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22 March 2016
Computer Hacking Conspiracy Charges Unsealed Against Members of Syrian Electronic ArmyRead the Press Release
ALEXANDRIA, Va. – Three Syrian nationals, all current or former members of the Syrian Electronic Army (SEA), were charged with multiple conspiracies related to computer hacking, according to two criminal complaints unsealed today here in the U.S. District Court of the Eastern District of Virginia.
Ahmad Umar Agha, 22, known online as “The Pro,” and Firas Dardar, 27, known online as “The Shadow,” were charged with a criminal conspiracy relating to: engaging in a hoax regarding a terrorist attack; attempting to cause mutiny of the U.S. armed forces; illicit possession of authentication features; access device fraud; unauthorized access to, and damage of, computers; and unlawful access to stored communications. Dardar and Peter Romar, 36, also known as Pierre Romar, were separately charged with multiple conspiracies relating to: unauthorized access to, and damage of, computers and related extortionate activities; receiving the proceeds of extortion; money laundering; wire fraud; violations of the Syrian Sanctions Regulations; and unlawful interstate communications. The court has issued arrest warrants for all three defendants.
“The tireless efforts of U.S. prosecutors and our investigative partners have allowed us to identify individuals who have been responsible for inflicting damage on U.S. government and private entities through computer intrusions,” said U.S. Attorney Boente. “Today’s announcement demonstrates that we will continue to pursue these individuals no matter where they are in the world.”
According to allegations in the first complaint, beginning in or around 2011, Agha and Dardar engaged in a multi-year criminal conspiracy under the name “Syrian Electronic Army” in support of the Syrian Government and President Bashar al-Assad. The conspiracy was dedicated to spear-phishing and compromising the computer systems of the U.S. government, as well as international organizations, media organizations and other private-sector entities that the SEA deemed as having been antagonistic toward the Syrian Government. When the conspiracy’s spear-phishing efforts were successful, Agha and Dardar would allegedly use stolen usernames and passwords to deface websites, redirect domains to sites controlled or utilized by the conspiracy, steal email and hijack social media accounts. For example, starting in 2011, the conspirators repeatedly targeted computer systems and employees of the Executive Office of the President. Despite these efforts, at no time was an EOP account or computer system successfully compromised. Additionally, in April 2013, a member of the conspiracy compromised the Twitter account of a prominent media organization and released a tweet claiming that a bomb had exploded at the White House and injured the President. In a later 2013 intrusion, through a third-party vendor, the conspirators gained control over a recruiting website for the U.S. Marine Corps and posted a defacement encouraging U.S. marines to “refuse [their] orders.”
“The Syrian Electronic Army publicly claims that its hacking activities are conducted in support of the embattled regime of Syrian President Bashar al-Assad,” said Assistant Attorney General Carlin. “While some of the activity sought to harm the economic and national security of the United States in the name of Syria, these detailed allegations reveal that the members also used extortion to try to line their own pockets at the expense of law-abiding people all over the world. The allegations in the complaint demonstrate that the line between ordinary criminal hackers and potential national security threats is increasingly blurry.”
Today, the FBI announced that it is adding Agha and Dardar to its Cyber Most Wanted and offering a reward of $100,000 for information that leads to their arrest. Both individuals are believed to be residing in Syria. Anyone with information is asked to contact their nearest FBI field office or U.S. Embassy or consulate.
“Cybercriminals cause significant damage and disruption around the world, often under the veil of anonymity,” said Assistant Director Trainor. “As this case shows, we will continue to work closely with our partners to identify these individuals and bring them to justice, regardless of where they are.”
According to allegations in the second complaint, beginning in or around 2013, SEA members Dardar and Romar engaged in multiple conspiracies dedicated to an extortion scheme that involved hacking online businesses in the United States and elsewhere for personal profit. Specifically, the complaint alleges that the conspiracy would gain unauthorized access to the victims’ computers and then threaten to damage computers, delete data or sell stolen data unless the victims provided extortion payments to Dardar and/or Romar. In at least one instance, Dardar attempted to use his affiliation with the SEA to instill fear into his victim. If a victim could not make extortion payments to the conspiracy’s Syrian bank accounts due to the Syrian Sanctions Regulations or other international sanctions regulations, Romar would act as an intermediary in an attempt to evade those sanctions.
“These three members of the Syrian Electronic Army targeted and compromised computer systems in order to provide support to the Assad regime as well as for their own personal monetary gain through extortion,” said Assistant Director in Charge Abbate. “As a result of a thorough cyber investigation, FBI agents and analysts identified the perpetrators and now continue to work with our domestic and international partners to ensure these individuals face justice in the United States. I want to thank the dedicated FBI personnel, federal prosecutors, and our law enforcement partners for their tremendous efforts to ensure on-line criminal activity is countered, U.S. cyber infrastructure is safeguarded, and violators are held accountable under the law.”
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John P. Carlin, Assistant Attorney General for National Security; James Trainor, Assistant Director of the FBI’s Cyber Division; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the charges were unsealed.
The case is being investigated by the FBI’s Washington Field Office, with assistance from the NASA Office of the Inspector General, Department of State Bureau of Diplomatic Security and other law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorneys Jay V. Prabhu and Maya D. Song of the Eastern District of Virginia, and Special Assistant U.S. Attorney Brandon Van Grack and Trial Attorneys Scott McCulloch and Nathan Charles of the National Security Division’s Counterintelligence and Export Control Section.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case Nos. 1:14-mj-292, and 1:14-mj-498.
Criminal complaints contain allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Computer Hacking Conspiracy Charges Unsealed Against Members of Syrian Electronic ArmyRead the Press Release
Two Fugitives Believed to be in Syria Added to FBI Cyber’s Most Wanted
Three Syrian nationals, all current or former members of the Syrian Electronic Army (SEA), were charged with multiple conspiracies related to computer hacking, according to two criminal complaints unsealed today in the U.S. District Court of the Eastern District of Virginia.
The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director James Trainor of the FBI’s Cyber Division and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office.
Ahmad Umar Agha, 22, known online as “The Pro,” and Firas Dardar, 27, known online as “The Shadow,” were charged with a criminal conspiracy relating to: engaging in a hoax regarding a terrorist attack; attempting to cause mutiny of the U.S. armed forces; illicit possession of authentication features; access device fraud; unauthorized access to, and damage of, computers; and unlawful access to stored communications. Dardar and Peter Romar, 36, also known as Pierre Romar, were separately charged with multiple conspiracies relating to: unauthorized access to, and damage of, computers and related extortionate activities; receiving the proceeds of extortion; money laundering; wire fraud; violations of the Syrian Sanctions Regulations; and unlawful interstate communications. The court has issued arrest warrants for all three defendants.
According to allegations in the first complaint, beginning in or around 2011, Agha and Dardar engaged in a multi-year criminal conspiracy under the name “Syrian Electronic Army” in support of the Syrian Government and President Bashar al-Assad. The conspiracy was dedicated to spear-phishing and compromising the computer systems of the U.S. government, as well as international organizations, media organizations and other private-sector entities that the SEA deemed as having been antagonistic toward the Syrian Government. When the conspiracy’s spear-phishing efforts were successful, Agha and Dardar would allegedly use stolen usernames and passwords to deface websites, redirect domains to sites controlled or utilized by the conspiracy, steal email and hijack social media accounts. For example, starting in 2011, the conspirators repeatedly targeted computer systems and employees of the Executive Office of the President (EOP). Despite these efforts, at no time was an EOP account or computer system successfully compromised. Additionally, in April 2013, a member of the conspiracy compromised the Twitter account of a prominent media organization and released a tweet claiming that a bomb had exploded at the White House and injured the President. In a later 2013 intrusion, through a third-party vendor, the conspirators gained control over a recruiting website for the U.S. Marine Corps and posted a defacement encouraging U.S. marines to “refuse [their] orders.”
Today, the FBI announced that it is adding Agha and Dardar to its Cyber Most Wanted and offering a reward of $100,000 for information that leads to their arrest. Both individuals are believed to be residing in Syria. Anyone with information is asked to contact their nearest FBI field office or U.S. Embassy or consulate.
According to allegations in the second complaint, beginning in or around 2013, SEA members Dardar and Romar engaged in multiple conspiracies dedicated to an extortion scheme that involved hacking online businesses in the United States and elsewhere for personal profit. Specifically, the complaint alleges that the conspiracy would gain unauthorized access to the victims’ computers and then threaten to damage computers, delete data or sell stolen data unless the victims provided extortion payments to Dardar and/or Romar. In at least one instance, Dardar attempted to use his affiliation with the SEA to instill fear into his victim. If a victim could not make extortion payments to the conspiracy’s Syrian bank accounts due to the Syrian Sanctions Regulations or other international sanctions regulations, Romar would act as an intermediary in an attempt to evade those sanctions.
“The Syrian Electronic Army publicly claims that its hacking activities are conducted in support of the embattled regime of Syrian President Bashar al-Assad,” said Assistant Attorney General Carlin. "While some of the activity sought to harm the economic and national security of the United States in the name of Syria, these detailed allegations reveal that the members also used extortion to try to line their own pockets at the expense of law-abiding people all over the world. The allegations in the complaint demonstrate that the line between ordinary criminal hackers and potential national security threats is increasingly blurry.”
“The tireless efforts of U.S. prosecutors and our investigative partners have allowed us to identify individuals who have been responsible for inflicting damage on U.S. government and private entities through computer intrusions,” said U.S. Attorney Boente. “Today’s announcement demonstrates that we will continue to pursue these individuals no matter where they are in the world.”
“Cybercriminals cause significant damage and disruption around the world, often under the veil of anonymity,” said Assistant Director Trainor. “As this case shows, we will continue to work closely with our partners to identify these individuals and bring them to justice, regardless of where they are.”
“These three members of the Syrian Electronic Army targeted and compromised computer systems in order to provide support to the Assad regime as well as for their own personal monetary gain through extortion,” said Assistant Director in Charge Abbate. “As a result of a thorough cyber investigation, FBI agents and analysts identified the perpetrators and now continue to work with our domestic and international partners to ensure these individuals face justice in the United States. I want to thank the dedicated FBI personnel, federal prosecutors, and our law enforcement partners for their tremendous efforts to ensure on-line criminal activity is countered, U.S. cyber infrastructure is safeguarded, and violators are held accountable under the law.”
The case is being investigated by the FBI’s Washington Field Office, with assistance from the NASA Office of the Inspector General, Department of State Bureau of Diplomatic Security and other law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorneys Jay V. Prabhu and Maya D. Song of the Eastern District of Virginia, and Special Assistant U.S. Attorney Brandon Van Grack and Trial Attorneys Scott McCulloch and Nathan Charles of the National Security Division’s Counterintelligence and Export Control Section.
Agha and Dardar Complaint
Romar and Dardar Complaint
Columbia Man Sentenced to 15.8 Years Impirsonment for Federal Firearm ChargeRead the Press Release
Contact Person: Stacey Haynes (803) 929-3000
Columbia, South Carolina ---- United States Attorney Bill Nettles stated today that Wade Andrew Albright, age 43, of Columbia, South Carolina was sentenced to 188 months (15.8 years) imprisonment today in federal court. In November 2015, Albright plead guilty to being a felon in possession of a firearm and ammunition, a violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2), and 924(e). Senior United States District Court Judge Margaret B. Seymour determined that Albright was an armed career criminal, subject to enhanced penalties. The imposed term of imprisonment will be followed by 3 years of supervised release.
Evidence presented at the earlier change of plea hearing established that on the early morning hours of November 29, 2013, officers with the Lexington County Narcotics Enforcement Team (“NET”) set up surveillance in order to arrest Albright on outstanding state warrants for distribution of cocaine and crack cocaine. Officers observed Albright drive into the employee parking lot for the plant where he was employed at the time. As officers approached his truck, Albright got back into the truck and fled. Officers observed Albright drive into a neighborhood. Shortly thereafter, officers observed Albright’s truck in the parking lot of an apartment complex in the area, the driver’s door was open and the truck was still running. Other officers then observed Albright along a wood line. After a brief chase, Albright was arrested. A search incident to arrest revealed numerous pill bottles containing individually bagged pills, cocaine, and marijuana both on Albright’s person and in a book bag he discarded while running. Officers also located a located Smith & Wesson .38 caliber revolver and additional rounds of ammunition on Albright. A check of the firearm revealed that it had previously been reported stolen in Richland County.
Albright is prohibited under federal law from possessing firearms and/or ammunition based upon his prior state convictions for burglary 2nd degree (3 separate convictions, each involving a firearm), strong arm robbery (3 separate convictions, each involving a firearm), escape, grand larceny (two separate counts), assault and battery of a high and aggravated nature stemming from an incident in a detention center, assault and battery of high and aggravated nature stemming from an incident in the South Carolina Department of Corrections), and manslaughter (stemming from the stabbing of another inmate in the South Carolina Department of Corrections). Albright is subject to enhanced penalties under 18 U.S.C. ' 924(e) in light of his prior convictions in state court for violent felonies.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Lexington County Narcotics Enforcement Team and was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Assistant United States Attorney Stacey D. Haynes of the Columbia office handled the case.
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Chicago Marketer Convicted of Illegally Pocketing Bribes in Exchange for Referring Elderly Patients to Skokie-Based Home Health CompanyRead the Press Release
CHICAGO — A federal judge today convicted a Chicago marketer of taking illegal payments in exchange for referring elderly patients to a Skokie-based home healthcare company.
JENETTE GEORGE was convicted on two counts of violating the federal Medicare and Medicaid Anti-Kickback Statute, and one count of conspiracy to violate the statute. U.S. District Judge John W. Darrah issued the verdict in federal court in Chicago.
George, 62, of Chicago, faces up to 15 years in prison when she is sentenced by Judge Darrah on August 10, 2016, at 1:30 p.m.
George is the eleventh defendant to be convicted as part of the federal investigation into the bribes-for-referrals and fraud schemes at Rosner Home Healthcare Inc. The prior convictions include three of the company’s owners, as well as two Illinois physicians. Between January 2008 and July 2012, Rosner officials paid kickbacks and bribes to doctors, marketers, medical office employees and nurses to refer patients to Rosner. The referrals enabled Rosner to bill Medicare for home healthcare treatment that it subsequently provided.
“Physicians did not refer patients to Rosner; Defendant did,” Judge Darrah wrote in an opinion supporting the George verdict.
Rosner, which was based in Skokie and later in Morton Grove, has since closed.
George operated Ttenej Senior Referral Agency, which provided senior citizens with referrals to home healthcare firms in the Chicago area. Evidence at her three-day bench trial in October 2015 revealed that George received approximately $500 from Rosner for each patient she referred to the company. In one undercover surveillance video presented at trial, George is seen counting out the cash that she received from EDGARDO HERNAL, a former Rosner employee who by then was cooperating with federal authorities. Evidence at trial further showed that nurses at Rosner regularly put false information into patient charts to make Rosner’s services appear to be medically necessary, and to make patients appear to be sicker than they actually were.
Hernal pleaded guilty in 2013 to a conspiracy charge and is awaiting sentencing. In addition to George and Hernal, the other defendants convicted in the investigation are:
ANA NERISSA TOLENTINO, of Morton Grove, a nurse and former part owner of Rosner.
ARMANDO TOLENTINO, of Morton Grove, a nurse and former part owner of Rosner.
FREDERICK MAGSINO, of Morton Grove, a former part owner of Rosner.
EMMANUEL NWAOKOCHA, of Skokie, an Illinois physician.
MASOOD SYED, of Mount Prospect, an Illinois physician.
JENNIFER HOLMAN, of Chicago, an office manager in a medical office.
TITIS JACKSON, also known as Titus Jackson, of Chicago, a marketer who referred Medicare patients to Rosner.
LIONEL PAUL GASSMANN, of Skokie, a Rosner nurse who treated patients in their homes.
GLORIA ZISMAN, of Des Plaines, a Rosner nurse who treated patients in their homes.
In addition, ARTHUR DAVIDA, a Bloomingdale physician who falsely certified many of Rosner’s patients for home-health services, including some referred by George, was convicted of health care fraud in a related case. Davida was sentenced earlier this year to two years in prison.
The conviction of George was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the U.S. Justice Department and the U.S. Department of Health and Human Services to prevent fraud and to enforce anti-fraud laws around the country. Dozens of defendants have been charged in numerous fraud cases since the strike force began operating in Chicago in 2011.
The government is represented by Assistant U.S. Attorneys Stephen Chahn Lee and Elizabeth Pozolo.
Chicago Investment Advisor Sentenced to Three Years in Prison for Defrauding a Suburban Bank and Two Clients out of More Than $3.2 MillionRead the Press Release
CHICAGO — A Chicago investment advisor was sentenced today to three years in federal prison for engaging in a scheme to defraud an Oak Brook bank and two of his clients out of more than $3.2 million.
ROBERT J. LUNN made a series of misrepresentations to Leaders Bank to obtain a line of credit and loans purportedly for the benefit of his business, Lunn Partners LLC, and two of his clients, including former Chicago Bulls player Scottie Pippen. Lunn misled the bank about the value of his assets and the purpose of the financing, and he fraudulently stated that Pippen and the other client, retired venture capitalist Robert Geras, were aware of the loans. In reality, neither Pippen nor Geras had any knowledge of them. Lunn used nearly all of the fraudulently obtained funds for his own benefit and to pay some of his other clients.
A federal jury in 2014 convicted Lunn, 66, of Chicago, on five counts of bank fraud. In addition to the 36-month sentence, U.S. District Judge Charles R. Norgle also ordered Lunn to pay restitution of more than $1.16 million to Leaders Bank, and $400,000 to Pippen.
“It is clear from the evidence that Lunn’s avarice knows no bounds,” Assistant U.S. Attorney Kenneth E. Yeadon and Special Assistant U.S. Attorney Richard G. Stoltz argued in the government’s sentencing memorandum. “He enriched himself by taking out the fraudulent loans and went to great lengths to conceal his crime from Leaders Bank, Mr. Pippen and Mr. Geras.”
According to evidence at trial, Lunn initially obtained a corporate line of credit from Leaders Bank for $480,000 in May 2001. He increased the credit line twice in 2004, first to $1.2 million and later to $1.32 million, after submitting financial statements that falsely proclaimed personal ownership of millions of dollars in stocks.
In September 2002, Lunn arranged for an unsecured bank loan of $1.4 million, purportedly for the benefit of Pippen. Lunn secured the loan by falsely representing that the proceeds would be used by Pippen to purchase an interest in an airplane.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Chicago Regional Office of the U.S. Securities and Exchange Commission provided cooperation and participation in the prosecution.
The government is represented by Mr. Yeadon of the U.S. Attorney’s Office for the Northern District of Illinois, and Mr. Stoltz, a senior attorney with the SEC.
Central Coast Man Pleads Guilty to Federal Copyright Infringement Offense Related to Online Sales of Pirated Adobe Software PackagesRead the Press Release
LOS ANGELES – A Lompoc man has pleaded guilty to a federal charge of trafficking in counterfeit goods for using two websites to market and sell counterfeit versions of Adobe software
Jeffrey Scott Patterson, 52, pleaded guilty yesterday in United States District Court.
In his plea agreement and in court yesterday, Patterson admitted that, over the course of approximately eight years, he used two websites to advertise and sell counterfeit Adobe software at prices below retail. The software sold by Patterson – sometimes under the assumed name of “Bruce Allen” – included Adobe Acrobat, Adobe Photoshop and Adobe Creative Suite.
“Protecting the business community’s intellectual property from being stolen is an important aspect of protecting our nation’s economy,” said United States Attorney Eileen M. Decker. “Counterfeiting is not a victimless crime, and all consumers end up paying the costs associated with the theft of intellectual property.”
Patterson offered victims either a digital download or a CD version of the pirated Adobe software. To bypass Adobe’s security protocols, Patterson altered the software and used a “key generator” to give his customers a counterfeit “key code” that must be entered by a user when the software is installed on a computer. Many of the counterfeit key codes failed to work, which prompted numerous complaints to Abode and Patterson.
As part of the investigation, special agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) made two undercover purchases at about half of the full retail price – one for Adobe Acrobat 9 Professional and one for Adobe Creative Suite 3 Design Premium.
Records obtained by HSI agents showed that Patterson generated well over $500,000 in sales over the course of his scheme.
“As this case makes clear, law enforcement is using every tool available to keep intellectual property thieves from profiting from others’ products, creativity, and ideas,” said Mark Selby, Deputy Special Agent in Charge for HSI Los Angeles. “Simply put, product counterfeiting amounts to economic sabotage and HSI will move aggressively to target those who get rich at the expense of those businesses that play by the rules.”
The charge of trafficking in counterfeit goods carries a statutory maximum sentence of 10 years in federal prison.
Patterson is scheduled to be sentenced by United States District Judge Philip S. Gutierrez on June 27.
Carrollton TX Man Pleads Guilty to Theft of Gaming Establishment on Indian LandsRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that DUNG THI NGOC NGUYEN, age 33, of Carrollton, Texas, pled guilty to THEFT BY OFFICERS OR EMPLOYEES OF GAMING ESTABLISHMENT ON INDIAN LANDS, in violation of Title 18, United States Code, Sections 1168(b) and 2.
The Indictment alleged that from on or about February 9, 2015, to on or about February 20, 2015, in the Eastern District of Oklahoma, the defendant did embezzle, abstract, purloin, willfully misapply and take and carry away in excess of $1,000.00 of moneys belonging to the Choctaw Nation Casino and Resort, an Indian gaming establishment operated by the Choctaw Nation in Indian Country, pursuant to an ordinance or resolution approved by the National Indian Gaming Commission.
The charges arose from an investigation by the Choctaw Nation Tribal Police and the Federal Bureau of Investigation.
The statutory range of punishment is up to 20 years imprisonment, up to a $1,000,000.00 fine or both.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing.
Assistant United States Attorney Edward Snow represented the United States.
Canadian Man Sentenced to 3½ Years for Benefit Fraud and Aggravated Identity TheftRead the Press Release
Contact: Chris Ruge
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Robert Jerome Bond, 47, recently of Gardiner, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 1½ years in prison for theft of public money and an additional two years for aggravated identity theft. He was also ordered to pay $5,923 in restitution. The defendant pled guilty on October 8, 2015.
According to court records, on about January 19, 2011, Bond applied for and was granted Supplemental Nutrition Assistance Program (“SNAP”) benefits using the name of an actual U.S. citizen. SNAP offers nutrition assistance to eligible, low-income individuals. Bond, a Canadian citizen, was not eligible for SNAP benefits at the time of the application and improperly received over $5,900 in SNAP benefits.
The benefit fraud was discovered when the real owner of Bond’s assumed identity applied for benefits in another state. That application led to an investigation by the Office of the Maine Attorney General that Judge Woodcock described as “most impressive.” It revealed Bond’s true name and citizenship and his 20-year-history of criminal activity under false identities. Judge Woodcock pointed out that the use of those false identities helped Bond avoid detection and deportation.
In imposing sentence, Judge Woodcock said that Bond had “cynically betrayed the trust of the people of this country” and told the defendant that “when you return to Canada after your prison sentence, you will leave behind in this country countless victims of the crimes you have committed.”
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Office of the Maine Attorney General, and the Maine Department of Health and Human Services.
Bronx Man Sentenced for Role in Tax Refund Fraud SchemeRead the Press Release
ERIE, Pa. - A resident of Bronx, New York, has been sentenced in federal court to 12 months plus 1 day in prison and ordered to make restitution in the amount of $51,363.00 on his conviction of conspiracy to commit wire fraud, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Nana Baffour, 39, of Bronx, New York.
According to information presented to the court, Baffour allowed bank accounts in his name and under his control to be used as repositories for fraudulently obtained federal tax refunds. Baffour would then withdraw the fraudulently obtained refunds, keep a portion for himself and give the remainder of the money to another co-defendant.
Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation for the investigation leading to the successful prosecution of Baffour.
Bangor Resident Pleads Guilty to Distributing CocaineRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Kliton Xhemali, 32, of Bangor pleaded guilty today U.S. District Court to distributing cocaine.
According to court records, on April 2, 2015, from his Bangor residence, the defendant sold about one ounce of cocaine for $1,550 to a cooperating witness and federal agent working in an undercover capacity.
The defendant faces up to 20 years in prison, a $1,000,000 fine and between three years and life on supervised release.
The case was investigated by the U.S Drug Enforcement Administration and the Maine Drug Enforcement Agency.
Baltimore Man Admits to Robbing Three Stores at GunpointRead the Press Release
Baltimore, Maryland – Howard Downey, age 33, of Baltimore, pleaded guilty today to robbing a store, and tampering with evidence in connection with the gun used in the robberies.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Baltimore City State’s Attorney Marilyn J. Mosby; and Baltimore Police Commissioner Kevin Davis.
According to his plea agreement, on March 7, 2015, Downey robbed a store on East Monument Street in Baltimore. Downey brandished a revolver at an employee, demanding money. After the employee handed over money from two cash registers, Downey told the victim to hand over the store’s telephone and kneel down. Downey fled to a van waiting outside.
On March 12 and 13, 2015, Downey used the revolver to rob two stores, one on Patapsco Avenue and the other on East Monument Street in Baltimore, respectively.
Detectives recovered video footage of the March 7 and 12 robberies. Downey is seen arriving and leaving the robbery scenes in a purple Dodge caravan. Further investigation led detectives to Downey’s residence where they executed a search warrant on March 26. They seized clothing that Downey wore during the robberies, and a phone used by Downey. In text messages found on the phone, Downey referred to himself and a cohort/getaway driver as Bonnie and Clyde.
Downey was arrested on March 27, 2015 and confessed to the March 7 robbery. He would not, however, reveal the identity of the driver of the van or the whereabouts of the gun used in the robberies. Subsequently, Downey was overheard on telephone calls from the Baltimore City jail conspiring to obstruct justice by hiding the gun he used in the robberies from law enforcement. Downey instructed the co-conspirator to retrieve the gun from where it was hidden and get rid of it. The next day, the co-conspirator reported to Downey via another recorded phone call that he took care of the gun. Further investigation revealed that the co-conspirator had taken the gun to a friend’s home, where it was recovered by law enforcement pursuant to a search warrant.
Downey and the government have agreed that if the Court accepts the plea agreement, Downey will be sentenced to between 87 and 97 months in prison. Chief U.S. District Judge Catherine C. Blake has scheduled sentencing for July 15, 2016 at 10:30 a.m.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department and Baltimore City State’s Attorney's Office for their work in the investigation. Mr. Rosenstein thanked Special Assistant United States Attorney Shelley S. Glenn, who is prosecuting the case.
Attorney General Loretta E. Lynch Statement on Terror Attacks in BrusselsRead the Press Release
Attorney General Loretta E. Lynch released the following statement regarding the attacks in Brussels this morning:
“I stand with President Obama and the American people in condemning this morning’s horrific attacks in Brussels. This was an appalling assault on the people of Belgium, on the European Union and on every nation that stands for peace and the rule of law. The Department of Justice is in contact with our counterparts in Belgium and we have offered any and all assistance that we can bring to bear. In the days ahead, we will continue to work with law enforcement abroad in order to help ensure those responsible are brought to justice. And as we go forward, our thoughts, prayers and deepest condolences will be with the victims and their loved ones.
“If the intent of this attack's perpetrators was to sow conflict and discord – to stoke mistrust and spread fear – they have failed. Today and every day, the people of the United States are joined with our friends in Belgium and around the world in love, compassion and resolve. The words on Belgium’s coat of arms speak for us all: L’Union Fait La Force. Unity Makes Strength.”
Artesia Man Sentenced to 92 Months for Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Victor R. Castillo, 37, of Artesia, N.M., was sentenced today in federal court in Las Cruces, N.M., to 92 months in prison for violating the federal firearms laws. Castillo will be on supervised release for three years following his incarceration.
Castillo was arrested on Sept. 1, 2015, on an indictment charging him with being a felon in possession of firearms and ammunition and possession of an unregistered firearm on Jan. 28, 2015, in Eddy County, N.M. Castillo was prohibited from possessing firearms and ammunition because he previously had been convicted of importation of marijuana, possession of marijuana with intent to distribute, aggravated fleeing a law enforcement officer, and possession of a controlled substance.
On Dec. 18, 2015, Castillo pled guilty to the indictment without the benefit of a plea agreement.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pecos Valley Drug Task Force and was prosecuted by Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office.
The Pecos Valley Drug Task Force is comprised of officers from the Eddy County Sheriff’s Office, Carlsbad Police Department and Artesia Police Department and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
This case was prosecuted under a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rate, on a per capita basis, is one of the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Eddy County, N.M., under this initiative.
Altoona Man Conspired to Distribute CocaineRead the Press Release
JOHNSTOWN, Pa. - A resident of Altoona, Pa., pleaded guilty in federal court to a charge of conspiracy to distribute and possess with the intent to distribute a quantity of cocaine, United States Attorney David J. Hickton announced today.
Matthew Fee, 33, of Altoona, Pa., pleaded guilty to one count before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the court was advised that from Jan. 9, 2014, to April 17, 2015, Fee conspired to distribute and possess with the intent to distribute a quantity of cocaine.
Judge Gibson scheduled sentencing for August 10, 2016, at 10:00 a.m. The law provides for a total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, the Pennsylvania Attorney General's Office, the Cambria County Drug Task Force, the Altoona Police Department, and the Cambria County District Attorney's Office, conducted the investigation that led to the prosecution of Fee.
16 Kingsmen Motorcycle Club Officers, Members Indicted in Major Racketeering Operation; National President Among Those IndictedRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a 46 count superseding indictment charging 16 officers and members of the Kingsmen Motorcycle Club (KMC) in a major racketeering operation that involved high ranking officials including the national president, regional and chapter presidents. Ten of the defendants are from Western New York.
“With today’s indictment, an era of violence perpetrated upon so many communities across this country by a single criminal enterprise has now come to an end,” said U.S. Attorney Hochul. “As this case demonstrates, law enforcement from across this region will not rest until all who would harm the peace and safety of our residents are brought to justice, regardless of where those threats originate.”
Named in the indictment are:
• David Pirk, 65, KMC National President; • Andre Jenkins, 37, KMC member, Nomad; • Timothy Enix, 56, KMC member, Florida/Tennessee Regional President; • Filip Caruso, 51, KMC member, New York Northern Regional President; • Edgar Dekay, 34, KMC member, North Tonawanda Chapter President, Nomad President; • Jason Williams, 41, KMC member, North Tonawanda Chapter Vice President; • Thomas Koszuta, 52, KMC member, Nomad; • Gregory Willson, 50, KMC member, Nomad; • Emmett Green, 44, KMC member, Arcade/Delevan Chapter President, New York Southern Tier Regional President, and New York Regional President; • Robert Osborne, Jr., 37, KMC member, Olean Chapter President; • Stanley Olejniczak, 51, KMC member; • Jack Wood, 45, KMC member, Arcade Chapter Sergeant at Arms; • Ryan Myrtle, 32, KMC member, North Tonawanda Chapter President; • Thomas Scanlon, 46, KMC member, Olean Chapter President, Nomad, and New York Regional President; • Glen Stacharczyck, 49, KMC member and North Tonawanda Chapter President; • Sean McIndoo, 42, KMC member and Nomad.
The charges include: Rico Conspiracy; Possession of Firearm In Furtherance of a Crime of Violence; Conspiracy to Distribute Cocaine; Possession with Intent to Distribute Cocaine; Using and Maintaining a Premises for Drug Dealing; Distribution of Marijuna; Possession of Firearms in Furtherance of Drug Trafficking Crimes; Felon in Possession of Firearm; Hobbs Act Conspiracy; Hobbs Act Robbery; Assault with Dangerous Weapon in of Racketeering; Use of Firearm During and in Relation to Crimes of Violence; Attempted Murder in Aid of Racketeering; Murder in Aid of Racketeering; Possession and Discharge of a Firearm in Furtherance of a Crime; Accessory after the Fact; Obstruction of Justice; False Statements before Grand Jury; User of Controlled Substance in Possession of Firearms; Distribution of Cocaine; and Distribution of Marijuana.
The charges carry a mandatory minimum penalty of five years in prison, a maximum penalty of life in prison and a $500,000 fine.
Assistant U.S. Attorneys Caleb J. Petzoldt and Joseph M. Tripi, who are handling the case, stated that according to the indictment, beginning in 2013, certain KMC members wanted to establish the KMC as a 1% club. The 1% refers to a previous statement by a representative of the American Motorcycle Association that 99% of motorcyclists were law-abiding citizens with the remaining 1% engaged in certain activities such as drug trafficking, firearm trafficking, and acts of violence.
Acts of violence allegedly committed by the KMC include:
• In September 2014, defendant KMC President David Pirk told defendant Andre Jenkins to “take care of it.” This was in reference to KMC members Paul Maue and Daniel "DJ" Szymanski who were murdered behind the North Tonawanda KMC Chapter clubhouse on September 6, 2014.
• On June 7, 2013, KMC forcibly shut down the Springville Chapter and strip members of their colors because they were non-compliant members. Brandishing firearms, KMC members struck a victim in the head with a blunt object and stole items from the Springville clubhouse. They then used bleach to clean areas where the victim bled and cut and removed portions of the rug which contained blood. As a result of assault, defendant Willson was elevated to the position of Nomad within the KMC. A KMC Nomad was a KMC member that was not required to regularly attend meetings but was expected to serve the interests of the KMC enterprise including fighting other clubs and committing violent crimes.
• On September 12, 2009, a female victim was punched repeatedly in the face by a KMC member and then held against her will for three days to conceal her facial injuries from police.
Fifteen of the defendants are in custody and the remaining defendant is expected to be taken into custody soon.The superseding indictment is the culmination of the an investigation led by the Federal Bureau of Investigation’s Safe Streets Task Force, under the direction of Special Agent in Charge Adam S. Cohen. Assisting in the investigation: the FBI Knoxville, TN, and Jacksonville, FL Field Offices, Immigration and Customs Enforcement, Homeland Security Investigations, the Erie County Sheriff’s Office, the Buffalo Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the New York State Police, the Olean Police Department, the Lancaster Police Department, the Amherst Police Department, the Town of Tonawanda Police Department, the Niagara Frontier Transportation Authority Police, the Cattaraugus County Sheriff’s Department, the Hamburg Police Department.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
21 March 2016
Washington, Pa., Man Sentenced to Probation, Fined for Selling Controlled SubstancesRead the Press Release
PITTSBURGH - A Washington County resident has been sentenced in federal court to five years of probation, the first six-months of which are to be served on home detention, a $3.000 fine, and ordered to forfeit $200,000 on his conviction of possession with intent to distribute schedule II controlled substances and obtaining prescriptions by fraud, United States Attorney David J. Hickton announced today.
United States District Judge Cathy Bissoon imposed the sentence on Dennis Devenney, Sr., 57, of Washington, Pennsylvania.
According to information presented to the court, Devenney sold controlled substances, Oxycodone, Opana, and Morphine, for cash and fraudulently obtained prescriptions.
Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Drug Enforcement Administration for the investigation leading to the successful prosecution of Devenney.
Verona Man Gets 20-Year Prison Sentence for Producing Child PornographyRead the Press Release
PITTSBURGH - A former resident of Verona, Pennsylvania, has been sentenced in federal court to 20 years imprisonment, followed by 25 years supervised release, on his conviction of production of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on David Hudak, 46, formerly of Verona, Pennsylvania.
According to information presented to the court at the time of the guilty plea, on Feb. 3, 2013, Hudak employed, used, and coerced a minor, approximately five years of age, to engage in sexually explicit conduct for the purpose of producing a video depicting her sexual exploitation. The court was further informed that the video was taken in Hudak’s Verona residence, while the child victim was in his custody and care. The video was discovered on a computer seized from Hudak’s residence during the execution of search warrant. The search warrant was issued following an undercover investigation during which Hudak distributed videos depicting the sexual exploitation of minors to an undercover officer.
Prior to imposing sentence, Judge Conti stated that a 20-year sentence of imprisonment, followed by 25 years of supervision, was an appropriately lengthy sentence given the very serious nature of Hudak’s conduct and the harm done to the child victim.
Assistant United States Attorney Carolyn J. Bloch prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation and other members of the Western Pennsylvania Violent Crimes Against Children Task Force for the investigation leading to the successful prosecution of Hudak.
United States Files Enforcement Action Against Kansas Food Manufacturer and Company’s Managers to Stop Distribution of Adulterated Food ProductsRead the Press Release
A civil complaint was filed today in the U.S. District Court for Kansas against Native American Enterprises LLC, of Wichita, Kansas; its Vice President and part-owner, William N. McGreevy and is production manager, Robert C. Conner, to stop the distribution of adulterated food, the Department of Justice announced today.
Native American Enterprises LLC (NAE), manufactures and distributes food, namely ready-to-eat (RTE) refried beans and sauces. The complaint alleges that the company’s RTE refried beans and sauces are adulterated in that they have been prepared, packed and/or held under insanitary conditions whereby the food may have become contaminated with filth or have been rendered injurious to health. According to the complaint, the insanitary conditions include the presence of Listeria Monocytogene (L. mono) in NAE’s facility and insanitary employee practices. The department filed the complaint at the request of the U.S. Food and Drug Administration (FDA).
“Insanitary conditions at food processing facilities can present significant risks to consumers and food manufacturers must take steps to minimize those risks,” 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 aggressively with the FDA to combat and deter conduct that leads to the distribution of adulterated food to consumers.”
According to the complaint, FDA inspected NAE’s facility, located at 230 N. West Street in Wichita, in August 2015 and collected environmental samples and observed numerous insanitary practices, including the defendants’ failure to manufacture and package food under conditions necessary to minimize microorganism growth, take necessary precautions to protect against contamination and maintain buildings in good repair. Specifically, according to the complaint, FDA observed rain water leaking through the roof in the packaging room, directly above where NAE employees packaged RTE refried beans. In addition, FDA observed cracks and holes in the walls and floor junctures that allow water and debris to collect, prohibit adequate cleaning and could harbor Listeria, according to the complaint.
FDA inspected NAE’s facility twice in 2014. As alleged in the complaint, FDA collected environmental samples during RTE refried bean production during each of the 2014 inspections and found Listeria in the facility. In addition, as alleged in the complaint, FDA also observed a failure to maintain equipment in an acceptable condition through appropriate cleaning and sanitizing.
As alleged in the complaint, L. mono thrives in moist environments, such as food-manufacturing environments. Unless proper precautions are taken, L. mono may become established and grow, and it is difficult to eliminate once it becomes established in a food-manufacturing environment. It is capable of surviving and growing at refrigerated temperatures and in high-salt environments. The complaint alleges that L. mono is a significant public health risk in RTE refried beans and sauces.
The government is represented by Trial Attorney Heide L. Herrmann of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Emily Metzger of the U.S. Attorney’s Office for the District of Kansas, with the assistance of Associate Chief Counsel for Enforcement Sonia W. Nath of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Kansas, visit its website at http://www.justice.gov/usao-ks.
United States Files Enforcement Action Against Kansas Food ManufacturerRead the Press Release
WASHINGTON – A civil complaint was filed today in the U.S. District Court for Kansas against Native American Enterprises LLC, of Wichita, Kansas; its Vice President and part-owner, William N. McGreevy and is production manager, Robert C. Conner, to stop the distribution of adulterated food, the Department of Justice announced today.
Native American Enterprises LLC (NAE), manufactures and distributes food, namely ready-to-eat (RTE) refried beans and sauces. The complaint alleges that the company’s RTE refried beans and sauces are adulterated in that they have been prepared, packed and/or held under insanitary conditions whereby the food may have become contaminated with filth or have been rendered injurious to health. According to the complaint, the insanitary conditions include the presence of Listeria Monocytogene (L. mono) in NAE’s facility and insanitary employee practices. The department filed the complaint at the request of the U.S. Food and Drug Administration (FDA).
“Insanitary conditions at food processing facilities can present significant risks to consumers and food manufacturers must take steps to minimize those risks,” 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 aggressively with the FDA to combat and deter conduct that leads to the distribution of adulterated food to consumers.”
According to the complaint, FDA inspected NAE’s facility, located at 230 N. West Street in Wichita, in August 2015 and collected environmental samples and observed numerous insanitary practices, including the defendants’ failure to manufacture and package food under conditions necessary to minimize microorganism growth, take necessary precautions to protect against contamination and maintain buildings in good repair. Specifically, according to the complaint, FDA observed rain water leaking through the roof in the packaging room, directly above where NAE employees packaged RTE refried beans. In addition, FDA observed cracks and holes in the walls and floor junctures that allow water and debris to collect, prohibit adequate cleaning and could harbor Listeria, according to the complaint.
FDA inspected NAE’s facility twice in 2014. As alleged in the complaint, FDA collected environmental samples during RTE refried bean production during each of the 2014 inspections and found Listeria in the facility. In addition, as alleged in the complaint, FDA also observed a failure to maintain equipment in an acceptable condition through appropriate cleaning and sanitizing.
As alleged in the complaint, L. mono thrives in moist environments, such as food-manufacturing environments. Unless proper precautions are taken, L. mono may become established and grow, and it is difficult to eliminate once it becomes established in a food-manufacturing environment. It is capable of surviving and growing at refrigerated temperatures and in high-salt environments. The complaint alleges that L. mono is a significant public health risk in RTE refried beans and sauces.
The government is represented by Trial Attorney Heide L. Herrmann of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Emily Metzger of the U.S. Attorney’s Office for the District of Kansas, with the assistance of Associate Chief Counsel for Enforcement Sonia W. Nath of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Kansas, visit its website at http://www.justice.gov/usao-ks.
Two Mexican Nationals Sent to Federal Prison for Maintaining Marijuana Grow Site on Routt National ForestRead the Press Release
DENVER – Two Mexican Nationals in the country illegally were sentenced by Chief U.S. District Court Judge Marcia S. Krieger to serve federal prison terms for intentionally manufacturing and possessing with intent to manufacturing 50 or more marijuana plants in the Routt National Forest, the U.S. Attorney, the U.S. Forest Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Routt County Sheriff’s Office announced.
The two defendants, Alfonso Rodriguez-Vazquez and Nestor Fabian Sinaloa-Sinaloa, were first charged by Criminal Complaint on August 8, 2015. They were then indicted by a federal grand jury on September 28, 2015. On November 24, 2015, Rodriguez-Vazquez was charged by Information, and then pled guilty to the manufacture of 50 or more marijuana plants. On November 30, 2015, Sinaloa-Sinaloa was also charged by Information, and then pled guilty to the same crime.
On March 7, 2016, Sinaloa-Sinaloa was sentenced by Chief Judge Krieger to serve 33 months in federal prison, followed by 3 years on supervised release. On March 8, 2016, Rodriguez-Vazquez was sentenced by Chief Judge Krieger to serve 30 months in federal prison, followed by 3 years on supervised release. Both appeared at their court hearings in custody, and were remanded at each hearings’ conclusion.
Both defendants were found maintaining a 3/4-acre illegal grow site located in the Buffalo Pass area, northeast of Steamboat Springs, Colorado. The eradication team seized 926 marijuana plants and removed camping gear from the site. The Forest Service also cleaned-up additional trash and other items. The grow was found after suspicious activity was reported to the U.S. Forest Service by a citizen, leading to the discovery of the grow site by law enforcement.
“Growing marijuana on public lands is not only a violation of the drug laws, it is a devastating form of environmental crime,” said U.S. Attorney John Walsh. “The Forest Service and Routt County Sheriff’s Office, with the support of Homeland Security Investigation deserve particular credit for their aggressive law enforcement work, which ensured that these two individuals were arrested and held criminally accountable.”
“Hopefully this sends a message that the Forest Service remains serious about keeping our national forests safe and free from the environmental damage and impacts resulting from marijuana cultivation which remains illegal on national forest lands in Colorado” said U.S. Forest Service Acting Special Agent in Charge, Kent Delbon. “The success of these investigations could not be achieved without the great working partnerships we have in place with our local and federal partners along with the United States Attorney’s Office.”
“Homeland Security Investigations added our unique customs and immigration law enforcement authorities to investigate this case,” said David A. Thompson, special agent in charge of HSI Denver. “Our partnership with other local, state and federal law enforcement agencies helped ensure that these criminals were fully investigated and presented for prosecution, and that their illegal operations were totally dismantled to make the affected public lands and the surrounding communities safer.”
According to the Forest Service, illegal marijuana cultivation poses a public safety risk and also directly harms the environment. The illegal use of pesticides can cause extensive long-term damage to natural resources. For example, the supply of public drinking water for hundreds of miles may be impacted because of one marijuana growing site. Overall, the negative impact of marijuana sites on natural resources is severe. Human waste, trash and the use of pesticides are widespread, contamination from sites affects fish and wildlife habitats, and soil erosion is common. In addition, water usage is extreme because each marijuana plant is estimated to require a gallon of water per day – water that is critical to native vegetation, wildlife and public drinking water sources.
This matter was investigated by the U.S. Forest Service, Homeland Security Investigations, and the Routt County Sheriff’s Office.
The defendants were prosecuted by Special Assistant U.S. Attorney Wayne Paugh.
Forest visitors are urged to be observant while recreating in secluded areas and to back out and contact the U.S. Forest Service Law Enforcement at (303) 275-5266, or your local law enforcement agency if they come across suspicious activities.
Turkish National Arrested for Conspiring to Evade U.S. Sanctions Against Iran, Money Laundering and Bank FraudRead the Press Release
Charges Unsealed against Three Defendants Who Allegedly Engaged in Hundreds of Millions of Dollars of Transactions on Behalf of the Government of Iran and Iranian Entities as Part of a Scheme to Evade U.S. Sanctions
An indictment was unsealed in the Southern District of New York against Reza Zarrab, aka Riza Sarraf, 33, a resident of Turkey and dual citizen of Turkey and Iran; Camelia Jamshidy, aka Kamelia Jamshidy, 29, a citizen of Iran; and Hossein Najafzadeh, 65, a citizen of Iran, for engaging in hundreds of millions of dollars-worth of transactions on behalf of the government of Iran and other Iranian entities, which were barred by U.S. sanctions, laundering the proceeds of those illegal transactions and defrauding several financial institutions by concealing the true nature of these transactions.
Zarrab was arrested on March 19, 2016, and was presented in federal court in Miami earlier today. Jamshidy and Najafzadeh remain at large. The case is assigned to U.S. District Judge Richard M. Berman of the Southern District of New York.
The indictment was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office.
“According to charges in the indictment, Zarrab, Jamshidy and Najafzadeh circumvented U.S. sanctions by conducting millions of dollars-worth of transactions on behalf of the Iranian government and Iranian businesses,” said Assistant Attorney General Carlin. “These alleged violations, as well as the subsequent efforts taken to cover up these illicit actions, undermined U.S. laws designed to protect national security interests. The National Security Division will continue to vigorously pursue and bring to justice those who seek to violate U.S. sanctions.”
“As alleged, these defendants conspired for years to violate and evade United States sanctions against Iran and Iranian entities,” said U.S. Attorney Bharara. “By allegedly laundering money through institutions around the world, Reza Zarrab, Camelia Jamshidy, and Hossein Najafzadeh undermined the U.S. sanctions regime imposed against Iran, and committed federal crimes.”
“For almost five years, from 2010 to 2015, the defendants allegedly conspired to thwart U.S. and international economic sanctions against Iran by concealing financial transactions that were on behalf of Iranian entities,” said Assistant Director in Charge Rodriguez. “The charges announced today should send a message to those who try to hide who are their true business partners. We appreciate the assistance of the FBI’s Miami Office with this case.”
According to the allegations contained in the indictment:
Beginning in 1979, the U.S. President found that the situation in Iran constituted an unusual and extraordinary threat to the national security, foreign policy and economy of the United States and declared a national emergency to deal with the threat. Consistent with that designation, the United States has instituted a host of economic sanctions against Iran and Iranian entities pursuant to the International Emergency Economic Powers Act (IEEPA). This sanctions regime prohibits, among other things, financial transactions involving the United States or United States persons that are intended for the government or Iran, or specified Iranian-related entities.
Between 2010 and 2015, Zarrab, Jamshidy and Najafzadeh conspired to conduct international financial transactions on behalf of and for the benefit of, among others, Iranian businesses, the Iranian government and entities owned or controlled by the Iranian government. Among the beneficiaries of these scheme were Bank Mellat, an Iranian government-owned bank designated, during the time of the charged offenses, by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) as a Specially Designated National (SDN) under the Iranian Transactions and Sanctions Regulations, the Iranian Financial Sanctions Regulations and the Weapons of Mass Destruction Proliferators Sanctions Regulations; Mellat Exchange, an Iranian money services business owned and controlled by Bank Mellat; the National Iranian Oil Company (NIOC), identified during the time of the charged offenses by OFAC as an agent or affiliate of Iran’s Islamic Revolutionary Guard Corp (IRGC); the Naftiran Intertrade Company Ltd. (NICO), Naftiran Intertrade Company Sarl (NICO Sarl) and Hong Kong Intertrade Company (KHICO), companies located in the United Kingdom, Switzerland and Hong Kong, respectively, that were acting on behalf of NIOC; and the MAPNA Group, an Iranian construction and power plant company. Bank Mellat, NIOC, NICO Sarl, NICO and HKICO are no longer designated as SDNs and NIOC is no longer identified as an agent or affiliate of the IRGC, though these entities remain “blocked parties,” with whom U.S. persons continue to be prohibited generally from engaging in unlicensed transactions or dealings.
The scheme was part of an intentional effort to assist the government of Iran in evading the effects of United States and international economic sanctions. For example, on or about Dec. 3, 2011, Zarrab and Najafzadeh received a draft letter in Farsi prepared for Zarrab’s signature and addressed to the general manager of the Central Bank of Iran. The letter stated, in part, that “[t]he role of the Supreme Leader and the esteemed officials and employees of Markazi Bank [the Central Bank of Iran] play against the sanctions, wisely neutralizes the sanctions and even turns them into opportunities by using specialized methods.” The letter goes on to state, in part, “[i]t is not secret that the trend is moving towards intensifying and increasing the sanctions, and since the wise leader of the Islamic Revolution of Iran has announced this to be the year of the Economic Jihad, the Zarrab family, which has had a half a century of experience in foreign exchange, . . . considers it to be our national and moral duty to declare our willingness to participate in any kind of cooperation in order to implement monetary and foreign exchange anti-sanction policies . . . .”
Zarrab, Jamshidy, Najafzadeh and their co-conspirators used an international network of companies located in Iran, Turkey and elsewhere to conceal from U.S. banks, OFAC and others that the transactions were on behalf of and for the benefit of Iranian entities. This network of companies includes Royal Holding A.S., a holding company in Turkey; Durak Doviz Exchange, a money services business in Turkey; Al Nafees Exchange, a money services business; Royal Emerald Investments; Asi Kiymetli Madenler Turizm Otom, a company located in Turkey; ECB Kuyumculuk Ic Vedis Sanayi Ticaret Limited Sirketi, a company located in Turkey; and Gunes General Trading LLC; and others. As a result of this scheme, the co-conspirators induced U.S. banks to unknowingly process international financial transactions in violation of the IEEPA.
Each defendant is charged with conspiracies to defraud the United States, to violate the IEEPA, to commit bank fraud and to commit money laundering. The conspiracy to defraud the United States charge carries a maximum sentence of five years in prison. The conspiracy to violate the IEEPA and money laundering conspiracy counts each carry a maximum of 20 years in prison. The bank fraud conspiracy charge carries a maximum sentence of 30 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the outstanding investigative work of the FBI New York Field Office’s Counterintelligence Division.
The case is being prosecuted by Assistant U.S. Attorneys Michael Lockard, Emil Bove and Sidhardha Kamaraju of the Southern District of New York, with assistance from Trial Attorney Mariclaire Rourke of the National Security Division’s Counterintelligence and Export Control Section. Assistant U.S. Attorney Jaimie Nawaday of the Southern District of New York is principally responsible for the forfeiture aspects of the case.
Zarrab et al Indictment
Three Charged with Violating the Travel ActRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Feng Yang Chen, 40, Liang Liang Guo, 30, and Cheng Qi Li, 27, all of Flushing, NY, were arrested and charged by criminal complaint with violating the Travel Act and conspiracy to violate the Travel Act. The charges carry a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney Elizabeth R. Moellering, who is handling the case, stated according to the complaint, that the defendants used the website Backpage.com to promote a multi-state prostitution organization. They posted advertisements on Backpage.com which led to encounters with prostitutes in Tonawanda, NY as well as other cities and states. The complaint further states that the defendants operated a call center in Flushing, Queens that scheduled meetings between prostitutes and their clients.
The defendants made an initial appearance today before U.S. Magistrate Judge Jeremiah J. McCarthy and were released on conditions.
The criminal complaint is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, the Tonawanda Police Department, under the direction of Chief Jerome C. Uschold III, the New York Police Department, under the direction of Chief William J. Bratton and the South Portland, Maine Police Department, under the direction of Chief Edward Googins.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Three Charged with Violating the Travel ActRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Feng Yang Chen, 40, Liang Liang Guo, 30, and Cheng Qi Li, 27, all of Flushing, NY, were arrested and charged by criminal complaint with violating the Travel Act and conspiracy to violate the Travel Act. The charges carry a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney Elizabeth R. Moellering, who is handling the case, stated according to the complaint, that the defendants used the website Backpage.com to promote a multi-state prostitution organization. They posted advertisements on Backpage.com which led to encounters with prostitutes in Tonawanda, NY as well as other cities and states. The complaint further states that the defendants operated a call center in Flushing, Queens that scheduled meetings between prostitutes and their clients.
The defendants made an initial appearance today before U.S. Magistrate Judge Jeremiah J. McCarthy and were released on conditions.
The criminal complaint is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of James C. Spero, the Tonawanda Police Department, under the direction of Chief Jerome C. Uschold III, the New York Police Department, under the direction of Chief William J. Bratton and the South Portland, Maine Police Department, under the direction of Chief Edward Googins.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
State Department Contractor to Pay $1.65 Million to Resolve Criminal and Civil Fraud AllegationsRead the Press Release
ALEXANDRIA, Va. – Coastal International Security, Inc., based in Upper Marlboro, Maryland, agreed to pay a total of $1.65 million to resolve criminal and civil allegations that the company defrauded the State Department during performance of a security contract and later concealed the fraud from contracting officials, and civil allegations that the company improperly obtained and used competitors’ pricing information to underbid competitors on government task orders.
The government’s investigation focused on the relationship between Marvin Hulsey, a former program manager for Coastal International Security, and Tony Chandler, a former contracting official of the State Department. According to court documents, Hulsey and Chandler conspired together to submit false invoices to the State Department for unallowable costs of nutritional supplements. Chandler, as an authorized distributor of the nutritional supplements, received commissions from the approximate $170,000 in fraudulent nutritional supplement billings. Independent of this scheme, Hulsey admitted to causing approximately $140,000 in additional fraudulent billings through a company owned by his wife.
The government discovered during its investigation that Curtis Wrenn, in his capacity as president of Coastal International Security, learned of Hulsey’s and Chandler’s nutritional supplement scheme. Wrenn knew that he had a responsibility under the Federal Acquisition Regulation to timely disclose to the government credible evidence of fraud, but instead intentionally omitted facts related to the fraud from a letter delivered to the State Department.
Chandler and Wrenn both pleaded guilty on June 12, 2015, and were both sentenced on Sept. 18, 2015. Chandler was sentenced to six months in prison, while Wrenn was sentenced to one year of probation for the false statement to the State Department. Hulsey pleaded guilty on July 24, 2015, and was sentenced on Oct. 30, 2015, to one year and one day in prison and two years of supervised release.
Under the terms of the agreement entered into between Coastal International Security and the United States to resolve the criminal allegations, the United States agreed not to bring criminal charges against the company related to the conduct that is the subject of the agreement in part because of the significant changes to the company’s ethics and compliance program. Coastal International Security has agreed to accept responsibility for the conduct of its former employees, continue its cooperation with federal investigators, pay a monetary penalty of $150,000 and maintain an effective ethics and compliance program, with particular attention to employee training, federal reporting requirements for suspected fraud, and whistleblower protection. The U.S. Attorney’s Office may seek to prosecute Coastal International Security for the admitted conduct of its employees, or to assess a further penalty of up to $500,000 if during the two year term of the criminal agreement, an executive management official commits federal crimes as outlined in the agreement, and the company fails to report the misconduct to the U.S. Attorney’s Office.
Coastal International Security simultaneously agreed to pay $1.5 million to resolve civil claims under the False Claims Act for the above conduct, as well as claims under the Procurement Integrity Act arising out of Coastal International Security’s knowledge and use of a competitor’s publicly unavailable bid proposal information. The competitor’s information allegedly enabled Coastal International Security to underbid the competition on bids that Coastal International Security made between Nov. 4, 2008, and Oct. 7, 2011, in connection with various Department of State task orders.
The civil claims settled by Coastal International Security and the United States are allegations only. There has been no determination of civil liability. The resolutions obtained were the result of parallel investigations by the criminal and civil divisions of the U.S. Attorney’s Office for the Eastern District of Virginia.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Steve A. Linick, Inspector General for the U.S. Department of State and Broadcasting Board of Governors; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the agreements were released. Special Assistant U.S. Attorney Brian D. Harrison and Assistant U.S. Attorney Grace L. Hill prosecuted the criminal case. Assistant U.S. Attorney Gerard Mene handled the civil case.
This case was investigated by the U.S. Department of State, Office of Inspector General (DOS-OIG) and the FBI’s Washington Field Office. Substantial assistance was provided by the Criminal Analysis Branch of the DOS-OIG.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-137 and 1:15-cr-150.
Southern Texas Man Pleads Guilty to Drug Conspiracy, Money Laundering Conspiracy, and Four Drug Distribution Counts While Serving Federal Sentence in USP MarionRead the Press Release
Joel Lopez, Jr., 37, pled guilty in federal district court yesterday afternoon to conspiracy to possess with intent to distribute and distribution of cocaine, methamphetamine, and marijuana, money laundering conspiracy, and four counts of distribution of methamphetamine, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Lopez was detained pending sentencing, which is scheduled for July 13, 2016, at 9:30 A.M. before the Honorable Nancy J. Rosenstengel, United States District Judge. Two of the distribution counts and the drug conspiracy count each carry a mandatory minimum sentence of ten years imprisonment up to life imprisonment followed by a minimum of five years on supervised release as well as a fine of up to $10,000,000 and a special assessment fee of $100. The other two distribution counts carry a mandatory minimum sentence of five years to no more than forty years imprisonment, no less than four years of supervised release, a fine up to $5,000,000 and a special assessment fee of $100 each. The money laundering conspiracy carries a maximum sentence of no more than twenty years imprisonment, a fine of $500,000, no more than three years of supervised release and $100 special assessment fee.
Facts revealed in open court indicated that in some time in or before May 2014, Lopez, who was an inmate at the United States Penitentiary Marion, in Williamson County, Illinois, passed to two fellow inmates the telephone number of a codefendant in Southern Texas who distributed drugs. This telephone number was then passed to others who purchased or agreed to purchase cocaine, methamphetamine, and marijuana from the codefendant. The purchasers wired through bank accounts or MoneyGram drug proceeds to the codefendant in Southern Texas, who provided some of the proceeds to Lopez’s family as payment for recruiting new customers. Law enforcement seized over ten kilograms of pure crystal methamphetamine, commonly referred to as "ice" in the investigation.
Evidence in support of this prosecution was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Agencies participating in this case include the Drug Enforcement Administration and the Internal Revenue Service, Criminal Investigations. This case was prosecuted by Assistant United States Attorney Monica A. Stump.
South Dakota Man Sentenced to 40 Years for Producing and Distributing Child PornographyRead the Press Release
A South Dakota man was sentenced today to 40 years in prison for producing and distributing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Randolph J. Seiler of the District of South Dakota.
Christopher R. Jansen, 35, of Selby, South Dakota, pleaded guilty on Nov. 17, 2015, to one count of sexual exploitation of a child and one count of distribution of material involving the sexual exploitation of minors. U.S. District Judge Roberto A. Lange of the District of South Dakota sentenced Jansen today and also ordered him to serve a lifetime term of supervised release.
In connection with his plea, Jansen, who is a lawyer, admitted that he sexually abused multiple minors, who were children of one of his clients, over a period of approximately two years and produced videos and photos of the abuse. Jansen also admitted that he was a member of an Internet website dedicated to the advertisement and distribution of child sexual exploitation material, through which he and others posted messages containing images of the sexual exploitation of children, including one of Jansen’s victims.
Jansen was arrested on July 29, 2014, following searches of his home and law office. On Sept. 25, 2015, Jansen was sentenced in Hughes County, South Dakota, to serve 50 years in prison for two counts of first degree rape for related conduct.
The FBI and the South Dakota Division of Criminal Investigation investigated the case with assistance from the Walworth County Sheriff’s Office and the Mobridge Police Department. Acting Assistant Deputy Chief Keith Becker of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Supervisory Assistant U.S. Attorney Tim Maher of the District of South Dakota prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
South Bay Resident Charged with Illegal Dumping in Wetlands and Other Protected WatersRead the Press Release
SAN FRANCISCO – Violations of the Federal Clean Water Act were filed last week against James Philip Lucero for the unpermitted discharge of pollutants into waters of the United States, including wetlands, announced Acting United States Attorney Brian J. Stretch, Environmental Protection Agency Acting Special Agent in Charge Jay Green, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and Alameda County District Attorney Nancy E. O’Malley.
In the indictment filed March 15, 2016, and unsealed this afternoon, a federal grand jury charged Lucero, 59, of Carmel, Calif., a self-described “dirt broker,” with illegally discharging pollutants into waters of the United States adjacent to Mowry Slough, part of the Don Edwards San Francisco Bay National Wildlife Refuge located in Newark, Calif. As a dirt-broker, Lucero is alleged to have charged a fee to contractors and trucking companies in exchange for providing open space to dump fill material, including construction debris. The defendant is alleged to have caused construction debris and fill material to be dumped on property containing federally-protected wetland and other waters of the United States, without applying for or obtaining a permit from either the U.S. Army Corps of Engineers or the Environmental Protection Agency. According to the two count indictment, beginning on or about June 2014 and extending through on or about September 8, 2014, Lucero, without a permit, caused dirt, soil and other materials to be discharged from a point source into waters of the United States, including 11.85 acres of wetlands and 1.33 acres of other waters. Lucero is charged with one count of unpermitted filling of wetlands, in violation of 33 U.S.C. §§ 1311, 1319(c)(2)(A) and 1344, and one count of the filling of other waters, in violation of the same statutes.
Lucero was arraigned this morning before U.S. Magistrate Judge Donna M. Ryu. He is next scheduled to appear on April 25, 2016, before U.S. District Judge Haywood S. Gilliam for an initial appearance.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the maximum statutory penalty for a violation of 33 U.S.C. §§ 1311, 1319(c)(2)(A) and 1344 is three years in prison and $50,000 fine. Additional fines, forfeitures, and a period of supervised release also may be imposed. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Philip J. Kearney is prosecuting the case with the assistance of paralegal Alycee Lane. The prosecution is the result of an investigation by the Environmental Protection Agency, the Federal Bureau of Investigation, the Alameda County District Attorney’s Office, and the Newark Police Department.
School Bus Driver Sentenced to 25 Years for Producing Child PornographyRead the Press Release
NORFOLK, Va. – Larry Carl Homan, 71, of Norfolk, was sentenced today to 300 months in prison and lifetime supervised release for production of child pornography.
Homan pleaded guilty on Dec. 21, 2015. According to court documents, in May 2015, a concerned parent complained to her daughter’s school that Homan, a school bus driver in Chesapeake, had acted inappropriately towards her daughter. A review of the surveillance footage from Homan’s school bus resulted in Homan being suspended without pay. The Chesapeake Police Department (CPD) became involved and executed a search warrant at Homan’s residence in Norfolk. A number of electronic devices were seized from Homan’s apartment. The CPD analyzed the electronic devices and found that Homan had been producing child pornography inside his apartment in Norfolk.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael Lamonea, Assistant Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Norfolk; Michael Goldsmith, Chief of Norfolk Police; and Col. K.L. Wright, Chief of Chesapeake Police, made the announcement after sentencing by Senior U.S. District Judge Robert G. Doumar. Assistant U.S. Attorney Elizabeth M. Yusi prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-129.
San Joaquin County District Attorney’s Office Receives Award for Its Contribution to the Mission of the Department of JusticeRead the Press Release
SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner is pleased to announce the 2015 winner of the Eastern District of California Outstanding Law Enforcement Agency Award for the Sacramento Division. This award is one of four awards presented annually to a law enforcement agency and an officer in each of the Sacramento and Fresno divisions of the Eastern District of California to recognize outstanding collaboration between federal, state and local law enforcement in addressing public safety issues in this region.
U.S. Attorney Wagner stated: “Our success was only possible because of the dedicated, hard-working staff of law enforcement agencies like Scott McDonald and Cheryl Mason. All successful prosecutions rely on good investigations. Without their professional attention to detail and dogged investigation, it would not have been possible to bring this defendant to justice. My office, the Eastern District, and San Joaquin County all owe a great debt to the District Attorney’s Office and the many skilled and dedicated people who work there.”
San Joaquin County District Attorney Tori Verber Salazar stated: “We are greatly appreciative of this award. It exemplifies the collaborative effort of our 220 employees with our law enforcement partners, like the U.S. Attorney’s Office, to make our communities safe.”
The 2015 Sacramento Division’s Outstanding Law Enforcement Agency Award goes to the San Joaquin County District Attorney’s Office for its work in the John Steven Keplinger case. Keplinger purported to sell used car engines online, took people’s money, and often never sent the engines or sent defective engines from junkyards. Working out of his house in Stockton, he had over 300 victims nationwide.
Before federal law enforcement became involved, the San Joaquin DA’s office, with Deputy District Attorney Scott McDonald and paralegal Cheryl Mason, did all they could to shut down the original website and find and shut down new websites he opened in order to continue his fraud. Their focus was always on the victims, many of whom were poor and were buying replacement engines because they could not afford a new car. When the FBI began investigating, McDonald and Mason connected them to the Bureau of Automotive Repair which had opened the investigation, and shared an extensive amount of victim complaint information collected from various agencies across the country. Throughout the time-consuming process, the San Joaquin County team of McDonald and Mason kept their focus on preventing Keplinger from committing further crimes. Eventually, he was sentenced to two years and three months in prison and a $100,000 fine.
Salem, Iowa Woman Sentenced to Thirty Months in Prison for Bank FraudRead the Press Release
DAVENPORT, IA – On March 18, 2016, Lori Kristine Bentler, 44, of Salem, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 30 months in federal prison for defrauding the M.H.I. Credit Union in Mount Pleasant, Iowa, announced Acting United States Attorney Kevin E. VanderSchel. Bentler was ordered to serve five years of supervised release following her prison term, pay $100 to the Crime Victims’ Fund, and pay $249,250.51 in restitution.
Bentler pleaded guilty to one count of bank fraud occurring on March 28, 2011. According to the plea agreement, on that date Bentler fraudulently funded a $30,000 loan to herself without approval from the credit union’s board of directors. Bentler also admitted that no later than on or about November 6, 2009, and ending on or about September 12, 2011, she devised a scheme and artifice to defraud M.H.I. Credit Union and to obtain funds and moneys under the custody and control of M.H.I. Credit Union by means of materially false and fraudulent pretenses, representations, and promises. Bentler fraudulently issued and refinanced several loans to herself, her sister, and her daughter, in some instances without the approval of the M.H.I. Credit Union board of directors and in other instances based on material misrepresentations or omissions. Bentler concealed many, if not all, of the unapproved loans from the board of directors and exposed M.H.I. Credit Union to a risk of loss on those loans.
The credit union’s deposits were, at all relevant times, insured by the National Credit Union Administration Board and the National Credit Union Insurance Fund. Bentler agreed with United States Attorney that her sentence should be between 18 months and 30 months, inclusive.
This matter was investigated by the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Rochester Man Charged with Possession of Contraband in Prison and Making False StatementsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned an indictment charging Hoeub Chan, 35, of Rochester, NY, with possession of contraband in prison and making false statements to the United States Marshal Service. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that according to the indictment, Chan, who was sentenced to federal prison in January 2016, smuggled Oxycodone and Dextroamphetamine into custody in the seams of his shirt, socks, and hidden in his shoes. The defendant made multiple false statements to deputies with the Marshal Service while being processed in which he denied possessing any contraband.
Chan was sentenced to federal prison on January 6, 2016 following his conviction for conspiracy to commit mail fraud. In that case, the defendant and his co-conspirators engaged in a scheme to defraud Rochester Electric and Gas by re-routing closed account payments. As a result of that scheme, Chan obtained over $72,000, which he was also ordered to repay.
Today’s indictment is the culmination of an investigation conducted by the United States Marshals Service, under the direction of Marshal Charles Salina.
Chan was arraigned this morning before U.S. Magistrate Judge Jonathan W. Feldman.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until proven guilty in a court of law.
Real Estate Brokers Imprisoned for Scheme to “Wash” Title to Million-Dollar San Diego HomesRead the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – March 21, 2016
SAN DIEGO – Brothers and former San Diego real estate brokers Adel Afkarian and Atef Afkarian were sentenced today to prison for their role in a fraudulent “debt elimination” scheme that purported to eliminate the mortgages on several million-dollar homes in San Diego.
U.S. District Judge John A. Houston sentenced Adel Afkarian to serve 18 months in custody and Atef Afkarian to serve 13 months. In addition to the time in custody, the brothers were both ordered to pay more than $5.5 million in restitution to the victims of the scheme.
To implement the scheme, the Afkarians identified underwater homeowners—including themselves—and began a process to make it appear as though the homeowners’ debts had been satisfied. To do so, they recorded fraudulent deeds that purported to extinguish the large mortgage loans encumbering each property. They then sold the properties to innocent purchasers, deceiving the buyers into paying the full purchase price to the Afkarians or their co-conspirators. The mortgage lenders, unaware of the fraudulent documents recorded on title or unable to prevent the sale in time, were left unpaid.
With regard to their own underwater home, the Afkarians pretended that $1.4 million in mortgage debt had vanished. They used the “debt elimination” method to successfully arrange the fraudulent sale of a total of four properties in and around San Diego, generating more than $4.3 million in proceeds which went directly into bank accounts owned by the brothers and their co-conspirators. In some cases, they sold this fraudulent “debt elimination” program to existing clients of their mortgage business.
In addition to the “debt elimination” scheme, Adel and Atef Afkarian also conspired to arrange fraudulent short sales for underwater clients through a simultaneous “double escrow” scheme. Rather than selling an underwater home at a pre-approved short sale price, the defendants arranged two simultaneous sales of the same property at two different sale prices, using a straw buyer as the intermediary and purported seller in the second transaction. This way, the short sale lender would believe that the property was being sold for initial first-escrow price, rather than the higher second-escrow price (which was in fact the arms-length market sales prices). The defendants and their co-conspirators would then pocket the difference, diverting money from the lenders.
The Afkarians each pleaded guilty in September 2013, admitting their participation in these schemes. As part of their guilty pleas, they also agreed to forfeit a home on Santa Fe Canyon Place, which they had purchased using approximately $715,000 in proceeds of the fraud, and an additional $388,000 recovered from bank accounts where they had transferred proceeds.
One of the Afkarians’ clients, Mehran Abazary, was also charged in connection with this case, and pleaded guilty on December 15, 2015. Abazary admitted that he owed more than $2 million in mortgage debt when he hired the Afkarians and their co-conspirators to help him “eliminate” this debt and sell the property. When the sale closed, Abazary received $250,000 in proceeds of the sale. Abazary pleaded guilty to filing a false tax return omitting to disclose this income to the Internal Revenue Service. He is scheduled to be sentenced by Judge Houston on September 6, 2016, at 8:30 am.
DEFENDANTS & CHARGES
Adel Afkarian, 13CR1469-JAH (1) Age: 42 Carlsbad, California
Atef Afkarian, 13CR1469-JAH (2) Age: 40 Slidell, Louisiana
Conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 371
Maximum Penalties: 5 years’ imprisonment, $250,000 fine or twice the pecuniary loss or gain, $100 special assessment, 3 years’ supervised release, restitution
ADDITIONAL DEFENDANT & CHARGES
Mehran Abazary, 15CR3073-JAH Age: 64 San Diego, CA
Subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1)
Maximum Penalties: 3 years’ imprisonment, $250,000 fine, $100 special assessment, 1 year supervised release, restitution
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Internal Revenue Service – Criminal Investigation
Orlando Pharmacist Convicted of Illegally Dispensing OxycodoneRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury found Valentine Okonkwo (54, Orlando) guilty of 1 count of conspiracy to distribute and dispense oxycodone outside the usual course of professional practice and without a legitimate medical purpose and 10 counts of dispensing and distributing oxycodone outside the usual course of professional practice and without a legitimate medical purpose. Okonkwo faces a maximum penalty of 20 years in federal prison on each count. His sentencing hearing has been set for June 22, 2016.
According to evidence presented during the trial, Okonkwo, a licensed pharmacist, dispensed more than 500,000 oxycodone pills during the timeframe of the conspiracy and collected over $1.3 million from illegal oxycodone sales. Okonkwo accepted fraudulent prescriptions from patients who had traveled long distances, and in groups, to get their oxycodone from his pharmacy, known as Avalon Park Pharmacy. The patients paid a premium, in cash, for the pain pills because they had fraudulent prescriptions and prescriptions from pill mill doctors. Avalon Park Pharmacy led the surrounding area in oxycodone distribution, including all of the major retail pharmacies. Many of the oxycodone pills were purchased by drug addicts and drug dealers who then sold the pills for up to $15 a piece on the streets. Okonkwo also had sex with several customers who had used fraudulent prescriptions at his pharmacy.
This case was investigated by the Drug Enforcement Administration. It is being prosecuted by Assistant United States Attorneys James D. Mandolfo and Nathan W. Hill.
North Carolina Resident Sentenced to Prison for Tax FraudRead the Press Release
A Charlotte, North Carolina, area resident was sentenced to 41 months in prison today for his involvement in a fraudulent tax return scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.
According to court documents and statements in court, in early 2011, Daniel Heggins, 44, and Joan Clark operated Guarantor Manufactures Inc. (GMI), a business that purported to help individuals who were in debt. Heggins and his co-conspirators, including Clark, prepared and filed false tax returns on behalf of GMI’s clients claiming fraudulent tax refunds from the Internal Revenue Service (IRS) in the amount of their clients’ debts. The intended loss of the conspiracy exceeded $4 million. Heggins also charged GMI’s clients bogus filing fees of $2,500 to $5,000 in order to prepare and file the fraudulent returns. Heggins and Clark pleaded guilty to conspiracy to defraud the United States in November 2015.
“While taxpayers are ultimately responsible for the information reported on their returns, they also are entitled to honest and accurate assistance from those paid to prepare their returns,” said Acting Assistant Attorney General Ciraolo. “Heggins and Clark took advantage of clients seeking such assistance, and used their fraudulent scheme to line their own pockets. The department will continue to work with our partners in the Internal Revenue Service to investigate, prosecute and incarcerate such individuals for their criminal conduct, and seek restitution for the victims.”
“As we are in the midst of the annual tax season, it is important for consumers to be cognizant of fraudsters who charge exorbitant fees to prepare tax returns and engage in the submission of fraudulent tax returns,” said U.S. Attorney Rose. “Taxpayers are urged to be wary of using tax return preparation businesses which make unusual or extreme promises and to exercise caution when selecting a tax preparation service.”
“During filing season, I’d like to encourage the taxpayers to heed the old warning, ‘Buyer beware,’” said Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation Division (IRS-CI), Charlotte Field Office. “Heggins and Clark perpetrated a scheme in which they offered assistance to clients and then victimized them, through their crimes. While the methods utilized by criminals may change, the constant is that we will be there to make sure they are brought to justice.”
In addition to the prison term, U.S. District Judge District Max O. Cogburn Jr. ordered Heggins to serve three years of supervised release and pay $24,325 in restitution to victims of the fraud, which included former clients and the IRS. Clark was sentenced in February to 20 months in prison for her involvement in the fraudulent refund scheme and for a separate scheme in which she filed fraudulent tax returns in the name of trusts.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rose commended special agents of IRS-Criminal Investigation and the FBI, who investigated the case and Assistant U.S. Attorney Mike Savage of the Western District of North Carolina and Trial Attorney Todd Kostyshak of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts can be found on the division’s website.
North Carolina Resident Sentenced to Prison for Tax FraudRead the Press Release
CHARLOTTE, N.C. – A Charlotte, North Carolina, area resident was sentenced to 41 months in prison today for his involvement in a fraudulent tax return scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.
According to court documents and statements in court, in early 2011, Daniel Heggins, 44, and Joan Clark operated Guarantor Manufactures Inc. (GMI), a business that purported to help individuals who were in debt. Heggins and his co-conspirators, including Clark, prepared and filed false tax returns on behalf of GMI’s clients claiming fraudulent tax refunds from the Internal Revenue Service (IRS) in the amount of their clients’ debts. The intended loss of the conspiracy exceeded $4 million. Heggins also charged GMI’s clients bogus filing fees of $2,500 to $5,000 in order to prepare and file the fraudulent returns. Heggins and Clark pleaded guilty to conspiracy to defraud the United States in November 2015.
“While taxpayers are ultimately responsible for the information reported on their returns, they also are entitled to honest and accurate assistance from those paid to prepare their returns,” said Acting Assistant Attorney General Ciraolo. “Heggins and Clark took advantage of clients seeking such assistance, and used their fraudulent scheme to line their own pockets. The Department will continue to work with our partners in the Internal Revenue Service to investigate, prosecute and incarcerate such individuals for their criminal conduct, and seek restitution for the victims.”
“As we are in the midst of the annual tax season, it is important for consumers to be cognizant of fraudsters who charge exorbitant fees to prepare tax returns and engage in the submission of fraudulent tax returns,” said U.S. Attorney Rose. “Taxpayers are urged to be wary of using tax return preparation businesses which make unusual or extreme promises and to exercise caution when selecting a tax preparation service.”
“During filing season, I’d like to encourage the taxpayers to heed the old warning, ‘Buyer beware,’” said Special Agent in Charge Thomas J. Holloman III of IRS Criminal Investigation Division (IRS-CI), Charlotte Field Office. “Heggins and Clark perpetrated a scheme in which they offered assistance to clients and then victimized them, through their crimes. While the methods utilized by criminals may change, the constant is that we will be there to make sure they are brought to justice.”
In addition to the prison term, U.S. District Judge District Max O. Cogburn Jr. ordered Heggins to serve three years of supervised release and pay $ 24,325 in restitution to victims of the fraud, which included former clients and the IRS. Clark was sentenced in February to 20 months in prison for her involvement in the fraudulent refund scheme and for a separate scheme in which she filed fraudulent tax returns in the name of trusts.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rose commended special agents of IRS-Criminal Investigation and the FBI, who investigated the case and Assistant U.S. Attorney Mike Savage of the Western District of North Carolina and Trial Attorney Todd Kostyshak of the Tax Division, who prosecuted the case.
New Smart on Crime Data Reveals Federal Prosecutors Are Focused on More Significant Drug Cases and Fewer Mandatory Minimums for Drug DefendantsRead the Press Release
The Justice Department today revealed new data from its innovative Smart on Crime Initiative that show charging decisions by federal prosecutors in fiscal year 2015 resulted in prosecutors' focusing on more serious drug cases and fewer indictments carrying a mandatory minimum. Meanwhile, prosecutions of high-level drug defendants have risen and cooperation and plea rates remained effectively the same.
“The promise of Smart on Crime is showing impressive results,” said Deputy Attorney General Sally Q. Yates. “Federal prosecutors are consistently using their discretion to focus our federal resources on the most serious cases and to ensure that we reserve harsh mandatory minimum sentence for the most dangerous offenders. By ensuring fair and proportional sentencing, these policies engender greater trust in our criminal justice system, save federal resources and make our communities more safe. "
As part of the department’s Smart on Crime Initiative – announced in August 2013 – federal prosecutors were instructed to ensure the department’s finite resources are devoted to the most important law enforcement priorities implicating substantial federal interests and to promote fair enforcement of our laws, especially for low-level, non-violent drug offenders.
Since that announcement, prosecutions of serious drug defendants – such as those involving a weapon or leaders of a conspiracy – have increased, and there has been virtually no change in the rates at which defendants cooperate with the government or plead guilty. During the same time, the department has seen steady reductions in charges that trigger mandatory minimums and fewer federal drug charges for low-level, non-violent offenders.
The FY2015 data, provided by the Sentencing Commission, shows:
- Federal prosecutors are being more selective in their drug prosecutions. Even though drug cases are fewer in number, they are more focused on the most serious defendants. There was a 14 percent drop in drug cases brought between FY2012 and FY2014 and an additional 6 percent drop from FY2014 to FY2015, showing a steady downward trend that resulted in nearly 5,000 fewer drug cases between FY2012 and FY2015.
- At the same time, the percentage of those drug defendants with a weapon rose (from 15.1 percent of cases in FY2012 to 16.4 percent of cases in FY2014 and then to 17.3 percent of cases in FY2015). Similarly, the percentage of defendants with an aggravating role steadily increased (from 6.6 percent in FY2012 to 7.1 percent in 2014 and 7.8 percent in 2015).
- Just as prosecutors are focusing on the most serious defendants, they are moving away from low-level offenders and letting state prosecutors take those cases, if they so choose. That fact is clear because prosecutors are charging defendants who qualify for safety valve (by definition, lower-level defendants) less frequently – from 37 percent of cases in 2011 to 32 percent in 2015.
- Federal prosecutors are charging mandatory minimums significantly less frequently. In FY 2012, 38.5 percent of all drug cases had no mandatory minimum, whereas post-Smart on Crime, that number rose to 48.7 percent in FY2014 – the first full year that Smart on Crime was implemented – and then up again to 53.1 percent in FY2015 – meaning less than half of all drug cases involved charges carrying a mandatory minimum.
- Finally, drug defendants are still cooperating with the government to make cases against others. The percentage of motions denoting substantial assistance, or cooperation, from defendants filed in drug cases have remained the same over time. They were filed in 23.1 percent of drug cases in FY2012 and in 23.9 percent of drug cases in FY2015. Guilty plea rates have stayed at roughly 97 percent consistently.
New Jersey woman sentenced for unlawful possession of firearmsRead the Press Release
WHEELING, WEST VIRGINIA – Tricia Renee Thames, 36, a Wheeling, West Virginia native currently residing in Swedesboro, New Jersey, was sentenced today to 24 months in prison for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.
Thames pled guilty in January 2016 to an Information charging her with one count of “Felon in Possession of a Firearm.” Thames, who has a felony conviction for “Manslaughter” from the State of Oklahoma, was discovered to be in possession of a .357 caliber revolver and a .22 caliber pistol in Ohio County, West Virginia in 2015.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Nevada Man Sentenced to 42 Months in Prison for Methamphetamine DistributionRead the Press Release
BOISE - Diego Alejandro Alcantar-Armenta, 29, of Elko, Nevada, was sentenced today in United States District Court to 42 months in prison for conspiracy to distribute methamphetamine, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Alcantar-Armenta to forfeit $8,200 in drug proceeds. He pleaded guilty to the charge on January 11, 2016.
According to evidence presented in court, Alcantar-Armenta, who was living in Elko, Nevada, conspired to distribute methamphetamine in the state of Idaho between July 24, 2015, and September 8, 2015. The defendant and his co-conspirators arranged for three separate deliveries of methamphetamine to the Boise area. Investigating officers discovered the conspiracy and were able to intervene.
The case was investigated by the Drug Enforcement Administration, Ada County Sheriff’s Office, Elmore County Sheriff’s Office, Owyhee County Sheriff’s Office, and the Elko Combined Narcotic Unit of Elko, Nevada.
The case was prosecuted by the Special Assistant U.S. Attorney hired by the Ada County Prosecuting Attorney’s Office and the Idaho High Intensity Drug Trafficking Area Board. The Idaho High Intensity Drug Trafficking Board is a collaboration of local law enforcement drug task forces and prosecuting agencies dedicated to addressing regional drug trafficking organizations that operate in Ada, Canyon, and Malheur County.
Muscatine Man Sentenced to Prison for Child Pornography OffensesRead the Press Release
DAVENPORT, IA – On March 18, 2016, Dustin Wayne Rogers, 30, of Muscatine, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 228 months in federal prison on three counts of Production of Child Pornography and one count of Attempted Production of Child Pornography, and 120 months on one count of Possession of Child Pornography announced Acting United States Attorney Kevin E. VanderSchel. The sentences were ordered to be served concurrently, meaning all at the same time. Rogers was ordered to serve five years of supervised release following his prison term, pay $500 to the Crime Victims’ Fund, and forfeit the items used to obtain, produce, and store the contraband images.
Rogers pleaded guilty to the five counts admitting in 2013 and 2014 he contacted four different minors, all under 16 years of age at the time, through social media cites on the Internet posing as a minor himself. Rogers asked these minors to produce images of themselves naked and requested depictions of sexual acts from at least one of the minors. During interactions with one of the minors, Rogers mentioned that they engage in sexual activities together. On May 22, 2014, police searched Rogers’s residence in Muscatine and found that he possessed child pornography on his iPhone.
This matter was investigated by the Muscatine Police Department and the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Mountrail County Man Sentenced for Possession of Child PornographyRead the Press Release
BISMARCK - U. S. Attorney Christopher C. Myers announced that on March 21, 2016, Timothy Howell, 49, Mountrail County, ND, was sentenced before U. S. District Judge Daniel L. Hovland to serve 12 years and 7 months in prison for Possession of Materials Involving the Sexual Exploitation of Minors. Judge Hovland also ordered Howell to serve a lifetime of supervised release, pay $500 in restitution, and also pay a $100 special assessment to the Crime Victims’ Fund.
This case came to the attention of law enforcement when a ND Bureau of Criminal Investigation special agent discovered that a computer geographically located in ND was sharing child pornography in a peer-to-peer network; that computer was later identified as belonging to Howell. Through forensic examination it was discovered that there were 8,968 images and videos of child pornography. Howell has a prior conviction of child pornography in Dec. 2009, to which he was sentenced to 57 months imprisonment and 10 years of supervised release.
This case was investigated by the Department of Homeland Security - Homeland Security Investigations, ND Bureau of Criminal Investigation, and the Montréal County Sheriff’s Department.
Assistant U. S. Attorney Gary Delorme prosecuted the case
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by U.S. Attorney Offices throughout the nation, Project Safe Childhood, in conjunction with Internet Crimes Against Children Task Force (ICAC), help federal, state, and local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communications systems, and/or computer technology to sexually exploit children. The ICAC Program is a national network of 61 coordinated task forces engaging in proactive investigations, forensic investigations, and criminal prosecutions. Project Safe Childhood also helps to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Mission Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on March 21, 2016, by United States District Court Judge Roberto A. Lange.
Stephen Paul Jordan, age 26, was sentenced to 60 months in custody, 4 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Jordan was initially indicted for Conspiracy to Distribute a Controlled Substance by a federal grand jury on July 21, 2015. A superseding indictment was filed on October 20, 2015. Jordan pled guilty on January 6, 2016, to distributing 50 grams or more of methamphetamine.
During 2014 and 2015, Jordan was actively selling methamphetamine on the Rosebud Sioux Indian Reservation in South Dakota. Jordan had individuals selling methamphetamine for him and he sold methamphetamine for others. Jordan admitted he was present for and participated in the sale of at least 50 grams of methamphetamine. During a search warrant executed in April of 2015 at the home in which he was residing in Mission, South Dakota, officers found Jordan, another co-conspirator, several bags of methamphetamine, marihuana, over $1,600 in U.S. currency, scales, numerous items of drug paraphernalia and a .22 caliber rifle.
This case was investigated by the Northern Plains Safe Trails Drug Enforcement Task Force and Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorneys Ted L. McBride and SaraBeth Donovan prosecuted the case.
Jordan was immediately turned over to the custody of the U.S. Marshals Service to begin serving his sentence.
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Mineral Springs Man Arraigned for Making Threats by MailRead the Press Release
Texarkana, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Maverick Dean Bryan, age 55, of Mineral Springs, Arkansas, appeared for arraignment today on seven counts of mailing threatening communications. The arraignment hearing was before Judge Caroline M. Craven in the United States District Court in Texarkana.
Bryan was indicted by a federal grand jury on all seven counts on March 16, 2016. The file marked indictment states that Bryan mailed letters to the mayors of seven different cities within the state of Arkansas containing a threat to injure said mayors. The detention hearing for Bryan has been set for Monday, March 28 at 10:00 a.m.
This case is being investigated by the Federal Bureau of Investigation, the United States Postal Inspection Service, and the Howard County Sheriff’s Office. Assistant United States Attorney David Harris is prosecuting the case for the United States.
The charges in the indictment are only allegations. A person is presumed innocent unless or until he or she is proven guilty beyond a reasonable doubt in a court of law.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Miami Man Pleads Guilty to Multimillion-Dollar Scheme to Defraud Commercial Lenders and U.S. Export-Import BankRead the Press Release
A Miami man pleaded guilty today for his role in a scheme to defraud two commercial lenders and the Export-Import Bank of the United States (EXIM) out of more than $11 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Inspector General Michael McCarthy of EXIM made the announcement.
Guillermo A. Sanchez-Badia, 61, pleaded today before U.S. District Judge Joan A. Lenard of the Southern District of Florida in Miami to one count of conspiracy to commit wire fraud, one count of wire fraud and one count of conspiracy to commit money laundering. Sentencing is scheduled for June 3 before Judge Lenard.
According to admissions made as part of his plea agreement, from 2007 through 2012, Sanchez and his co-conspirators utilized companies they controlled to create fictitious invoices for sales of merchandise that never occurred. These invoices were sold to two Miami-area commercial lenders in a process called “factoring,” which allowed the conspirators to receive cash for approximately 90 percent of the value of the merchandise listed on the fake invoices, according to the plea. Sanchez admitted that, in order to continue the scheme, he and his co-conspirators created additional fictitious invoices, transferred the funds they received through numerous bank accounts under their control and, in a Ponzi-style scheme, used a portion of the new proceeds to pay off prior factored invoices.
Sanchez admitted that when the Miami lenders refused to extend further credit, he and his co-conspirators created false invoices and shipping documents to obtain a loan guaranteed by the EXIM. Rather than acquiring, selling and shipping American manufactured goods as required for an EXIM guaranteed loan, Sanchez and his co-conspirators used the loan proceeds to pay off earlier factored invoices, thereby extending the scheme, and kept the balance of the loan proceeds for themselves, Sanchez admitted. The factoring loans and the EXIM-guaranteed loan ultimately defaulted, causing more than $11 million dollars in losses to the lenders and the United States, according to the plea.
Five other individuals have been convicted for their roles in this scheme. Isabel C. Sanchez, 36, of Miami, the daughter of Sanchez-Badia, and Gustavo Giral, 38, of Miami, who were charged in the same indictment as Sanchez-Badia, pleaded guilty on Feb. 26, 2016, for their participation in this scheme to defraud, and will be sentenced on May 13, 2016. Isabel Sanchez created the false sales and shipping documents and arranged for the transfer of criminal proceeds through over 50 bank accounts. Giral assisted in circulating the fraudulent documents and in converting loan proceeds to currency, facilitating the money-laundering concealment by making the source of funds more difficult to trace. Freddy Moreno-Beltran, 43, of Bogota, Colombia; Ricardo Beato, 62, of Miami; and Jorge Amad, 48, of Miramar, Florida, were separately charged and have each pleaded guilty for their roles in the scheme. According to admissions in their plea agreements, Moreno-Beltran owned Clientric, a company in Colombia, which purportedly purchased goods from companies that the defendants controlled. Beato and Amad owned Approach Technologies International, a company offering call center software. The conspirators admitted that they told the EXIM that Approach Technologies International had sold more than $1 million in American manufactured software and equipment to Clientric, which was false, in order to obtain an EXIM-guaranteed loan. Moreno-Beltran and Beato were each sentenced to 12 months and one day in prison and ordered to pay $1,951,643.05 in restitution.
Ultimately, the EXIM-guaranteed loan defaulted, causing a loss to the United States of nearly $2 million.
The EXIM Office of Inspector General investigated the case, and Senior Litigation Counsel Patrick Donley and Trial Attorney William Bowne of the Criminal Division’s Fraud Section prosecuted the case.
Martville, New York Man Sentenced for Child Pornography ChargesRead the Press Release
SYRACUSE, NEW YORK – Kenneth Burghardt, 44, of Martville, New York was sentenced today to serve 262 months in prison and a lifetime term of supervised release in connection with his previous guilty pleas to all ten counts of an indictment charging him with receipt and distribution of images of minors engaged in sexually explicit conduct, announced United States Attorney Richard S. Hartunian. The defendant was serving a federal supervised release term from a 2008 federal court child exploitation offense at the time he committed the crimes for which he was sentenced today1. For violating the conditions of his 2008 term of supervised term, Burghardt was sentenced to an additional 60 months in prison to be served consecutively to the 262 month sentence. He will also be required to register as a sex offender in connection with these convictions.
The evidence in the case showed that Kenneth Burghardt possessed a mobile telephone at his home on February 24, 2015 when he was visited by U.S. Probation officers who heard its ringtone. The Probation officers located and seized the mobile telephone, which was found to contain 1,437 images and 28 video files containing child pornography. Additional images of child pornography were also located on a computer used by the defendant. The conditions of supervised release imposed as part of Burghardt’s 2008 conviction prohibited from him possessing a mobile phone or computer without the permission of the Court and permitted Probation Officers to search such devices.
This case was investigated by United States Probation Department, Northern District of New York, and the Federal Bureau of Investigation ("FBI") Albany Division, Syracuse Resident Agency and was prosecuted by Assistant U.S. Attorney Lisa Fletcher.
Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
1 Kenneth Burghardt pled guilty in 2008 and was sentenced in 2009 to serve 87 months imprisonment, a lifetime term of supervised release, and required him to register as a sex offender.
Manhattan U.S. Attorney Announces Arrest of Turkish National for Conspiring to Evade U.S. Sanctions Against Iran, Money Laundering, and Bank FraudRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, John P. Carlin, Assistant Attorney General for National Security, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an indictment against three individuals in connection with engaging in hundreds of millions of dollars’ worth of transactions on behalf of the Government of Iran and other Iranian entities, which were barred by United States sanctions, laundering the proceeds of those illegal transactions, and defrauding several financial institutions by concealing the true nature of these transactions. REZA ZARRAB, a/k/a “Riza Sarraf,” CAMELIA JAMSHIDY, a/k/a “Kamelia Jamshidy,” and HOSSEIN NAJAFZADEH are charged with orchestrating fraudulent transactions that were intended to hide the fact that the transactions were for the benefit of the Government of Iran or other sanctioned Iranian entities and to launder the proceeds of that illegal activity. The case is assigned to United States District Judge Richard M. Berman.
ZARRAB was arrested on March 19, 2016, and was presented in federal court in Miami, Florida, today. JAMSHIDY and NAJAFZADEH remain at large.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, these defendants conspired for years to violate and evade United States sanctions against Iran and Iranian entities. By allegedly laundering money through institutions around the world, Reza Zarrab, Camelia Jamshidy, and Hossein Najafzadeh undermined the U.S. sanctions regime imposed against Iran, and committed federal crimes.”
Assistant Attorney General John P. Carlin stated: “According to charges in the indictment, Zarrab, Jamshidy and Najafzadeh circumvented U.S. sanctions by conducting millions of dollars-worth of transactions on behalf of the Iranian government and Iranian businesses. These alleged violations, as well as the subsequent efforts taken to cover up these illicit actions, undermined U.S. laws designed to protect national security interests. The National Security Division will continue to vigorously pursue and bring to justice those who seek to violate U.S. sanctions.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “For almost five years, from 2010 to 2015, the defendants allegedly conspired to thwart U.S. and international economic sanctions against Iran by concealing financial transactions that were on behalf of Iranian entities. The charges announced today should send a message to those who try to hide who are their true business partners. We appreciate the assistance of the FBI’s Miami Office with this case.”
According to the allegations contained in the Indictment[1] unsealed today in Manhattan federal court:
Beginning in 1979, the President found that the situation in Iran constituted an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with the threat. Consistent with that designation, the United States has instituted a host of economic sanctions against Iran and Iranian entities pursuant to the International Emergency Economic Powers Act (the “IEEPA”). This sanctions regime prohibits, among other things, financial transactions involving the United States or United States persons that are intended for the Government or Iran, or specified Iranian-related entities.
Between at least in or about 2010 and in or about 2015, ZARRAB, JAMSHIDY, and NAJAFZADEH conspired to conduct international financial transactions on behalf of and for the benefit of, among others, Iranian business, the Iranian government, and entities owned or controlled by the Iranian government. Among the beneficiaries of these scheme were Bank Mellat, an Iranian government-owned bank designated, during the time of the charged offenses, by the United States Department of the Treasury, Office of Foreign Assets Control (“OFAC”), as a Specially Designated National (“SDN”) under the Iranian Transactions and Sanctions Regulations, the Iranian Financial Sanctions Regulations, and the Weapons of Mass Destruction Proliferators Sanctions Regulations; Mellat Exchange, an Iranian money services business owned and controlled by Bank Mellat; the National Iranian Oil Company (“NIOC”), identified during the time of the charged offenses by OFAC as an agent or affiliate of Iran’s Islamic Revolutionary Guard Corp (“IRGC”); the Naftiran Intertrade Company Ltd. (“NICO”), Naftiran Intertrade Company Sarl (“NICO Sarl”), and Hong Kong Intertrade Company (HKICO), companies located in the United Kingdom, Switzerland, and Hong Kong that were acting on behalf of NIOC; and the MAPNA Group, an Iranian construction and power plant company. Bank Mellat, NIOC, NICO Sarl, NICO, and HKICO are no longer designated as SDNs and NIOC is no longer identified as an agent or affiliate of the IRGC, though these entities remain “blocked parties,” with whom U.S. persons continue to be prohibited generally from engaging in unlicensed transactions or dealings.
The scheme was part of an intentional effort to assist the Government of Iran in evading the effects of United States and international economic sanctions. For example, on or about December 3, 2011, ZARRAB and NAJAFZADEH received a draft letter in Farsi prepared for ZARRAB’s signature and addressed to the General Manager of the Central Bank of Iran. The letter stated, in part, that “[t]he role of the Supreme Leader and the esteemed officials and employees of Markazi Bank [the Central Bank of Iran] play against the sanctions, wisely neutralizes the sanctions and even turns them into opportunities by using specialized methods.” The letter goes on to state, in part, “[i]t is not secret that the trend is moving towards intensifying and increasing the sanctions, and since the wise leader of the Islamic Revolution of Iran has announced this to be the year of the Economic Jihad, the Zarrab family, which has had a half a century of experience in foreign exchange, . . . considers it to be our national and moral duty to declare our willingness to participate in any kind of cooperation in order to implement monetary and foreign exchange anti-sanction policies . . . .”
ZARRAB, JAMSHIDY, NAJAFZADEH, and their co-conspirators used an international network of companies located in Iran, Turkey, and elsewhere to conceal from U.S. banks, OFAC, and others that the transactions were on behalf of and for the benefit of Iranian entities. This network of companies includes Royal Holding A.S., a holding company in Turkey; Durak Doviz Exchange, a money services business in Turkey; Al Nafees Exchange, a money services business; Royal Emerald Investments; Asi Kiymetli Madenler Turizm Otom, a company located in Turkey; ECB Kuyumculuk Ic Vedis Sanayi Ticaret Limited Sirketi, a company located in Turkey; Gunes General Trading LLC; and others. As a result of this scheme, the co-conspirators induced U.S. banks to unknowingly process international financial transactions in violation of the IEEPA.
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ZARRAB, 33, is a resident of Turkey is an Iranian-Turkish citizen. JAMSHIDY, 29, is a citizen of Iran. NAJAFZADEH, 65, is a citizen of Iran. Each defendant is charged with conspiracy to defraud the United States, which carries a maximum sentence of five years in prison; conspiracy to violate the IEEPA, which carries a maximum sentence of 20 years in prison; conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; and conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and the Department of Justice, National Security Division, Counterintelligence and Export Section.
The prosecution of this case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael Lockard, Emil Bove, and Sidhardha Kamaraju are in charge of the prosecution. Assistant United States Attorney Jaimie Nawaday is principally responsible for the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Man Sentenced to More Than Eight Years in Prison for two Fraud Schemes, Including one that Cost Verizon $17 MillionRead the Press Release
Assistant U. S. Attorneys Joseph Green (619) 546-6955 and Jennifer Resnik (213) 894-6595
NEWS RELEASE SUMMARY – March 21, 2016
SAN DIEGO – The owner of a Glendale-based ride-sharing business was sentenced in federal court today to more than eight years in prison in two separate fraud cases, including one involving the sale of more than 30,000 Apple iPhones fraudulently obtained from Verizon Wireless at substantially discounted prices.
Karen “Kevin” Galstian, 38, of Chatsworth, California, was sentenced by U.S. District Judge Barry Ted Moskowitz to 100 months in the scheme against Verizon Wireless that generated illegal profits of more than $13 million, and 87 months for defrauding Bank of America out of almost $700,000. The sentences are to run concurrently.
Judge Moskowitz also ordered Galstain to pay $17 million in restitution to Verizon and more than $200,000 in restitution to Bank of America.
Galstian pleaded guilty in November in San Diego to one count of wire fraud, admitting that he committed the offense while on pre-trial release in the case involving Bank of America. In that case, Galstian pleaded guilty in January 2014 to bank fraud.
As part of the scheme involving the iPhones, Galstian admitted that he used his company, Toro Ride, Inc., to induce Verizon Wireless to provide the business with more than 30,000 iPhones at a substantial discount. He purchased most of the mobile phones that usually sell for more than $500 for only 99 cents each – in connection with a two-year contract.
Galstian claimed that the phones would be used by drivers for Toro Ride’s ride-sharing service and that Toro Ride, which had only been operating in the Los Angeles area, was poised to expand nationwide. Galstian falsely told Verizon that Toro Ride had received $20 million from investors. When he brokered the deal with Verizon last year, Galstian failed to disclose the he was awaiting sentencing in the bank fraud case and thus would be incarcerated and unavailable to lead the company in the expansion.
As Verizon provided the iPhones that supposedly would be used by Toro Ride’s drivers, Galstian sold the vast majority of the devices to companies engaged in the international re-sale of consumer electronics. Thousands of the iPhones that Verizon shipped to Toro Ride were never used on its network and instead were activated in countries such as Vietnam, Iraq, China and Saudi Arabia.
Galstian fraudulently convinced Verizon to provide him with iPhones worth more than $19.4 million. In less than six months, Galstian generated illegal proceeds of more than $13 million by re-selling the iPhones. Toro Ride used some of the illicit proceeds derived from iPhone sales to make required monthly payments to Verizon, which enabled Galstian to continue to order thousands of additional iPhones.
In the bank fraud scheme, Galstian orchestrated a conspiracy to defraud Bank of America of approximately $689,000. As part of the scheme, members of the conspiracy opened over 90 accounts at Bank of America and engaged in a series of transactions that allowed them withdraw funds before Bank of America learned that there were not sufficient funds in the target accounts to cover the withdrawals.
In yet another scheme, Galstain admitted to cashing checks drawn on accounts in which fraudulently-obtained tax returns had been deposited.
Galstian used approximately $2.5 million of the proceeds from the Verizon fraud to purchase several properties, including a penthouse condominium in the Palms Casino in Las Vegas, and a Mercedes S550. The court ordered the forfeiture of various assets obtained by Galstian through the fraud scheme, including real properties in Northridge, Sherman Oaks, Tujunga and Las Vegas, as well as more than $200,000 seized from bank accounts and a number of vehicles.
DEFENDANTS
Karen “Kevin” Galstian Age: 38 Newport Beach, CA
SUMMARY OF CHARGES Case Number 15cr2509
15cr2509-BTM (Verizon iPhone scheme)
Wire Fraud, 18 USC 1343; Commission of an Offense While on Release, 18 U.S.C. 3147
Max penalties: 30 years prison, a fine in the amount of twice the gross gain or loss resulting from the offense, $100 special assessment, 3 years supervised release
SUMMARY OF CHARGES Case Number 13cr3481
13cr3481-BTM (Bank of America scheme)
Conspiracy to Commit Bank Fraud, 18 U.S.C. 1349
Max penalties: 30 years prison, $1,000,00 fine, $100 special assessment, 3 years supervised release
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
Louisville Daycare Owner/Operator Guilty of Fraud in Seeking Child Care Payments from Kentucky AgencyRead the Press Release
Lottie Carisa Burgos, former owner of ABC Village Daycare, falsified daycare attendance figures and qualifications of daycare workers
Agreed to pay over $1.4 million in restitution
LOUISVILLE, Ky. –United States Attorney John E. Kuhn, Jr. announced today the guilty plea of a former Louisville daycare owner to charges of wire fraud and money laundering and an agreement by the defendant to pay $1,424,929.00 in restitution to the victim agency.
Lottie Carisa Burgos, the former owner and operator of ABC Village Daycare, pleaded guilty in United States District Court, before District Judge Greg N. Stivers, to 18 counts of an indictment returned by a federal grand jury on July 16, 2014.
“In committing this fraud, Ms. Burgos not only took taxpayer money intended to assist economically disadvantaged parents with childcare costs, but also placed infants and toddlers in harm’s way,” stated United States Attorney John Kuhn. “With this prosecution, we are protecting children and recovering stolen taxpayer money. I thank the Kentucky Cabinet for Health and Family Services and the Federal Bureau of Investigation for their work on this case.”
Burgos operated ABC Village Daycare at two locations, 1801 West Market Street, Louisville, Kentucky, and 2823 7th Street Road, Louisville, Kentucky. According to the plea agreement, Burgos or others acting at her direction falsified a wide range of information which was a condition of payment for child care services from Kentucky’s Department for Community Based Services. The Department for Community Based Services provides child care benefits to low-income working parents and guardians. Burgos or others acting at her direction falsified the following information: high school diplomas which are a requirement of child care staff with supervisory authority over minors; negative tuberculosis tests and CPR certificates of ABC Village Daycare employees; the employment status of parents; the number of children who attended the daycare centers; and the number of days children attended the daycare centers.
Further, Burgos committed wire fraud on occasions ranging from January 1, 2011, through March 31, 2013. The fraud is associated with payments from the Kentucky Department for Community Based Services totaling $275,576. The total loss was $1,424,929.00.
Burgos also pleaded guilty to six counts of money laundering. Burgos engaged in various financial transactions with money derived from her wire-fraud scheme on six different occasions ranging from September 2011 through May 2012.
Burgos faces a maximum sentence of 300 years in prison, a maximum fine of $4,500,000, and up to 3 years of supervised release. Sentencing is scheduled before Judge Stivers on June 9, 2016, in Louisville.
This case is being prosecuted by Assistant United States Attorney David Weiser and was investigated by the Kentucky Cabinet for Health and Family Services and the Federal Bureau of Investigation.
Leader of Scheme that Embezzled $8 Million from Commercial Laundry associated with Luxury Jeans Pleads GuiltyRead the Press Release
LOS ANGELES – An East Los Angeles man who oversaw a scheme that embezzled more than $8 million from an industrial launderer that provided finishing services for Citizens of Humanity, a manufacturer of high-end designer jeans, pleaded guilty this morning to federal charges.
Luis Mariano Rodriguez, 48, of East Los Angeles, who was the president of the Gardena-based CM Laundry, LLC, pleaded guilty today to one count of mail fraud.
Rodriguez admitted in court today that he and three other businessmen participated in a scheme that submitted fraudulent invoices to CM Laundry, which paid the bogus bills, with the proceeds being shared by the four men.
According to court documents, the invoices sent to CM Laundry were fraudulent in at least two ways. First, the invoices included fictitious and inflated charges. Second, the invoices were issued by companies operated by Rodriguez’s associates, which served to conceal Rodriguez’s role in the scheme.
Rodriguez admitted that he sent e-mails to two of his co-schemers that gave them detailed instruction on what information to include on each of the fraudulent invoices that were submitted to CM Laundry. At Rodriguez’s behest, the third associate established a fictitious business name (dba) for K&R Industrial Supplies, and Rodriguez used this dba to submit other fictitious and inflated invoices to CM Laundry.
“This defendant victimized the very business that had entrusted him to lead it,” said United States Attorney Eileen M. Decker. “His fraud scheme, motivated by insatiable greed, threatened the viability of the victim company and the livelihood of its employees. Today’s guilty plea demonstrates the Department of Justice’s continued commitment to protecting American businesses from internal and external threats.”
Rodriguez admitted that an industrial supply company in Riverside, FI Products, billed CM Laundry for over $3.6 million and transferred approximately $2.3 million of the proceeds to Rodriguez and a company he owned, Genesis Electronics, Inc.
The Rancho Palos Verdes-based H&T Industrial Products, which was owned by another co-schemer, billed CM Laundry for over $5.5 million and transferred approximately $3.6 million to Rodriguez and Genesis, according to court documents.
Fraudulent bills from K&R industrial supplies amounted to approximately $639,939, of which approximately $493,617 was transferred to Rodriguez. As he admitted in court, Rodriguez generally kept approximately 75 percent of the proceeds generated by the false invoice scheme.
Rodriguez pleaded guilty before United States District Judge Beverly Reid O’Connell, who is scheduled to sentence the defendant on June 20. As a result of today’s guilty plea, Rodriguez faces a statutory maximum sentence of 20 years in federal prison.
In related proceedings, Terry Jay Mink, 62, of Rancho Palos Verdes, the owner of H&T Industrial Products, pleaded guilty to conspiracy to commit mail fraud on February 22. Mink faces a statutory maximum sentence of five years in prison when he is sentenced by Judge O’Connell on May 16.
Rene Exequiel Bautista, 43, of Sylmar, the owner of the company used in the scheme under the dba “K&R Industrial Supplies,” has agreed to plead guilty to one count of conspiracy to commit mail fraud. Bautista was arraigned in the case last week and is expected to enter his guilty plea in the coming weeks.
The fourth man allegedly involved in the scheme – Antonio Anguiano, 48, of Riverside, who was the owner of FI Products, which sold personal protective equipment – was indicted by a federal grand jury on March 4. The indictment charges Anguiano with five counts of mail fraud and two counts of aggravated identity theft. Anguiano has pleaded not guilty and a trial in his case is set for April 26. If convicted, Anguiano faces a statutory maximum sentence of 20 years on each of the mail fraud counts and a consecutive mandatory two years on each of the aggravated identity theft charges.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
As a result of civil litigation brought by CM Laundry and Citizens of Humanity, a Los Angeles Superior Court judge in November 2015 ordered Rodriguez and several other defendants to pay a total of $9,563,786, according to court documents.
The investigation into the embezzlement scheme was conducted by the Federal Bureau of Investigation and the Los Angeles Police Department, Major Crimes Division, Criminal Investigations Section.
Lawyer Charged with Defrauding Elderly ClientRead the Press Release
ATLANTA – Attorney Bennett L. Kight was arraigned on a federal indictment today charging him with mail fraud while serving as a trustee and manager for assets, investments, and real estate owned by one of his clients.
“Kight was trusted to properly manage assets and investments belonging to an elderly client,” said U. S. Attorney John Horn. “This indictment alleges that he instead misappropriated $2 million from her by orchestrating a sham real estate transaction involving his former personal residence.”
According to U.S. Attorney Horn, the charges, and other information presented in court: Kight is a lawyer licensed to practice law in the State of Georgia since 1966. Kight represented F.B. and members of her family, as well as serving as a trustee and manager for assets, investments, and real estate owned and held for the benefit of F.B. and her family.
In January 2006, Kight used his responsibility over F.B.’s assets to misappropriate approximately $2 million from accounts owned by or held for the benefit of F.B. Kight used the money he took from F.B.’s accounts to pay off the $500,000 mortgage on his former home in Atlanta and to fund investments for his benefit. Without informing F.B., Kight obtained the money by purporting to sell F.B. his former home. To facilitate the sale, Kight formed and used two limited liability companies that were supposed to hold title to the house for F.B.’s benefit. However, no deed transferring Kight’s former home to F.B. or these companies was publicly recorded, and Kight later dissolved these companies.
Kight’s son ultimately moved into the property Kight allegedly “sold” to F.B. and caused a back dated deed to the property to be prepared and publicly recorded on March 21, 2011. The back dated deed purported to show that an entity owned and controlled by Kight had owned the house since July 2005, which was several months before Kight obtained $2 million from F.B.’s assets by allegedly selling her the property.
Kight, 75, of Atlanta, Georgia, was arraigned before United States Magistrate Judge John K. Larkins. He was indicted by a federal grand jury on March 16, 2016.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the FBI.
Assistant United States Attorney Douglas W. Gilfillan is prosecuting the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.”
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Last Defendant Sentenced in Central Valley Student Aid Fraud and Identity Theft SchemeRead the Press Release
FRESNO, Calif. — Piersha Dwan Woolridge, 37, of Atwater, was sentenced today by United States District Judge Anthony W. Ishii to four years and eight months in prison and ordered to pay $347,732 in restitution, for her role in a student aid fraud and identity theft scheme, United States Attorney Benjamin B. Wagner announced.
According to court documents, Woolridge was the leader of a scheme to defraud the United States Department of Education of student aid grants and loans. She submitted false financial aid applications to the University of Phoenix and Capella University on behalf of students who did not intend to attend either school. She also used stolen identities to apply for college financial aid in the names of persons who did not know their information was being used in the scheme. As a result of the scheme, more than $370,000 in fraudulently obtained grants and loans was disbursed.
“U.S. Attorney Wagner said: “Federal student loan programs are intended to improve the long-term prospects of students committed to education and to create a more competitive economy for the nation. Those who rip off these programs are not only stealing from the taxpayer, they are taking money intended for deserving students. The U.S. Department of Justice will continue to target fraudsters who perpetuate student loan fraud schemes.”
“I’m proud of the work of OIG special agents and our law enforcement colleagues for shutting down yet another student aid fraud ring and holding Ms. Woolridge and her conspirators accountable for their criminal actions,” said Natalie Forbort, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Western Regional Office. “OIG is committed to fighting student financial aid fraud, and we will continue to aggressively pursue those who participate in these types of crimes.”
On July 11, 2013, a jury found co-defendant Keith Woolridge guilty of conspiracy to commit mail fraud, mail fraud, and aggravated identity theft after a three-day jury trial. He was sentenced to three years and eight months in prison. Other participants in the scheme received the following prison sentences after pleading guilty: Yvette August was sentenced to two years and one month; Kim Gray was sentenced to two years and four months; and Sherise Woolridge was sentenced to four years and six months.
This case was the product of an investigation by the U.S. Department of Education Office of Inspector General. United States Attorneys Mark J. McKeon and Grant B. Rabenn prosecuted the case.