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Wednesday 27 January 2016
Reno Lawyer Indicted on Federal Conspiracy and Tax ChargesRead the Press Release
RENO, Nev. – A Reno lawyer was indicted by the federal grand jury today on charges that he and a business partner concealed and attempted to conceal the true source of funding of their business by structuring cash deposits in order to avoid IRS detection, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
“Federal laws require federally-insured financial institutions to report cash or money orders deposited or withdrawn in amounts of $10,000 or more to provide a means to detect fraud, evasion or other criminal activity,” said U.S. Attorney Bogden. “These transaction reporting laws assist law enforcement in investigations of a variety of criminal offenses and many other types of criminal activity.”
Delmar L. Hardy, 60, of Reno, is charged with one count of conspiracy to structure financial transactions, three counts of filing false tax returns, and one count of corruptly obstructing or impeding due administration of IRS laws. If convicted, he faces not more than five years in prison on the conspiracy charge, not more than three years in prison on each of the other charges, not more than $250,000 in fines per count, and criminal forfeiture in the amount of $574,105. Hardy will be scheduled for an arraignment in Reno in the near future.
According to the indictment and other public information, Hardy is a licensed attorney in Nevada and operates the Hardy Law Group. Hardy was business partners with Antonio Servidio in XYZ Real Estate, LLC. Servidio is charged and has pleaded guilty in a related case filed in U.S. District Court in Reno. The indictment alleges that from about July 2009 to January 2012, Hardy and Servidio concealed and attempted to conceal the true source of XYZ’s funds by purchasing structured money orders and by making structured deposits into XYZ bank accounts in order to avoid the currency transaction reporting requirements of financial institutions, and the record-keeping requirements of domestic financial institutions. Hardy also allegedly filed false tax returns for the years 2008, 2009, and 2010, which significantly understated his true income, including cash he received in his practice, and concealed Servidio’s contributions to, and interests in, XYZ Real Estate, LLC, in 2009 and 2010.
The case is being investigated by IRS Criminal Investigation and prosecuted by First Assistant U.S. Attorney Steven W. Myhre and Assistant U.S. Attorney James E. Keller.
An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Readout of Attorney General Lynch’s Visit to New OrleansRead the Press Release
Attorney General Loretta E. Lynch spent the day in New Orleans participating in a roundtable on human trafficking with U.S. Attorney for the Eastern District of Louisiana Kenneth A. Polite; attending a roll call meeting with the New Orleans Police Department; and meeting with the family of Jefferson Parish, Louisiana Sheriff's Deputy Steven Arnold, who is being treated for injuries sustained in yesterday’s shooting.
The roundtable discussion on human trafficking was held at Covenant House in New Orleans and included representatives from Covenant House, Eden House, the Department of Homeland Security's Homeland Security Investigations, the Jefferson Parish Sheriff's Office as well as two human trafficking survivors.
Covenant House and the Jefferson Parish Sheriff's Office were the recipients of one of the Enhanced Collaborative Model (ECM) grants that are jointly administered by the Department of Justice's Bureau of Justice Assistance and the Office for Victims of Crime. The ECM grants use a holistic approach to respond to human trafficking by supporting law enforcement entities that partner with victim service providers in order to improve services to human trafficking survivors and bring traffickers to justice through effective partnerships.
The discussion focused on the importance of a victim-focused, trauma-informed response to human trafficking and the importance of partnerships between law enforcement and victim service providers to ensure that survivors are able to effectively build new lives.
Today’s roundtable is one part of the department’s work to raise awareness during National Slavery and Human Trafficking Prevention Month. Earlier this month, the Office for Victims of Crime released a video series and resource guide, The Faces of Human Trafficking, to raise awareness about the many forms of human trafficking in the United States.
Following the roundtable, Attorney General Lynch also attended a roll call meeting at the New Orleans Police Department’s 1st District Police Station with rank and file officers, Police Superintendent Michael Harrison and 1st District Commander Hans Ganthier. The Attorney General expressed her continued support for the department, as well as her appreciation for their hard work in implementing the terms of the NOPD's consent decree agreement with the Justice Department, which she noted will lead to more effective policing in New Orleans.
Attorney General Lynch also met with the family of Jefferson Parish Sheriff's Deputy Steven Arnold at the LSU Medical Center. During the meeting, she shared her best wishes for his swift recovery and her commitment to justice for his shooting.
Raytown Man Charged with Distributing Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Raytown, Mo., man has been charged with distributing child pornography over the Internet.
Cody Lee Davidson, 18, of Raytown, was charged in a criminal complaint filed in the U.S. District Court in Kansas City, Mo., on Tuesday, Jan. 26, 2016. Davidson was arrested yesterday and will have his initial court appearance today.
According to an affidavit filed in support of the federal criminal complaint, Davidson took pornographic photos of a 7-year-old child victim, identified as Jane Doe, and posted those images on a Web site. Davidson also took a video of the child victim, the affidavit says, which federal agents located on his cell phone.
Davidson also took photos of an 8-year-old child victim, identified as Jane Doe 2, and sent those images to another individual via Kik Messenger.
Investigators have found more than 100 images and videos of child pornography on Davidson’s cell phone and camera, the affidavit says, and vast majority of the images and videos of child pornography depict victims from infants to 10 years old. Three videos, according to the affidavit, depict a female child engaged in sexually explicit conduct with an adult male.
The investigation began when federal agents in Boston, Mass., discovered six images of child pornography being distributed over the Internet on Aug. 7, 2015, during an undercover operation. Earlier this month, agents discovered new images from the same Web site, and learned that these images allegedly had been uploaded to another Web site by Davidson. On Tuesday, Jan. 26, 2016, federal agents and Raytown, Mo., police officers executed a search warrant at Davidson’s residence.
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 David Luna. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
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."
Pottstown Man Indicted on Gun and Drug ChargesRead the Press Release
PHILADELPHIA - Jose Charriez, 35, of Pottstown, Pennsylvania, was charged today by indictment with possession of cocaine with the intent to distribute, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a convicted felon, announced United States Attorney Zane David Memeger. The indictment alleges that on or about March 18, 2015, Charriez was in possession of the cocaine and a loaded .45 caliber handgun in a home in Pottstown, Pennsylvania.
If convicted the defendant faces a maximum possible sentence of life in prison, a fine of up to $2.5 million, up to six years of supervised release, and $300 special assessment.
The case was investigated by the Federal Bureau of Investigation, the Montgomery County Detective Bureau, and the Pottstown Police Department It is being prosecuted by Assistant United States Attorney Jason P. Bologna.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Postal Worker Sentenced for Theft of MailRead the Press Release
U.S. Attorney Kenneth A. Polite announced that O’NEIL EDWARDS, age 27, of New Orleans, was sentenced yesterday after previously pleading guilty to theft of mail matter by a postal employee.
U.S. District Court Judge Jay C. Zainey sentenced EDWARDS to one year of probation to include three months of home confinement. EDWARDS was also ordered to pay $200 dollars in restitution and a fine of $1000.
According to court records, in or about December 2013, EDWARDS, a United States Postal employee, stole two $100 gift cards from mail sent from Las Vegas, Nevada to Belle Chasse, Louisiana.
U.S. Attorney Polite praised the work of the U.S. Postal Service, Office of Inspector General for investigating this matter. Assistant U.S. Attorney G. Dall Kammer was in charge of the prosecution.
Post Falls Banker Sentenced for Bank FraudRead the Press Release
COEUR D'ALENE - Randy Gard Teall, 67, of Post Falls, Idaho, was sentenced today in United States District Court to 12 months and one day in prison followed by five years of supervised release for bank fraud, U.S. Attorney Wendy J. Olson announced. Senior U.S. District Judge Edward J. Lodge will determine the amount of restitution Teall will be ordered to pay. Teall pleaded guilty to the charge on September 15, 2015.
According to the plea agreement, Teall was an officer at Global Credit Union in Coeur d’Alene, Idaho. In this position, Teall was authorized to make and approve loans up to $300,000 without board approval. During Teall’s employment with Global Credit Union, he executed a scheme to procure loans from Global Credit Union by false promises or statements. Specifically, Teall made false statements to Global Credit Union about the creditworthiness of three borrowers and a business. Teall and one of the borrowers were business partners in a real estate endeavor and Teall was the borrower’s landlord. After providing these false statements, Teall approved loans to these individuals which defrauded Global Credit Union. Teall acted with the intent to defraud Global Credit Union when he made and approved these loans. Global Credit Union was a financial institution whose deposits were federally insured by the National Credit Union Share Insurance Fund. Teall was previously convicted of making false statements on a loan application while he was employed by U.S. Bank in 1997.
The case was investigated by Federal Bureau of Investigation.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
Placer County Man Sentenced to 5 Years in Prison for Receiving Child PornographyRead the Press Release
SACRAMENTO, Calif. — United States District Judge Kimberly J. Mueller sentenced Paul Ross Pacini, 46, of Rocklin, to five years in prison, to be followed by 15 years of supervised release, for receiving child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, an undercover investigation revealed that from June 2013 through August 2013, Pacini used a peer-to-peer file-sharing network to make available more than 300 files of pictures and videos depicting the sexual exploitation of children. A search warrant executed at Pacini’s home revealed that his computers contained more than 2,500 images and more than 900 videos depicting the sexual abuse of children, and that at various times, many of those videos were made available to others over the Internet. The images and videos Pacini possessed involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of prepubescent minors under 12 years old.
This case was the product of an investigation by the Sacramento Internet Crimes Against Children (ICAC) Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant United States Attorney André M. Espinosa prosecuted the case.
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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Pine Ridge Woman and Man Charged with Murder and Accessory to MurderRead the Press Release
United States Attorney Randolph J. Seiler announced that a federal grand jury has indicted a Pine Ridge, South Dakota, woman for First Degree Murder, and a Pine Ridge, South Dakota, man for Accessory to First Degree Murder.
Elizabeth Ann LeBeau, a/k/a Ann LeBeau, age 23, and Fred Quiver, a/k/a Fred Brings Plenty, age, 29, were indicted on January 26, 2016.
The Indictment alleges that on or between January 1, and January 3, 2016, LeBeau murdered Emily Bluebird by strangulation, and that between January 1, and January 21, 2016, Brings Plenty was an accessory to Bluebird’s murder.
The charges are merely an accusation and LeBeau and Quiver are presumed innocent until and unless proven guilty. Their initial appearance has not been scheduled. The defendants are in custody.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen is prosecuting the case.
Peoria Man Pleads Guilty to Distributing Child PornographyRead the Press Release
Peoria, Ill. – Jacob T. Burmood, 24, of the 6800 block of N. Fawndale Drive, Peoria, Ill., pleaded guilty in U.S. District Court on Monday, Jan. 25, to a single count of distribution of child pornography. Burmood, a registered sex offender, entered his plea before U.S. District Judge Michael M. Mihm, pursuant to a plea agreement. The agreement includes a stipulated sentence of 360 months in federal prison, subject to acceptance by the court. Sentencing has been scheduled for May 27, 2016.
The charges are the result of an investigation by the Peoria Police Department, acting in participation with the Illinois Attorney General’s Internet Crimes Against Children (ICAC) taskforce and the National Center for Missing and Exploited Children.
According to court documents, on Oct. 14, 2015, Peoria police officers executed search warrants on Burmood’s person, his residence, and various computers and electronic media. A subsequent forensic analysis of Burmood’s computer showed that he possessed more than 3,000 images and approximately 200 video files of minors engaged in sexually explicit conduct with other minors and adults. The forensic review further revealed that Burmood distributed child pornography to others using an e-mail account.
Burmood is a registered sex offender as a result of a prior conviction for a sex crime in Illinois in 2011. He has remained in the custody of the U.S. Marshals Service since he was arrested on Oct. 16, 2015.
Assistant U.S. Attorney Ron Hanna is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Operation Home of the Brave: Eight Individuals Arraigned for Drug ConspiracyRead the Press Release
The following named individuals have been charged with a federal crime or crimes. A Criminal Complaint does not constitute evidence of guilt. A Criminal Complaint is a method of bringing charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt. United States Sentencing Guidelines may be considered, upon conviction, by the sentencing court. Federal prison sentences are non-paroleable.
"OPERATION HOME OF THE BRAVE"
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that the following individuals were arraigned on January 27, 2016, on charges of Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(1) and 841(b)(1)(A).
CODY McCLENDON, age 35, of Tahlequah, Oklahoma, MICHAEL LINCOLN, age 39, of Tulsa, Oklahoma, AMBER CLAPHAN, age 33, of Stilwell, Oklahoma, DONALD TRAMMEL, age 40, of Tahlequah, Oklahoma, SAMANTHA SMITH, age 21, of Muskogee, Oklahoma, TERESA CHAGOLLA, age 54, of Tahlequah, Oklahoma, JACOB MASTERS, age 54, of Tulsa, Oklahoma and NATHAN GREEN, age 27, of Hulbert, Oklahoma.
The Criminal Complaint filed on January 25, 2016, alleges that from in or about June 2015 and continuing up to and including the time of this Complaint, in the Eastern District of Oklahoma, the defendants, did willfully and knowingly combine, conspire, confederate and agree together, and with other persons known and unknown, to Possess with Intent to Distribute and the Distribution of 500 grams or more of a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II Controlled Substance.
The Investigation revealed that Cody McClendon, an Indian Brotherhood (IBH) gang member, currently an inmate with the Oklahoma Department of Corrections in McAlester, Oklahoma was utilizing a contraband cellular phone that he kept hidden on his person and inside his prison cell to facilitate the sale and distribution of methamphetamine. McClendon was doing this by using the cellular phone to communicate with co-conspirators via audio phone calls, text messages, and by communicating on the social media website Facebook.
The charges arose from a joint investigation by the Oklahoma Bureau of Narcotics, the Tahlequah Police Department, the Muskogee Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the Drug Enforcement Administration. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led, and coordinated by, the Office of the United States Attorney.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearings. All defendants were remanded into the custody of the United States Marshals Service.
The statutory range of punishment for a violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A), is not less than 10 years and not more than life imprisonment up to a $10,000,000.00 fine or both.
Assistant United States Attorney Shannon Henson represented the United States.
New York Man Sentenced to More Than 8 Years in Federal Prison for Kidnapping, Jewelry Store RobberyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CHRISTOPHER GAY, 30, of the Bronx, N.Y., was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 102 months of imprisonment, followed by five years of supervised release, for his role in a violent kidnapping and jewelry store robbery in April 2013.
According to court documents and statements made in court, at approximately 9:00 p.m. on April 11, 2013, GAY, William Davis, Jeffrey Houston and Kasam Hennix, all of whom were wearing masks and gloves and two of whom were armed with handguns, broke into an apartment on Gravel Street in Meriden, Conn., bound four victims with duct tape and covered their heads with pillowcases, towels and jackets. Davis, Houston and Hennix then forced two of the victims into a victim’s vehicle and drove to Lenox Jewelers in Fairfield, Conn., where the two victims worked. A fifth co-defendant followed behind them in a second vehicle. GAY remained in the Meriden apartment to guard the two other victims.
After the perpetrators arrived at the Fairfield store, they stole jewelry, watches and loose diamonds with a total replacement value of more than $3 million. They then fled in the victim’s car, leaving the two victims bound inside the store. One of the defendants called GAY to advise him that they had successfully carried out the robbery and that he should leave the apartment.
On May 22, 2013, GAY was arrested at a hotel in the Bronx. A search of his hotel room revealed approximately $59,000 in cash, two Movado watches, one Breitling watch and several pieces of jewelry that were still bearing price tags, including a pair of diamond earrings concealed inside a cassette case with a $23,800 price tag from Lenox Jewelers.
GAY was ordered to pay restitution of more than $3 million.
GAY has been detained since his arrest. On December 10, 2014, he pleaded guilty to one count of interference with commerce by robbery and one count of use of a firearm during and in relation to a crime of violence.
William Davis of Allentown, Pa., Jeffrey Houston of Allentown, and Kasam Hennix of Easton, Pa., also pleaded guilty to charges stemming from their involvement in this kidnapping and robbery. The fifth co-defendant is awaiting trial. On April 17, 2015, Davis was sentenced to 176 months of imprisonment. Houston and Hennix have not been sentenced.
The defendants also have forfeited gemstones, jewelry, watches, a vehicle, and more than $127,000 in cash seized from them at the time of their arrests.
This matter has been investigated by the U.S. Marshals Service, Federal Bureau of Investigation, Fairfield Police Department and Meriden Police Department. U.S. Attorney Daly also acknowledged the assistance provided by the U.S. Marshals Service and FBI in New York and Pennsylvania; the York, Allentown and Bethlehem Police Departments in Pennsylvania, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
This case is being prosecuted by Assistant U.S. Attorney Tracy Lee Dayton.
New Jersey Man Pleads Guilty to Heroin TraffickingRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 28-year-old New Jersey resident pled guilty today before Senior U.S. District Court Judge James M. Munley in Scranton, to distributing heroin in Luzerne County in October 2014.
According to United States Attorney Peter Smith, the defendant, Shaquan Murphy, admitted to traveling from New Jersey to Luzerne County with a co-defendant to distribute 50 bricks of heroin to sub-distributors on October 11, 2014. Murphy acknowledged distributing a total of between 100 grams and 400 grams of heroin, which is approximately equivalent to between 3,300 bags and 13,200 bags, during August-October 2014.
Murphy was indicted by a federal grand jury in Scranton in October 2014, as a result of an investigation by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Kingston Police, Plymouth Police and the Luzerne County District Attorney’s Office.
Murphy is the sixth defendant connected to the heroin trafficking operation to plead guilty in the case.
Judge Munley ordered a presentence investigation to be completed, and scheduled sentencing for April 28, 2016. Murphy faces up to 20 years in prison and a fine of $1 million. Murphy was ordered to be detained in prison pending sentencing.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years in prison, 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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New Haven Man Sentenced to 18 Months in Prison for Tax FraudRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that WILLIE E. McKAY, 41, of New Haven, was sentenced yesterday by Chief U.S. District Judge Janet C. Hall in New Haven to 18 months of imprisonment, followed by three years of supervised release, for assisting in the preparation and filing of false tax returns. McKAY also was ordered to pay a $3,000 fine.
According to court documents and statements made in court, from as early as 2005 through 2008, McKAY was the pastor of The Love Temple Church, Inc., located at 75 Fresh Meadow Road in West Haven. During that time, McKAY provided people, including those in his congregation, with income tax preparation services. In February 2007, McKAY prepared and electronically filed a fraudulent individual U.S. Individual Income Tax Return, Form 1040, for 2006 of a taxpayer who was a member of his congregation. The tax return listed the address of Love Temple Church as the taxpayer’s home address, which was not accurate, and included a fictitious Form W-2 reflecting inflated wages and withholdings. The return also reflected fictitious deductions for state and personal property taxes, which reduced the taxpayer’s taxable income.
The fraudulent tax return that McKAY prepared reported wages of $47,900 from the State of Connecticut, withholdings of $14,952, and Schedule A deductions for state taxes of $4,359 and personal property tax of $852. Based on the false claim, the IRS issued a refund check in the amount of $9,693.
McKAY knew that the taxpayer was a student working at school and was not entitled to the claimed refund. McKAY also did not identify himself as the preparer of the tax return. According to the IRS, the taxpayer was entitled to a federal tax refund of only $363.
Chief Judge Hall ordered McKAY to pay $9,693 in restitution to the IRS.
On April 3, 2015, McKAY, pleaded guilty to one count of making a false claim to the Internal Revenue Service. In pleading guilty, McKAY admitted that he prepared and filed other false tax returns for the 2005 through 2007 tax years.
McKAY’s criminal history includes multiple state larceny convictions, and a federal wire fraud conviction for which he received 10-month prison term in May 2000.
McKAY, who is released on bond, was ordered to report to prison on March 31, 2016.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division with the assistance of the U.S. Secret Service, U.S. Postal Inspection Service and Hartford Police Department. The case was prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.
Mining Company Owners Plead Guilty to Fraud ChargesRead the Press Release
St. Louis, MO – CRISTOPHER CRISTEA and DAVID COREY TOLLE pled guilty to charges involving the solicitation of investors with promises of large returns from mining activities. Instead, the money was used to pay personal expenses and repay earlier investors. Tolle entered his plea today. Cristea pled last week.
According to court documents, in May 2009, Cristea and Tolle formed Cristol Enterprises, LLC and Charis Minerals, Inc. They solicited investors for Cristol Enterprises, LLC and Charis Minerals, Inc., which purported to be in the business of exploring for and extracting valuable minerals, such as gold, silver, copper, lead and zinc, through mining operations in the western United States, including Arizona and Oregon, and in Western Africa. The investors were told that the money would be used to purchase property and equipment and pay for administration and other expenses involved in the exploration, and they were promised large returns on their investments, often over a short period of time. Instead, a substantial majority of the money was used for personal expenditures and unrelated business expenses. In one instance, Cristea used funds to provide student loans to beauty academy students, and in another instance, funds were used to repay an earlier investor.
In December 2014, after he had previously been arrested on this indictment, Cristopher Cristea applied for a $1 million line of credit at a bank. In the application, he falsely stated that he was not a defendant in any suit or legal action. Additionally, he falsely stated that he had $295,000 cash in checking accounts and had securities – stocks/bonds/mutual funds – in the amount of $13,000,000.
David Corey Tolle, St. Charles, MO, pled guilty today to one felony count of wire fraud. Cristopher Cristea, also of St. Charles, MO, pled guilty last week to one felony count of conspiracy, four felony counts of wire fraud, one felony count of money laundering and one felony count of making a false statement to a financial institution. Both defendants appeared before United States District Judge Carol E. Jackson. Sentencing for Cristea has been set for April 20, 2016. Sentencing for Tolle is set for May 2, 2016.
Each of the conspiracy and fraud charges carry a maximum penalty of 20 years in prison and/or fines up to $250,000; money laundering carries a maximum of 10 years prison and/or fines up to $250,000; false statement to a financial institution carries a maximum of 30 years in prison and/or fines up to $1 million. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Steven Muchnick is handling the case for the U.S. Attorney’s Office.
Milwaukee, Wisconsin, Man Pleads guilty to Sex Trafficking of Children and Milwaukee, Wisconsin, Woman Pleads Guilty to Interstate Travel in Aid of ProstitutionRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on Jan. 26, 2016, Kurtis William Johnson, 26, Milwaukee, Wisconsin, and Tara Malinda Ridley, 26, Milwaukee, Wisconsin, pleaded guilty before U. S. District Judge Ralph R Erickson. Johnson pleaded guilty to two counts of Sex Trafficking of Children and one count of Conspiracy to Commit Sex Trafficking. Ridley pleaded guilty to one count of Interstate Travel in Aid of Prostitution.
The case came to the attention of law enforcement after the North Dakota Highway Patrol pulled over a rental vehicle driven by Kurtis Johnson. Found with Johnson was a woman and a 17-year-old female who Johnson transported from Milwaukee, Wisconsin, to Bismarck, North Dakota, for the purpose of prostitution. A subsequent investigation revealed that Johnson was provided narcotics by Tyrice Akins in exchange for transporting women and one juvenile to various locations throughout the United States, including Florida, Louisiana, and North Dakota, throughout 2014 and 2015 for the purpose of prostitution.
The investigation further revealed that Tara Ridley facilitated Tyrice Akins’ business enterprise involving prostitution by renting vehicles for Akins that were used by Johnson to transport the women to North Dakota and elsewhere.
Tyrice Akins was indicted in May of 2015, and is currently awaiting trial on April 12, 2016.
This case is being investigated by the North Dakota Bureau of Criminal Investigations and the Department of Homeland Security - Homeland Security Investigations.
Assistant U. S. Attorney Jennifer Puhl is prosecuting the case.
This case was prosecuted with the assistance of the North Dakota Human Trafficking Task Force (NDHTTF), which includes regional response teams that consists of federal, state, and local law enforcement and victim service providers working together to identify and rescue human trafficking victims as well as investigate and prosecute human trafficking cases. Led by the U.S. Attorney’s Office, BCI, and the North Dakota Counsel on Abused Women Services (CAWS), the NDHTTF is dedicated to addressing the individualized needs of human trafficking victims and the apprehension, investigation, and prosecution of the perpetrators of human trafficking.
The NDHTTF includes representatives from Youthworks, the Children’s Advocacy Center, the Domestic Violence Crisis Center, Lutheran Social Services, the ND Association of Counties, a Force to End hUman Sexual Exploitation (FUSE), a survivor of human trafficking, First Nations Women’s Alliance (FNWA), and the Department of Homeland Security - Homeland Security Investigations (HSI).
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Militia Man Ordered to Federal PrisonRead the Press Release
BROWNSVILLE, Texas – A 46-year-old member of a citizen group known as “Rusty’s Rangers” or “Rusty’s Regulators” has been sentenced for illegal possession of a firearm, announced U.S. Attorney Kenneth Magidson. John Frederick Foerster, of Brownsville, was a convicted felon and pleaded guilty to possession of a 7.62 x 39 mm pistol on March 25, 2015.
Today, U.S. District Judge Andrew S. Hanen ordered Foerster to serve 30 months in federal prison to be immediately followed by three years of supervised release.
According to court records, Rusty’s Rangers consisted of citizens who mounted armed patrols in the Rio Grande area allegedly in search of and to possibly apprehend aliens attempting to enter the U.S. illegally. Foerster was observed in possession of the firearm by Border Patrol (BP) agents on Aug. 29, 2014. On that date, a BP agent thought Foerster was an armed alien smuggler and fired upon him. Foerster was not injured.
The Investigation led to the discovery that Foerster had been twice convicted of burglary and was, therefore, prohibited from possessing a firearm.
Foerster will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by the FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives and Cameron County Sheriff’s Office. Assistant U.S. Attorney William Hagen is prosecuting the case.
Mexican National Sentenced for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAIRO JACIEL JIMENEZ-HERNANDEZ, age 29, a citizen of Mexico, was sentenced today after previously pleading guilty to a one-count indictment for illegal reentry of a removed alien.
U.S. District Judge Carl J. Barbier sentenced JIMENEZ-HERNANDEZ to time served and ordered him to serve one year of supervised release. Additionally, JIMENEZ-HERNANDEZ was ordered to pay a $5,000 fine and a $100 special assessment. JIMENEZ-HERNANDEZ will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, JIMENEZ-HERNANDEZ reentered the United States on or about August 30, 2015 after having been previously deported on May 17, 2012.
U.S. Attorney Polite praised the work of the United States Immigration and Customs Enforcement Agency in investigating this matter. Assistant U. S. Attorney Spiro G. Latsis was in charge of the prosecution.
Mexican National Pleads Guilty to Illegally Possessing a FirearmRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ERIC DE JESUS MENDOZA-MARTINEZ, age 20, a citizen of Mexico, pled guilty today to one count of possession of a firearm by an illegal alien.
According to court documents, MENDOZA-MARTINEZ, an illegal alien from Mexico, was stopped for a traffic violation on November 7, 2015. During the traffic stop, it was discovered that MENDOZA-MARTINEZ had a Taurus .380 caliber pistol in his possession.
If convicted, MENDOZA-MARTINEZ faces a maximum term of imprisonment of ten years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment.
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.
Member of the Jenifer Drug Trafficking Organization Sentenced to 13 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Andre Brewer, age 36, of Jessup, Maryland, today to 13 years in prison followed by five years of supervised release for conspiring to distribute cocaine. Judge Bennett entered an order requiring Brewer to forfeit the proceeds of the drug trafficking, including: cash; five vehicles, including a 2014 Mercedes Benz valued at $100,000; jewelry valued at over $62,000; several bank accounts; and property in Baltimore.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Commissioner Kevin Davis of the Baltimore Police Department; and Chief James W. Johnson of the Baltimore County Police Department.
According to his plea agreement and court documents, from September 2012 until his arrest in October 2014, Kedrick Jenifer was the head of a drug organization (Jenifer DTO) that transported cocaine and cash between Baltimore and Houston, Texas. Brewer assisted Jenifer with the DTO’s operations, including the distribution of cocaine to the organization’s customers. The Jenifer DTO obtained its cocaine from sources of supply in and around Houston. The Jenifer DTO would hide money in secret compartments in “courier vehicles” that were transported from Baltimore to Houston. The cocaine was then transported from Houston to Baltimore hidden in the courier vehicles.
In September 2012, Texas State Police stopped a courier vehicle in Chambers County, Texas. Law enforcement officers discovered approximately 30 kilograms of cocaine hidden in secret compartments within the vehicle. In July 2013, a courier vehicle for the Jenifer DTO loaded on a car-carrier was intercepted in Arkansas. The vehicle contained approximately 23 kilograms of cocaine hidden in a secret compartment, and was destined for Brewer’s residence.
Between August 2013 and October 2014, approximately 30 shipments of cocaine concealed in secret compartments in the courier vehicles were made to the Jenifer DTO. During this time, Brewer was seen meeting with Jenifer and providing Jenifer with money to buy cocaine. Brewer was also seen with the Jenifer DTO’s courier vehicles before and after “drug runs” between Baltimore and Houston, receiving kilogram-quantities of cocaine after the courier vehicles, loaded with cocaine, returned from Houston. Investigating agents also saw the courier vehicles parked at the apartment complex where Brewer resided.
During intercepted phone calls between Jenifer and Brewer, Brewer discussed his purchase of a 2014 Mercedes Benz S63 AMG, a vehicle valued at approximately $100,000. Brewer indicated that the sales application for the vehicle requested his job information, and he told Jenifer that he did not know how to respond. Wage and earning records, as well as tax records, indicated no legitimate income for Brewer.
Brewer admitted that he was responsible for the distribution of at least 450 kilograms of cocaine between August 2013 and October 2014.
Kedrick Arnold Jenifer, a/k/a “Ricky Jenifer,” “James Howard Collier, Jr.” and “Rick,” age 44, of Bowie, Maryland, pleaded guilty to conspiring to distribute cocaine and is scheduled to be sentenced on March 4, 2016. Eight other co-conspirators have pleaded guilty. Brooke Renee Lunn, a/k/a “Brooke Thomas” and “Brooke Renee,” age 49; William Hegie, age 55; Kermit Clark, age 45; and Elroy Johnson, age 49, all of Baltimore; and Tyrone Allen, age 44, of Bowie, Maryland, and Thomas Simmons, age 38, of Hampton, Virginia, were sentenced to between 10 and 16 years in prison. The other three defendants are awaiting sentencing.
United States Attorney Rod J. Rosenstein praised the DEA, IRS Criminal Investigation and Baltimore City and County Police Departments for their work in the investigation, and expressed his appreciation to the United States Attorney’s Offices for the Southern District of Texas and the Southern District of New York for their assistance. Mr. Rosenstein thanked Assistant United States Attorney John W. Sippel, Jr. and Special Assistant United States Attorney Matthew Hoff, a cross-designated Baltimore City Assistant State’s Attorney, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Malheur National Wildlife Refuge Protestors Appear Before Federal Magistrate on Conspiracy ChargesRead the Press Release
PORTLAND, Ore. – Billy J. Williams, United States Attorney for the District of Oregon, announced that the individuals arrested overnight in the occupation of the Malheur National Wildlife Refuge in Burns, Oregon, appeared in court today for an initial appearance before Magistrate Judge Stacie F. Beckerman. Each defendant is charged in a criminal complaint with one felony count of conspiracy to impede officers of the United States from discharging their official duties through the use of force, intimidation, or threats. The defendants are Ammon Edward Bundy, 40, of Emmett, Idaho; Ryan C. Bundy, 43, of Bunkerville, Nevada; Brian Cavalier, 44, of Bunkerville, Nevada; Shawna Cox, 59, of Kanab, Utah; Ryan Waylen Payne, 32, of Anaconda, Montana; Joseph Donald O'Shaughnessy, 45, of Cottonwood, Arizona; and Peter Santilli, 50, of Cincinnati, Ohio. Each defendant entered a plea of not guilty to the charge.
Judge Beckerman ordered all seven defendants to remain in federal custody pending a detention hearing on Friday, January 29th at 1:30 p.m.
An eighth person, Jon Eric Ritzheimer, 32, of Peoria, Arizona, self-surrendered to police on January 26, 2016, and appeared before a magistrate judge today in Phoenix, Arizona to face a felony charge of conspiracy to impede officers of the United States from discharging their official duties through the use of force, intimidation, or threats. His detention hearing is scheduled for February 2, 2016 in Phoenix, Arizona.
All defendants are presumed innocent until proven guilty. The criminal complaint and affidavit is attached below.
The case is being prosecuted by Assistant U.S. Attorneys Ethan Knight and Geoffrey Barrow.
bundy_et_al_redacted_complaint.pdf (2.83 MB)
Lincoln Resident Sentenced to 1½ Years on Firearms ChargeRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Bruce Smith, 60 of Lincoln, Maine was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 1½ years in prison and three years of supervised release for possessing firearms while being an unlawful user of controlled substances. Smith pled guilty on August 7, 2015.
According to court records, between January and April 2014, the defendant possessed seven firearms at a time when he was regularly using Alpha-PVP. Alpha-PVP is a schedule I controlled substance and is among a group of illegal, street drugs commonly referred to as bath salts. Two of the firearms were seized on March 9, 2014 following a traffic stop and Smith’s arrest by the Lincoln Police Department. Two more were seized on March 11, 2014 in Bradford, Maine and traced back to Smith. Smith possessed three more on April 8, 2014 when he was questioned by federal agents. Smith was a regular user of bath salts during this period of time and had pawned two of the firearms for Alpha-pvp in January 2014.
The case was investigated by the Maine Drug Enforcement Agency; the U.S. Postal Inspection Service; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Lincoln Police Department.Lee County Offenders Convicted and SentencedRead the Press Release
Greensboro, NC - As a result of continued initiatives focused on violent crime in Lee County, the following individuals have recently been sentenced in federal court, announced United States Attorney Ripley Rand.
CASES ADJUDICATED
Shamar Davell Petty, Age 29, of Sanford, NC, was federally indicted in the Middle District of North Carolina on April 27, 2015, for a firearm offense that occurred on March 17, 2015. On July 15, 2015, Petty pleaded guilty to possession of a firearm by a felon. On October 28, 2015, Petty was sentenced to ninety-two (92) months in prison, 3 years supervised release, and a $100.00 special assessment by United States District Court Judge Catherine C. Eagles.
Jaquell Maurice Tysor, Age 29, of Sanford, NC, was federally indicted in the Middle District of North Carolina on April 27, 2015, for a firearm offense that occurred on March 1, 2015. On July 10, 2015, Petty pleaded guilty to possession of a firearm by a felon. On January 26, 2016, Tysor was sentenced to 120 months in prison, 3 years supervised release, and a $100.00 special assessment by United States District Court Judge Catherine C. Eagles.
"We are very pleased to be part of the team fighting gun crime in Lee County," said United States Attorney Ripley Rand. "The effective partnership between Lee County law enforcement and our office will continue to work hard to make our communities safer for all."
The convictions noted above are the result of close cooperation of the Lee County Project Safe Neighborhoods (PSN) coalition. PSN is a nationwide gun and violent crime strategy to create and maintain safer communities. The Lee County PSN coalition is comprised of a number of law enforcement agencies, including Broadway Police Department, Sanford Police Department, Lee County Sheriff’s Office, Department of Public Safety Division of Adult Correction and Juvenile Justice (probation), State Bureau of Investigation, Lee County District Attorney’s Office, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, United States Attorney’s Office, as well as many community partners.
The Sanford Police Department, Lee County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated these cases. Assistant United States Attorney JoAnna McFadden prosecuted the cases for the United States Attorney’s Office.
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Lebanon Service Man Sentenced to 12 Months in Prison for Conspiracy to Receive Bribes While Serving in AfghanistanRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania, announced that Timothy H. Albright, age 37, of Lebanon, Pennsylvania, was sentenced today to 12 months in prison by United States District Court Judge John E. Jones, III in Harrisburg for conspiracy to receive bribes while serving in the United States Army at Bagram, Afghanistan.
Judge Jones also ordered the forfeiture of $16,000. Albright pled guilty in March 2015 to charges filed in a criminal information on March 13, 2015.
According to U.S. Attorney Peter Smith, Albright, a Specialist with the Pennsylvania National Guard, was assigned to the 53rd Joint Movement Control Battalion, 101st Joint Logistics Command, Combined Joint Task Force, with duties at Bagram Airfield in Afghanistan (Bagram). He served as an E4 (Enlisted Grade 4) in the United States Army at Bagram between January 7, 2008 and October 20, 2008. In his position at Bagram, Albright, who served as a Commercial Vendor Services Specialist, processed invoices resulting from the provision of supplies by Afghan vendors to restock supplies at the Humanitarian Aid Yard at Bagram. Albright was responsible for reviewing invoices submitted by Afghan vendors who had been awarded contracts to replenish the Humanitarian Aid Yard. If the documents were in order, Albright would date-stamp and submit them for payment.
An Afghan vendor had several million-dollar contracts through his company with the Humanitarian Aid Yard through the Army. He began to give cash to Albright as a way of thanking him for expeditiously processing his invoices. As the relationship developed, so did the size of the amounts of cash from the vendor. Ultimately, Albright received at least $25,000 in cash bribes from the Afghan vendor.
Albright sent the money he received from the Afghan vendor to his home in Lebanon. He concealed the money in envelopes inserted in boxes filled with DVDs. Also, Albright told his supervisor at Bagram about the payments and encouraged him to participate in the scheme. The supervisor did so, and Albright and his supervisor would split up stacks of $100 bills provided by the vendor.
The case was investigated by the Special Inspector General for Afghanistan Reconstruction, United States Army’s Criminal Investigation Division, the Defense Criminal Investigative Service, the Federal Bureau of Investigation, and the Air Force Office of Special Investigation. The prosecution is being handled by Assistant U.S. Attorney Chelsea Schinnour and Trial Attorneys Daniel Butler and Bob Doherty of the Criminal Division of the U.S. Department of Justice.
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Las Vegas Man Sentenced to Four Years in Federal Prison for Aggravated Identity Theft and Theft of VA BenefitsRead the Press Release
In Waco today, 44-year-old Lawrence Annon Lee, III, of Las Vegas, NV, was sentenced to four years in federal prison for stealing approximately $43,000 in Department of Veterans Affairs (VA) benefits announced United States Attorney Richard L. Durbin, Jr.
In addition to the prison term, United States Magistrate Judge Jeffrey C. Manske ordered that Lee pay $42,912.78 restitution and be placed on supervised release for a period of three years after completing his prison term.
On December 3, 2015, Lee pleaded guilty to one count of theft of Government property and one count of aggravated identity theft. By pleading guilty, Lee admitted that between October and December in 2014, he used the name and social security number of an unsuspecting Bellmead, TX, resident to collect approximately $5,500 in monthly VA benefits Lee was not entitled to receive. Lee also admitted that in 2011, he fraudulently used his victim’s personal information to apply for and receive outpatient health care, prescriptions and prosthetics from the VA valued at approximately $28,000.
This case resulted from an investigation conducted by the Department of Veterans Affairs Office of Inspector General and the Bellmead Police Department. Assistant United States Attorney Mark Frazier prosecuted this case on behalf of the Government.
Justice Department Announces Final Swiss Bank Program Category 2 Resolution with HSZH Verwaltungs AGRead the Press Release
Department’s Swiss Bank Program Imposed More Than $1.3 Billion in Penalties on 80 Banks, Which Continue to Cooperate with the Department
The Department of Justice announced today that it reached its final non-prosecution agreement under Category 2 of the Swiss Bank Program, with HSZH Verwaltungs AG (HSZH). The department has executed agreements with 80 banks since March 30, 2015, when it announced the first Swiss Bank Program non-prosecution agreement with BSI SA. The department has imposed a total of more than $1.36 billion in Swiss Bank penalties, including more than $49 million in penalties from HSZH. Every bank in the program, including HSZH, is required to cooperate in any related criminal or civil proceedings, and that cooperation continues through 2016 and beyond.
“The Department of Justice is committed to aggressively pursuing tax evasion, and the Swiss Bank Program has been a central component of that effort,” said Attorney General Loretta E. Lynch. “Through this initiative, we have uncovered those who help facilitate evasion schemes and those who hide funds in secret offshore accounts. We have improved our ability to return tax dollars to the United States. And we have pursued investigations into banks and individuals. I would like to thank the Swiss government for their cooperation in this effort, and I look forward to continuing our work together to root out fraud and corruption wherever it is found.”
“The department’s Swiss Bank Program has been a successful, innovative effort to get the financial institutions that facilitated fraud on the American tax system to come forward with information about their wrongdoing – and to ensure that they are held responsible for it,” said Acting Associate Attorney General Stuart F. Delery. “As we have seen over the last year, Swiss banks are paying an appropriate penalty for their misconduct, and the information and continuing cooperation we have required the banks to provide in order to participate in the program is allowing us to systematically attack offshore tax avoidance schemes.”
“The completion of the agreements under Category 2 of the Swiss Bank Program represents a substantial milestone in the department’s ongoing efforts to combat offshore tax evasion, and we remain committed to holding financial institutions, professionals and individual taxpayers accountable for their respective roles in concealing foreign accounts and assets, and evading U.S. tax obligations,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Using the flood of information flowing from various sources, the department is investigating this criminal conduct, referring appropriate matters to the Internal Revenue Service for civil enforcement and pursuing leads in jurisdictions well beyond Switzerland. Individuals and entities engaged in offshore tax evasion are well advised to come forward now, because the window to get to us before we get to you is rapidly closing.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
HSZH, the final bank to reach a non-prosecution agreement under Category 2 of the Swiss Bank Program, was previously known as Hyposwiss Privatbank AG. HSZH was founded in 1889 in Solothurn, Switzerland. In 1988, Schweizerische Bankgesellschaft AG, which was later merged into UBS AG, acquired the bank and renamed it Hyposwiss Privatbank AG. Hyposwiss Privatbank AG increasingly focused on private banking activities, servicing both domestic and international clients, and at all times, HSZH solely operated on Swiss territory. In 2002, the bank was acquired from UBS by St. Galler Kantonalbank (SGKB), the state-owned cantonal bank of St. Gallen. In 2014, HSZH unwound its residual banking operations under the supervision of FINMA, the Swiss banking regulator. On Jan. 6, 2014, and in connection with the wind-down, the bank changed its name to HSZH Verwaltungs AG. HSZH returned its banking license, and FINMA released HSZH from its supervision on Nov. 27, 2014.
Until 2013, HSZH conducted a U.S. cross-border banking business that aided and assisted certain of its U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the U.S. government. Through its managers, employees and/or others, HSZH knew or had reason to know that some U.S. taxpayers who opened and maintained accounts at HSZH were not complying with their U.S. income tax and reporting obligations.
HSZH and other banks operating in Switzerland have closely monitored the criminal investigations of UBS and other Swiss banks. In 2008, UBS publicly announced that it was the target of a criminal investigation by the Internal Revenue Service (IRS) and the department and that it would be exiting and no longer accepting certain U.S. clients. In February 2009, the department and UBS filed a deferred prosecution agreement, in which UBS admitted that its cross-border banking business used Swiss privacy law to aid and assist U.S. clients in opening and maintaining undeclared assets and income from the IRS. Since UBS, several other Swiss banks have publicly announced that they were or are the targets of similar criminal investigations and that they would be exiting and not accepting certain U.S. clients.
The senior management of HSZH viewed the exit of U.S. clients by the targeted Swiss banks as a business opportunity to be seized immediately rather than a warning to be heeded. In addition to 83 accounts opened through two pipelines of U.S. clients transferred from UBS, HSZH opened at least 275 accounts for U.S. clients after August 2008. Internal bank notes indicate that in September and October 2008, certain external asset managers with whom HSZH entered into agreements were expected to have “many former UBS clients” and would introduce U.S. clients to HSZH.
The first pipeline of undeclared U.S. clients transferred from UBS was solicited by the CEO of HSZH (CEO #1) from a UBS private banker who was a former colleague of CEO #1. On Aug. 15, 2008, the general counsel of HSZH sent CEO #1 an email containing his views on a new internal bank IRS Form W-9 policy for CEO #1’s review and discussion before sending to SGKB: “In my opinion this policy should be a clarification of the already existing practice in connection with U.S. persons. The actual situation in the US (UBS, Birkenfeld, etc.) has nothing to do with [HSZH] [redacted] or SGKB. . . . Why should we freely throw away a good business opportunity?” Between Sept. 19, 2008, and Jan. 26, 2009, HSZH knowingly opened six undeclared accounts for U.S. clients with an aggregate total of approximately $9.2 million in peak assets under management; all six undeclared U.S. clients had previously been with UBS.
The second pipeline of undeclared U.S. clients predominantly from UBS were all introduced and managed by an external asset management firm in Zurich whose head of private banking was formerly in charge of UBS’s North America International business (EAM #1). In June 2008, the head of HSZH’s EAM Desk provided EAM #1 with HSZH marketing materials, and the Executive Board of HSZH unanimously approved a new business relationship with EAM #1 on Sept. 24, 2008. On Aug. 18, 2009, HSZH opened the last EAM #1 pipeline account. On Aug. 20, 2009, the head of private banking for EAM #1 was indicted by the U.S. Attorney’s Office of the Southern District of Florida.
Meetings between HSZH private bankers and U.S. clients took place in multiple locations within the United States, including in Florida, New York, Pennsylvania, Virginia and Washington, D.C. Some U.S. clients asked for cash on a regular basis, so at times, the HSZH private banker for such clients would personally deliver cash to the clients in the United States in amounts below $10,000 to avoid the reporting requirements.
HSZH private bankers also met with U.S. clients outside of the United States to provide banking services and investment advice related to their accounts, which included undeclared accounts. For example, one U.S. client resided in the United States and had assets of more than $90 million in an account at HSZH held by a Liechtenstein foundation. An HSZH private banker regularly met with this U.S. client in a Swiss hotel, at HSZH or in London. When meeting in London, the HSZH private banker usually delivered cash amounts of 10,000 to 50,000 Swiss francs or U.S. dollars to the U.S. client, who had a preference to receive used U.S. dollar banknotes. The funds were wired to the custodian bank for HSZH in London, where the HSZH private banker would withdraw the cash and personally deliver it to the U.S. client in a London hotel.
HSZH processed significant cash and precious metals withdrawals for U.S.-related accounts at or around the time the clients’ accounts were closed, even though HSZH knew, or had reason to know, that some of the accounts contained undeclared assets. For example, a U.S. couple that owned more than $24 million in assets in an account nominally held by a Liechtenstein foundation, and known by HSZH to be undeclared, regularly withdrew cash amounts between $10,000 and $30,000 – they requested used bank notes – and repeatedly withdrew gold bars. Five instances in 2010 involved 15 kilograms of gold bars. When this U.S. couple closed their HSZH account in 2012, they withdrew large cash amounts totaling more than 19 million Swiss francs, as well as 55 kilograms in gold bars during five visits to HSZH.
HSZH serviced approximately 103 U.S. clients who structured their accounts so that they appeared as if they were held by a non-U.S. legal structure, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their accounts from the IRS. While HSZH did not provide direct structuring services to U.S. clients, HSZH private bankers and members of HSZH’s management suggested the use of structures in some instances for U.S. clients and provided referrals to third-party service providers. In addition, at least two HSZH private bankers served as board members for structures with U.S. beneficial owners maintained at HSZH. Despite the decision in 2009 by HSZH to stop this practice due to the risk of conflicts of interest, one HSZH private banker remained a member of an offshore foundation’s board until 2011. External trust companies created and administered offshore structures incorporated or based in offshore locations such as the British Virgin Islands, Liechtenstein and Panama.
HSZH assisted at least two U.S. taxpayers in further concealing their undeclared funds from the IRS by transferring those funds from UBS in August 2010 through an HSZH account held by a Swiss attorney to an HSZH account held by a sham entity domiciled in Panama that was beneficially owned by the two U.S. taxpayers. In connection with this transfer, HSZH received a revised Form A from the Swiss attorney listing the two U.S. taxpayers as beneficial owners for one transaction only along with instructions from the Swiss attorney to HSZH that his clients’ funds should be transferred from UBS to HSZH through his account, due to the “understandable interests of his clients, that the target account would not be visible.” HSZH’s anti-money laundering documentation dated one day after this August 2010 transfer states: “Since this [sic] are U.S. clients, the transfer was made over the account holder’s account due to understandable reasons. Sender and recipient are identical.”
During the period since Aug. 1, 2008, HSZH held a total of 605 U.S.-related accounts, both declared and undeclared, with an aggregate peak of approximately $1.12 billion in assets under management. HSZH will pay a penalty of $49.757 million.
In accordance with the terms of the Swiss Bank Program, HSZH mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at HSZH who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at HSZH must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today’s resolution with HSZH Verwaltungs AG brings to a close this phase of DOJ’s Swiss Bank Program,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International Division. “The comprehensive success of this program sends a powerful message to those who might think they can evade their tax obligations by going offshore. A whole sector of financial institutions, 80 banks in all, has been held accountable for aiding the use of secret accounts and circumventing U.S. law. In addition to the more than $1.3 billion in penalties from these resolutions, more than 54,000 taxpayers have come forward to the IRS to pay more than $8 billion in taxes, interest and penalties.”
“The bank agreement with HSZH announced today may bring an end to one phase of the Swiss Bank Program, but more importantly it brings us closer to our overall goal of compliance and accountability for financial institutions and U.S. taxpayers,” said Chief Richard Weber of IRS-Criminal Investigation. “The data received from each agreement on the accounts, schemes and linkages is extremely valuable in combating international tax evasion. I could not be more proud of the effort of our special agents who worked tirelessly to make this program a success in coordination with the Department of Justice.”
Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Acting Assistant Attorney General Ciraolo also thanked Kimberle E. Dodd, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Jury Convicts California Man for Money Laundering Scheme to Hide Drug ProceedsRead the Press Release
Rock Island, Ill. – A jury deliberated for less than an hour yesterday before returning guilty verdicts on all counts against Gianco Sheridan, 27, aka “Geo,” of Los Angeles. Sheridan was charged with 32 counts of money laundering to conceal drug proceeds and one count of conspiracy to launder drug proceeds. Sentencing is scheduled on May 26, 2016, in Rock Island, before U.S. District Judge Sara Darrow.
At trial, which began on Monday afternoon, Jan. 25, the government presented evidence that Sheridan laundered money to hide proceeds from a marijuana trafficking operation tied to a sham company, Trust Auto Sales, in Rock Island, Ill. The purported used car sales and repair business, located at 801 11th Street, was owned by Joel McCalebb, aka Omar Mukhtar, a co-defendant in the case. Over the course of the scheme, from August 2013 to June 2014, numerous packages, with fictitious California return addresses, were delivered to Trust Auto Sales. The packages, which contained high grade marijuana from two different medical marijuana dispensaries in Los Angeles, were arranged by another co-defendant, Quisontro Rahman Hart, 35, aka “BJ,” of Los Angeles.
As part of the scheme, evidence showed that McCalebb made cash deposits into bank accounts opened by Sheridan, at the request of Hart, Sheridan’s cousin. The sums of cash were from McCalebb and Hart’s distribution and possession of marijuana with intent to distribute. Between July 2013 and April 2014, the government’s evidence showed that McCalebb made approximately 83 cash deposits to accounts at banks that also have branches in the Los Angeles area. None of the accounts were in McCalebb’s name, but were in the name of Sheridan or a business account held by Sheridan. All of the deposits were under $10,000. Sheridan would withdraw the cash, often on the same day as the deposit, and give the money to Hart. As a result of the scheme, the total amount of money laundered through Sheridan’s accounts was approximately $230,000 from August 2013 to June 2014.
McCalebb, 52, of Rock Island, pled guilty in September 2015, to one count of conspiracy to distribute marijuana and was sentenced on Jan. 7, 2016, to serve two years in federal prison. Co-defendant Hart entered a plea of guilty in August 2015 to one count of conspiracy to distribute marijuana and is scheduled to be sentenced on Mar. 10, 2016. Both men have remained in the custody of the U.S. Marshals Service since their respective arrests.
Following the jury’s return of the guilty verdicts, Judge Darrow allowed Sheridan to remain on release, under conditions of bond, until sentencing.
The statutory penalty for each count of money laundering and for conspiracy to commit money laundering is up to 20 years in prison and a fine of up to $500,000, or twice the value of the property involved in the transaction, whichever is greater.
The case is being prosecuted by Assistant U.S. Attorneys Linda Mott and Don Allegro. The charges were investigated by the U.S. Postal Inspection Service, the Drug Enforcement Administration and the Quad City Metropolitan Enforcement Group.
Joint Federal Human Trafficking Task Forces Meeting Held January 29, 2016 at 9:00 AMRead the Press Release
Montgomery, Alabama - United States Attorney George L. Beck, Jr., will join with members of the Middle District of Alabama Human Trafficking Task Force, the Northern District of Alabama Human Trafficking Task Force, and the Southern District of Alabama Human Trafficking Task Force for a meeting on January 29, 2016. The purpose of the meeting is to unite federal, state, and local law enforcement officials, prosecutors and victim service providers to discuss investigation strategies and victim resources, and to implement a state-wide protocol in an effort to combat human trafficking.
According to the U.S. Department of Health and Human Services, human trafficking is recognized as “a modern-day form of slavery” and “is tied with the illegal arms industry as the second largest criminal industry in the world today.” Human trafficking often takes one of two forms – labor or sex trafficking. Labor trafficking may include forced labor or debt bondage, where a victim continually works to pay off an undefined and seemingly endless debt. Sex trafficking includes forcing victims to perform sexual acts, performances, or prostitution, or subjecting them to sexual abuse or torture. Victims may be subject to inhumane conditions and may be afraid to seek help due to language barriers, immigration status, or fear of the trafficker. Both Federal and Alabama law criminalize human trafficking, with penalties including significant prison time, large fines, and mandatory restitution.
The mission of the Middle District of Alabama Human Trafficking Task Force is “To Find and Free” victims of human trafficking. The Task Force began its work in 2009, initiated by the U.S. Attorney’s Office for the Middle District of Alabama.
The Task Force consists of federal, state, and local partners within the River Region and from the 23 counties which comprise the Middle District of Alabama. In addition to the United States Attorney’s Office for the Middle District of Alabama, the Task Force partners include: the Montgomery County District Attorney’s Office, the Federal Bureau of Investigation, the Homeland Security Investigations of the United States Department of Homeland Security, the Alabama Attorney General’s Office, the Alabama Fusion Center (which is a division of ALEA), the Montgomery Police Department, the Montgomery County Sheriff’s Office, One Place Family Justice Center, Legal Services Alabama, the Family Sunshine Center, the Alabama Coalition Against Domestic Violence, Stella’s Voice, SABRA Sanctuary of Selma, the Alabama Department of Youth Services, the Alabama Department of Child Abuse and Neglect Prevention, the Alabama Department of Education, survivors of human trafficking, college students, and local college chapters of International Justice Mission.
The meeting on Friday will include training by presenters from the Federal Bureau of Investigation and Homeland Security. All members of law enforcement, victim service providers, and service organizations are invited to attend.
For more information, please contact Assistant United States Attorney Hollie Worley at 334-223-7280 or United States Attorney’s Office Victim Witness Specialist Jackie Vickers at 334-223-7280.
To learn more about human trafficking, visit DOJ’s website at www.ovc.ncjrs.gov/humantrafficking/or the HHS website at acf.hhs.gov/opre/topic/human-trafficking
Jacksonville Fugitive Sentenced to Federal Prison for Passing Counterfeit Currency and Failing to Appear for SentencingRead the Press Release
Jacksonville, Florida – United States District Judge Brian J. Davis today sentenced Charles Cornelius Smith (36, Jacksonville) to 30 months in federal prison for passing counterfeit Federal Reserve notes and failing to appear for his sentencing hearing. As part of the sentence, the Court ordered Smith to pay restitution to the various individuals that he defrauded.
According to court documents, in December 2014, Smith was indicted on three counts of uttering counterfeit Federal Reserve notes. He was arrested on January 20, 2015, and was released on bail. Smith pleaded guilty on February 6, 2015, and a sentencing hearing was set for May 27, 2015. On the day of sentencing, however, Smith failed to appear. Approximately four months later, Smith was arrested by deputies from the U.S. Marshals Service in Jacksonville.
This case was investigated by the United States Secret Service, Jacksonville Field Office and the U.S. Marshals Service. It was prosecuted by Assistant United States Attorney Kevin C. Frein.
Iowa Businessmen Indicted for Failing to Pay Employment TaxesRead the Press Release
A grand jury sitting in Cedar Rapids, Iowa returned an indictment on Jan. 21, unsealed yesterday after their initial court appearances, charging two Iowa businessmen with federal employment tax violations, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kevin W. Techau of the Northern District of Iowa announced today.
Randy Less, 48, of Hopkinton, Iowa, and Darrell Smith, 59, of Forest City, Iowa, are each charged with multiple counts of willfully failing to truthfully account for, and pay over federal income, social security and Medicare taxes that were withheld from the wages of the employees of Permeate Refining Inc., which was in the business of ethanol production.
According to the allegations in the indictment, Less was the majority owner, a general partner and the general manager of Permeate Refining Inc. in Hopkinton. In those roles, Less had the responsibility to collect, truthfully account for and pay over to the Internal Revenue Service (IRS) federal income, social security and Medicare taxes withheld from the wages of his employees. From approximately the fourth quarter of 2009 and continuing through the fourth quarter of 2010, Less is alleged to have willfully failed to pay over to the IRS more than $116,000 in withheld taxes.
The indictment further alleges that a company called Algae Energae purchased an ownership interest in Permeate in September 2009. After that purchase, it is alleged that Smith, a corporate officer and manager of Algae Energae, also had the responsibility to collect, truthfully account for and pay over to the IRS taxes withheld from the wages of Permeate’s employees. From approximately the first quarter of 2011 and continuing through the third quarter of 2012, both Less and Smith are alleged to have willfully failed to pay over to the IRS more than $307,000 in withheld taxes.
If convicted, the defendants face a statutory maximum sentence of five years in prison and a $250,000 fine for each count.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Techau thanked special agents of IRS Criminal Investigation, the FBI, the U.S. Postal Inspection Service and the U.S. Environmental Protection Agency, who investigated the case and Assistant U.S. Attorney Tim Vavricek of the Northern District of Iowa and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website
Iowa Businessmen Indicted for Failing to Pay Employment TaxesRead the Press Release
CEDAR RAPIDS, IA – A grand jury sitting in Cedar Rapids, Iowa, returned an indictment on January 21, 2016 charging two Iowa businessmen with federal employment tax violations, announced U.S. Attorney Kevin W. Techau for the Northern District of Iowa and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Randy Less, a resident of Hopkinton, Iowa, and Darrell Smith, a resident of Forest City, Iowa, are each charged with multiple counts of willfully failing to collect, truthfully account for and pay over federal income, Social Security, and Medicare taxes that were withheld from the wages of the employees of Permeate Refining, Inc., which was in the business of ethanol production.
According to the allegations in the indictment, Less was the majority owner, a general partner, and the general manager of Permeate Refining, Inc. in Hopkinton, Iowa. In those roles, Less had the responsibility to collect, truthfully account for, and pay over to the Internal Revenue Service (IRS) federal employment, Social Security, and Medicare taxes withheld from the wages of his employees. From approximately the fourth quarter of 2009 and continuing through the fourth quarter of 2010, Less is alleged to have willfully failed to pay over to the IRS more than $116,000 in withheld taxes.
The indictment further alleges that a company called Algae Energae purchased an ownership interest in Permeate in September 2009. After that purchase, it is alleged that Smith, a corporate officer and manager of Algae Energae, also had the responsibility to collect, truthfully account for, and pay over to the IRS taxes withheld from the wages of Permeate’s employees. From approximately the first quarter of 2011 and continuing through the third quarter of 2012, both Less and Smith are alleged to have willfully failed to pay over to the IRS more than $307,000 in withheld taxes.
If convicted, the defendants face a statutory maximum sentence of 5 years in prison and a $250,000 fine for each count.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Techau thanked special agents of IRS Criminal Investigation, the FBI, the U.S. Postal Inspection Service, and the U.S. Environmental Protection Agency, who investigated the case and Assistant U.S. Attorney Tim Vavricek of the Northern District of Iowa and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting the case.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-2002-LRR.
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Illinois Man Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – JASON CRIPE, Windsor, Illinois, was sentenced to a total of five years in prison for his fraud scheme that spanned two years and two states and ended in a confrontation with federal law enforcement agents.
In October, Cripe pled guilty to wire fraud and to assaulting an officer. His sentence for the fraud charge was 48 months and his sentence for the assault was 12 months, which represents the statutory maximum. United States District Judge Ronnie White, before whom Cripe appeared this morning, ordered those sentences to run consecutively, for a total of 60 months.
According to his plea agreement, Cripe defrauded two victims of $7,800 in February 2015 in connection with the purported sale of construction equipment by taking deposits for equipment he did not own. Subsequent investigation revealed Cripe had engaged in similar conduct on at least eleven different occasions during 2014 and 2015 in Missouri and Illinois. In total, the parties agreed that Cripe collected more than $58,000 through these fraud schemes. After Cripe was charged for this fraud scheme, Cripe remained at large for a time until federal agents tracked him to a St. Louis County gas station. While apprehending Cripe, he assaulted the officers, causing minor injuries, before eventually being taken into custody.
The United States Secret Service investigated the case, which was resolved with the help of prosecutors in Warren County (MO), Monroe County (IL), Fayette County (IL), Christian County (IL) and Shelby County (IL). Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
ISIL-Linked Hacker Arrives in United States to Face Terrorism ChargesRead the Press Release
Ardit Ferizi, 20, a citizen of Kosovo, made his initial appearance this afternoon before U.S. Magistrate Judge Ivan D. Davis of the Eastern District of Virginia on charges alleging that he provided material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and committed computer hacking and identity theft violations in conjunction with the theft and release of personally identifiable information (PII) of U.S. servicemembers and federal employees.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office and Special Agent in Charge Michelle S. Klimt of the FBI’s Jacksonville, Florida, Division made the announcement.
Ferizi, who was detained by Malaysian authorities on a provisional arrest warrant on behalf of the United States, was charged by criminal complaint on Oct. 6, 2015. The criminal complaint was unsealed on Oct. 15, 2015. Ferizi subsequently waived extradition.
If convicted, Ferizi faces a maximum penalty of 35 years in prison. 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.
The investigation is being conducted by the FBI’s Washington Field Office and Jacksonville Division. The case is being prosecuted by Special Assistant U.S. Attorney Brandon Van Grack of the Eastern District of Virginia and Trial Attorney Gregory Gonzalez of the National Security Division’s Counterterrorism Section. The Malaysian authorities and the Justice Department’s Office of International Affairs also provided significant assistance.
ISIL-Linked Hacker Arrives in U.S. to Face Terrorism ChargesRead the Press Release
ALEXANDRIA, Va. – Ardit Ferizi, 20, a citizen of Kosovo, made his initial appearance here this afternoon on charges alleging that he provided material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and committed computer hacking and identity theft violations in conjunction with the theft and release of personally identifiable information (PII) of U.S. service members and federal employees.
Ferizi, who was detained by Malaysian authorities on a U.S. provisional arrest warrant, was charged by criminal complaint on Oct. 6, 2015. The criminal complaint was unsealed on Oct. 15, 2015.
Ferizi’s next court appearance will be on Friday at 2 p.m. at the federal courthouse in Alexandria.
Ferizi faces a maximum penalty of 35 years in prison, if convicted. 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; John Carlin, Assistant Attorney General for National Security; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; and Special Agent in Charge Michelle S. Klimt of the FBI’s Jacksonville, Florida, Division, made the announcement after Ferizi’s initial appearance in front of U.S. Magistrate Judge Ivan D. Davis. Special Assistant U.S. Attorney Brandon L. Van Grack and Trial Attorney Gregory R. Gonzalez of the National Security Division’s Counterterrorism Section are prosecuting the case. The investigation is being conducted by the FBI’s Washington Field Office and FBI’s Jacksonville Division.
The U.S. Attorney, Assistant Attorney General, and FBI Assistant Director thanked the Malaysian authorities for their assistance in this matter.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-MJ-515.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Huntsville Man Charged with Sexual Abuse of MinorRead the Press Release
BIRMINGHAM – A federal grand today indicted a 45-year-old Huntsville man on charges he sexually abused a minor, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
An indictment filed in U.S. District Court charges WILLIAM MAURICE PATTERSON with four counts of engaging in a sexual act with a girl who was between 12 and 16 years old. The indictment charges the abusive conduct occurred between July 1, 2015, and Jan. 4, 2016, within the jurisdiction of Redstone Arsenal.
Each count of sexual abuse of a minor carries a maximum penalty of 15 years in prison and a $250,000 fine.
The FBI and U.S. Army Criminal Investigation Command investigated the case, which Assistant U.S. Attorney Mary Stuart Burrell is prosecuting.
An indictment contains only charges. A defendant is presumed guilty unless and until proven guilty.
Head of Mental Health Clinic Charged in Fraud Scheme Involving Federal FundsRead the Press Release
PHILADELPHIA – An indictment was unsealed today charging Renee Tartaglione, 60, of Philadelphia, PA, with conspiracy, fraud, and theft involving a nonprofit clinic which provides mental health services to persons eligible under Medicaid. According to the indictment, Tartaglione defrauded the Juniata Community Mental Health Clinic (JCMHC) by misappropriating funds of the clinic. The charges were announced by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge William F. Sweeney, Jr., IRS Criminal Investigations Special Agent-in-Charge Akeia Conner, and Philadelphia Inspector General Amy Kurland.
Specifically, it is alleged that between 2007 and 2015, Tartaglione, as President of JCMHC’s Board of Directors, defrauded and stole money from JCMHC through a series of actions designed to benefit Tartaglione at the expense of the clinic. It is alleged that Tartaglione purchased the building on 3rd Street in Philadelphia which housed the clinic and then raised the rent, repeatedly, causing the clinic’s rent for the 3rd Street building to increase from $4,500 per month to $25,000 per month.
It is further alleged that in July of 2010, a co-conspirator, known to the Grand Jury, made a deposit on the purchase of a building located on 5th Street in Philadelphia using a check signed by defendant Tartaglione. In December 2011, the conspirators, through Tartaglione’s company, Norris Hancock LLC, purchased the building on 5th Street, and, in December 2012, leased it to JCMHC under a lease that called for rent of $35,000 per month for the first two years, and $75,000 per month for the next three years. The indictment alleges that the rent Tartaglione charged the nonprofit clinic was substantially in excess of the market rent.
The indictment alleges that neither the rent increases nor the lease agreements were approved by JCMHC’s Board of Directors and that Tartaglione and her co-conspirators created false and fictitious documents in an attempt to make the transactions appear legitimate.
The indictment also charges that Tartaglione defrauded and took money from JCMHC through kickbacks from persons who were issued checks drawn on JCMHC’s accounts, and by causing JCMHC to pay Norris Hancock more than 12 months of rent in some years.
The indictment further alleges that Tartaglione falsified Federal income tax returns by underreporting her income for tax years 2008, 2009, 2010, and 2012.
“Non-profit organizations, including those that deliver health care, hold a special place in our society, and the people who manage them are required to act in the best interests of the nonprofit,” said Memeger. “When instead, those trusted leaders decide to commit fraud, and line their pockets with the funds of the nonprofit, they appropriately face the severe consequences of a federal prosecution.”
“The IRS enforces the nation's tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others,” said Conner. “With both law enforcement and financial investigation expertise, our agents are uniquely qualified to assist federal law enforcement agencies with these types of cases by following the money.”
“We’re committed to holding nonprofits accountable because of what’s at stake: the well-being of some of our most vulnerable friends and neighbors,” said Kurland. “For those who depend on our nonprofits, the impact of fraud is real and direct. It’s the bed that’s no longer available at a local shelter. It’s the shuttered soup kitchen in a neighborhood that desperately needs one.”
If convicted of all charges, the defendant faces a substantial prison term, restitution, possible fines, supervised release, and special assessments.
This case was investigated by the FBI, IRS Criminal Investigation, and the Philadelphia Office of the Inspector General. It is being prosecuted by Assistant United States Attorney Bea Witzleben.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Grand Forks Resident Sentenced in Fentanyl Conspiracy Operation DenialRead the Press Release
FARGO - U S. Attorney Christopher C. Myers announced that on Jan. 26, 2016, Joshua Tyler Fulp, 20, Grand Forks, N.D., was sentenced before U. S. District Judge to serve 12 years in prison for Conspiracy to Distribute Controlled Substances Resulting in Serious Bodily Injury and Death. Judge Erickson also sentenced Fulp to 36 months supervised release and to pay $17,264 restitution jointly and severally with other co-defendants, as well as pay a $100 special assessment to the Crime Victims Fund.
Beginning in January 2014, Fulp and a co-defendant’s began receiving shipments of fentanyl from Oregon. The investigation started in North Dakota on Jan. 3, 2015, with the overdose death of 18-year-old Bailey Henke of Grand Forks. The Organized Crime and Drug Enforcement Task Force began investigating what would become known as "Operation Denial," which alleges that the drugs and substances were obtained from Canada and China.
On Jan. 25, 2016, Judge Erickson also sentenced co-defendants David Todd Noye Jr., 19, Grand Forks, ND, to 39 months in prison followed by 36 months of supervised release, and also Kain Daniel Schwandt, 20, Grand Forks, ND, to 42 months in prison followed by 36 months of supervised release.
This case is being investigated by the Department of Homeland Security - Homeland Security Investigations, Drug Enforcement Administration, United States Postal Inspection Service, Grand Forks Narcotics Task Force, Royal Canadian Mounted Police, Portland Oregon Police Bureau – Drugs and Vice Division, Portland HIDTA Interdiction Task Force, Oregon State Police, and the Grand Forks Police Department.
U. S. Attorney Christopher C. Myers and AUSA Scott Schneider are prosecuted the case.
Former Talladega Correctional Officer Indicted for Accepting Bribe to Smuggle Phone to InmateRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a former corrections officer at the Federal Correctional Institution in Talladega on charges she accepted a bribe in exchange for providing a cell phone to an inmate, announced U.S. Attorney Joyce White Vance and U.S. Department of Justice Office of the Inspector General Special Agent in Charge Robert A. Bourbon.
A two-count indictment filed in U.S. District Court charges correctional officer STACIE MARIE GARDNER, 31, of Weaver, with accepting $1,474, sent via Western Union in January 2015, in exchange for smuggling contraband into the prison. The indictment also charges that Gardner smuggled a cell phone into the prison and provided it to an inmate in exchange for the payment.
The maximum penalty for receipt of a bribe by a public official is 15 years in prison and a $250,000 fine. The maximum penalty for providing contraband to a federal prisoner is one year in prison and a $100,000 fine.
DOJ OIG investigated the case, which Assistant U.S. Attorney Davis A. Barlow is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Former Postal Inspector Sentenced to 3 Years in Prison for Possession of Stolen Mail and Marijuana TraffickingRead the Press Release
SAN JOSE, Calif. — Quan Pham Howard, 53, of Saratoga, California, a former supervisory postal inspector who worked at the San Jose Processing and Distribution Center was sentenced today by U.S. District Judge Lucy H. Koh to three years in prison for possession of stolen U.S. mail and possession with intent to distribute marijuana, United States Attorney Benjamin B. Wagner announced.
At sentencing, Judge Koh noted that as a sworn federal officer, Howard abused his position of trust, and that he obstructed justice when he interfered with the investigation into his criminal activity by attempting to influence or tamper with witnesses. Judge Koh set a hearing to decide restitution and any fine for March 16, 2016. She ordered Howard to begin serving his sentence on March 17, 2016.
According to court documents, on June 26, 2014, following an investigation and the execution of a search warrant at his house and office, Howard was arrested and charged with theft of mail. He pleaded guilty to the charges on July 22, 2015.
According to the plea agreement, between late 2010 and June 25, 2014, Howard unlawfully opened and stole United States mail that contained quantities of prescription drugs. He also possessed a variety of items that had been stolen from the mail distribution center including: a gun scope, a silver bar, jewelry, coins, gift cards, a gun silencer, a Rolex watch and other items. Howard also possessed over eight kilograms of marijuana with the intent to distribute. During this period, to conceal his theft and trafficking, Howard falsified postal records and disabled a surveillance camera at the distribution center.
After Howard was arrested and released on bond, he attempted to obstruct justice. On July 2, 2014, Howard contacted a former USPS employee whom he had supervised and attempted to influence the employee’s testimony with instructions regarding what to remember about Howard's prior supervision. In addition, Howard repeatedly contacted one of his former supervisors in an attempt to obtain her support for his false explanation of his possession of stolen property.
U.S. Attorney Wagner stated: “We are grateful for the assistance of the U.S. Postal Inspection Service in securing justice in this case. Mr. Howard violated the law, victimized postal customers, and endangered the critical trust between law enforcement and the community. We will continue our efforts to nurture that trust by working with our law enforcement partners to vigorously investigate and prosecute such cases.”
“When the USPS OIG receives these types of complaints, we take them very seriously and investigate them to their fullest. This sentencing serves as a deterrent to employees who think this type of behavior is acceptable and may be willing to compromise the integrity of the mail or their responsibility as a Postal Service employee,” says Special Agent in Charge Curtis Lembke.
U.S. Postal Inspection Service Special Agent in Charge Rafael E. Nunez stated: “It is disheartening to see a Postal Inspector accused and convicted of violating laws they were sworn to uphold, but it is reassuring that justice has been done today. Howard's actions should not diminish the fine work the men and women of the U.S. Postal Inspection Service do every day. We will continue to work with honor and integrity in a steadfast effort to maintain the safety and security of the U.S. Mail.”
This case was the product of an investigation by the United States Postal Service Office of Inspector General. Assistant United States Attorney Michelle Rodriguez, of the Eastern District of California, is prosecuting the case. Because Howard was a postal inspector who investigated cases in the Northern District of California, the U.S. Attorney’s Office for the Northern District was recused from this case. The case was heard in the U.S. District Court in San Jose.
Former Marion County, Florida, Deputy Sheriff Charged with Excessive Use of ForceRead the Press Release
Former Marion County, Florida, Deputy Sheriff Jesse Alan Terrell, 33, was indicted late yesterday on charges of violating the civil rights of “D.P.”, an unnamed victim, by using excessive force during an arrest. The indictment was returned by a federal grand jury in the Middle District of Florida, and was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, and U.S. Attorney A. Lee Bentley III of the Middle District of Florida.
The indictment alleges that on Aug. 7, 2014, Terrell, while working as a deputy sheriff with the Marion County Sheriff’s Office, assaulted “D.P.,” resulting in bodily injury. The indictment alleges that Terrell repeatedly struck, kneed and kicked the victim in the head, neck and shoulder area.
If convicted, the defendant faces a maximum sentence of 10 years in prison and a fine of up to $250,000.
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’s Jacksonville Division, and is being prosecuted by U.S. Attorney A. Lee Bentley III of the Middle District of Florida and Mark Blumberg and Maura White of the Civil Rights Division’s Criminal Section.
Terrell Indictment
Former Marion County Deputy Charged with Excessive Use of ForceRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces the return of an indictment charging former Marion County Deputy Sheriff Jesse Alan Terrell, 33, with violating the civil rights of “D.P.”, an unnamed victim, by using excessive force during an arrest.
The indictment alleges that on Aug. 7, 2014, Terrell, while working as a deputy sheriff with the Marion County Sheriff’s Office, assaulted “D.P.,” resulting in bodily injury. The indictment alleges that Terrell repeatedly struck, kneed and kicked the victim in the head, neck and shoulder area.
If convicted, the defendant faces a maximum sentence of 10 years in prison and a fine of up to $250,000.
An indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
Four other deputies from the Marion County Sheriff’s Office were previously charged for their roles in the August 2014 incident. Cody Hoppel, Adam Crawford, James Amidei, and Trevor Fitzgerald have each pleaded guilty to federal civil rights violations and are currently awaiting sentencing.
This case is being investigated by the FBI’s Jacksonville Division, and is being prosecuted by U.S. Attorney Bentley and Mark Blumberg and Maura White of the Civil Rights Division’s Criminal Section.
Former Manager at HBO Agrees to Plead Guilty to Federal Fraud and Tax Charges in Scheme that Stole about $1 Million from CompanyRead the Press Release
LOS ANGELES – A San Fernando Valley woman was charged today with three federal offenses in relation to a scheme in which she submitted fraudulent bills and illegally took approximately $1 million from HBO, where she worked as manager in the Talent Relations Department.
In court documents filed today, Jennifer Choi, 38, of Valley Village, agreed to plead guilty to two counts of wire fraud and one count of tax evasion.
Choi, who worked at HBO for nearly 10 years, where she was responsible for scheduling services – such as hairstyling, wardrobe and make-up – for actors associated with HBO. Choi set up a company called Shine Glossy, LLP, which she used to submit bogus invoices to HBO for style and make-up services supposedly provided to actors. But, according to court documents, the services were never actually provided, and HBO funds instead went directly into a bank account she had established. Through Shine Glossy, Choi submitted nearly 300 fraudulent invoices that led HBO to pay approximately $940,000.
“Ms. Choi has admitted to bilking her employer out of nearly a million dollars through a fraud scheme that used a fake company that provided no services,” said United States Attorney Eileen M. Decker. “This long-term scheme violated both her duty to her employer as well as federal law, and Ms. Choi now faces serious consequences beyond losing her job.”
Choi also admitted in a plea agreement filed today that she used a car service for herself, her family and her friends and provided HBO’s account information, which led the car service to bill HBO for the unauthorized rides. In this part of the scheme, Choi fraudulently obtained approximately $63,000 in car services that were paid for by HBO.
Choi was terminated by HBO in September 2014.
“The defendant stole $1 million from her employer by concocting a scheme to conceal her misdeeds – enriching herself by choosing greed over good judgment,” said David Bowdich, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “The FBI will continue to work with our partners to ensure that those who engage in this kind of financial fraud are held accountable.”
In her plea agreement, Choi also admitted that she failed to file federal income tax returns for several years, even though she earned hundreds of thousands of dollars in the years 2011, 2013 and 2014. She also admitted significantly under-reported her income when she did file tax returns for the years 2010 and 2012.
“Spanning more than six years, Ms. Choi stole funds from her employer by creating phony invoices for services which were never provided,” stated Erick Martinez, Special Agent in Charge of IRS - Criminal Investigation. “Our office will vigorously investigate individuals who line their pockets with fraudulently obtained funds and then file fraudulent tax returns.”
Choi is expected to make her first court appearance in this case on February 19.
The three charges alleged in this case carry a statutory maximum penalty of 45 years, although the parties in this case believe that her actual sentence will be significantly less than that. The actual sentence to be imposed after she pleads guilty will be determined solely by the judge presiding over the case.
The investigation into Choi was conducted by the Federal Bureau of Investigation and IRS – Criminal Investigation.
Former Fair Bluff Police Officer Charged with the Manufacturing of Child Pornography Pleads GuiltyRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court on January 25, 2016, DONALD BRIAN BEAUCHAINE, 40, of Lake Waccamaw, North Carolina, pled guilty before Chief United States District Judge James C. Dever, III, to one count of manufacturing child pornography, in violation of Title 18, United States Code, Section 2251(a)and (d).
According to the investigation, On June 4, 2014, BEAUCHAINE was previously employed as a police officer with the Fair Bluff Police Department. He was caught secretly videotaping his girlfriend’s minor daughter in the bathroom. He admitted to videotaping the girl beginning in April 2014 until he was caught. A forensics examination of BEAUCHAINE’S cellphone and laptop 12,000 images of child pornography.
At sentencing, not yet scheduled by the court, BEAUCHAINE faces up to 30 years imprisonment.
The criminal investigation of this case was conducted by the North Carolina State Bureau of Investigation and the Lake Waccamaw Police Department. Assistant United States Attorney Ethan A. Ontjes is handling the prosecution on behalf of the Eastern District of North Carolina.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Former D’hanis State Bank President Sentenced to Federal PrisonRead the Press Release
In San Antonio today, a former D’Hanis State Bank (DSB) president Laurie Mayfield (aka “Laurie H. Scott”) was sentenced to two years in federal prison after admitting that she filed fraudulent bank regulating reports which overestimated the bank’s assets announced United States Attorney Richard L. Durbin, Jr., Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division and U.S. Secret Service Special Agent in Charge Lee Dotson.
In addition to the prison term, United States District Judge Xavier Rodriguez ordered that Mayfield pay $817,892.32 restitution and be placed on supervised release for a period of three years after completing her prison term. Judge Rodriguez also ordered Mayfield to surrender to federal authorities on or before April 1, 2016, to begin serving her prison term.
On June 9, 2015, the 55–year-old Fredericksburg, TX, resident pleaded guilty to one count of wire fraud. According to court records, from January 2012 until September 2014, Mayfield prepared and filed false Consolidated Reports of Condition and Income (aka “Call Reports) with federal and state bank regulators on behalf of DSB which overstated the assets of DSB by approximately $830,000. By pleading guilty, Mayfield admitted that on September 16, 2014, she emailed those false reports to a prospective buyer of DSB. The buyer relied on those false DSB Call Reports in their decision to purchase DSB.
The case resulted from a joint investigation by the Federal Bureau of Investigation, U.S. Secret Service, Federal Deposit Insurance Corporation (FDIC) and the Office of Inspector General for the Board of Governors of the Federal Reserve System – Consumer Financial Protection Bureau. This case is being prosecuted by Assistant United States Attorney Greg Surovic.
Former Credit Union Employee Pleads Guilty to $34,000 EmbezzlementRead the Press Release
KANSAS CITY, KAN. - A former credit union employee pleaded guilty Wednesday to embezzling more than $34,000, U.S. Attorney Barry Grissom said.
Susan Wooten-Robb, 25, pleaded guilty to one count of wire fraud. In her plea, she admitted the crime occurred while she worked for Community America Credit Union at 5601 W. 95th in Overland Park, Kan. In February 2014 two account holders complained about unauthorized debits from their accounts. Investigation revealed Wooten-Robb had made unauthorized debits totaling $34,035. In one instance, she attempted to cover up an unauthorized debit by filing a false currency transaction report claiming the account holders took out the money to assist a family member with paying tuition.
Sentencing will be set for a later date. She faces a maximum penalty of 30 years in federal prison and a fine up to $1 million.
Grissom commended the U.S. Secret Service and Assistant U.S. Attorney Jabari Wamble for their work on the case.
Former Buffalo Nurse Pleads Guilty to Stealing Pain Medications Intended for Patients from Local HospitalRead 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 Leyla Samadi, 54, formerly of Buffalo, NY, currently of St. Mary’s County, Maryland, pleaded guilty to illegally obtaining controlled substances by fraud. The charge carries a maximum penalty of four years in prison and a $250,000 fine.
“This nurse not only stole pain medicine intended for patients, she refilled the medicine bottles with useless saline to conceal her tracks,” said U. S. Attorney Hochul. “Because Samadi then returned the tampered bottles to the dispenser, it’s possible that deserving patients received nothing more potent than water.”
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that between November 22, 2014 and January 7, 2015, the defendant tampered with pain medications Demerol and Hydromorphone while working as a registered nurse at Sisters of Charity Hospital in Buffalo.
Samadi, while working in her capacity as a nurse, would log into a Pyxis machine which is used to automatically dispense liquid pain medications using her username and fingerprint scan. The defendant would identify the narcotic and patient it would be administered to. But rather than administer the medication to the patient, Samadi would instead inject herself with the narcotic. The defendant then replaced the missing medication with saline solution and returned it to the Pyxis machine. Once she returned the vile to the Pyxis machine, Samadi would cancel the transaction claiming that she had selected the wrong medication or the wrong patient.
This is the second time in three days there has been a development involving a medical professional accused of inappropriately utilizing controlled substances. On Monday, Dr. Pravin Mehta was sentenced to 24 months in prison for illegally prescribing massive quantities of pain medications.
The plea is the culmination of an investigation by the Food and Drug Administration, Office of Criminal Investigations, under the direction of Acting Special Agent in Charge Spencer Morrison, the New York State Attorney General’s Office, under the direction of Eric T. Schneiderman, New York State Department of Health, Bureau of Narcotic Enforcement, under the direction of Joshua Vinciguerra, and the New York State Office of the Attorney General, Medicaid Fraud Control Unit, under the direction of Chief Upstate Investigator Upstate William Falk.
Former Bank Branch Manager Pleads Guilty to Embezzlement, False Tax ReturnRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former branch manager of a Mountain Grove, Mo., bank pleaded guilty in federal court today to embezzling approximately $140,000 from the bank and failing to pay taxes on that income.
Diana L. Emery, 47, of Mount Grove, pleaded guilty before U.S. District Judge M. Douglas Harpool to one count of making a false entry in banking documents and one count of filing a false federal income tax return.
Emery was employed by First Home Savings Bank (FHSB) for approximately 15 years, first as a bookkeeper and eventually as branch manager at FHSB in Mountain Grove.
By pleading guilty today, Emery admitted that she used her position to make unauthorized payments to herself from bank funds from 2008 to 2012. Emery secretly took money from the bank vault and concealed her theft by making false entries in FHSB’s books, reports and the electronic journal detail report. Emery embezzled at least $139,999 from FHSB, which she deposited into her personal checking accounts.
When Emery filed her federal income tax returns, she excluded her embezzlement income and thus underreported her income by $205,325 (of which at least $139,999 was embezzled from FHSB; the rest came from unidentified sources). This underreported income, along with additional unreported deposits, resulted in a total tax due and owing from 2008 through 2012 of $53,155.
Under the terms of today’s plea agreement, Emery will be held accountable for her entire tax loss – which consists of the $53,155 tax due and owed for the tax years 2008 through 2012, plus any fees, penalties and restitution owed to the Internal Revenue Service and/or FHSB. The total amount of restitution owed to FHSB is $148,851 (which includes the embezzled amount plus expenses incurred by the bank as a result of her theft).
Under federal statutes, Emery is subject to a sentence of up to 33 years in federal prison without parole, plus a fine up to $1,250,000 and an order of restitution. 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 Abram McGull II. It was investigated by IRS-Criminal Investigation and the FBI.
Former Army Employee at Redstone Indicted for Submitting False Tax ReturnRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a former U.S. Army Contracting Command employee for submitting a false federal income tax return for 2013, announced U.S. Attorney Joyce White Vance and Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
A one-count indictment filed in U.S. District Court charges that WILLIS EPPS, 61, of Madison, knowingly omitted $56,250 of income on a tax return he signed and submitted in April 2014 for the 2013 tax year. Epps, now retired, worked as a contracting official for the ACC at Redstone Arsenal, assigned to the Non-Standard Rotary Wing Aircraft Project.
The maximum penalty for subscribing a false return is three years in prison and a $100,000 fine.
IRS-CI, in conjunction with the Special Inspector General for Afghanistan Reconstruction, Department of Defense Criminal Investigative Service, Army Criminal Investigation Command and FBI, investigated the case. Assistant U.S. Attorneys Ramona C. Albin and Henry Cornelius are prosecuting the case.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Florida Residents Sentenced to Prison for Involvement in Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Two Miami, Florida residents were sentenced to prison for their role in a stolen identity tax refund fraud scheme, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Special Agent in Charge Kelly R. Jackson of the Internal Revenue Service (IRS) Criminal Investigation announced yesterday.
Roland Alexis, 34, was sentenced yesterday to 42 months in prison followed by three years of supervised release. Alexis’s co-conspirator, Jim Joseph, 31, was previously sentenced to 42 months in prison followed by three years of supervised release on Jan. 20.
“Identity theft and filing false tax returns are serious crimes that inflict tremendous damage on innocent victims,” said Acting Assistant Attorney General Ciraolo. “We will continue to work with our federal and state law enforcement partners to aggressively investigate and prosecute these crimes and, where appropriate, seek the maximum sentence available to punish the perpetrators, deter others from engaging in such behavior, and seek justice for the victims.”
According to the indictment and information disclosed in court proceedings, Joseph and Alexis conspired to file more than 860 false income tax returns claiming more than $1 million in refunds from the IRS. Alexis’s conduct resulted in a tax loss of $1.8 million; Joseph’s conduct resulted in a tax loss of $1.2 million. Joseph and Alexis each pleaded guilty in November 2015 to one count of a multi-object conspiracy to defraud the IRS, commit wire fraud and commit aggravated identity theft, as well as one count of aggravated identity theft.
Between 2007 and July 2014, Joseph, Alexis and others filed false federal income tax returns using stolen identities. Joseph and Alexis obtained the personal identification information including names, social security numbers, addresses and dates of birth, without the individuals’ authorization. Much of the stolen personal identification information belonged to prisoners and deceased individuals. Joseph, Alexis and others recruited knowing co-conspirators and unknowing victims to obtain Electronic Filing Identification Numbers (EFINs) in their names through which fraudulent income tax returns would be filed. In late 2009, Alexis and Joseph, along with a co-conspirator, formed Worldwide Income Tax Multi-Services LLC and North Miami Income Tax Services. The companies were created with the intended purpose of filing fraudulent tax returns using stolen identities. Worldwide Income Tax Multi-Services was located in Miramar, Florida and listed Alexis as President and Joseph as Vice-President. North Miami Income Tax Services was set up in Miami and listed Alexis as Registered Agent. Joseph, Alexis and others then used the stolen identities and EFINs to electronically file fraudulent tax returns.
In addition to the prison term, U.S. District Judge William Zloch for the Southern District of Florida ordered Joseph to pay $1,225,686.12 in restitution to the IRS. Alexis was also ordered to pay $1,805,332.71 in restitution, forfeit two single family owned properties in Miami and $369,776.18 in proceeds held in a bank account.
U.S. Attorney Ferrer, Acting Assistant Attorney General Ciraolo and Special Agent in Charge Jackson commended special agents of IRS Criminal Investigation and Homeland Security Investigations, who investigated the case and Assistant U.S. Attorney Neil Karadbil of the Southern District of Florida and Assistant Chief Gregory E. Tortella of the Tax Division, who prosecuted the case.
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.
Florence Man Indicted on Federal Domestic Violence and Stalking ChargesRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Florence man on interstate domestic violence and stalking charges for assaulting and sending threatening phone messages to a former girlfriend living on Redstone Arsenal, announced U.S. Attorney Joyce White Vance.
An indictment filed in U.S. District Court charges RONNIE CHRISTOPHER RICKS, 46, with one count of interstate domestic violence for coming into the U.S. government’s special territorial jurisdiction of Redstone Arsenal and striking his former girlfriend with his fists on Aug. 5. The indictment also charges Ricks with interstate stalking for using an electronic communication system of interstate commerce, a cellular telephone, in order to harass or intimidate the woman and cause, or attempt to cause her substantial emotional distress.
The maximum penalty for each count is five years in prison and a $250,000 fine.
The Redstone Arsenal Police investigated the case, which Assistant U.S. Attorney David Estes is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Federal Drug Initiative Nets 19 Arrested on Federal and State Drug OffensesRead the Press Release
CHARLOTTE, N.C. – United States Attorney Jill Westmoreland Rose announced that during an early morning round-up FBI agents and Charlotte-Mecklenburg police officers arrested 19 individuals charged with federal and state drug offenses. A federal criminal indictment returned on January 20, 2016, and unsealed today, names 20 defendants charged with multiple federal drug related offenses. Eight others will be prosecuted in state court, bringing the total number of those charged in connection with the federal drug initiative to 28.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina and Chief Kerr Putney, of the Charlotte-Mecklenburg Police Department (CMPD), join U.S. Attorney Rose in making today’s announcement.
The six-month joint federal and local investigation aimed at reducing drug distribution and drug related criminal activity and increasing community safety in Mecklenburg County was focused on the Belmont neighborhood in Charlotte.
“This morning’s arrests are the result of a joint law enforcement investigation targeting an area of Charlotte that has been plagued by drug trafficking and drug-related criminal activity. I want to thank our law enforcement partners for working together in this initiative to identify and remove the individuals who continue to pose a threat to our community,” said U.S. Attorney Rose in making today’s announcement. “Also, let this be a warning, that as we work with our law enforcement partners to combat drug activity and violent crime throughout Mecklenburg County, we are keenly focused on specific neighborhoods where crime statistics are significant. To the law abiding citizens who reside in these areas, we will continue to work hard to restore your neighborhoods as places where you can live and prosper. To those who engage in criminal activity, our message is clear: we will not sit on the sidelines while you continue to pollute our neighborhoods with drugs and crime,” Rose added.
“The danger and chaos that drugs create in our local communities eats away at the ability of our citizens to live their lives peacefully. These arrests are an outstanding example of what federal and local law enforcement can accomplish when we work together to target the individuals who threaten the safety and stability of our neighborhood streets,” said FBI’s SAC Strong.
“The Charlotte-Mecklenburg Police Department will continue our relentless pursuit of community safety. We remain focused in our efforts and continue to work with our partner agencies to ensure neighborhoods like Belmont remain safe,” said Chief Putney.
The 20 defendants named in the federal indictment are each charged with conspiracy to distribute crack cocaine and related drug offenses. They are:
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Emmanuel Gooding, 39, of Charlotte. (not arrested yet)
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Daniel Simpson, 32, of Charlotte. (arrested)
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James Dixon, 48, of Charlotte. (arrested)
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Vinton Teeter, 35, of Charlotte. (arrested)
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Ricki Foster, 35, of Charlotte. (arrested)
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Lamont Davis, 39, of Charlotte. (arrested)
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Johnny Byrd, 38 of Charlotte. (arrested)
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Jasper Toney, Jr. 24, of Charlotte. (arrested)
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Miguel Mantic Perry, 36, of Charlotte. (not arrested yet)
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Tony William Robinson, 36, of Charlotte. (arrested)
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Derek Murphy, 41, of Charlotte. (arrested)
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Donald Jenkins, 62, of Charlotte. (arrested)
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Shawnda Craig-Houston, 41, of Charlotte. (arrested)
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Rodney Scott Smith, 45, of Charlotte. (arrested)
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Thomas Pearce, 26, of Charlotte. (not arrested yet)
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Mckinza Feaster, 26, of Charlotte. (previously in federal custody)
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Andrea Hines, 45, of Charlotte. (arrested)
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Quanard Harrison, 38, of Charlotte. (arrested)
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Kenneth Wallace, 23, of Charlotte. (arrested)
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James Lamont Walker, 27 of Charlotte (arrested)
Sixteen of the 20 federal defendants were arrested this morning and one was already in federal custody. Federal arrest warrants have been issued against Gooding, Perry and Pearce.
Today’s initiative netted eight additional defendants facing state drug charges. The three arrested earlier today are Cleveland Little, Michael Young, Rochilla Harrell. Three more individuals, Dontaie Patton, Tanisha Harris, and Charles Vaughn, Jr. are still wanted by law enforcement. Brandon Monk and Rysuon Norris, were already in state custody on separate charges.
“My office is grateful for the strong working relationship we enjoy with the U.S. Attorney’s Office, the FBI and CMPD as we all work together to keep our communities safe from illegal drugs and criminal activity associated with those drugs,” said Andrew Murray, District Attorney for Mecklenburg County, whose office will be handling the prosecution of those charged with state offenses.
In making today’s announcement, U.S. Attorney Rose thanked District Attorney Murray, for his office’s continued collaboration and support.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The investigation was conducted by the FBI and CMPD. U.S. Attorney Rose also thanked the U.S. Marshals Service, Gastonia Police Department and the Union County Sheriff’s Office for their assistance with this investigation.
Assistant U.S. Attorneys William Bozin and Lambert Guinn of the U.S. Attorney’s Office in Charlotte are leading the prosecution.
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