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Thursday 28 January 2016
Honduran Man Charged with Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that HECTOR ORLANDO RECATE REYES, age 30, a citizen of Honduras, was charged today in a one-count Indictment with illegal reentry of a removed alien.
According to the Indictment, RECATE-REYES reentered the United States after having been previously deported on August 8, 2012. If convicted, RECATE-REYES faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment.
U.S. Attorney Polite reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Former Tribal Corrections Officer Pleads Guilty to Sexual Abuse and Civil Rights Violations of InmateRead the Press Release
ALBUQUERQUE – Trevor Hunt, 22, of Paguate, N.M., a former detention officer with the Pueblo of Laguna’s Detention Facility (LPDF), pleaded guilty today in federal court in Albuquerque, N.M., on charges related to the sexual abuse of an inmate during the summer of 2015. Specifically, Hunt pled guilty to one count of sexual abuse of a ward and one count of violating the civil rights of the victim, who was an inmate under Hunt’s supervision at the time Hunt committed the crimes.
In announcing the guilty plea, U.S. Attorney Damon P. Martinez said, “Sexual assaults by corrections officers on those they are charged with keeping safe gravely undermine the very foundation of our judicial system. The Justice Department will vigorously prosecute these crimes and work to vindicate the rights of the courageous victims who report them.”
“Correction Officers fill important and challenging roles in the criminal justice system. While the majority perform their duties honorably, those who abuse their authority deserve to be prosecuted to the fullest extent of the law,” said Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division. “The FBI is proud to have worked with the U.S. Attorney’s Office and the Pueblo of Laguna Tribal Police Department on this case.”
“The Pueblo of Laguna and its Public Safety Department do not condone Hunt’s conduct as demonstrated by the immediate judicial and administrative action taken by the Pueblo upon learning about this unfortunate incident. Inmates of the Laguna Pueblo Detention Facility and other detention facilities deserve to feel safe and secure while incarcerated” said Director Jesse Orozco of the Pueblo of Laguna Public Safety Department. “I am proud of the fine work done by the Laguna Pueblo law enforcement officers on this case, and would like to express my gratitude for the assistance of the FBI and the U.S. Attorney's Office.”
According to the plea agreement, on May 23, 2015, Hunt was a corrections officer at the LPDF who supervised both male and female inmates. On that day, Hunt accompanied the victim to the LPDF’s laundry room where he sexually assaulted the victim. During today’s change of plea hearing, Hunt acknowledged that the victim was in official detention and under his custodial and supervisory control when he sexually assaulted her. Hunt also admitted that he was aware that he willfully violated the victim’s constitutional rights when he assaulted her.
Hunt was ordered to surrender to the U.S. Marshals Service on Feb. 1, 2016, and will be detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by Albuquerque office of the FBI and the Pueblo of Laguna Tribal Police Department, and is being prosecuted by Assistant U.S. Attorneys David Adams and Holland S. Kastrin.
This case was brought as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native American women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Former State Parole Officer Sentenced to Prison for BriberyRead the Press Release
Jackson, Miss - Andra Lowmon Smith, 44, of Anguilla, Mississippi, was sentenced today by Senior U.S. District Judge Tom Lee to 10 months in federal prison followed by two years of supervised release for bribery, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Donald Alway. Smith must also pay $800 in restitution, and a $100 special assessment.
Smith is a former Probation and Parole Officer with the Mississippi Department of Corrections who worked out of Madison County. He admitted that he solicited bribes from a parolee he was supervising from March, 2015 through June, 2015. He took the money in exchange for allowing the parolee to leave Mississippi to find employment.
This case was investigated by the Federal Bureau of Investigation and the Criminal Investigation Division of the Mississippi Department of Corrections. Assistant United States Attorneys Scott Gilbert and Mary Helen Wall prosecuted the case.
Former Real Estate Broker Pleads Guilty to Second Federal Fraud SchemeRead the Press Release
BOSTON – A former real estate broker pleaded guilty on Tuesday, Jan. 26, 2016, in U.S. District Court in Boston, in connection a scheme to defraud a couple of the deposit they paid to purchase three properties in Randolph, Roxbury and Jamaica Plain.
Michael David Scott, 51, of Mansfield, pleaded guilty to one count of wire fraud. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for March 25, 2016.
From February 2011 to October 2013, Scott fraudulently persuaded a couple to sign three Purchase & Sale Agreements to buy properties in Randolph, Roxbury and Jamaica Plain. The couple deposited $199,000 with Scott under the false promise that their funds would be held in escrow. However, Scott immediately spent the funds for his own use. Furthermore, Scott knew that the first property was taken off the market by the sellers, that the bank holding the mortgage had refused to approve the sale of the second property, and that he had sold the third property to someone else. Scott never informed the couple about the status of the properties, and when they tried to get a refund of their deposits, he falsely assured them their deals were still pending and refused to return their deposits.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
In a separate federal case, Scott was sentenced on November 12, 2015 to 135 months in prison in connection with a multi-year, multi-property mortgage fraud scheme in Boston. Scott was on pre-trial release in this earlier fraud case when he committed the aforementioned crimes.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Victor A. Wild and Ryan M. DiSantis of Ortiz’s Criminal Division.
Former Postal Carrier Pleads Guilty to BriberyRead 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 Dennis Bernhard, 56, of Derby, N.Y., pleaded guilty to bribery before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 15 years in prison and a $250,000 fine.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that Bernhard was a mail carrier for the United States Postal Service for 16 years, working out of the Eastside Station Post Office for the last 10 years. The Eastside Station covers the east side of the City of Buffalo. The investigation began when law enforcement officials learned that Bernhard had previously been paid by drug dealers to provide addresses of unsuspecting citizens in the City of Buffalo in order to mail boxes of narcotics. These addresses were within the defendant’s mail delivery route, so that when the boxes arrived in Buffalo, Bernhard did not deliver the boxes to the listed recipient address, but held on to the boxes and handed them directly to the drug dealers in exchange for cash payments.
When police approached Bernhard during an undercover operation in 2015, the defendant indicated he was willing to continue the scheme. During one transaction, Bernhard even said that one of the prior drug dealers “treated me pretty good. . . . at the end he was giving me like a hundred. . . .” (referring to $100 per box).
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the United States Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski, the United States Postal Service, Office of the Inspector General, under the direction of Special Agent in Charge Monica Weyler, Eastern Area Field Office, Philadelphia, PA, and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.
Sentencing is scheduled for May 18, 2016, at 11 a.m. before Judge Skretny.
Former Postal Carrier Pleads Guilty to BriberyRead 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 Dennis Bernhard, 56, of Derby, N.Y., pleaded guilty to bribery before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 15 years in prison and a $250,000 fine.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that Bernhard was a mail carrier for the United States Postal Service for 16 years, working out of the Eastside Station Post Office for the last 10 years. The Eastside Station covers the east side of the City of Buffalo. The investigation began when law enforcement officials learned that Bernhard had previously been paid by drug dealers to provide addresses of unsuspecting citizens in the City of Buffalo in order to mail boxes of narcotics. These addresses were within the defendant’s mail delivery route, so that when the boxes arrived in Buffalo, Bernhard did not deliver the boxes to the listed recipient address, but held on to the boxes and handed them directly to the drug dealers in exchange for cash payments.
When police approached Bernhard during an undercover operation in 2015, the defendant indicated he was willing to continue the scheme. During one transaction, Bernhard even said that one of the prior drug dealers “treated me pretty good. . . . at the end he was giving me like a hundred. . . .” (referring to $100 per box).
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the United States Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski, the United States Postal Service, Office of the Inspector General, under the direction of Special Agent in Charge Monica Weyler, Eastern Area Field Office, Philadelphia, PA, and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.
Sentencing is scheduled for May 18, 2016, at 11 a.m. before Judge Skretny.
Former Pine Lawn Lieutenant Convicted of Federal ChargesRead the Press Release
St. Louis, MO – Former Pine Lawn Lieutenant STEVEN BLAKENEY was convicted of criminal civil rights charges arising from his arrest in 2013 of a candidate for the office of Mayor of the City of Pine Lawn.
According to testimony presented at trial, on March 31, 2013, Blakeney, while a police officer with the City of Pine Lawn Police Department, conspired with others to cause the arrest of a mayoral candidate based on false allegations and without probable cause. Blakeney ordered another person to falsely report that the mayoral candidate had stolen a campaign poster from a local business and then arranged for the candidate to be arrested.
Blakeney was convicted of one felony count of conspiracy against rights, one count of deprivation of rights under color of law and one count of falsification of records. The four-day trial was held before United States District Judge Stephen N. Limbaugh, Jr. Sentencing has been set for May 4, 2016.
These charges carry a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentence, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorneys Reginald Harris and Jennifer Winfield handled the case for the U.S. Attorney’s Office.
Former Hilton Middle School Teacher Sentenced for Attempted Enticement of A MinorRead 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 Charles Kane, 46, of Spencerport, NY, who was convicted of attempted online enticement of minor, was sentenced to 120 months in prison and 240 months of supervised release by U.S. District Court Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Craig R. Gestring, who handled the case, stated that the defendant, a middle school teacher in the Hilton School District, was arrested April 2, 2015 as he attempted to meet with a person he thought was a 14 year old girl.
The investigation determined that in October 2014, the defendant posted an ad on Craigslist which read “daddy/daughter. Love younger women.” A federal law enforcement officer, working in an undercover capacity, posed as the father of a young daughter and conversed with Kane online for the next several months. During these conversations, Kane discussed traveling to meet the undercover and engaging in sexual activity with the undercover’s ten year old daughter.
On January 26, 2015, another undercover officer noticed a different sexually explicit ad on Craigslist which was traced back, once again, to the defendant. The officer responded to the ad in the persona of a 14 year old girl. Kane responded that he was “down with it.” The defendant asked the girl where she lived and said he wanted to meet her. The two remained in contact through March of 2015. During online chats, Kane sent the undercover officer photos of himself, including one he took in the men’s room at the Middle School where he taught, and repeatedly asked for photos of the 14 year old girl. Also during the chats, the defendant repeatedly discussed engaging in sexually explicit activity with the child and traveling to and meeting with the child for sexual purposes. One message read “I could get a room and I could sneak you there.” Kane acknowledged that he could get in “big trouble” and told the girl “this is between you and me.”
Following repeated requests, the girl agreed to meet the defendant at a theatre in Webster on April 2, 2015. The defendant was observed entering a pharmacy just before meeting with the undercover, where they learned that Kane purchased a box of condoms. Kane was arrested as soon as he pulled up to the theatre parking lot. He has been in federal custody since his arrest, and was held following a detention hearing last month.
The sentencing is the culmination of an investigation by the New York State Police, under the direction of Major Craig Hanesworth and the Federal Bureau of Investigation Child Exploitation Task Force, under the direction of Adam S. Cohen. The task force includes the Buffalo Police Department, Cheektowaga Police Department, Niagara County Sheriff’s Office, Monroe County Sheriff’s Office, the Rochester Police Department, and U.S. Immigration and Customs Enforcement-Homeland Security Investigations.
Former Arvest Bank Executive Sentenced to over Eight Years in Federal Prison for Bank FraudRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Henry Dennis Smiley, Jr., age 52, of Rogers, Arkansas, was sentenced to 97 months in federal prison followed by two years supervised release, and ordered to pay over $4,900,000.00 restitution on one count of Bank Fraud. The Honorable P.K. Holmes, III presided over the sentencing hearing in the United States District Court in Fayetteville. Smiley pleaded guilty to the charge on August 25, 2015.
This case was investigated by Federal Bureau of Investigation. Acting United States Attorney Kenneth Elser prosecuted the case for the United States.
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.Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Florida Man Admits Using Bogus Transportation Company to Defraud New Jersey Factoring Business Out of $220,000Read the Press Release
NEWARK, N.J. - A Seminole, Florida, man today admitted using phony invoices from his transportation company to obtain $220,000 from a New Jersey-based factoring business, U.S. Attorney Paul Fishman announced.
Karl Stehlin, a/k/a “Mark Sawyer,” 60, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to Count One of an indictment charging him with wire fraud.
According to documents filed in this case and statements made in Court:
Stehlin admitted that from June 2014 through September 2014, he defrauded a Bergen County, New Jersey, factoring business that purchased accounts receivable in return for short term financing. Stehlin created a bogus Idaho-based company, Sawyer Express Transportation Inc., and emailed accounts receivable invoices to the factoring company for transportation services that were never provided. As a result, Stehlin was able to defraud the factoring company out of $220,000 in advance payment on those invoices.
During his plea hearing, Stehlin also admitted using the same methods to defraud a Glendale, California, factoring business out of $127, 953.34 and a Las Vegas factoring business out of $524,025.28.
The wire fraud charge to which Stehlin pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for May 24, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s plea. He also thanked special agents of the FBI Tampa Division, under the direction of Special Agent in Charge Paul Wysopal, for their assistance.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit and Acting Chief Barbara Ward of the Asset Forfeiture and Money Laundering Unit in Newark.
Defense counsel: Michael Koribanics Esq., Clifton, New Jersey
Federal Jury Convicts Texas Men in Drug ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that a federal jury convicted JORGE PERRALTA, age 33, of Pasadena, Texas, and PAUL NORRIS, age 57, of Houston, Texas, of a drug conspiracy charge, following a four-day trial.
PERRALTA and NORRIS were convicted of conspiracy to distribute and possess with the intent to distribute cocaine and heroin. According to the Indictment, beginning on a date unknown and continuing until on or about March 19, 2015, PERRALTA and NORRIS knowingly combined, conspired, confederated and agreed with persons known and unknown, to possess with the intent to distribute five kilograms or more of cocaine hydrochloride and one kilogram or more of heroin.
The convictions of PERRALTA and NORRIS followed an Organized Crime Drug Enforcement Task Force (“OCDETF”) investigation by the Drug Enforcement Administration and Houston, Texas Police Department of a drug trafficking organization operating from Mexico into several of the United States, including Louisiana.
Both PERRALTA and NORRIS face a minimum term of imprisonment of ten years, a maximum term of life imprisonment, a fine of $10,000,000, a minimum of five years of supervised release after imprisonment, and a $100.00 special assessment. U.S. District Judge Lance M. Africk set sentencing for May 19, 2016.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in New Orleans and Houston, Texas along with the Houston Police Department in investigating this matter. Assistant United States Attorneys Andre’ Jones, Elizabeth Privitera, and Jeffrey Sandman were in charge of the prosecution.
Federal Criminal Charges Filed Against Two Pharmacists for Adulteration of Drugs in Connection with Alabama-Based Compounding PharmacyRead the Press Release
A criminal Information was filed today in the U.S. District Court for the Northern District of Alabama against David Allen, former pharmacist-in-charge of the now-defunct compounding pharmacy Advanced Specialty Pharmacy doing business as “Meds IV,” and William Timothy Rogers, a pharmacist and the former president of Meds IV, the Department of Justice announced today. Allen and Rogers were charged in connection with the distribution of adulterated drugs, which were compounded at the Meds IV facility and distributed to Birmingham, Alabama-area hospitals in 2011.
“The compounding of sterile drug products requires significant care, and the distribution of contaminated drug products can cause serious harm to patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This criminal case demonstrates the Justice Department’s commitment to protecting consumers and patients, and making sure pharmaceutical drugs are safe and effective.”
Allen, 60, of McCalla, Alabama, and Rogers, 48, of Hoover, Alabama, have signed plea agreements, in which both individuals have agreed to plead guilty to two misdemeanor violations of the federal Food, Drug and Cosmetic Act (FDCA) as charged in the Information. Following today’s filing of the criminal charges; the U.S. District Court will schedule an arraignment, where the defendants will be formally advised of the charges against them. Another hearing will then be set in which the defendants can enter their guilty pleas to the Court.
As alleged in the Information, Meds IV compounded various drugs for human use, including an intravenous drug known as Total Parenteral Nutrition (TPN). TPN is liquid nutrition administered intravenously to patients who cannot or should not receive their nutrition through eating. The information alleges that beginning in or around February 2011, Meds IV compounded its own amino acid solution, which it then mixed with other ingredients to form TPN.
As charged in the information, amino acid used in compounding the TPN was adulterated in the following ways: it consisted in whole or in part of a filthy, putrid, or decomposed substance, namely Serratia marcescens (S. marcescens) and it was prepared, packed, or held under insanitary conditions whereby it may have been contaminated with filth or rendered injurious to health. S. marcescens is gram-negative bacteria that can cause bloodstream infections if introduced into the bloodstream through contaminated medications. These infections can cause serious medical complications, including death, because S. marcescens is resistant to many antibiotics.
“Meds IV was in the business of compounding drugs and IV nutrition that was supposed to help patients heal,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama. “Instead, because of unsanitary procedures in the mixing of liquid nutrition, contaminated IV fluid was sent to Birmingham area hospitals and a number of patients developed serious bloodstream infections. I thank the FDA and its Office of Criminal Investigations for their diligence in helping us prosecute those responsible for the failings at Meds IV which contributed to significant harm.”
According to the charging document, the amino acid was prepared by Meds IV outside a laminar airflow workbench and was kept unrefrigerated, in a room that was not sterile, in a large pot sitting on the floor, sometimes overnight, before it was sterilized and used.
As alleged in the information, between March 5 and 15, 2011, nine patients at various Birmingham-area hospitals who developed bloodstream infections caused by S. marcescens died, and several other hospital patients developed S. marcescens bloodstream infections but survived. According to the charges, all of these patients had been given TPN that was compounded and distributed by Meds IV. As alleged in the information, while a number of the patients who died had underlying conditions which may have contributed to their deaths, medical records of some patients suggest that the S. marcescens bloodstream infections were also a significant factor.
According to the information, Meds IV was notified on March 14, 2011, by a hospital in the Birmingham area, that four patients receiving TPN had tested positive for S. marcescens. The information alleges that the TPN was compounded and distributed by Meds IV and that this notification was the first time Meds IV was informed of a link between its TPN and patients testing positive for S. marcescens. The information alleges that on or around March 16, 2011, Meds IV began notifying some customers that compounding of TPN was suspended until further notice.
As noted in the information, during an inspection at Meds IV starting on March 22, 2011, investigators from the U.S. Centers for Disease Control and Prevention (CDC) found S. marcescens that was indistinguishable to the outbreak strain on a tap-water faucet, in an open container of amino acid powder and on the surface of mixing equipment that had been used to make TPN. According to the charging document, the U.S. Food and Drug Administration (FDA) and CDC investigators linked the S. marcescens to TPN that had been compounded by Meds IV.
“Americans expect and deserve drugs that are safe, effective, and that meet appropriate standards for quality, yet Meds IV contaminated and distributed drug products that resulted in serious harm to patients,” said Acting FDA Commissioner Stephen Ostroff, MD. “Such conduct cannot be tolerated, and the FDA will continue to work with the Department of Justice to pursue aggressive enforcement actions against those who place American patients at risk.”
As alleged in the Information, Allen supervised all compounding at Meds IV, was specifically responsible for reviewing and approving TPN formulations, and was also responsible for filling the individual prescriptions Meds IV received for patient-specific TPN products. The information alleges that Rogers was ultimately responsible for overseeing all of the day-to-day operations of Meds IV. Both defendants have agreed to plead guilty to two misdemeanor counts, representing the two lots of amino acid which were determined to be adulterated in violation of the FDCA. For each count, the defendants face a statutory maximum sentence of up to one year in prison, a fine of up to $250,000, or both, and a term of supervised release after any imprisonment for up to one year.
The case is being prosecuted by Trial Attorney Heide L. Herrmann of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Henry Cornelius of the Northern District of Alabama. They were assisted by Associate Chief Counsel Shannon M. Singleton of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services. The case was investigated by the FDA’s Office of Criminal Investigations.
A criminal Information is merely an allegation and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Federal Criminal Charges Filed Against Two Pharmacists for Adulteration of Drugs in Connection with Alabama-Based Compounding PharmacyRead the Press Release
BIRMINGHAM – A criminal information was filed today in the U.S. District Court for the Northern District of Alabama against David Allen, former pharmacist-in-charge of the now-defunct compounding pharmacy Advanced Specialty Pharmacy doing business as “Meds IV,” and William Timothy Rogers, a pharmacist and the former president of Meds IV, the Department of Justice and U.S. Attorney Joyce White Vance announced. Allen and Rogers were charged in connection with the distribution of adulterated drugs, which were compounded at the Meds IV facility and distributed to Birmingham-area hospitals in 2011.
Allen, 60, of McCalla, and Rogers, 48, of Hoover, have signed plea agreements, in which both individuals have agreed to plead guilty to two misdemeanor violations of the federal Food, Drug and Cosmetic Act (FDCA) as charged in the Information. Following today’s filing of the criminal charges; the U.S. District Court will schedule an arraignment, where the defendants will be formally advised of the charges against them. Another hearing will then be set in which the defendants can enter their guilty pleas to the Court.
“The compounding of sterile drug products requires significant care, and the distribution of contaminated drug products can cause serious harm to patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This criminal case demonstrates the Justice Department’s commitment to protecting consumers and patients, and making sure pharmaceutical drugs are safe and effective.”
“Meds IV was in the business of compounding drugs and IV nutrition that was supposed to help patients heal,” Vance said. “Instead, because of unsanitary procedures in the mixing of liquid nutrition, contaminated IV fluid was sent to Birmingham area hospitals and a number of patients developed serious bloodstream infections. I thank the FDA and its Office of Criminal Investigations for their diligence in helping us prosecute those responsible for the failings at Meds IV which contributed to significant harm.”
As alleged in the Information, Meds IV compounded various drugs for human use, including an intravenous drug known as Total Parenteral Nutrition (TPN). TPN is liquid nutrition administered intravenously to patients who cannot or should not receive their nutrition through eating. The information alleges that beginning in or around February 2011, Meds IV compounded its own amino acid solution, which it then mixed with other ingredients to form TPN.
As charged in the information, amino acid used in compounding the TPN was adulterated in the following ways: it consisted in whole or in part of a filthy, putrid, or decomposed substance, namely Serratia marcescens (S. marcescens) and it was prepared, packed, or held under insanitary conditions whereby it may have been contaminated with filth or rendered injurious to health. S. marcescens is gram-negative bacteria that can cause bloodstream infections if introduced into the bloodstream through contaminated medications. These infections can cause serious medical complications, including death, because S. marcescens is resistant to many antibiotics.
According to the charging document, the amino acid was prepared by Meds IV outside a laminar airflow workbench and was kept unrefrigerated, in a room that was not sterile, in a large pot sitting on the floor, sometimes overnight, before it was sterilized and used.
As alleged in the information, between March 5 and 15, 2011, nine patients at various Birmingham-area hospitals who developed bloodstream infections caused by S. marcescens died, and several other hospital patients developed S. marcescens bloodstream infections but survived. According to the charges, all of these patients had been given TPN that was compounded and distributed by Meds IV. As alleged in the information, while a number of the patients who died had underlying conditions which may have contributed to their deaths, medical records of some patients suggest that the S. marcescens bloodstream infections were also a significant factor.
According to the information, Meds IV was notified on March 14, 2011, by a hospital in the Birmingham area, that four patients receiving TPN had tested positive for S. marcescens. The information alleges that the TPN was compounded and distributed by Meds IV and that this notification was the first time Meds IV was informed of a link between its TPN and patients testing positive for S. marcescens. The information alleges that on or around March 16, 2011, Meds IV began notifying some customers that compounding of TPN was suspended until further notice.
As noted in the information, during an inspection at Meds IV starting on March 22, 2011, investigators from the U.S. Centers for Disease Control and Prevention (CDC) found S. marcescens that was indistinguishable to the outbreak strain on a tap-water faucet, in an open container of amino acid powder and on the surface of mixing equipment that had been used to make TPN. According to the charging document, the U.S. Food and Drug Administration (FDA) and CDC investigators linked the S. marcescens to TPN that had been compounded by Meds IV.
“Americans expect and deserve drugs that are safe, effective, and that meet appropriate standards for quality, yet Meds IV contaminated and distributed drug products that resulted in serious harm to patients,” said Acting FDA Commissioner Stephen Ostroff, MD. “Such conduct cannot be tolerated, and the FDA will continue to work with the Department of Justice to pursue aggressive enforcement actions against those who place American patients at risk.”
As alleged in the Information, Allen supervised all compounding at Meds IV, was specifically responsible for reviewing and approving TPN formulations, and was also responsible for filling the individual prescriptions Meds IV received for patient-specific TPN products. The information alleges that Rogers was ultimately responsible for overseeing all of the day-to-day operations of Meds IV. Both defendants have agreed to plead guilty to two misdemeanor counts, representing the two lots of amino acid which were determined to be adulterated in violation of the FDCA. For each count, the defendants face a statutory maximum sentence of up to one year in prison, a fine of up to $250,000, or both, and a term of supervised release after any imprisonment for up to one year.
The case is being prosecuted by Assistant U.S. Attorney Henry Cornelius of the Northern District of Alabama and Trial Attorney Heide L. Herrmann of the Justice Department’s Consumer Protection Branch. They were assisted by Associate Chief Counsel Shannon M. Singleton of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services. The case was investigated by the FDA’s Office of Criminal Investigations.
A criminal Information is merely an allegation and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
information_allen_rogers.pdf (213.59 KB)
Fayetteville Man Sentenced to 12 Years in Federal Prison for Sex Trafficking of a 16 Year OldRead the Press Release
Fayetteville - Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Gregory Lynnell Gibson, age 23, of Fayetteville, Arkansas, was sentenced to 144 months in prison without the possibility of parole and ten years of supervised release for one count of Sex Trafficking of Children. He was also ordered to pay a $4,900.00 fine. The sentencing took place before the Honorable Timothy L. Brooks in the United States District Court in Fayetteville.
In January, 2014, detectives with the Springdale Police Department were notified that a 16 year old runaway (“Jane Doe”) was at a hotel in Springdale working as a prostitute for Gibson. Officers confirmed that Gibson had rented two rooms there and made contact with a sixteen year old female who confirmed that she was working for Gibson as a prostitute. She told officers that she had known Gibson since the 8th grade and recently reconnected with him via Facebook. She said Gibson had convinced her to quit school and offered to split the proceeds from her prostitution with her 50/50, however, she stated she gave all of her money from her prostitution to Gibson. A search of Gibson’s phone revealed text messages relating to sixteen year old female’s prostitution detailing prices, time limits, and specific sex acts. There were also text messages on the phone relating to prostitution dating back to November, 2013 with other individuals in addition to the sixteen year old female, as well as messages between Gibson and the sixteen year old female discussing the fact that she was under the age of 18. Gibson pled guilty to the charge in August, 2015.
This case was investigated by the Springdale Police Department, the Fort Smith Police Department, and the Federal Bureau of Investigation (FBI). Assistant United States Attorney Aaron Jennen prosecuted the case for the United States.
The 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 their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Evansville woman indicted on five counts of theftRead the Press Release
Evansville –United States Attorney Josh J. Minkler announced today that an Evansville woman who worked as the cafeteria manager at St Benedict Cathedral School, was indicted on five counts of theft concerning programs receiving federal funds. Mary Merrill, 49, Evansville, was arrested today and will appear before a federal magistrate judge for her initial appearance.
“Faith-based institutions are built around trust and honesty; Ms. Merrill betrayed both values,” said Minkler. “The Diocese of Evansville, as well as parishioners and students of St. Benedict, deserve better from their staff.”
Merrill served as the cafeteria manager since 2007, and controlled the cafeteria budget, managed accounts payable, purchased food and other supplies from vendors as well as supervised employees and volunteers. She controlled an account at an Evansville bank named the “St Benedict School Cafeteria” and was the only person with signatory power.
From February 2011, until March 2015, Merrill is alleged to have embezzled over $104,000 from the cafeteria account by making fraudulent claims for reimbursement, issuing unauthorized checks to herself and credit card companies, and creating false check registries with vendor names to conceal her personal expenditures. During this time period the school received federal funds as a participant in the Federal School Lunch Program.
This case was investigated by the Evansville Police Department, United States Secret Service, and the Vanderburgh County Prosecutor’s Office.
Evansville Police Chief Billy Bolin said, “It is unfortunate that someone would take advantage of a place of worship, especially one that is charged with educating young people in our community.”
According to Assistant United States Attorney Kyle M. Sawa, who is prosecuting the case for the government, Merrill could face up to 10 years imprisonment on each count if convicted.
An indictment is merely a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in federal court.
No future court date has been set.
During National Slavery and Human Trafficking Prevention Month, United States Attorney’s Office Works to Raise Awareness of the Cruel Practice that Exploits the Most Vulnerable Members of SocietyRead the Press Release
LOS ANGELES – United States Attorney Eileen M. Decker marked January as National Slavery and Human Trafficking Prevention Month by renewing the commitment of the United States Attorney’s Office to combat all forms of human trafficking and to engage all of our diverse communities to raise awareness about the inhumane practice.
“Those who engage in any form of human trafficking are exploiting the most vulnerable among us by inducing or forcing their victims to engage in commercial sex or by subjecting them to forced labor,” United States Attorney Decker said.
Human trafficking takes many forms, but generally targets the most vulnerable in our society – our children, those who suffered past abuse, people with physical or mental disabilities, the poor and those without legal immigration status.
The United States Attorney’s Office and its federal, state, local, and tribal partners are working diligently to identify and support victims – and to bring their abusers to justice. Authorities are working to bring freedom to all victims of human trafficking – whether they are adults or children; male, female, or transgender individuals; citizens or noncitizens – regardless of the trafficking they endured.
Anti-trafficking efforts have been bolstered with the recent establishment of the multi-agency Los Angeles Human Trafficking Task Force, which is being jointly led by the United States Attorney’s Office and the Los Angeles County Sheriff’s Department. The Task Force was established in September 2015 as the result of $1.5 million grant from the Department of Justice (see: http://go.usa.gov/cPbAe). This partnership will enhance coordination and collaboration between agencies and will expand the capacity to provide comprehensive services to victims.
The United States Attorney’s Office is committed to prosecuting individuals who prey upon trafficking victims. Among the criminal cases recently in federal court:
• a Long Beach man received a 20-year federal prison sentence last year for running a sex trafficking operation that victimized young women (see: http://go.usa.gov/cPjuR);
• A former special agent with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations pleaded guilty in December to accepting a bribe from a man being investigated for human trafficking (see: http://go.usa.gov/cExGF);
• a mother and son team pleaded guilty to sex trafficking charges last year and admitted to trafficking in minors and young women in California and Nevada (see: http://go.usa.gov/cEabe);
• a South Bay man was sentenced to nearly five years in prison for lying to federal investigators about hiring a minor for commercial sex in the first federal prosecution in the Los Angeles-area of a “john” in a teen human trafficking investigation (see: http://go.usa.gov/cEavJ); and
• a trial began this week in the case of a man charged with travelling to Cambodia to have sex with children.
For more information on human trafficking and victim services, including a recently released video series and resource guide to raise awareness about the many forms of human trafficking in the United States, please visit the website of the Department of Justice’s Office for Victims of Crime website – http://ovc.ncjrs.gov/humantrafficking/. Materials are available in Spanish, Thai, Hindi and Tagalog.
President Obama issued a proclamation on New Year’s Eve that designated January as National Slavery and Human Trafficking Prevention Month (see: http://go.usa.gov/cPjJm). The President called upon all Americans to play a role to end all forms of human trafficking, and he pledged that the United States will continue to lead the effort to root out human trafficking around the world.
To report suspected human trafficking, connect with anti-trafficking services in your area or find anti-trafficking resources, contact the National Human Trafficking Resource Center hotline at 1-888-373-7888, [email protected], or www.traffickingresourcecenter.org. The toll-free hotline is available to answer calls from anywhere in the United States, 24 hours a day/7 days a week, in more than 200 languages.
Duenweg Sex Offender Charged with Online Child Sex ShowsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a registered sex offender in Duenweg, Mo., has been charged in federal court with paying to watch online sex shows with children in the Philippines.
Paul L. Sipeer, 65, of Duenweg, was charged in a criminal complaint filed in the U.S. District Court in Springfield, Mo., on Wednesday, Jan. 27, 2016. The complaint charges Sipeer with receiving child pornography over the Internet. Sipeer had his initial court appearance today and remains in federal custody pending a detention hearing on Tuesday, Feb. 2, 2016.
Sipeer is a registered sex offender with a 1992 conviction for sexual abuse in the first degree involving the physical harm of a 7-year-old child.
According to an affidavit filed in support of the federal criminal complaint, Homeland Security Investigations (HSI) agents learned that Sipeer was conducting online money transfers between $10 and $20 several times a month during the summer of 2015 to individuals in the Philippines.
Money transfers, conducted through Western Union and MoneyGram, are often used to send funds to pay for sexual performances by children in the Philippines. In prior investigations conducted by HSI, small amounts of money, typically between $5 and $100, are often sent to individuals in the Philippines. In return, the recipients would have young children perform sexual acts on webcams for the senders. Often the senders would send additional payments for continued and/or repeat performances.
Upon further investigation, the affidavit says, agents learned that Sipeer had making money transfers to various individuals in the Philippines since January 2013, in amounts ranging up to $480.
On Jan. 26, 2016, law enforcement officers contacted Sipeer at his residence. According to the affidavit, Sipeer told the officers he sent money to the Philippines to pay for “sex shows.” Sipeer said he has sent approximately $1,200 to the Philippines in total.
Sipeer consented to a search of his residence, including his computer. Officers located images of child pornography during a preview of Sipeer’s computer.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Southwest Missouri Cyber Crimes Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Detroit Man Sentenced to 51 Months in Prison for Role in Smash-and-Grab Robbery of Stamford Jewelry StoreRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAJUHN GRIFFIN, 20, of Detroit, Michigan, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 51 months of imprisonment, followed by three years of supervised release for his role in a smash-and-grab robbery of a Stamford jewelry store in November 2014.
According to court documents and statements made in court, on November 26, 2014, GRIFFIN and others stole a Stamford resident’s SUV and drove it to the Stamford Town Center Mall. GRIFFIN and two accomplices, armed with hammers, then entered Sidney Thomas Jewelers during regular business hours. Soon after entering, they used the hammers to smash open a jewelry display case and removed more than $250,000 worth of Rolex watches. The three then fled with security guards in pursuit. One of GRIFFIN’s accomplices, Richard Mathew Bailey, was caught and apprehended inside the mall while fleeing.
After the robbery, Stamford Police found the stolen SUV running in the mall’s parking garage.
GRIFFIN was arrested in Detroit on April 6, 2015. On September 4, 2015, he pleaded guilty to one count of interfering with commerce by robbery.
GRIFFIN, who had been released on bond, was remanded to custody at the conclusion of today’s sentencing.
Richard Mathew Bailey and Brian Moore, both from Detroit, previously pleaded guilty to the same charge. Moore helped organize and carry out the robbery by soliciting others to participate and partially funding it. He also drove accomplices from Detroit to Stamford to carry out the robbery and picked them up after the robbery in order to return to Detroit.
On November 23, 2015, Moore was sentenced to 48 months of imprisonment. Bailey awaits sentencing. A fourth defendant, also a resident of Detroit, has been charged and is awaiting trial.
This case is being investigated by the Federal Bureau of Investigation and the Stamford Police Department. The case is being prosecuted by Assistant U.S. Attorney Gabriel J. Vidoni.
Delaware Woman Pleads Guilty to $600,000+ Embezzlement from Credit Card ProcessorRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Lisa Mose, age 43, of Bear, Delaware, pleaded guilty to one count of wire fraud, in violation of 18 U.S.C. § 1343. Mose faces a maximum sentence of twenty years in prison, a fine of $250,000, and 3 years of supervised release following a prison sentence. She will be sentenced on April 27, 2016, by the Honorable Leonard P. Stark, Chief Judge, United States District Court for the District of Delaware,
According to statements made at the plea hearing and documents filed in court, Mose was employed by a credit card transaction processor, in New Castle, Delaware. Mose was a supervisor within the reconciliation and settlements department. She had access to initiate manual wire transfers from her employer’s operating accounts.
From January 2009 through June 2014, Mose made false entries into the company’s computerized system and initiated at least 325 wire transfers, totaling at least $618,075, to her personal bank accounts and bank accounts of known associates. Mose used a significant portion of the proceeds to purchase vacations and high-end consumer goods.
U.S. Attorney Oberly commented, “Ms. Mose was a trusted supervisor at her place of employment and she systematically, over a period of years, proceeded to steal over $600,000 from her employer. Such a breach of trust cannot go unpunished and a sentence of incarceration is necessary to deter others who might consider stealing from their employers.”
This case is being investigated by the Federal Bureau of Investigation.
Darkode Defendant Sentenced to ProbationRead the Press Release
PITTSBURGH - A resident of Tampa, Florida, has been sentenced in federal court to two years probation on his conviction of violating the CAN-SPAM ACT, United States Attorney David J. Hickton announced today.
Senior United States District Judge Maurice B. Cohill, Jr. imposed the sentence on Naveed Ahmed, 27. Ahmed is one of 12 individuals charged in connection with a significant computer hacking forum known as Darkode, which has been dismantled.
According to information presented to the court, Ahmed knowingly used a protected computer to relay or retransmit multiple commercial electronic mail messages with the intent to deceive or mislead recipients.
Assistant United States Attorney James T. Kitchen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Naveed Ahmed.
Columbia Man Pleads Guilty to Renting Room to Use HeroinRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Mo., man pleaded guilty in federal court today to renting the motel room where a 16-year-old female died of a heroin overdose.
Jon Patrick Washington, also known as “Doom,” 29, of Columbia, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to maintaining a drug-involved premise. Washington has been in federal custody since his arrest in 2014.
Washington admitted that he rented a room at the Providence Inn and Suites Motel, 1718 Providence Road in Columbia (now closed), for the purpose of using heroin from April 1 to April 3, 2014.
Columbia police officers responded to a suspected heroin overdose death at Washington’s motel room on April 3, 2014. The victim was a 16-year-old female. Based on information from a confidential informant, Washington was located later the same day and brought in for questioning by law enforcement. He admitted that he had injected the juvenile victim with heroin at about 8:30 p.m.
Washington told law enforcement officers that the juvenile was nodding off from a prior heroin injection, and that the juvenile and another individual (who Washington claimed supplied the heroin to the juvenile) kept asking him to help shoot the juvenile up again. Washington said the needle was already filled with heroin prior to him injecting the juvenile. Washington told officers that he found a vein on the juvenile on his second attempt.
Washington admitted that another individual and the juvenile victim gave him the money to rent the motel room. Washington had previously been renting another room at the motel, but moved into the new room on April 1. Washington admitted that he knew the room was being used by the juvenile to use heroin.
Under the terms of today’s plea agreement, which still must be accepted by the court, Washington will be sentenced to five years in federal prison without parole and is subject to a fine up to $500,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Lawrence E. Miller. It was investigated by the Columbia, Mo., Police Department, the Drug Enforcement Administration and the Missouri State Highway Patrol.
Cocktail Napkin Insider Tip Leads to Federal ConvictionRead the Press Release
BOSTON – Following a three-day trial, a Boston-area real estate developer was convicted today of engaging in insider trading for buying – and later selling – shares of Wainwright Bank & Trust Company (“Wainwright”) based on a tip that Wainwright would be acquired. Prior to the acquisition, shares of Wainwright traded on the Nasdaq Stock Market.
Robert H. Bray, 78, of Watertown, was convicted by a jury of one count of securities fraud. He was acquitted of a separate count of conspiracy. U.S. District Court Judge William G. Young scheduled sentencing for May 4, 2016.
Bray is the owner of R&B Construction, a construction and real-estate development company that operates in the Cambridge and Watertown area. As the government proved at trial, in June 2010, Bray was tipped by a friend who was an executive at Boston-based Eastern Bank Corp. (“Eastern Bank”) that Wainwright would be acquired. The tip – more than two weeks before the acquisition was publicly announced – was passed on a napkin slipped to Bray over drinks at a country club bar in Watertown where both men are members. On Monday, June 14, 2010, Bray called his broker to ask how he could buy 25,000 shares of Wainwright stock, which he acknowledged “kinda sounds crazy,” given how thinly the stock traded. Bray ultimately purchased a total of 31,000 Wainwright shares over the next two weeks, at prices between $8.85 and $9.90 per share, single-handedly accounting for some 56 percent of the total trading volume in Wainwright shares during that period. On June 29, 2010, Eastern Bank announced its agreement to acquire Wainwright for $19 per share in cash, a premium of nearly 100% over the stock’s prior closing price. Bray ultimately sold his shares for a profit of approximately $300,000.
United States Attorney Carmen M. Ortiz and Harold Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today.
“Today’s conviction underscores our commitment to making sure that there is a level playing field for all securities investors – and that those who would pass on confidential corporate information on napkins at bars, in whispered conversations on golf courses or in any other way, are held accountable for their actions,” said U.S. Attorney Ortiz.
“Mr. Bray thought he could engage in a back-door deal to get rich quick. By capitalizing on insider information, he cheated the system established to protect hard-working investors. Financial fraud is not a victimless crime and the FBI will do everything it can to identify those individuals who are trying to undermine the integrity of the financial market,” said Special Agent in Charge Shaw.
The maximum sentence under the statute is 20 years in prison to be followed by three years of supervised release and a fine of up to five million dollars. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The United States Attorney’s Office received valuable assistance from the U.S. Securities and Exchange Commission in the course of investigating this case. The case was prosecuted by Stephen E. Frank and Eric P. Christofferson of Ortiz’s Economic Crimes Unit.
Cincinnati Drug Ring Members Plead Guilty to Related ChargesRead the Press Release
CINCINNATI – Defendants involved in a major cocaine and heroin trafficking ring have pleaded guilty to related charges in U.S. District Court.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office and Cincinnati Police Chief Eliot K. Isaac, announced the final plea entered into yesterday before United States District Court Judge Timothy S. Black.
According to court documents, the defendants were charged in April 2015 in a 23-count indictment. The indictment outlined that the group conspired to facilitate an illegal drug business, primarily cocaine and heroin.
It was further part of the conspiracy that the defendants operated “stash” houses to process, cut, package and store the drugs as well as firearms and money. In order to conceal the money generated from the drug sales, defendants would launder the profits by purchasing real and personal property and place assets in the names of other individuals.
Upon executing search warrants in this case, investigators discovered more than $1 million in cash at the properties maintained by the narcotics trafficking organization.
Also included in forfeiture in this case are: seven firearms, three properties in Cincinnati, five vehicles including two luxury vehicles and a motorcycle, multiple pieces of jewelry, Gucci and Rolex watches, two ballistic vests, a number of “mink” fur coats and vests, 13 designer handbags and Beats headphones and ear buds.
The defendants and the charges to which they pled guilty include:
Name Age Residence Pleaded to Potential sentence
Christopher Whitfield 42 Cincinnati Conspiracy to commit money laundering 20 years in prison
Tonia Whitfield 41 Cincinnati Money laundering (3counts) 20 years in prison per count
Steven Griffin 40 Cincinnati Possession with intent to distribute 40 years in prison; 10 years in prison
herion; felon in possession of a firearm
Icierra Martin-Bronson 38 Cincinnati Money laundering (2counts) 20 years in prison
Griffin was sentenced on January 13, 2015 to 87 months in prison. Tonia Whitfield was sentenced on December 14, 2015 to 12 months and one day in prison.
“IRS Criminal Investigation follows the money so we can financially disrupt and dismantle major drug trafficking organizations, especially when individuals attempt to conceal the true source of their money,” said Guy A. Ficco, Acting Special Agent in Charge, IRS, Criminal Investigation. “Today's announcement is a direct result of the excellent partnership IRS, the U.S. Attorney’s Office, the FBI, and the Cincinnati Police Department has in combating major drug trafficking organizations, which have such a negative impact on our community."
U.S. Attorney Stewart commended the cooperative investigation by local and federal law enforcement, including the IRS, FBI and Cincinnati Police Department, as well as Assistant United States Attorneys Karl Kadon and Jessica W. Knight, who are representing the United States in this case.
Chinese National Pleads Guilty to Conspiracy to Steal Trade SecretsRead the Press Release
DES MOINES, IA – On January 27, 2016, Mo Hailong, also known as Robert Mo, 46,
appeared before the Honorable Stephanie M. Rose and pleaded guilty to conspiracy to steal trade
secrets, announced Assistant Attorney General for National Security John P. Carlin and Acting
United States Attorney Kevin E. VanderSchel.
According to the plea agreement, Mo Hailong admitted to participating in a long term
conspiracy to steal trade secrets from DuPont Pioneer and Monsanto. Mo Hailong participated in
the theft of inbred corn seeds from fields in the Southern District of Iowa for the purpose of
transporting the seeds to China. The stolen inbred, or parent, seeds were the valuable intellectual
property of DuPont Pioneer and Monsanto.
During the course of the conspiracy, Mo Hailong was employed as the Director of
International Business of the Beijing Dabeinong Technology Group Company, commonly
referred to as DBN. DBN is a Chinese conglomerate with a corn seed subsidiary company, Kings
Nower Seed. Mo Hailong is a Chinese national who became a lawful permanent resident of the
United States pursuant to an H-1B visa.
The investigation was initiated when DuPont Pioneer security staff detected suspicious
activity and alerted the Federal Bureau of Investigation. DuPont Pioneer and Monsanto were
fully cooperative throughout the investigation.
Mo Hailong will be sentenced at a date to be determined in Des Moines, Iowa.
Conspiracy to steal trade secrets is a felony that carries up to 10 years of imprisonment
and up to a $250,000 fine. As part of the plea agreement in this case, the government agreed not
to seek more than a five year prison sentence.
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 and the
National Security Division’s Counterintelligence and Export Control Section.
Carencro firearms dealer sentenced for failing to maintain accurate recordsRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Carencro man was sentenced Tuesday to six months of home confinement for failing to maintain accurate records of firearms sales at his business.
Morgan Joseph Parlow Jr., 33, of Carencro, La., was sentenced by U.S. Magistrate Judge Patrick J. Hanna on one count of failure to maintain firearms inventory records. He was also sentenced to five years of probation and 600 hours of community service, and he was ordered to forfeit approximately $100,000 worth of firearm inventory, including a machinegun and numerous firearm silencers, and pay a $7,500 fine. Additionally, he agreed to forfeit his right to hold a Federal Firearms License. According to the August 18, 2015 guilty plea, Parlow was a licensed firearms manufacturer and dealer under investigation for theft when agents discovered that his Federal Firearms Licensee and Special Occupational Tax Number had expired. Law enforcement agents conducted a search on March 23, 2015, of Parlow’s home and the site of his business, Specialties of Acadiana. Agents found incomplete sales, purchase and inventory records, which he was required to keep and maintain under the Gun Control Act and the National Firearms Act. Specifically, the records failed to account for Parlow’s possession of seven silencers and one machine gun as well as Parlow’s acquisition of other firearms.
The ATF conducted the investigation. Assistant U.S. Attorneys David C. Joseph and Joseph T. Mickel prosecuted the case.
Camden County, New Jersey, Man Admits Possessing Child Pornography While on Federal Supervised Release, State ParoleRead the Press Release
CAMDEN, N.J. - A previously convicted sex offender from Bellmawr, New Jersey, today admitted possessing images of child pornography that he acquired through social media and email correspondence with two boys, U.S. Attorney Paul J. Fishman announced.
Robert Pelle, 50, pleaded guilty before Chief U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of knowingly possessing child pornography.
According to documents filed in this case and statements made in court:
From April 2013 through July 2013, Pelle was still on supervised release and state parole after being incarcerated for possession of child pornography and related state charges from 2007. Pelle admitted today that in July 2013, he used a public library computer to access social networks and sexually explicit websites, which he was not permitted to do under conditions of his parole.
In addition, Pelle admitted that from April 2013 through July 2013, he used social media accounts and email to pose as a minor and communicate with two young boys. During the correspondence, Pelle asked one boy to send nude images of himself, which he did. Pelle also admitted sending one of those images to the other boy.
As a previously convicted sex offender, Pelle faces a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of 20 years in prison, a lifetime of supervised release and a $250,000 fine. Pelle also faces an additional five years in prison because the crime was committed while on federal supervised release. Sentencing is scheduled for May 6, 2016.
U.S. Attorney Fishman credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge William F. Sweeney Jr. in Philadelphia, with the investigation leading to today’s plea. He also thanked the parole officers of the New Jersey Department of Parole, under the direction of Chairman James Plousis, and detectives from the Bellmawr Police Department, under the direction of Chief William Walsh, for their assistance.
The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the U.S. Attorney’s Office in Camden.
Defense counsel: Lori M. Koch, Esquire and Edward J. Crisonino, Esquire, Camden
CBP Officer Charged with BriberyRead the Press Release
McALLEN, Texas – A U.S. Customs and Border Protection (CBP) officer has been arrested on allegations he accepted a bribe and for exceeding his authorized access to gain information from a protected government computer, announced United States Attorney Kenneth Magidson.
Julio Trujillo, 30, of Mission, was taken into custody this morning. He is expected to make an initial appearance before U.S. Magistrate Judge Dorina Ramos tomorrow at 9:00 a.m.
The criminal complaint, filed Jan. 27, 2016, alleges Trujillo accepted $3,600 in exchange for agreeing to extend one individual’s visa and assisting another individual in obtaining a visa. After receiving the money, Trujillo also allegedly exceeded his access to a protected government computer. According to the charges, he performed a record query on one of the individuals on a government computer to obtain records from the Department of Homeland Security, Department of State and FBI relating to the individual.
If convicted of the bribery charge, he faces up to 15 years in federal prison. The exceeding access to a government computer carries a possible penalty of five years, upon conviction. Both convictions also carry as possible punishment a $250,000 fine.
The charges are the result of an investigation conducted by the FBI, and CBP - Internal Affairs. Assistant U.S. Attorneys Roberto Lopez Jr. and David Lindenmuth are prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Bridgeville Man Sentenced for Making False Claims and Money LaunderingRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Gerald Nocks, age 44, of Bridgeville, Delaware was sentenced yesterday by the Honorable Sue L. Robinson to 18 months incarceration and three years of supervised release. Mr. Nocks was also ordered to pay restitution in the amount of $162,201 to the Internal Revenue Service (IRS).
The sentence follows Nocks’ April 15, 2015 guilty plea to one count of conspiring to make false claims against the government and one count of money laundering.
According to statements made in open court and documents filed in court, from March through April 2011, the defendant caused sixteen (16) false Forms 1120, U.S. Corporate Tax Returns to be mailed to the IRS, in the names of six non-existent corporations for the years 2008, 2009, and 2010. The fictitious returns listed Delaware addresses associated with Nocks, and at which he had access to U.S. mail. Each return claimed approximately $160,000 in gross income and a tax of $2,000. However, each return also claimed an approximate $14,000 fuel tax credit, off-setting the tax due and resulting in a $12,000 refund. The 16 false claims total $198,441.
In April 2011, before the scheme was detected, Nocks received 13 refund checks totaling $162, 201. He then laundered those proceeds through various bank accounts before wiring $150,000 to a settlement table in Georgia for the purchase of a home, where he was living at the time his fraudulent actions were detected.
“IRS Criminal Investigation is diligent when it comes to enforcing the laws directed at those who attempt to defraud our nation’s tax system," said Akeia Conner, Special Agent in Charge of Philadelphia Field Office. “Today’s sentencing shows how seriously the courts take federal tax crimes and it should serve as a deterrent to those who might contemplate similar fraudulent actions."
This case is the result of an investigation conducted by the Internal Revenue Service, Criminal Investigation. The case was prosecuted by Assistant United States Attorney Edmond Falgowski.
Assessments of Public Confidence and Community Trust in the Seattle Police Department Filed with CourtRead the Press Release
SEATTLE – Assessments of the state of public confidence and community trust in the Seattle Police Department (SPD) were filed with the Court yesterday. These assessments are the seventh and eighth – of 15 total – formal assessments by the Federal Monitor overseeing whether SPD is complying with the specific requirements and overall goals of the consent decree. The public confidence and community trust surveys looked at progress towards a primary goal of reform: promoting public confidence in SPD, its officers and the services SPD delivers.
An assessment of SPD’s Office of Professional Accountability was filed last week and can be found here. Five previous assessments – which can be found here and here – related to SPD’s use of force reporting investigations and found that, with respect to four of them, SPD was in “initial compliance” with the requirements of the consent decree. The two assessments filed today were not designed to evaluate compliance with specific terms of the consent decree. Rather, these assessments surveyed the “many areas, initiatives, programs, and general characteristics that are commonly associated with community policing and public confidence in law enforcement – and [are] an evaluation of how SPD is doing with respect to each of them.”
“An overarching goal of reform is ensuring that the people of Seattle have trust and confidence in SPD’s ability to be responsive to a diverse community’s needs,” said Annette L. Hayes, U.S. Attorney for the Western District of Washington. “The public confidence survey demonstrates that Seattle residents have increasing faith in SPD. At the same time, it also helps identify areas where there remains work to do, particularly in isolated and marginalized communities, where positive perceptions are lagging. The commitment of community stakeholders – including the Community Police Commission – to identify areas of concern and work with SPD to build strong public safety partnerships is to be commended.”
The assessments of public confidence and trust in SPD include two elements. The first is a statistically-valid survey of public confidence in the SPD and its officers. That survey – which found the overall approval of SPD improving, disapproval of the department decreasing, and fewer troubling interactions between officers and Seattle residents, particularly African Americans and Latinos and notably with respect to the excessive use of force – was filed with the Court in October and can be found here.
The second element of the assessment is a qualitative review of SPD’s efforts to build public confidence with the community. This review included conducting interviews over several months with SPD personnel; reviewing numerous documents and reports created by the SPD, Community Police Commission, and other governmental and community organizations; and interviewing community members from across Seattle. The goal of the review was “to ensure efforts to implement community policing and increase public trust are aligned with recognized best practices in the field of policing today.”
Overall, the Monitor found that, since the start of the consent decree, SPD “has not only fully embraced a community-oriented policing approach, but has demonstrated . . . a willingness to engage and join with the community in an effort that is impressive in focus and shows early signs of success.” That said, the Monitor also noted that these efforts “are just a beginning of the steps necessary to cementing an organizational culture capable of building and sustaining trust with the community,” particularly in isolated communities.
The full assessments are attached.
Aspects of community outreach and engagement have been tasked to the CPC as part of the consent decree process. For instance, following also study and community outreach, the CPC recently released a report on SPD’s recruitment, hiring, and training practices addressing how well they promote engagement with members of the city’s diverse racial, ethnic, immigrant, and refugee communities. This was the first of two reports the CPC was charged in the consent decree to complete. The CPC has announced that it expects to release an additional report in the spring of 2016 that will examine the formal and informal channels of communication between the SPD and these same communities.
Upcoming Assessments
The next assessment to be filed will address crisis-intervention and the dispatching of crisis-trained officers. Also filed in February will be an assessment of the Early Intervention System. In March, assessments relating to supervisors, stops and detentions, and three use of force-related assessments covering officer uses of force, use of force data and officer activity level will be filed.
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Amherst Doctor Pleads Guilty to Obtaining Controlled Substances by Fraud and Health Care FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. – In the second case this week involving a doctor illegally prescribing narcotics, and the third case this week involving a medical professional, U.S. Attorney William J. Hochul, Jr. announced today Dr. Albert R. Cowie, 37, of Amherst, NY, pleaded guilty to obtaining controlled substances by fraud and health care fraud before U.S District Judge Lawrence J. Vilardo. The charges carry a maximum penalty of 10 years in prison, a $250,000 fine or both.
“As stated several times before, this Office is committed to identifying and prosecuting all traffickers of narcotics – whether they be medical professionals or corner drug dealers,” said U.S. Attorney Hochul. “With this being the third case this week involving a medical professional, hopefully that focus will become known to those who contribute to the current opiate/opioid crisis.”
“DEA Special Agent in Charge James J. Hunt stated, “Three out of four people who use heroin previously abused prescription drugs. It is imperative to regulate the distribution of prescription medication; and this plea represents law enforcement’s commitment to keeping diverted prescription medication off the streets.”
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that between January 2010 and March 22, 2014, the defendant, a practicing radiologist, wrote more than 200 illegal prescriptions for controlled substances such as Oxycodone, Percocet, and Hydrocodone. The prescriptions were distributed to an individual who then went to local pharmacies and had the scripts filled. The individual retained some of the controlled substances for personal use but returned the remainder of the narcotics to Cowie for his own use.
During a meeting between Cowie and a confidential witness, the defendant advised the witness to lie to insurance investigators about his alleged prescription fraud. The witness is quoted as saying to the defendant “okay so just say they were written for me even though they were written for you…is what you’re saying? Cowie replied “right.”
As a result of the prescription fraud, Univera Health Care and HealthNow New York were fraudulently billed $20,482.83.
On Monday, Dr. Pravin Mehta was sentenced to 24 months in prison for illegally prescribing massive quantities of pain medications. And on Wednesday, Leyla Samadi was convicted of illegally obtaining controlled substances by fraud.
The plea is the culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the New York State Bureau of Narcotic Enforcement, under the direction of NYS Health Commissioner Howard Zucker, and the Amherst Police Department, under the direction of Chief John Askey.
Sentencing is scheduled for May 6, 2016 at 11:00 a.m. before Judge Vilardo.Alfred Man Pleads Guilty to Possessing Child PornographyRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Kevin Millette, 43, of Alfred, Maine, pled guilty today in U.S. District Court to possessing child pornography.
According to court records, in November 2015, federal agents executed a search warrant at Millette’s residence in Alfred. Millette was present, agreed to be interviewed, admitted that he had accessed child pornography recently using his phone and estimated that he had thousands of child pornography images on the phone.
Investigators seized three cell phones and a memory card from the residence. One of the phones was in the process of downloading child pornography images when it was seized. A forensic analysis of the phone and its memory card revealed thousands of digital still images depicting children engaging in sexually explicit conduct, as well as a smaller number of child pornography videos. Another memory card was also found to contain child pornography images.
Millette faces a sentence of between 10 and 20 years in prison, a $250,000 fine and between five years and life on supervised release. He faces enhanced penalties because he has a prior child pornography conviction. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Maine State Police Computer Crimes Unit.Alabama Woman Sentenced to Prison for Involvement in Stolen Identity Tax Refund Fraud RingRead the Press Release
Filed 326 Fraudulent Tax Returns Seeking More than $450,000 in Tax Refunds
A Phenix City, Alabama resident was sentenced to serve 51 months in prison, followed by three years of supervised release and ordered to pay $116,636 in restitution for her role in a stolen identity refund fraud (SIRF) scheme, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama announced today.
“Prosecuting stolen identity refund fraud remains a top priority of the department,” said Assistant Attorney General Ciraolo. “Individuals engaged in this criminal conduct not only cause millions of dollars in financial losses to the IRS, but inflict long-term economic and personal consequences on those US taxpayers whose private information is stolen. The Tax Division will continue to work with its federal, state and local law enforcement partners to combat this serious fraud on the American public, and seek lengthy terms of incarceration for those responsible.”
“My office will continue to work with the IRS to vigorously prosecute those people who steal an innocent person’s identity, just to file a false tax return and steal the tax refunds,” said U.S. Attorney Beck. “These criminals need to be punished for the harm they cause to the person whose identity is stolen and the harm they cause to the U.S. taxpayer.”
According to court documents, during 2013, Benita E. Short, conspired with others to defraud the United States by filing false federal income tax returns using stolen identities. Short obtained personal identifiable information, including names, social security numbers, addresses and dates of birth, without the individuals’ authorization. A co-conspirator obtained the stolen personal identifiable information from an individual who had access to Alabama state databases and obtained Electronic Filing Identification Numbers (EFINs) in the names of several tax preparation businesses, and provided this information to Short. Short then used the stolen identities and EFINs to electronically file 326 fraudulent tax returns with the Internal Revenue Service (IRS), causing a tax loss of $456,853. Short also caused income tax refund checks that were issued as a result of the fraudulent tax returns to be cashed at several businesses in Alabama and Georgia. For her role in the conspiracy, Short pleaded guilty in October 2015 to conspiracy to defraud the United States and aggravated identity theft.
In March 2015, one of Short’s co-conspirators, Keshia Lanier, the ringleader of a $24 million SIRF conspiracy, also pleaded guilty to one count of wire fraud and one count of aggravated identity theft. On Sept. 25, 2015, Lanier was sentenced to serve 15 years in prison to be followed by three years of supervised release and ordered to forfeit $5,811,406.
In addition to the prison term, U.S. District Judge Myron H. Thompson of the Middle District of Alabama ordered Short to serve three years of supervised release and pay $116,636 in restitution to the IRS. Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of IRS Criminal Investigation, who investigated the case and Trial Attorneys Michael C. Boteler and Michael P. Hatzimichalis of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Alabama Woman Sentenced to Prison for Involvement in Stolen Identity Tax Refund Fraud RingRead the Press Release
Montgomery, AL –A Phenix City, Alabama resident was sentenced to serve 51 months in prison, followed by three years of supervised release and ordered to pay $116,636 in restitution for her role in a stolen identity refund fraud (SIRF) scheme, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama announced today.
“Prosecuting stolen identity refund fraud remains a top priority of the department,” said Assistant Attorney General Ciraolo. “Individuals engaged in this criminal conduct not only cause millions of dollars in financial losses to the IRS, but inflict long-term economic and personal consequences on those US taxpayers whose private information is stolen. The Tax Division will continue to work with its federal, state and local law enforcement partners to combat this serious fraud on the American public, and seek lengthy terms of incarceration for those responsible.”
“My office will continue to work with the IRS to vigorously prosecute those people who steal an innocent person’s identity, just to file a false tax return and steal the tax refunds,” said U.S. Attorney Beck. “These criminals need to be punished for the harm they cause to the person whose identity is stolen and the harm they cause to the U.S. taxpayer.”
According to court documents, during 2013, Benita E. Short, conspired with others to defraud the United States by filing false federal income tax returns using stolen identities. Short obtained personal identifiable information, including names, social security numbers, addresses and dates of birth, without the individuals’ authorization. A co-conspirator obtained the stolen personal identifiable information from an individual who had access to Alabama state databases and obtained Electronic Filing Identification Numbers (EFINs) in the names of several tax preparation businesses, and provided this information to Short. Short then used the stolen identities and EFINs to electronically file 326 fraudulent tax returns with the Internal Revenue Service (IRS), causing a tax loss of $456,853. Short also caused income tax refund checks that were issued as a result of the fraudulent tax returns to be cashed at several businesses in Alabama and Georgia. For her role in the conspiracy, Short pleaded guilty in October 2015 to conspiracy to defraud the United States and aggravated identity theft.
In March 2015, one of Short’s co-conspirators, Keshia Lanier, the ringleader of a $24 million SIRF conspiracy, also pleaded guilty to one count of wire fraud and one count of aggravated identity theft. On Sept. 25, 2015, Lanier was sentenced to serve 15 years in prison to be followed by three years of supervised release and ordered to forfeit $5,811,406.
In addition to the prison term, U.S. District Judge Myron H. Thompson of the Middle District of Alabama ordered Short to serve three years of supervised release and pay $116,636 in restitution to the IRS. Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of IRS Criminal Investigation, who investigated the case and Trial Attorneys Michael C. Boteler and Michael P. Hatzimichalis of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at justice.gov/tax.
Wednesday 27 January 2016
Wilmington Man Sentenced for Unlawful Possession of FirearmRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today Chief United States District Judge James C. Dever, III, sentenced KEVIN ROBINSON, 31, of Wilmington, North Carolina, to 84 months’ imprisonment followed by 3 years’ supervised release.
On July 28, 2015, a Federal Grand Jury returned a Criminal Indictment charging ROBINSON with unlawful possession of a firearm and ammunition by a convicted felon. On October 29, 2015, ROBINSON pled guilty to the charge.
According to the investigation, on April 16, 2015, Wilmington police officers located ROBINSON and executed an arrest warrant for a probation violation. As officers were placing ROBINSON under arrest, ROBINSON told officers he was carrying a gun in the waistband of his clothing. Upon a search, officers found a loaded Ruger P-90 .45 caliber handgun.
The criminal investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Wilmington Police Department. Assistant United States Attorney Jane J. Jackson handled the prosecution on behalf of the Eastern District of North Carolina.
Wichita Massage Parlor Owner Sentenced on Federal Prostitution ChargeRead the Press Release
WICHITA, KAN. - A Wichita massage parlor owner was sentenced Wednesday to time served (10 months) for trying to recruit a Chinese-speaking woman to perform sexual services at a massage parlor in Wichita, U.S. Attorney Barry Grissom said. She also will serve five years on federal supervised release.
Ping Liu, 44, Wichita, Kan., pleaded guilty to one count of attempted coercion and enticement to prostitution. In her plea, she admitted that during a phone conversation conducted in Mandarin Chinese she arranged for a woman posing as a job applicant from New York to come to Wichita to work at Q Massage, 3833 W. 13th in Wichita. Liu told the applicant that the job included providing sexual services to customers. Liu told the applicant she would pick her up at the airport in Wichita.
In her plea, Liu also admitted twice offering to perform sexual services for undercover Wichita police officers who came to the massage parlor posing as customers.
Grissom commended the Wichita Police Department, Homeland Security Investigations (HSI) and Assistant U.S. Attorney Jason Hart for their work on the case.
Veteran York County Police Officer Charged with Federal CorruptionRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Harrisburg has indicted Tyson Baker, a 17 year veteran police officer with the Fairview Township Police Department, on charges related to the theft of drug proceeds and efforts to conceal those thefts.
According to United States Attorney Peter Smith, the indictment alleges that Baker, age 41, Etters, stole several thousand dollars of real and suspected drug proceeds in November and December of 2015. Baker then allegedly caused the preparation of false reports in connection with those two thefts to cover up his conduct and obstruct the investigation. Baker was indicted in two counts of the indictment with taking property to prevent its seizure, two counts of obstruction of justice, three counts pertaining to the filing false reports, and one count of theft of government property.
The indictment alleges that, in November, Baker orchestrated the theft of $2,000 in drug proceeds seized by the Fairview Township Police Department during the search of a residence that had resulted in the seizure of several pounds of marijuana and approximately $15,000. The Federal Bureau of Investigation (FBI) recorded conversations between Baker and a cooperating individual (CI) regarding the theft. The indictment also alleges that Baker discussed with the CI stopping suspected drug traffickers driving through the township to steal their drug proceeds during traffic stops.
The indictment also alleges that on December 16, 2015 the FBI, with the full cooperation of the Fairview Township Police Department, arranged for a vehicle operated by an undercover FBI agent to be stopped. It is alleged that Baker had the vehicle towed from the scene. It is also alleged that, without first obtaining a search warrant and in spite of directions by the FBI not to search the vehicle, Baker searched the vehicle and stole $3,000 that was concealed in the vehicle that Baker believed were drug proceeds. The grand jury also found that false reports were prepared and filed in connection with both theft incidents.
The case was investigated by the FBI, Harrisburg Resident Office, the Pennsylvania State Police, the Pennsylvania Office of Attorney General, and the Fairview Township Police Department.
Prosecution of the case is assigned to Assistant United States Attorney William A. Behe.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years on the 4 counts dealing with obstruction and records tampering charges, 5 years on each of the two counts charging removal of property to prevent its seizure, 5 years on the false reports to federal authorities charge, and 10 years on the theft of government property charge. There is also a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Two Florida Brothers Sentenced to 84 Months in Prison for Bath Salts and Money Laundering Conspiracies in Eastern TennesseeRead the Press Release
GREENEVILLE, Tenn. – Michael Loren Sheaffer, 35, of Pinellas Park, Fla., and Matthew Shawn Sheaffer, 35, of Holiday, Fla., were both sentenced on Jan. 27, 2016, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to each serve 84 months in federal prison. Both Sheaffers were previously convicted of conspiracy to distribute, and possess with the intent to distribute, assorted Schedule I controlled substances and their analogues; and conspiracy to commit money laundering. There is no parole in the federal system.
Beginning in the summer of 2010, the Sheaffers began an elaborate criminal business of procuring, marketing, packaging, and distributing massive amounts of Schedule I controlled substances and corresponding analogues. Collectively, these drugs are commonly referred to as bath salts, spice, and synthetic marijuana. However, those names are misnomers used to lure consumers and avoid criminal liability. In reality, such substances are nothing more than hard drugs masquerading as harmless chemicals.
Utilizing a website and a network of distributors, the Sheaffers sold these drugs throughout the southeastern United States and elsewhere. A large portion of the contraband was distributed from head shops and businesses within the Eastern District of Tennessee. The resulting proceeds were then laundered, funneled back to the Sheaffers and other co-conspirators, and used to further perpetuate their drugs crimes.
A total of five individuals were charged in this case including: Mitchel Lee Chambers, 36, of Magnolia, Tex., who was sentenced to serve 87 months; Niki Lyn Maxwell, 33, of New Port Richey, Fla., who was sentenced to serve 54 months; and, Gretchen Elizabeth Sheaffer, 30, of Pinellas Park, Fla., who was sentenced to serve 54 months.
Acting U.S. Attorney Nancy Stallard Harr said, “Northeast Tennessee has been particularly hard hit by these dangerous, so-called synthetic, drugs. Thanks to the teamwork of our law enforcement partners in the Kingsport Police Department, Sullivan County Sheriff’s office, and Johnson City Police Department, as well as the Drug Enforcement Administration (DEA) and Internal Revenue Service, Criminal Investigation Division (IRS-CI), we were able to react swiftly and decisively to stem the flow of these harmful substances which have no legitimate or legal purpose.”
“The role of Criminal Investigation Division of the Internal Revenue Service in narcotics investigations is to follow the money so we can financially disrupt and dismantle major drug trafficking organizations,” stated Tamera Cantu, Acting Special Agent in Charge, IRS-CI. “This investigation is a great example of how the various law enforcement agencies in this district work together, and these sentences should send a clear message that drug and money laundering violations are serious crimes that will be punished accordingly.”
This investigation was the product of a partnership between the Kingsport, Tennessee Police Department, Sullivan County Sheriff’s Department, Johnson City Police Department, IRS-CI, and DEA. Assistant U.S. Attorneys M. Neil Smith and Nick Regalia represented the United States.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (“OCDETF”) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Twenty-Two Charged with Racketeering Conspiracy and Related Crimes Involving Drug Trafficking, Illegal Gambling and Money LaunderingRead the Press Release
Assistant U. S. Attorneys Andrew Young (619) 546-7981, Mark W. Pletcher (619) 546-9714 or Benjamin Katz (619) 546-9604
NEWS RELEASE SUMMARY – January 27, 2015
SAN DIEGO – A federal grand jury sitting in the Southern District of California has charged 22 people with participating in an international narcotics trafficking and illegal gambling ring led by former University of Southern California athlete Owen Hanson.
Early today, authorities arrested 19 people at locations around San Diego, Orange and Los Angeles counties, as well as in Sacramento, Phoenix, Louisiana, and Virginia. Owen Hanson and Giovanni “Tank” Brandolino were previously arrested; Kenny Hilinski remains a fugitive.
According to court documents, Hanson and his associates conspired to operate “ODOG,” an enterprise engaged in international and domestic drug trafficking, illegal sports gambling and international money laundering. The organization used threats and violence against its gambling and drug customers to force compliance. For example, the organization sent a DVD of a beheading and a photo of an individual’s family gravestone in an effort to collect an alleged $2 million debt.
“Transnational criminal organizations pose a significant threat to our country and our allies throughout the world,” said U.S. Attorney Laura Duffy. “Such criminal organizations are unhindered by national boundaries, and unrestricted in the types of crimes they will commit in the pursuit of illegal profits. Here, we allege that the ODOG enterprise employed illegal gambling, drug trafficking and money laundering to expand its tentacles throughout the world, and its operators regularly used complicated financial transactions and encrypted communications to conceal their criminal activities. Those who mistakenly underestimate the dangers of illegal gambling should take note of the extreme threats of violence employed by the ODOG enterprise to extort payment from their ‘customers.’”
“Today's indictment will begin the process of dismantling a sophisticated international criminal enterprise that used violence and intimidation to advance their criminal objectives," commented FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is appreciative of the assistance from our domestic and international law enforcement partners in this investigation especially the Australian Crime Commission, the New South Wales Police Force and the New South Wales Crime Commission.”
“Utilizing the professional services of a Certified Public Account, the ODOG Enterprise laundered illicit funds through shell companies, phony bank accounts and structured bank deposits in an attempt to avoid detection by law enforcement,” said Erick Martinez, Special Agent in Charge for IRS Criminal Investigation. “This joint investigation continues to demonstrate our efforts to ensure that financial institutions will not be abused by narcotics traffickers and illegal gambling businesses attempting to conceal their ill-gotten gains.”
Here’s how the enterprise operated, according to the indictment:
Gambling Network
ODOG’s network of bookies and runners extended nationally from Virginia to California where various bookies accepted wagers on professional and collegiate football and baseball games. Hanson, who allegedly oversaw the organization, delegated a portion of the responsibility to operate the gambling network to Kenny Hilinksi, an expatriate living in Peru. From Peru, Hilinski maintained various websites used by gamblers to place bets, coordinated the collection of payments from various bookies and gamblers, and directed the organization’s runners to distribute the proceeds through shell companies and cash deliveries.
As indicated above, the ODOG gambling network employed violence and threats of violence to ensure that delinquent bettors paid their gambling debts. Daniel Portley-Hanks, a Los Angeles private investigator also charged in the indictment, allegedly assisted with the collection of debts from gamblers by obtaining personal identification information, locating the individuals, and coordinating the attacks.
Drug Distribution
The ODOG Enterprise distributed narcotics – including cocaine, methamphetamine, heroin, and ecstasy – both domestically and internationally in wholesale and retail quantities. Hanson, who oversaw the organization, shared domestic operations with Giovanni “Tank” Brandolino. Brandolino was arrested in October 2015 by DEA agents in Brooklyn, New York in a separate narcotics trafficking case. Derek Loville, a former professional football player, also distributed drugs for the ODOG Enterprise in Arizona.
Money Laundering
The ODOG Enterprise used sophisticated techniques and employed financial professionals to launder the proceeds of both the gambling and drug trafficking networks. Luke Fairfield, a Certified Public Accountant based in San Diego, set up shell corporations and advised members of the organization on methods to structure bank transactions to avoid detection by bank security and law enforcement. The ODOG Enterprise also used “runners” who collected and distributed the Enterprise’s illegal proceeds in a manner designed to evade detection by law enforcement.
The case stems from of a prior international sports gambling case against the Macho Sports Enterprise (13CR2196-JLS). In Macho Sports, a June 2013 federal grand jury charged 19 defendants with various crimes, including a racketeering conspiracy and running an illegal gambling business. Following the international criminal web identified in the Macho Sports case, the FBI began working with Australia’s New South Wales Police Force (in conjunction with the New South Wales Crime Commission) to uncover this second international sports betting—and drug—conspiracy.
Hanson was initially indicted and arrested on September 9, 2015 after arranging the delivery of five kilograms of cocaine and five kilograms of methamphetamine. This indictment adds additional charges relating to Hanson’s organization. Hanson and co-defendants Luke Fairfield, Kenny Hilinski, Giovanni Brandolino, Daniel Portley-Hanks, Jack Rissell, and Derek Loville are charged with a racketeering conspiracy related to illegal gambling and narcotics trafficking.
The indictment also charges Hanson, Fairfield, Hilinski, Brandolino, Portley-Hanks, Rissell, and fifteen others with operating an illegal gambling business. Of these additional fifteen defendants, thirteen (Charlie D’agostino, Marlyn Villareal, Dylan Anderson, Jim Muse, Jeff Bellandi, Curtis Chen, James Duley, Dee Foxx, Khalid Petras, Rahul Bhagat, David Kipper, Todd Oldham, and Daniel Ortega) were bookies working for Hanson, and two, Marlyn Villareal and Tim Bryan, were runners responsible for transporting gambling and drug trafficking proceeds funds on Hanson’s behalf.
Finally, Hanson, Fairfield, Hilinski, Brandolino, D’Agostino, Villareal, Anderson, Bryan, and Bellandi are charged with laundering the proceeds of the organizations drug and gambling businesses. This money laundering was done by depositing funds into bank accounts opened in the names of fictitious companies but controlled by Hanson and Hilinski. Villareal alone was responsible for the laundering of hundreds of thousands of dollars in drug and gambling proceeds.
In a related matter, Rufus Leon Rhone was also indicted and pled guilty on January 19, 2016 to charges of conspiring to distribute methamphetamine and cocaine. His sentencing is set for April 11, 2016.
DEFENDANT Case Number: 15CR2310-WQH
Owen Hanson Age: 33
Luke Fairfield Age: 39
*Kenny Hilinski Age: 38
Giovanni Brandolino Age: 41
Daniel Portley-Hanks Age: 69
Jack Rissell Age: 49
Derek Loville Age: 47
Chalie D’Agostino Age: 51
Marlyn Villareal Age: 31
Dylan Anderson Age: 33
Tim Bryan Age: 47
Jim Muse Age: 52
Jeff Bellandi aka “Jazzy” Age: 49
Curtis Chen Age: 32
James Duley Age: 40
Dee Foxx Age: 34
Khalid Petras Age: 54
Rahul Bhagat Age: 30
David Kipper Age: 34
Todd Oldham Age: 31
Daniel Ortega Age: 41
*Fugitives
SUMMARY OF CHARGES
Racketeering Conspiracy to Conduct Enterprise Affairs, 18 U.S.C. § 1962(d)
Maximum penalty: Life
Illegal Gambling Business, 18 U.S.C. § 1955
Maximum penalty: Five years
Money Laundering Conspiracy, 18 U.S.C. § 1956(h)
Maximum penalty: Twenty years
Conspiracy to Distribute Narcotics, 21 U.S.C. § 841(a)(1) and 846
Maximum penalty: Life
AGENCY
Federal Bureau of Investigation – San Diego Field Office
Internal Revenue Service – San Diego
Australian Crime Commission
New South Wales Police Force
New South Wales Crime Commission
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Three Senior Executives Sentenced in Manhattan Federal Court for Their Roles in Student Visa and Financial Aid Frauds at For-Profit SchoolsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that SURESH HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA, who were senior executives of privately owned for-profit schools, were sentenced yesterday in Manhattan federal court for their roles in a student financial aid fraud scheme in which they defrauded the United States Department of Education (“Education Department”) of $1,000,000 in education grant funds, and in a student visa fraud scheme that generated $7,440,000 in illegal revenues.
United States District Judge J. Paul Oetken sentenced HIRANANDANEY to one year and one day in prison, LALIT CHABRIA to one year and one day in prison, and ANITA CHABRIA to six months of home confinement. Judge Oetken also ordered these three former executives to forfeit $7,440,000 for the student visa fraud and to pay $1,000,000 in restitution for the student financial aid fraud. These former executives were arrested in May 2014, along with co-defendants Samir Hiranandaney and Seema Shah, following a long-term investigation by the United States Immigration and Customs Enforcement’s Homeland Security Investigations (“ICE-HSI”), the United States Department of State’s Diplomatic Security Service (“DOS-DSS”), and the United States Department of Education’s Office of the Inspector General (“ED-OIG”).
Manhattan U.S. Attorney Bharara stated: “Suresh Hiranandaney, Lalit Chabria, and Anita Chabria exploited our nation’s financial aid and foreign student visa programs, engaging in a long-running fraud scheme that generated millions of dollars. The defendants greedily took advantage of programs meant to help people get a higher education, and in the process, committed federal crimes.”
According to the Complaint and Indictment, sentencing submissions and other publicly filed court documents, and statements made at public court proceedings in this case, including yesterday’s sentencings:
HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA were associated with the Micropower Career Institute (“MCI”), a for-profit school with five campuses in New York and New Jersey, or the Institute for Health Education (“IHE”), a for-profit school located in New Jersey, both of which offered vocational, language, and other classes to, among others, domestic students whose tuition was partially covered by Department of Education Department financial aid, and foreign students who were allowed to stay in this country on student visas requiring that they pursue full courses of study at bona fide educational institutions. Hiranandaney was MCI’s president; his brother-in-law, LALIT CHABRIA, was MCI’s chief executive officer and IHE’s president; and ANITA CHABRIA, the sister of HIRANANDANEY and wife of LALIT CHABRIA, was MCI’s vice president and the director of MCI’s Mineola Campus in Mineola, New York.
HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA defrauded the Education Department of $1,000,000 of educational grant money – funds that the Education Department had paid to MCI for the purpose of covering tuition for domestic students to attend classes at MCI. As part of this fraud, they falsified and manipulated documents to hide MCI’s failure to timely return financial aid money received by MCI for domestic students who had dropped out of MCI.
Similarly, HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA made $7,440,000 in illicit profits by defrauding immigration authorities. In this scheme, they concealed that MCI and IHE were collecting millions of dollars in tuition revenues from foreign students who were not attending courses as required to stay in the United States on student visas. HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and others fraudulently portrayed MCI and IHE to immigration authorities as legitimate institutes of higher learning where foreign students carried full course loads. In reality, the majority of foreign students at MCI and IHE did not attend the required number of classes. HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA failed to report this to immigration authorities, as required, while MCI and IHE continued to collect millions of dollars in tuition from foreign students with delinquent attendance. When a campus of MCI came under regulatory scrutiny, HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and others transferred foreign students with delinquent attendance to affiliated schools (such as another MCI campus or IHE) that were not under scrutiny.
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In addition to their prison and home confinement sentences, HIRANANDANEY, 61, of Dix Hills, New York, and LALIT CHABRIA, 54, and ANITA CHABRIA, 50, both of Old Bethpage, New York, were ordered to forfeit $7,440,000 to the United States Government from the proceeds of their student visa fraud, and pay $1,000,000 in restitution to United States Department of Education for losses from their student financial aid fraud.
The remaining defendants, Samir Hiranandaney and Seema Shah, are scheduled to be sentenced later this year before Judge Oetken.
Manhattan U.S. Attorney Bharara praised ICE-HSI, DOS-DSS, and ED-OIG for their work in the investigation of this case.
This case is being prosecuted by the Office’s General Crimes Unit. Assistant U.S. Attorneys Samson Enzer and Margaret Graham are in charge of the prosecution. Assistant U.S. Attorney Andrew Adams is in charge of the forfeiture aspects of the case.
Tenth and Final Defendant from Butte County Methamphetamine Trafficking Organization Sentenced to Federal PrisonRead the Press Release
SACRAMENTO, Calif. — Manuel Garcia Navarro, 33, of Fresno, was sentenced today by United States District Judge Kimberly J. Mueller to two years in prison for conspiring to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Navarro was a methamphetamine courier. On June 29, 2013, Navarro was stopped by the California Highway Patrol for a vehicle code violation. A subsequent search of Navarro’s vehicle resulted in the seizure of four pounds of methamphetamine concealed within the airbag compartment.
Federico Aguilar was the head of this drug trafficking organization that was responsible for distributing pound-quantities of methamphetamine on a weekly basis in Butte County. Over a four-month period in 2013, Aguilar’s organization distributed over 49 pounds of methamphetamine. Aguilar was arrested at his residence in August 2013, where law enforcement officers found 15 cellphones, five guns, and $50,000 in cash concealed within a bathroom air vent.
Navarro is the tenth and final defendant to be sentenced in this case. Nine other defendants have been sentenced this year:
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On October 14, 2015, Federico Aguilar was sentenced to 17 and a half years in prison.
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On September 30, 2015, Rafael Medina was sentenced to six years and eight months in prison.
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On August 19, 2015, David Eleazar was sentenced to six years and eight months in prison.
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On July 8, 2015, Neng Xiong was sentenced to four years and five months in prison.
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On February 25, 2015, Alejandro Corona was sentenced to three years and six months in prison.
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On October 28, 2015, Rickey Xiong was sentenced to three years and six months in prison.
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On March 25, 2015, Jaime Dominguez was sentenced to two years in prison.
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On May 20, 2015, Sou Xiong was sentenced to two years in prison.
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On June 10, 2015, Cindy Hunter was sentenced to one year of supervised release.
This case was the product of an investigation by the Drug Enforcement Administration, the Butte Interagency Narcotics Task Force (BINTF), the Butte County Sheriff’s Office, the Butte County Probation Department, the Butte County District Attorney’s Office, the California Highway Patrol, the California Department of Justice Bureau of Gambling Control, the Chico Police Department, and the United States Marshals Service. Assistant United States Attorney Justin Lee prosecuted the case.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Swan’s Island Man Sentenced to Seven Years for Illegally Possessing Guns and AmmunitionRead the Press Release
Contact: James M. Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Shaun G. Lemoine, 36, of Swan’s Island, Maine, was sentenced yesterday in U.S. District Court by Judge John A. Woodcock Jr. to seven years in prison and three years of supervised release for illegally possessing firearms and ammunition. Lemoine pleaded guilty on March 17, 2015.
Court records reveal that on January 24, 2014, the Swan’s Island Police Department executed a warrant at Lemoine’s home and seized two firearms and 48 rounds of ammunition. Lemoine was prohibited from possessing these items because of prior federal (gun) and state (burglary and theft) felony convictions.
Prior to this sentencing, the defendant had been jailed over a half dozen times including being sentenced three times in federal court. The defendant also obstructed justice in this case by pressuring a witness to provide false information. In imposing the lengthy sentence, Judge Woodcock said that the defendant’s attempt to cover up his crime and his lengthy criminal history spoke “volumes about [his] utter disrespect for the law” and that “the only answer [was] to place [him] in jail.”The investigation was conducted by the Swan’s Island Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Subway Franchisee and Gas Station Owner Pleads Guilty to Multi-Million Dollar Conspiracy to Defraud the Internal Revenue ServiceRead the Press Release
Defendant Failed to Report More Than $6 Million in Gross Receipts
A Subway franchisee and resident of Alexandria, Virginia pleaded guilty today to conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia.
According to court documents, Obayedul Hoque, 49, owned and operated a gas station in Alexandria called Skyhill Shell and multiple Subway restaurant franchises in Alexandria, Arlington, Virginia and Washington, D.C. Hoque admitted that between 2008 and 2014, he and his co-conspirators, who were managers of some of the Subway franchises and the gas station, conspired to defraud the United States for the purpose of obstructing the Internal Revenue Service (IRS) in the ascertainment and collection of individual and corporate income taxes. Hoque and his co-conspirators did not deposit all of the gas station or the Subway franchises’ gross receipts into the corporate or partnership bank accounts. Instead, Hoque and the managers retained a portion of the gross receipts for their personal benefit and failed to report those funds to the IRS. For the Subway franchises that had no co-conspirator managers, Hoque retained all of the unreported gross receipts for himself.
For the period of 2008 through 2013, point of sales records for the Subway franchises reflected total sales of $20,805,667. However, Hoque and his co-conspirators provided false monthly sales figures to the accounting firm to prepare the Subway entities’ tax returns. As a result, Hoque and his co-conspirators caused false corporate and partnership tax returns to be filed for the Subway franchises, which reported sales of only $14,377,696. Hoque and a co-conspirator also caused false corporate tax returns to be filed on behalf of Skyhill Shell. For some years, some of the entities did not file tax returns with the IRS. Hoque also filed false individual income tax returns with the IRS. Hoque admitted that his conduct caused a tax loss to the IRS of between $1.5 million and $3.5 million.
“As we start the 2016 filing season, this case serves as a reminder that the Justice Department, working with its partners at the IRS, remains committed to identifying, investigating and prosecuting businesses and individual taxpayers who willfully fail to file accurate tax returns and pay the taxes due,” said Acting Assistant Attorney General Ciraolo. “Every taxpayer owes a duty to their fellow citizens to pay their fair share and those who choose not to do so will face the consequences.”
“Today’s plea of Obayedul Hoque for conspiracy to defraud the United States sends a clear message to would-be tax cheats,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “Whether you fail to file and pay your corporate taxes or your personal income taxes, IRS-CI special agents work diligently to uncover all kinds of fraud and hold everyone accountable. U.S. citizens expect and deserve a level playing field when it comes to paying taxes and there are no better financial investigators in the world when it comes to following the money.”
U.S. District Judge Liam O’Grady set sentencing for May 13 at 9:00 a.m. EST. Hoque faces a statutory maximum prison term of five years and a fine of up to $250,000. As part of his plea agreement, Hoque agreed to pay restitution to the IRS for tax liabilities for the years 2008 through 2013.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Boente thanked special agents of IRS-CI, who investigated the case and Assistant U.S. Attorney Uzo Asonye and Assistant Chief Caryn Finley and Trial Attorney Kimberly Shartar of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Subway Franchisee and Gas Station Owner Pleads Guilty to Multi-Million Dollar Conspiracy to Defraud the IRSRead the Press Release
ALEXANDRIA, Va. – Obayedul Hoque, 49, of Alexandria, pleaded guilty today to charges of conspiracy to defraud the United States.
In a statement of facts filed with the plea agreement, Hoque owned and operated a gas station in Alexandria called Skyhill Shell and multiple Subway restaurant franchises in Alexandria, Arlington, and Washington, D.C. Hoque admitted that between 2008 and 2014, he and his co-conspirators, who were managers of some of the Subway franchises and the gas station, conspired to defraud the United States for the purpose of obstructing the IRS in the ascertainment and collection of individual and corporate income taxes. Hoque and his co-conspirators did not deposit all of the gas station or the Subway franchises’ gross receipts into the corporate or partnership bank accounts. Instead, Hoque and the managers retained a portion of the gross receipts for their personal benefit and failed to report those funds to the IRS. For the Subway franchises that had no co-conspirator managers, Hoque retained all of the unreported gross receipts for himself.
For the period of 2008 through 2013, point of sales records for the Subway franchises reflected total sales of $20,805,667. However, Hoque and his co-conspirators provided false monthly sales figures to the accounting firm to prepare the Subway entities’ tax returns. As a result, Hoque and his co-conspirators caused false corporate and partnership tax returns to be filed for the Subway franchises, which reported sales of only $14,377,696. Hoque and a co-conspirator also caused false corporate tax returns to be filed on behalf of Skyhill Shell. For some years, some of the entities did not file tax returns with the IRS. Hoque also filed false individual income tax returns with the IRS. Hoque admitted that his conduct caused a tax loss to the IRS of between $1.5 million and $3.5 million.
Hoque faces a maximum penalty of five years in prison and a fine of $250,000 when sentenced on May 13, 2016. As part of his plea agreement, Hoque agreed to pay restitution to the IRS for tax liabilities for the years 2008 through 2013. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Caroline D. Ciraolo, Acting Assistant Attorney General of the Justice Department’s Tax Division, made the announcement after the plea was accepted by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney Uzo Asonye is prosecuting the case along with Assistant Chief Caryn Finley and Trial Attorney Kimberly Shartar of the Tax Division.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-9.
Stevenson, Alabama, Police Chief Charged with Civil Rights Offenses for Assaulting ArresteeRead the Press Release
The Justice Department announced today that a grand jury in the Northern District of Alabama charged the Chief of Police of Stevenson, Alabama, Daniel Winters, 55, with two counts of deprivation of civil rights under color of law.
The indictment alleges that on or about March 22, 2015, Winters physically assaulted an arrestee, and willfully failed to intervene to stop another person from using unreasonable force during the arrest. The assault caused the arrestee to suffer bodily injuries.
An indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI, with assistance from the Alabama State Bureau of Investigation. The investigation remains ongoing. The matter is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Samantha Trepel of the Civil Rights Division’s Criminal Section and Deputy Chief Laura Hodge of the Northern District of Alabama.
Winters Indictment
Stevenson Police Chief Charged with Civil Rights Offenses for Assaulting ArresteeRead the Press Release
BIRMINGHAM –A federal grand jury today indicted Stevenson Police Chief Daniel Winters, 55, on two counts of deprivation of civil rights under color of law, announced the Justice Department and U.S. Attorney Joyce White Vance.
The indictment alleges that on or about March 22, 2015, Winters physically assaulted an arrestee, and willfully failed to intervene to stop another person from using unreasonable force during the arrest. The assault caused the arrestee to suffer bodily injuries.
An indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI, with assistance from the Alabama State Bureau of Investigation. The investigation remains ongoing. The matter is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Samantha Trepel of the Civil Rights Division’s Criminal Section and Deputy Chief Laura Hodge of the Northern District of Alabama.
Statement by Bill Williams in Regards to the Malheur National Wildlife Refuge Occupation and Related ArrestsRead the Press Release
Statement by Bill Williams
U.S. Attorney
District of Oregon
January 27, 2016
Good Morning. My name is Bill Williams, and I am the U.S. Attorney for Oregon.
I have been coming to Harney County on behalf of the US Attorney's Office for the last 15 years. I am keenly aware of the concerns that are important to this community. I have seen first-hand the passion that folks in this community have for the way of life that is so special. Clearly, this has been disrupted by this armed occupation.
The FBI, the Harney County Sheriff’s Office, OSP, Oregon Sheriff's Association, and numerous law enforcement agencies from around the state have been working very hard to resolve this situation in a peaceful manner, to stop the threats to public safety, and to end the significant disruption this has caused to the people of this county.
We continue working towards resolution, and will do so with the primary goal of restoring normalcy to this community, and highlighting the already existing cooperative efforts of local and federal partners in addressing their own issues.
There are currently eight people in custody - - seven in Oregon and one in Arizona. They will all make an initial appearance before a federal magistrate today. At some time in the future, the defendant in Arizona will come to Oregon for future court proceedings.
As the FBI announced last night, these eight people were arrested for the federal felony offense of “conspiracy to impede officers of the United States from discharging their official duties through the use of force, intimidation, or threats.”
This is an ongoing investigation, and we will not be commenting on the case, instead we will let the publicly filed documents in the case speak for themselves.
In closing, I want to thank the federal, state, local, and tribal law enforcement officers and agents who are working very well together to support this community and this effort.
I also want to again thank the people of Harney County and the Burns Paiute Tribe for their patience…and their passion for returning this community to normalcy.
We will continue working around the clock until this matter is appropriately resolved.
Six Defendants Plead Guilty in Extensive Stolen Identity Tax Refund Fraud Scheme Involving Tens of Thousands of Individuals’ Personal Identifying InformationRead the Press Release
Six defendants pled guilty for their participation in an extensive stolen identity tax refund fraud scheme involving tens of thousands of individuals’ personal identifying information (PII). The defendants used the PII, including names, dates of birth, and Social Security numbers, to file thousands of fraudulent federal income tax returns with the IRS claiming tens of millions of dollars in refunds.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Delany De-Leon Colon, Acting Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations Miami Office (DOL-OIG), Carlos A. Canino, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Dexter Williams, Chief, City of Miramar Police Department, Steve Steinberg, Chief, Aventura Police Department, William Hernandez, Chief, North Miami Beach Police Department (NMBPD), and Franklin Adderley, Chief, Fort Lauderdale Police Department, made the announcement.
Harlan Decoste, a/k/a “Money King,” a/k/a “Moneyking_111,” 27, Kerby Luma, a/k/a "Money Makin Kerb," 26, Frantz Decoste, a/k/a "Gripe_111," 21, Francis Jeudy, a/k/a "Money Makin Rab," a/k/a "Brizzleon111," 26, all of Miramar, and Andy Cherrelus, a/k/a "Risktakers111," 24, of Miami, each pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, one count of conspiracy to possess fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(b)(2), one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(1)(a). Frantz Decoste and Jeudy also pled guilty to one count of possession of stolen mail, in violation of Title 18, United States Code, Section 1708. Chad Davis, a/k/a "Chadillac," a/k/a "Chadillac 305," 29, of Miami, pled guilty to one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3).
According to court documents, while officers from the Miramar Police Department were investigating an armed home invasion that occurred at a home occupied by Harlan Decoste, Frantz Decoste, Luma, and Jeudy, in the Silver Falls Subdivision in Miramar, they discovered evidence of narcotics activity within the home. As a result, officers obtained a state court search warrant for the residence.
While officers were searching the home pursuant to the state court warrant, they found evidence of fraud related activity in various bedrooms and common areas, consisting of approximately 500 debit cards issued in other persons’ names, one ledger/notebook that contained PII, one ledger/notebook that contained information related to tax returns, five United States income tax refund checks in other persons’ names, and various tax return documentation in other persons’ names. In addition, the officers seized approximately 10 computers and 3 USB drives. There were also significant amounts of United States currency, jewelry, expensive shoes and clothing, and other valuable items in the home.
Federal Agents obtained a search warrant to review the electronic and other evidence recovered from the residence. A forensic review of those items revealed that the computers contained PII of tens of thousands of individuals. Some of the PII appeared in photographs of computer screens (screenshots) from a medical center. The screenshots each contained approximately twelve patient names, dates of birth, and Social Security numbers. The PII was also contained in rich text document files. Many of the rich text document files contained the PII from the patient screenshots, along with additional user-inputted information such as the victims’ true addresses, fictitious addresses associated with tax returns, account numbers, IRS filing personal identification numbers, and refund amounts.
Further analysis revealed that the defendants filed and caused to be filed thousands of fraudulent tax returns claiming tens of millions of dollars associated with the PII recovered from the residence. The defendants provided payment instructions on the tax returns, directing the IRS to transfer the tax refunds to various accounts in other persons' names that the defendants and their co-conspirators controlled. The defendants then withdrew the unlawfully obtained tax proceeds for their personal use and to further the fraud scheme.
The defendants each face a maximum of ten years imprisonment for each of the conspiracy to defraud the government and access device charges, a maximum of five years imprisonment for the conspiracy to possess access devices, a maximum of five years imprisonment for possession of stolen mail, and a mandatory term of two years’ imprisonment, consecutive to any other prison term, for the aggravated identity theft charges.
The defendants are scheduled to be sentenced on April 5, 2016, before Judge Dimitrouleas in Fort Lauderdale.
Mr. Ferrer commended the investigative efforts of the IRS-CI, ICE-HSI, USPIS, DOL-OIG, ATF, FBI Miami Cyber Task Force, as well as the Miramar, Aventura, and North Miami Beach Police Departments. The case is being prosecuted by Assistant United States Attorney Brooke Watson.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Schuele Boys Gang Associate Pleads Guilty to Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. — U.S. Attorney William J. Hochul, Jr. announced today that Andre Wise, 37, of Buffalo, pleaded guilty to conspiracy to distribute marijuana before U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that between June 2013 and July 2014, Wise conspired with other Schuele Boys associates and gang members to distribute marijuana in the City of Buffalo.
The Schuele Boys Gang, which operated in the Schuele Street area of the East Side of Buffalo, is believed to be responsible for multiple acts of violence and the distribution of illegal narcotics including cocaine, crack cocaine and marijuana.
Wise is one of 28 Schuele Boys Gang members, associates and other individuals arrested in this case. To date, 17 of the defendants have been convicted.
Today’s sentenced and plea are the culmination of an investigation on the part of the FBI's Safe Streets Task Force which includes representatives of the Amherst Police Department; the Buffalo Police Department; U.S. Border Patrol, the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Cheektowaga Police Department; the Erie County Sheriff’s Department; the Hamburg Police Department; the Lancaster Police Department; the Niagara Frontier Transportation Authority Police; the New York State Department of Correctional Services; the New York State Police; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations. Additional assistance was provided by the Drug Enforcement Administration; U.S. Customs and Border Protection, the United States Marshal Service, the Lackawanna Police Department, and the Niagara County Sheriff’s Department.
Wise will be sentenced on May 16, 2016 at 12:30 p.m. before Judge Arcara.
Rochester Radiologist Sentenced for Defrauding Health Insurance ProgramsRead 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 Thomas F. Stephenson, MD, 72, of Rochester, NY, who was convicted of committing health care fraud, was sentenced to one year probation and ordered to perform 200 hours of community service by Chief U.S. District Judge Frank P. Geraci. The defendant was also fined $25,000.
Assistant U.S. Attorney John J. Field, who handled the case, stated that Stephenson, a radiologist, owned and operated Westside Imaging in Rochester. From January 2007 to April 2010, the defendant engaged in a scheme to defraud Excellus Health, MVP Health and Medicare by double-billing certain x-rays. In total, Stephenson fraudulently sought reimbursements of approximately $135,961.77.
The sentencing is the result of an investigation by Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.
Ridgely Woman Pleads Guilty to Stealing over $173,000 in Social Security and Medicaid BenefitsRead the Press Release
Baltimore, Maryland – Debra Kay Schindler, age 59, of Ridgely, Maryland, pleaded guilty today to theft of government property arising from a scheme to steal $173,529 in social security and Medicaid benefits.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division.
According to her guilty plea, from June 2003 to July 2013, Schindler received Social Security Administration (SSA) Supplemental Security Income (SSI) and Medicaid benefits due to back disorders and diabetes. Schindler reported to SSA that she was married to E.S. but was living alone and had no income or resources. In fact, however, during the entire period that she received SSA and Medicaid benefits, Schindler was living with her husband who worked at Giant Food. Schindler shared a bank account with her husband, and was the co-beneficiary of her husband’s pension. Had SSA been aware of Schindler’s income, resources or living arrangements, Schindler would not have qualified for any benefits.
Schindler fraudulently received a total of $173,529.81 in SSI and Medicaid benefits.
Schindler faces a maximum sentence of 10 years in prison for theft of government property. Schindler has agreed to pay restitution of $173,529.81. U.S. District Judge Richard D. Bennett has scheduled sentencing for April 27, 2016 at 3:00 p.m.
United States Attorney Rod J. Rosenstein commended the Social Security Administration - Office of Inspector General for its work in the investigation and thanked Special Assistant U.S. Attorney Lauren E. Perry, who is prosecuting the case.