filed in May 2015, alleged that Gentle Manor Estates LLC and John Townsend violated the Fair Housing Act by maintaining and enforcing a discriminatory policy of refusing to allow families with children to live at Gentle Manor Estates, a 173-lot mobile home park in Crown Point, Indiana. The allegations were based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
“The Fair Housing Act guarantees families with children the right to choose a home without facing unlawful barriers of discrimination,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act to ensure that equal access to housing – a bedrock of the American dream – remains a reality for all families in our country.”
Under the terms of the proposed settlement, the defendants must pay $100,000 into a settlement fund to compensate victims of discrimination and an additional $30,000 to the government as a civil penalty. In addition, the proposed settlement requires the defendants to implement a nondiscrimination policy, establish new nondiscriminatory application and rental procedures and undergo training on the Fair Housing Act. Anyone who believes that they have been discriminated against by Gentle Manor Estates because they have children should call the Justice Department at 1-800-896-7743, mailbox number 9994 or email the department at [email protected].
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt/.
Gentle Manor Estates Consent Order
Justice Department Obtains $130,000 Settlement in Lawsuit Against Indiana Mobile Home Park for Discriminating Against Families with ChildrenRead the Press Release
WASHINGTON – The Justice Department announced that the corporate owner and agent of Gentle Manor Estates have agreed to pay $130,000 to settle a Justice Department lawsuit alleging familial status discrimination. The settlement must still be approved by the U.S. District Court for the Northern District of Indiana.
The lawsuit, filed in May 2015, alleged that Gentle Manor Estates LLC and John Townsend violated the Fair Housing Act by maintaining and enforcing a discriminatory policy of refusing to allow families with children to live at Gentle Manor Estates, a 173-lot mobile home park in Crown Point, Indiana. The allegations were based on evidence generated by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
“The Fair Housing Act guarantees families with children the right to choose a home without facing unlawful barriers of discrimination,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act to ensure that equal access to housing – a bedrock of the American dream – remains a reality for all families in our country.”
Under the terms of the proposed settlement, the defendants must pay $100,000 into a settlement fund to compensate victims of discrimination and an additional $30,000 to the government as a civil penalty. In addition, the proposed settlement requires the defendants to implement a nondiscrimination policy, establish new nondiscriminatory application and rental procedures and undergo training on the Fair Housing Act. Anyone who believes that they have been discriminated against by Gentle Manor Estates because they have children should call the Justice Department at 1-800-896-7743, mailbox number 9994 or email the department at [email protected].
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt/.
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Jury Finds Mexican Businessowner Guilty in Stolen Identity Refund Fraud CaseRead the Press Release
In El Paso today, a federal jury convicted Elizabeth “Betty” Garcia de Nieto of Delicias, Chihuahua, Mexico, of her role in an income tax return scheme that resulted in more than $2.9 million in fraudulent refunds being issued by the IRS announced United States Attorney Richard L. Durbin, Jr., and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge William Cotter.
Jurors convicted Garcia (aka “Elizabeth Jurado”) of one count of conspiracy to defraud the United States; five counts of mail fraud; three counts of aiding and abetting aggravated identity theft; and, one count of conspiracy to defraud the United States with respect to claims.
Evidence presented during trial revealed that from January 2010 to February 2015, Garcia used stolen identities to create fraudulent U.S. tax returns. Each return claimed an approximate $5,000 refund from the IRS. Garcia gave some of the IRS refund checks to individuals to bring into the United States to be cashed at money service businesses in El Paso. She mailed others to individuals residing in the U.S. (namely El Paso, Chaparral, NM, and Oklahoma City, OK) to be converted to U.S. currency. All monies derived from the scheme, minus agreed-to-fees retained by co-defendants, were wired back to Garcia.
Trial testimony also revealed that in September 2014, U.S. Customs agents at the Paso del Norte Port of Entry seized ten fraudulent tax returns from an employee of Garcia.
“Garcia used false and fraudulent tax returns to steal from the IRS, and ultimately, from American taxpayers. Working from Mexico, she thought she was beyond the reach of U.S. justice. This verdict introduces her to the American justice system, and should serve notice on others that U.S. prosecutors and IRS criminal investigators will not stop at the border,” said U.S. Attorney Richard L. Durbin, Jr.
“Today’s guilty verdict for Elizabeth Garcia de Nieto demonstrates the power of the American judicial system when it comes to stealing from the United States Treasury,” said Special Agent in Charge William Cotter, IRS-CI San Antonio Field Office. “Despite the fact that Ms. Garcia lived in Mexico, IRS-CI special agents tracked the fraudulent IRS tax returns she filed and, because of our strong relationships with our international law enforcement partners, brought her to justice.”
Garcia faces up to 20 years in federal prison on each mail fraud charge; up to ten years imprisonment for conspiracy to defraud with respect to claims; up to five years imprisonment for conspiracy to defraud the United States; and, a mandatory two years imprisonment for each aggravated identity theft charge to run consecutive to any other term of imprisonment assessed. Garcia also faces restitution to the United States to be determined at sentencing.
Prior to jury selection, 38-year-old co-defendant Christina Perez Altamirano of Oklahoma City, OK, pleaded guilty to conspiracy to commit mail fraud prior. Garcia and Perez remain in federal custody pending sentencing. No sentencing dates have been scheduled.
Two other co-defendants--42-year-old Rodolfo Ramirez-Estrada of El Paso, and 35-year-old Alberto Altamirano Armendarie of Montgomery, AL— remain in custody awaiting trial on two counts of conspiracy to defraud the U.S. No trial date has been set for Ramirez-Estrada and Altamirano.
This case was investigated by special agents with the Internal Revenue Service-Criminal Investigation, Homeland Security Investigations and U.S. Department of State—Diplomatic Security Service. Assistant United States Attorneys Jose Luis Gonzalez, Adrian E. Gallegos and Anna Arreola are prosecuting this case on behalf of the Government.
Jury Finds Mexican Businessowner Guilty in Stolen Identity Refund Fraud CaseRead the Press Release
In El Paso today, a federal jury convicted Elizabeth “Betty” Garcia de Nieto of Delicias, Chihuahua, Mexico, of her role in an income tax return scheme that resulted in more than $2.9 million in fraudulent refunds being issued by the IRS announced United States Attorney Richard L. Durbin, Jr., and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge William Cotter.
Jurors convicted Garcia (aka “Elizabeth Jurado”) of one count of conspiracy to defraud the United States; five counts of mail fraud; three counts of aiding and abetting aggravated identity theft; and, one count of conspiracy to defraud the United States with respect to claims.
Evidence presented during trial revealed that from January 2010 to February 2015, Garcia used stolen identities to create fraudulent U.S. tax returns. Each return claimed an approximate $5,000 refund from the IRS. Garcia gave some of the IRS refund checks to individuals to bring into the United States to be cashed at money service businesses in El Paso. She mailed others to individuals residing in the U.S. (namely El Paso, Chaparral, NM, and Oklahoma City, OK) to be converted to U.S. currency. All monies derived from the scheme, minus agreed-to-fees retained by co-defendants, were wired back to Garcia.
Trial testimony also revealed that in September 2014, U.S. Customs agents at the Paso del Norte Port of Entry seized ten fraudulent tax returns from an employee of Garcia.
“Garcia used false and fraudulent tax returns to steal from the IRS, and ultimately, from American taxpayers. Working from Mexico, she thought she was beyond the reach of U.S. justice. This verdict introduces her to the American justice system, and should serve notice on others that U.S. prosecutors and IRS criminal investigators will not stop at the border,” said U.S. Attorney Richard L. Durbin, Jr.
“Today’s guilty verdict for Elizabeth Garcia de Nieto demonstrates the power of the American judicial system when it comes to stealing from the United States Treasury,” said Special Agent in Charge William Cotter, IRS-CI San Antonio Field Office. “Despite the fact that Ms. Garcia lived in Mexico, IRS-CI special agents tracked the fraudulent IRS tax returns she filed and, because of our strong relationships with our international law enforcement partners, brought her to justice.”
Garcia faces up to 20 years in federal prison on each mail fraud charge; up to ten years imprisonment for conspiracy to defraud with respect to claims; up to five years imprisonment for conspiracy to defraud the United States; and, a mandatory two years imprisonment for each aggravated identity theft charge to run consecutive to any other term of imprisonment assessed. Garcia also faces restitution to the United States to be determined at sentencing.
Prior to jury selection, 38-year-old co-defendant Christina Perez Altamirano of Oklahoma City, OK, pleaded guilty to conspiracy to commit mail fraud prior. Garcia and Perez remain in federal custody pending sentencing. No sentencing dates have been scheduled.
Two other co-defendants--42-year-old Rodolfo Ramirez-Estrada of El Paso, and 35-year-old Alberto Altamirano Armendarie of Montgomery, AL— remain in custody awaiting trial on two counts of conspiracy to defraud the U.S. No trial date has been set for Ramirez-Estrada and Altamirano.
This case was investigated by special agents with the Internal Revenue Service-Criminal Investigation, Homeland Security Investigations and U.S. Department of State—Diplomatic Security Service. Assistant United States Attorneys Jose Luis Gonzalez, Adrian E. Gallegos and Anna Arreola are prosecuting this case on behalf of the Government.
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Judge Orders Recall of Dangerous MagnetsRead the Press Release
A federal judge yesterday ordered a Colorado company to recall powerful, small magnets that can cause fatal injuries when swallowed, the Justice Department announced.
U.S. District Court Judge Christine M. Arguello of the District of Colorado had previously issued a preliminary injunction that prohibited Zen Magnets LLC and its owner, Shihan Qu, from further sale of the magnets. On Tuesday, Judge Arguello made the injunction against the sale of the magnets permanent, ordered Zen Magnets to conduct a recall in which the company must provide refunds to consumers who return the magnets and directed Zen Magnets to destroy the remaining magnets in the company’s inventory.
The court found that Zen Magnets purchased approximately 917,000 small magnets at a substantial discount from another company that one week later agreed to recall the magnets as part of an agreement with the U.S. Consumer Product Safety Commission (CPSC). Judge Arguello ruled that Zen Magnets violated the Consumer Product Safety Act when it subsequently resold the magnets.
“We are pleased that the district court recognized that putting a dangerous consumer product in a different box and calling it a different name does not permit a company to circumvent a recall,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work with the Consumer Product Safety Commission to protect consumers—especially children—by enforcing recalls of dangerous products.”
The company had argued that by placing the magnets in different packaging and selling the magnets under different names, the magnets were no longer covered by the recall. Judge Arguello rejected that argument, saying that Zen Magnets’ interpretation “would allow manufacturers and importers of consumer products to simply circumvent (and effectively disarm)” the Consumer Product Safety Act “by merely repackaging recalled products as they saw fit.”
Judge Arguello noted that Qu knew when his company purchased the magnets in July 2014 that the seller was about to enter into an agreement with the CPSC to recall the magnets and that it was likely that it would soon be illegal to sell the magnets. Nonetheless, Zen Magnets ignored repeated warnings by the CPSC and continued to sell the magnets until the court issued the preliminary injunction last year. Judge Arguello stated that allowing consumers to return the magnets “will reduce the likelihood that such consumers are injured by those products” and would deter future violations of the law by forcing Zen Magnets to issue refunds.
“Thanks to the hard work of Assistant U.S. Attorneys from Colorado and Department of Justice Trial Attorneys, a dangerous product has been successfully removed from the market,” said U.S. Attorney John Walsh for the District of Colorado. “This product is known to harm children, and based on that fact alone, the litigation to remove it was critical to protect consumers.”
“Today’s decision puts the rule of law and the safety of children above the profits sought by Zen Magnets,” said Chairman Elliot F. Kaye for CPSC. “Far too many children have been rushed into hospital emergency rooms to have multiple, high-powered magnets surgically removed from their stomachs. Young children have suffered infections and one child tragically died from swallowing loose magnets that often look like candy. The ruling is a major victory for the safety of consumers. Our pursuit of this case makes clear we will not tolerate the sale of recalled goods in any form. I am pleased that Judge Arguello ordered Zen to issue refunds to consumers, and I urge anyone who purchased these magnets to immediately seek a refund from Zen.”
The magnets at issue are typically sold in sets of hundreds and are commonly marketed and sold as “sculptural” desk toys. According to the CPSC, when a person ingests more than one of the powerful small magnets, the magnets are attracted to each other in the digestive system, creating the potential for serious damage to the intestinal tissue trapped in between or even death.
Zen Magnets is separately challenging a rule issued by the CPSC that prohibits the sale of magnets or magnet sets that are small enough to be swallowed and that have a high degree of magnetic attraction. That rule went into effect and applies only to magnets sold after April 1, 2015. That case remains pending on appeal.
The case is being handled by Senior Litigation Counsel Patrick Jasperse of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys Jamie Mendelson and Jacob Licht-Steenfat of the District of Colorado.
Internet predator from Avon sentenced in Federal CourtRead the Press Release
Indianapolis –United States Attorney Josh J. Minkler announced today the sentencing of an Avon, Indiana, man who terrorized young girls on the internet. Spencer Wheeler, 27, was sentenced to 36 years in federal prison by Chief District Judge Richard L. Young.
“Wheeler targeted girls as young as 11 years for sexual exploitation,” said Minkler. “That cannot be tolerated in our society. Now he will spend the next three decades in federal prison. That is a clear message to others who would consider exploiting our children.”
From October 2013, to January 2014, Wheeler used the Internet to search for personal information about the victims including their name and location of their schools. He used this data, together with their name and address to target victims and threaten their reputation. He used what he learned to mislead the girls to believe he was another student at their school. Because he knew who the victims were and where they went to school, these threats terrified his victims.
To obtain the sexually explicit videos and images, Wheeler would coerce them by making devastating threats to their reputation in their schools, circle of friends and their families. He told his victims he would notify their school as well as family and friends that the young girls were communicating on line about sexual matters or sending nude or partially clothed images of themselves to others on line. These victims took the threats so seriously one attempted suicide and several others threatened.
Eventually, Wheeler assembled a large collection of child pornography and related visual materials including 100’s of images produced at his demand. He used this child pornography to fuel his sexual fantasies and to exploit further victims by posing as a prior victim.
This case was investigated by the Federal Bureau of Investigation, the Indianapolis Metropolitan Police Department, the Indiana State Police and the Internet Crimes Against Children Task Force.
According to Senior Litigation Counsel Steven D. DeBrota who prosecuted this case for the government, Wheeler must serve 10 years of supervised release after his sentence.
Inmate Pleads Guilty to Escaping from Halfway HouseRead the Press Release
Joshua James Morrow, 28, a Federal Bureau of Prisons inmate housed at the Centerstone Halfway House in Marion, Illinois, pled guilty today in United States District Court in Benton to an indictment charging him with escaping from that facility, announced James L. Porter, Acting United States Attorney for the Southern District of Illinois. The indictment, returned by a Federal Grand Jury on February 2, 2016, alleged that the escape occurred on January 6th. Morrow was taken into custody by the United States Marshal’s Service on January 8th in Carrier Mills, Illinois. At the time of the escape, Morrow was serving a 30 month federal sentence for various counterfeiting offenses.
Sentencing was set for June 29, 2016, at 10:30 a.m. at the United States Courthouse in Benton. Morrow faces up to an additional 5 years in prison, a $250,000 fine, and 3 years of supervised release following his incarceration.
Morrow was returned to the custody of the Federal Bureau of Prisons to await sentencing on the escape charge.
Morrow’s codefendant, Jessica Hayden, is charged with aiding and abetting Morrow’s escape. A trial date of May 23rd at 9:00 a.m. has been set in her case.
Note: Hayden is presumed innocent of this charge until proven guilty beyond a reasonable doubt.
The case was investigated by the United States Marshals Service and is being prosecuted by Assistant United States Attorney James M. Cutchin.
Houma Interpreter SentencedRead the Press Release
U.S. Attorney Kenneth A. Polite announced that TRINA MARIE BOURG, age 45, of Houma, was sentenced today after previously pleading guilty to five counts of a Superseding Indictment for crimes involving the solicitation of illegal payments from undocumented clients and their family members.
United States District Judge Susie Morgan sentenced BOURG to four years probation and ordered restitution in the amount of $5,500 to the victims.
According to court records, on May 7, 2014, the U.S. Department of Homeland Security-Homeland Security Investigations (“HSI”) received information that BOURG, who worked as a Spanish language interpreter contract employee for the Office of the District Defender for the 32nd Judicial District for Terrebonne Parish (“Public Defender’s Office”), was soliciting illegal payments from undocumented clients. According to court records, BOURG, while providing Spanish interpreting services for attorneys employed by the Public Defender’s Office, identified clients facing criminal charges who were subject to potential removal from the United States. BOURG then initiated contact with the client, or the client’s family, outside of the presence or knowledge of their court appointed attorney and falsely represented to the client or the client’s family that for a certain amount of money, she could bribe federal immigration officials not to seek federal prosecution or initiate removal proceedings against the client. BOURG charged the client, or the client’s family, approximately $2,000 to $4,000 and said she would use the money to pay federal immigration officials in order to secure the client’s release from immigration custody. The defendant pled guilty to knowingly devising a scheme and artifice to defraud undocumented Hispanic aliens and through false material misrepresentation was able to accomplish her scheme through lies, misrepresentations, coercion, and threats.
In 2011 and again in 2014, BOURG solicited illegal payments totaling $5,000 from Client “A” and his family members. BOURG admitted to employing threats and intimidation to coerce the family members into paying BOURG.
It is important to note that no federal immigration officials have been implicated in this investigation, nor is it believed that any federal officials were complicit in BOURG’s crimes. BOURG was originally indicted in August 2014.
U.S. Attorney Polite praised the work of the U. S. Department of Homeland Security-HSI (McAllen, TX and Houma, LA offices), the Louisiana State Police-Criminal Investigation Division, and the Terrebonne Parish Sheriff’s Office in investigating this matter. Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba and Assistant U.S. Attorney Marquest Meeks were in charge of the prosecution.
Hilton Head Island Man Sentenced to 108 Months in Prison for Child Pornography OffensesRead the Press Release
Contact Person: Dean H. Secor (843) 727-4381
Columbia, South Carolina---- United States Attorney Bill Nettles stated today that David Christman Berg, Jr., age 55, of Hilton Head Island, South Carolina was sentenced on Tuesday in federal court in Charleston, South Carolina for Possession of Child Pornography, a violation of 18 U.S.C. § 2252A(a)(5)(B). Senior U.S. District Judge Margaret B. Seymour sentenced Berg to 108 months in federal prison. Judge Seymour also ordered Berg to serve a lifetime term of supervised release after he is released from prison.
Evidence presented at the change of plea hearing last June established that in April 2012 an undercover FBI agent was browsing a website known to be used by child pornographers. The agent determined that Berg had posted child pornography images on the website. A search warrant was executed at Berg’s residence in Hilton Head Island on May 14, 2012. Agents seized computers and thumb drives from Berg that contained approximately 14,000 child pornography images and 41 child pornography videos, including child pornography involving prepubescent minors and sadistic and masochistic conduct. Berg was interviewed and admitted that he possessed child pornography.
The case was investigated by agents of the Federal Bureau of Investigation (FBI). Assistant United States Attorney Dean H. Secor of the Charleston office prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched by the Justice Department in May 2006 to combat the growing epidemic of child exploitation and abuse. Led by U.S. Attorney’s Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Guatemalan National Sentenced for his Role in $10 Million Tax Fraud ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CARLOS HUMBERTO FUENTES CORDON, 36, a Guatemalan national, was sentenced today for conspiracy to defraud the United States by filing false tax returns.
U.S. District Court Judge Susie Morgan sentenced FUENTES CORDON to 24 months in prison, one year of supervised release, and ordered him to pay restitution in the amount of $393,031 to the United States. In November 2014, FUENTES CORDON’s sister, JACQUELINE J. ARIAS, a tax return preparer from Spruce Pine, Alabama was sentenced to serve 97 months in prison for her role in the scheme and ordered to pay more than $10,000,000 in restitution.
On February 11, 2015, FUENTES CORDON pleaded guilty to one count of conspiracy to defraud the United States. According to court documents, FUENTES CORDON and his co-conspirators filed false returns listing Individual Taxpayer Identification Numbers (ITINs). An ITIN is a tax processing number issued by the Internal Revenue Service (IRS) to individuals who do not have, and are not eligible to obtain, a Social Security Number. The indictment charged that ARIAS filed false applications for ITINs, false income tax returns, and collected preparation fees from the fraudulently-obtained tax refunds. As alleged in the superseding indictment, FUENTES CORDON worked at ARIAS’s income tax preparation business when he was present in the United States, filing false income tax returns listing a Post Office Box under his control.
To date, seventeen defendants have pleaded guilty in the case and four remain fugitives believed to be overseas. All of the defendants in this case who pleaded guilty thus far were sentenced to terms of imprisonment, including OLSEN SARAVIA HERNANDEZ (43 months); CESAR ALEJANDRO SORIANO (42 months); OSCAR ARMANDO PERDOMO (42 months); YONI PERDOMO (38 months); ARNULFO SANTOS-MEDRADO, (38 months); ELSIDES EDGARDO ALVARADO-CANALES (36 months); ELIECER OBED RODRIGUEZ (34 months); OCTAVIO JOSUE PERDOMO (34 months); ELBER MENDOZA-LOPEZ (34 months); AURELIO MONTIEL-MARTINEZ (24 months); MILLER PERDOMO-ACEITUNO (24 months); SANTOS MARTIN HERNANDEZ, (24 months); and SUSANA CARILLO MENDOZA (19 months).
U.S. Attorney Polite praised the work of the U.S. Immigration and Customs Enforcement, which oversees U.S. Homeland Security Investigations; IRS-Criminal Investigation; the U.S. Secret Service; the U.S. Postal Inspection Service; and the Social Security Administration, Office of the Inspector General, in partnership with the St. Tammany Parish and Jefferson Parish Sheriffs’ Departments in investigating this matter. Assistant United States Attorneys Hayden Brockett and Assistant United States Attorney David Haller were in charge of the prosecution.
Gladstone Man Pleads Guilty to Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Gladstone, Mo., man pleaded guilty in federal court today to charges related to receiving and attempting to distribute child pornography over the Internet.
Jack E. Grubb III, 34, of Gladstone, pleaded guilty before U.S. Chief District Judge Greg Kays to all three counts of a Sept. 10, 2015, federal indictment. Grubb was taken into custody at the conclusion of the hearing.
By pleading guilty today, Grubb admitted that he received child pornography over the Internet on Oct. 27, 2013. Grubb also admitted that he attempted to distribute child pornography over the Internet on Nov. 7, 2013, and that he was in possession of child pornography on Jan. 23, 2014.
Under federal statutes, Grubb is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 50 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Catherine A. Connelly. It was investigated by the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Galax Woman Sentenced on Oxycodone ChargesRead the Press Release
ABINGDON, VIRGINIA – A former licensed nurse practitioner, who illegally prescribed more than 3,700 pills of 15 mg oxycodone pills, was sentenced yesterday in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney John P. Fishwick announced today.
Gloria W. “Faye” Kennedy, 52, of Richlands, Virginia, previously pled guilty to one count of conspiring to distribute oxycodone. Yesterday in District Court she was sentenced to imprisonment for a term of 46 months.
“The abuse of prescription pain killers has decimated communities in Southwest Virginia and all across the Western District,” United States Attorney John P. Fishwick said today. “The abuse of prescription opioids, quite often, leads to the abuse of more dangerous and addictive drugs, like heroin. We must continue to be vigilant in prosecuting those who provide rescription drugs for illicit purposes.”
Between April 22, 2014 and September 3, 2015, Kennedy and her husband, Darryl Lynn Wells, conspired to distribute 3,780 pills of 15 mg oxycodone, without a legitimate medical purpose. Kennedy, using her position as a licensed medical practitioner, wrote prescriptions in the name of her husband and various other people for the purpose of having the prescriptions filled. The pills were then illegally distributed. Evidence was presented at yesterday’s sentencing hearing that Kennedy was upset with Wells because he was not selling all of the pills.
Kennedy’s husband, Darrell Lynn Wells, was previously sentenced to imprisonment for a term of 41 months for his role in the offense.
The investigation of the case was conducted by the United States Drug Enforcement Agency Tactical Diversion Squad, with the assistance of the Virginia Medicaid Fraud Control Unit, Virginia State Police, and Tazewell Regional Drug Task Force. Special Assistant United States Attorney Brian Patton and Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Fraudster Sentenced to 78 Months in Federal Prison for Running Lottery/Sweepstakes ScamRead the Press Release
FORT WORTH, Texas — Andre Hugh Saunders, 35, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to 78 months in federal prison and ordered to pay $505,403 in restitution to the victims. This sentence followed his guilty plea in November 2015 to an indictment charging one count of mail fraud stemming from a lottery/sweepstakes scheme targeting elderly victims, announced U.S. Attorney John Parker of the Northern District of Texas.
Saunders, a/k/a David Turner, has been in custody since his arrest in October 2015 in New York on a criminal complaint. He resided in and/or operated the scam out of Jamaica, Florida and New York. Saunders is a citizen of Jamaica and a lawful permanent resident of the U.S.
According to plea documents filed in the case, from approximately November 2012 to July 2015, Saunders defrauded a Fort Worth, Texas, resident by advising him he had won a multimillion-dollar prize in the “Las Vegas, Sidney, Australian Lottery and Sweepstakes,” but that he must pay various administrative fees and taxes prior to collecting the sweepstakes winnings. This Fort Worth resident believed he had won a sweepstakes and began sending money as Saunders directed.
As a result of the fraudulent lottery/sweepstakes scheme, Saunders obtained approximately $505,000 from elderly victims, including more than $300,000 from the Fort Worth victim.
The U.S. Postal Inspection Service and Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated the case. Assistant U.S. Attorney Mark Nichols prosecuted.
# # #Former USP-Marion Employee Pleads Guilty to Providing Contraband to Inmate and Lying to Federal InvestigatorsRead the Press Release
Renee D. Strauss, 42, of Marion, Illinois, pled guilty today in United States District Court in Benton to a four-count information charging her with two counts of making false statements to a special agent of the United States Department of Justice Office of the Inspector General, one count of providing a cellular telephone to an inmate, and one count of attempting to provide other contraband to an inmate, announced James L. Porter, Acting United States Attorney for the Southern District of Illinois. The information to which Strauss pled guilty alleged that between June 2015 and September 27, 2015, while she was employed as a case manager and correctional officer by the Federal Bureau of Prisons and assigned to the United States Penitentiary at Marion, Strauss provided contraband to an inmate and then lied to agents who were investigating that misconduct. Strauss, who has been on administrative leave since September 27th, resigned her position with the federal government prior to pleading guilty.
Sentencing was set for June 29, 2016, 2016, at 10:00 a.m., at the United States District Courthouse in Benton. Strauss faces up to 5 years in prison, a $250,000 fine, and 3 years of supervised release to follow any term of incarceration imposed on each of the two false statement counts. She faces a terms of up to 1 year in prison for providing the cellular telephone and up to 6 months in prison for providing the other contraband. Strauss was placed on bond pending sentencing.
The investigation leading to the charges and guilty plea was conducted by the United States Department of Justice Office of the Inspector General. The case is being prosecuted by Assistant United States Attorney James M. Cutchin.
Former Truck Driver Sentenced for Transporting and Sexually Abusing MinorsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. – U.S. Attorney Williams J. Hochul, Jr. announced today that David Allen Vickers, 51, of Stanley, NY, who was convicted following a jury trial of transportation of minors with the intent to have sex, was sentenced to life in prison by U.S. District Judge Richard J. Arcara.“The harm inflicted upon the victims in this case by the defendant continues to impact those victims to this day,” said U.S. Attorney Hochul. “Given that the victims’ complete recovery could very well take a lifetime, it is particularly appropriate that the defendant today received a life sentence - the highest permitted by law. Such a sentence is directly proportional to the harm caused, and ensures that no other minor will ever again be abused by this defendant.”
Assistant U.S. Attorneys Aaron J. Mango and Elizabeth R. Moellering stated that the jury found the defendant guilty of transporting two minors in interstate commerce with the intent to engage in criminal sexual activity. According to the evidence introduced at trial, the defendant, an over the road truck driver, transported two victims to Canada, New Jersey and Pennsylvania, and repeatedly abused and molested them while he was making deliveries. This abuse occurred in the time frame of 1999 to 2007.The trial evidence also disclosed that the defendant abused other children, with the first abuse beginning in 1983. This pattern of abuse included extensive psychological manipulation of the victims (sometimes referred to as “grooming”), and was facilitated through the defendant’s projection of benevolence to the victims’ families. Vickers also established and operated a bed and breakfast on Seneca Lake, “Paradise on the Lake,” where he took the eventual victims in an effort to manipulate and gain their trust. The defendant also gave the victims alcohol, cigarettes, toys, and access to ATVs.
Vickers cover was so devious, in fact, that both of the victims named in the indictment against the defendant had at one time been assigned to his custody by a Family Court Judge.
The sentencing is the culmination of an investigation on the part of Agents of the Federal Bureau of Investigation, under the direction of Adam S. Cohen, Special Agent in Charge, and the Batavia City Police Department under the direction of Chief Shawn Heubusch.
Former Tennessee Probation Officer Pleads Guilty in Tax Fraud SchemeRead the Press Release
Memphis, TN – A former State of Tennessee probation officer has pleaded guilty in a tax fraud scheme that defrauded the government of more than $50,000. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the plea today.
According to information presented in court, between January 2011 and April 2014, LaShear Poole, 41, of Memphis, operated Five Star Tax Professionals, a tax preparation business. Poole, a probation officer at the time, used the business’ Professional Tax Identification Number (PTIN) and Electronic Filing Identification Number (EFIN) to file federal income tax returns.
On at least 15 occasions for the tax years 2011–2013, the defendant prepared, and caused to be filed with the Internal Revenue Service (IRS), federal income tax returns containing false and fraudulent misrepresentations. The majority of these misrepresentations pertained to the filing of false IRS Schedule C forms, which claimed income from businesses that either did not exist or were not actively engaged in business during the tax year as claimed.
Poole filed the fraudulent tax returns by means of wire communication. As a result of the scheme, she obtained more than $50,000 in tax refunds.
On Tuesday, March 22, 2016, Poole pled guilty before U.S. District Judge Sheryl H. Lipman to one count of conspiracy to violate the False Claims Act.
Poole is scheduled to be sentenced on Friday, June 24, 2016 at 10:30 a.m.
She faces up to 10 years imprisonment and a fine of up to $250,000.
This case is being investigated by IRS-Criminal Investigation.
Assistant U.S. Attorney Christopher E. Cotten is prosecuting this case on the government’s behalf.