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10 March 2016
East St. Louis Man Sentenced for Firearm OffenseRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today that on March 10, 2016, Anthony M. Williams, 33, East St. Louis, IL, was sentenced for the Unlawful Possession of a Firearm by a Previously Convicted Felon. Williams received 24 months in federal prison, to be followed by 3 years of supervised release, and ordered to pay a $100 special assessment. Williams also agreed to forfeit the illegal firearm that he possessed.
The charge arose on April 10, 2015, when Illinois State Police officers attempted to stop Williams in East St. Louis, Illinois, for traffic violations. Williams did not immediately stop and, as he continued driving, an officer saw him throw something out of the passenger side window. When officers went to the area where they had seen the object thrown, they recovered a FEG, .9mm pistol. Further investigation revealed that Williams had previously been convicted of Unlawful Possession of a Weapon by a Felon in St. Clair County in 2009.
The case was investigated by the Illinois State Police and assigned to Assistant United States Attorneys Don Boyce and Angela Scott for prosecution.
Drug User Possessing a Weapon off to PrisonRead the Press Release
A man who possessed a handgun while intoxicated and had marijuana and cocaine within his system was sentenced today to five years in federal prison.
Darius Omar Akheen Rhone, age 27, from Dubuque, Iowa, received the prison term after a December 16, 2015, guilty plea to a single count Indictment of being a prohibited person in possession of a firearm and ammunition. Rhone’s prohibited status was established by his illegal drug use.
At the guilty plea, Rhone admitted his drug use and possession of the weapon and ammunition on September 1, 2015. At the sentencing hearing, the facts revealed that Rhone, while intoxicated at a local bar, frequently displayed a .22 caliber pistol kept in his waistband and had threatened to hurt someone. The loaded magazine was in the weapon but a round was not chambered. Further investigation revealed Rhone was in possession of a small quantity of marijuana and later tested positive for both marijuana and cocaine use.
Rhone was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade to 60 months’ imprisonment. A special assessment of $100 was imposed and he must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system. Rhone is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Steve Young and investigated by the Dubuque Police Department.
Court file information at: https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-01025.
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Dinner Cruise Ship Captain Arrested for Using Stolen IdentityRead the Press Release
HOUSTON – A ship captain for Majestic Ventures, Majestic Dinner Cruises and Majestic Yacht Charters dinner cruise lines has been arrested on charges of using a stolen identity for more than 20 years, announced U.S. Attorney Kenneth Magidson.
Cynthia Lyerla, 52, of League City, allegedly used the identity of Christina White to obtain driver’s licenses, passports, mariner licenses and Transportation Security Administration (TSA) documentation allowing her to enter secure port areas. Without a mariner license and TSA documentation, Lyerla would not be allowed to captain the ships for the dinner cruise companies.
Lyerla was charged in a four-count indictment returned under seal on March 8, 2016, and unsealed today. She was taken into custody this morning and is expected to make her initial appearance before U.S. Magistrate Judge Frances H. Stacy at 2:00 p.m.
The indictment alleges Lyerla used the identity of Christina White, who passed away in 1965. She is charged with aggravated identity theft, false statements in a passport application, unlawful use and possession of a mariner license and unlawful use by false personation of a transportation worker identification credential.
According to the indictment, Cynthia Lynn Knox was born in 1964, later married Harold Lyerla and took his name. The marriage ended when Harold Lyerla was murdered in 1988 in Lompoc, California. Although another individual was convicted for that crime, Lyerla’s fingerprints were taken by the local police in the course of the investigation.
Since that time, Lyerla has allegedly used the identity of Christina White to obtain driver’s licenses, passports, mariner’s licenses and TSA documentation allowing her access into secure port areas. In applying for those documents, she not only used the name Christina White, but also provided Christina White’s date of birth, place of birth, Social Security number and parents’ names, according to the charges.
The indictment alleges her true identity was confirmed after her fingerprints were taken in connection with a mariner license application.
If convicted, she faces up to 10 years in federal prison.
The charges were the result of an investigation conducted by the Department of State - Diplomatic Security Service and U.S. Coast Guard Investigative Service. Assistant U.S. Attorney Adam Goldman is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Detriot Area Doctors Charged with Illegal Distribution of Prescription DrugsRead the Press Release
A superseding indictment was unsealed today charging three doctors and seven other individuals with conspiracy to illegally distribute prescription drugs, U.S. Attorney Barbara L. McQuade announced today.
McQuade was joined in the announcement by Acting Special Agent in Charge David A. Grant, U.S. Drug Enforcement Administration (DEA), Detroit Field Division and Jared Koopman, Special Agent in Charge, Internal Revenue Service, Criminal Investigation.
Charged in the superseding indictment are:
Dr. Boris Zigmond, D.C., 50, of West Bloomfield
Dr. Jennifer Franklin, M.D., 39, of Harrison Township
Dr. Carlos Godoy, M.D., 78, of Farmington Hills
Rodney Knight, 32, of Highland Park
Tara Marcia Jackson, 53, of Detroit
Sashanti Morris, 44, of Detroit
Anna Fradlis, 61, of West Bloomfield
Maryna Pitsenko, 46, of Sterling Heights
Svetlana Sribna, 64, of Sterling Heights
Marina Jacobs, 44, of West Bloomfield
The superseding indictment alleges that from January 2013 through May 2015, Zigmond was the leader of a large-scale prescription drug trafficking organization whose purpose was to secure written prescriptions from medical doctors for controlled substances, primarily Roxicodone, and its generic equivalent Oxycodone, that could be filled at various pharmacies. According to the superseding indictment, Zigmond’s organization distributed approximately 1 million pills and grossed approximately $5.7 million from trafficking these pills on the illegal street market. The prescriptions for these highly addictive drugs were written outside the course of usual medical practice and for no legitimate purpose.
The superseding indictment further alleges that Zigmond, a chiropractor, did not see patients himself or write prescriptions but rather used co-defendants Rodney Knight, Tara Jackson and Sashanti Morris as “marketers” or “patient recruiters” who would pay money directly to Zigmond or Zigmond’s assistants, co-defendants Anna Fradlis, Maryna Pitsenko, Svetlana Sribna and Marina Jacobs who would then schedule appointments with co-defendants Dr. Franklin and Dr. Godoy. Each appointment cost $500-$600 cash and the “marketer” paid the money before a phony patient was seen by either Franklin or Godoy.
“Diversion of prescription pills to the street market promotes the addiction to painkillers that leads to overdose deaths,” McQuade said. “We are focusing on charging doctors, pharmacists and the networks that are putting this poison on the streets.”
DEA Acting Special Agent in Charge David A. Grant stated, “The arrests today are just one example of DEA's determination and commitment to combat the troubling prescription drug abuse problem in this country. The doctors involved in this investigation abused their positions of trust and jeopardized the lives of many individuals by participating in the conspiracy to distribute nearly a million dosage units of controlled substances onto the streets of southeast Michigan and beyond. These indictments should make it clear that the DEA and our law enforcement partners are focused on investigating and pursuing those that are illegally diverting prescription drugs into our communities.”
“Physicians who prescribe drugs to those without a medical purpose but rather for the known purpose of selling them on the street is extremely harmful to our communities,” said Special Agent in Charge Jarod Koopman, IRS- CI. “Where the law allows, we will continue to follow the money and seize the proceeds from those that profit at the expense of our neighborhoods.”
According to the superseding indictment, Zigmond set up office suites in several different locations in Oak Park, where co-defendants Franklin and Godoy would see fake patients and write the prescriptions. Franklin, Godoy, Fradlis, Pitsenko, Sribna and Jacobs were paid by Zigmond.
In addition to the drug conspiracy charge, Zigmond was also charged with money laundering and Knight was also charged with being a felon in possession of a firearm. The United States will pursue forfeiture of all proceeds and property traceable to the offenses charged.
An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
The case was investigated by Special Agents of the DEA and IRS. The case is being prosecuted by Assistant U.S. Attorneys Wayne Pratt and Jonathan Grey.
Defendants from Northern Colorado Heroin Network Convicted and Sentenced for Their Roles in Drug Trafficking Which Resulted in DeathRead the Press Release
DENVER – Four defendants who were indicted by a federal grand jury in Denver for their roles in the distribution of heroin which resulted in a fatal overdose have all be convicted and sentenced, U.S. Attorney John Walsh, FBI Denver Division Special Agent in Charge Thomas Ravenelle and Longmont Public Safety Chief Mike Butler announced. The four defendants were charged following the March 4, 2013 fatal overdose of an individual in Longmont, Colorado. In their respective plea agreements, all four admitted their roles in the distribution of the heroin which resulted in that fatality. The January 23, 2015 arrests of the four federal defendants were conducted simultaneously with those of 10 other persons who were named in state charges for possession and/or distribution of a schedule I controlled substance.
Brice Alday and his three co-defendants have all pled guilty and were sentenced by U.S. District Court Judge Christine M. Arguello. Lead defendant Brice Alday was sentenced to serve 120 months (10 years) in federal prison for Conspiracy to Distribute Heroin. Danielle Sciortino was sentenced to serve 60 months (5 years) in federal prison for conspiracy to distribute heroin, the use of which resulted in death. Jesse Hervey was sentenced to serve 36 months (3 years) in federal prison for that same charge. Finally, Jacquelynn Bradley was sentenced to serve 5 years’ probation, with the first 8 months in home detention for her role in the conspiracy to distribute heroin.
“Heroin is a deadly drug that is killing young people across all segments of our society,” said U.S. Attorney John Walsh. “This heroin trafficking network sold a dangerous drug that resulted in the death of an individual. Because of their conduct, they will be held criminally accountable. And a word to other heroin dealers – you’re next.”
"The distribution of heroin is a serious matter because in addition to the victim in this case, the drug is killing thousands of people across the country. In fact, heroin abuse is now a full-fledged epidemic in the United States. That's why we will continue to work closely with the United States Attorney's Office to investigate and prosecute heroin traffickers like the defendants in this case," said Denver FBI Special Agent in Charge Thomas Ravenelle.
“This was a great partnership between the FBI, Longmont Police Department, and the U.S. Attorney’s Office, and we could not have pulled off this major investigation without the support and teamwork between these three agencies,” said Longmont Public Safety Chief Mike Butler. “It had a positive impact in our community and sent a strong message that we are taking narcotics investigations seriously.”
This case was investigated by the Federal Bureau of Investigation, Fort Collins Resident Agency and the Longmont Police Department. In addition, the Boulder District Attorney’s Office and the Boulder County Coroner’s Office worked closely with law enforcement in the investigation and prosecution of these defendants.
The federal defendants were prosecuted by Assistant U.S. Attorney Bradley Giles.
Defendant Sean Anthony Lizama Sentenced to Ninety Six Months IncarcerationRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that on March 7, 2016, Defendant SEAN ANTHONY LIZAMA was sentenced by the Honorable Frances Tydingco-Gatewood, Chief Judge, District Court of Guam. Defendant was sentenced to serve 96 months incarceration followed by three years of supervised release, with credit for time served.
Defendant LIZAMA pled guilty on January 15, 2015, to Attempted Possession of Methamphetamine with Intent to Distribute, in violation of Title 21 U.S.C. Section 846(a)(1) and (b)(1)(C). Defendant LIZAMA attempted to receive 214.9 grams of methamphetamine hydrochloride on October 16, 2013. The Drug Enforcement Administration Forensic Laboratory determined that the methamphetamine had a purity level of 100%.
The investigation was conducted by U.S. Postal Inspectors and Special Agents from the Department of Homeland Security, Homeland Security Investigations.
U.S. Attorney Limtiaco notes that this prosecution is part of the U.S. Department of Justice’s Project Safe Neighborhood (PSN) Initiative, a nationwide commitment to aggressively prosecute defendants who illegally possess firearms, engage in violent crimes, drug distribution and gang involvement.
The case was handled by Assistant U.S. Attorney Rosetta San Nicolas.
Danbury Man Sentenced to 16 Years in Federal Prison for Armed Home InvasionsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that MARLON PATTERSON, also known as “Head,” 32, of Danbury, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to 192 months of imprisonment, followed by five years of supervised release, for orchestrating a series of violent home invasion robberies of illegal drugs and drug trafficking proceeds.
According to court documents and statements made in court, in January 2013 the Danbury Police Department began investigating a narcotics trafficking network, headed by PATTERSON and Michael Spears, which maintained a series of drug distribution locations, known as trap houses, in Danbury, out of which members of the organization sold crack cocaine and heroin. The organization also rented hotel rooms where they packaged and distributed narcotics. The investigation also revealed that PATTERSON, Spears and others had organized and committed armed home invasion robberies of marijuana dealers on January 30, February 14 and February 18, 2013. During each of the robberies, PATTERSON and others, wearing masks and armed with firearms, forced entry into the residence of a known marijuana dealer. Once inside, the perpetrators attempted to or did steal marijuana and cash. In each instance, the perpetrators pistol whipped a victim and threatened to kill others within the home.
In addition, in May 2013, PATTERSON and his associate, Paul Whitehurst, kidnapped an individual who owed Whitehurst a drug debt of approximately $100. Whitehurst physically and verbally assaulted the victim as they drove to a nearby reservoir. At the reservoir, Whitehurst pushed the victim into the water and then threw rocks at him. PATTERSON recorded the incident on his phone and can be heard laughing in the video.
PATTERSON and Whitehurst then drove the victim to a liquor store and purchased a liter of vodka, which Whitehurst forced the victim to drink in its entirety in approximately 15 minutes until the victim lost consciousness. The victim, still unconscious, was then driven to a trap house where he was locked in a bathroom overnight. The next day, PATTERSON and Whitehurst directed the victim to work off his drug debt by selling heroin to customers. After selling the drugs, the victim was released.
PATTERSON’s criminal history includes several felony convictions. In September 2007, he shot an individual in the face and subsequently served approximately five years of imprisonment. Sometime after his release from prison he had the words “Face Shot” tattooed on his arm. PATTERSON faces up to eight years of state incarceration for violating his probation.
PATTERSON has been detained since his arrest on October 16, 2013. On May 1, 2015, he pleaded guilty to one count of interference with commerce by robbery, one count of attempted interference with commerce by robbery, and one count of use of a firearm during and in relation to crimes of violence.
Spears has pleaded guilty and awaits sentencing. Whitehurst also pleaded guilty and, on March 20, 2015, was sentenced to 48 months of imprisonment.
This matter was investigated by the Drug Enforcement Administration’s New Haven Task Force and the Danbury Police Department. The DEA Task Force includes personnel from the New Haven, Hamden, Branford, Meriden, West Haven, North Haven, East Haven, Derby and Ansonia Police Departments. The case is being prosecuted by Assistant U.S. Attorneys Tracy Dayton and Vanessa Richards.
Convicted Felon from Chicago Indicted on Federal Firearm OffensesRead the Press Release
CHICAGO — A Chicago man with a prior felony conviction has been indicted on federal gun charges for illegally dealing and possessing firearms.
The indictment contends that LAZARO SALAS, 32, illegally dealt firearms from September 2013 to November 2015. Salas allegedly purchased between 40 and 60 guns through a straw purchaser and then later re-sold them, according to a federal criminal complaint and affidavit. Two of the firearms were later found in the possession of Chicago gang members, the complaint states.
On Jan. 7, 2016, Salas purchased four handguns from an undercover agent with the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives, according to the complaint. The sale took place in a store parking lot near Salas’ residence in Chicago. Salas paid $350 for two of the guns, and he agreed to purchase the other pair for $200 and an ounce of marijuana, according to the complaint.
Salas was previously convicted of a felony, the indictment states.
The indictment was returned Tuesday in U.S. District Court in Chicago. It charges Salas with one count of dealing firearms without a license, and one count of being a felon-in-possession of a firearm. An arraignment date in federal court has not yet been set.
The charge of dealing firearms without a license is punishable by up to five years in prison, while being a felon-in-possession of a firearm carries a maximum sentence of ten years in prison and a $250,000 fine.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffrey A. Magee, Special Agent-in-Charge of the Chicago Field Division of ATF; and John Escalante, Interim Superintendent of the Chicago Police Department. The Illinois State Police also assisted in the investigation.
The public is reminded that an indictment 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.
The government is represented by Assistant U.S. Attorney Scott Edenfield.
Indictment
Child Pornographer Sentenced to 33 1/3 Years in PrisonRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of SEAN GERALD PENONCELLO, 42, for the production of child pornography involving two minor victims. On June 9, 2015, PENONCELLO was charged by superseding indictment with two counts of producing child pornography and one count of possessing child pornography. Following a three-day trial before Judge Patrick J. Schiltz, a jury on September 23, 2015, found PENONCELLO guilty of all counts. The defendant was sentenced today before Judge Schiltz.
“Penoncello is a predator,” said Assistant United States Attorney Laura Provinzino. “Not only did he commit a series of heinous crimes against women and children, but he also showed not one iota of remorse to his victims, including a 5-year-old girl entrusted to his care. The long sentence handed down today is warranted.”
“The FBI remains committed to protecting those who are most vulnerable,” said Special Agent in Charge of the FBI Minneapolis Division Richard T. Thornton. “Those who would engage in the production, distribution, or viewing of child pornography will always be on the radar of law enforcement.”
As proven at trial, on April 3, 2014, a series of nude images of an unidentified five-year-old minor were submitted to the National Center for Missing and Exploited Children (NCMEC) that were traced back to PENONCELLO’s residence in Cherry, Minn. On March 27, 2015, law enforcement executed a search warrant of PENONCELLO’s residence and recovered two hidden thumb drives and a surreptitious recording device taken from PENONCELLO’s truck.
As proven at trial, the evidence contained on the two thumb drives revealed sexually explicit images and videos of a second minor victim, produced when the victim was 14-years-old. The thumb drives also contained numerous pornographic images and videos of other known NCMEC-identified minor victims.
If you know of any child who may have been a victim of exploitation, please call the National Center for Missing or Exploited Children (NCMEC) at 1-800-THE-LOST (1-800-843-5678) or visit NCMEC’s web site at www.missingkids.com.
This case is the result of an investigation conducted by the Federal Bureau of Investigation and the St. Louis County Sheriff’s Office, with assistance from the St. Louis County Attorney’s Office, Virginia Police Department and Eveleth Police Department.
This was prosecuted by Assistant U.S. Attorneys Laura M. Provinzino and Benjamin F. Langner.
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, 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.
Defendant Information:
SEAN GERALD PENONCELLO, 42
Iron, Minn.
Convicted:
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Production of Child Pornography, 2 counts
- Possession of Child Pornography, 1 count
Sentenced:
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33 1/3 years in prison
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10 years supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Chesapeake Man Sentenced for Illegally Receiving Silencers from CanadaRead the Press Release
NORFOLK, Va. – Benjamin Lloyd Fisher, 42, of Chesapeake, was sentenced today to 30 months in prison for illegally receiving imported firearms, namely silencers.
Fisher pleaded on Nov. 17, 2015. According to court documents, Fisher admitted that in the spring of 2014 he purchased a homemade .22 caliber suppressor (silencer) from a Canadian source he had met online. The parties arranged that the silencer would be shipped to Fisher in two separate packages, in order to avoid detection by U.S. Customs and Border Patrol. Based on email correspondence between Fisher and his Canadian source, as well as other evidence, in May 2015 ATF agents executed a search warrant on the home in Chesapeake that Fisher shared with his mother. During the search agents recovered 13 firearms, eight silencers, and crates of ammunition. One month later, 5 additional firearms associated with Fisher were recovered. Fisher is a convicted felon and unable to possess a firearm. After the search warrant and prior to his arrest, the Chesapeake Police received a phone call from one of Fisher’s relatives which caused the police to conduct a welfare check on Fisher. When the police arrived, Fisher hid inside his bedroom and told the police that his door was booby trapped with an explosive device and that he had a bomb around his neck. After a stand-off lasting several hours, Fisher finally surrendered. No bombs or explosive devices were found.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) Washington Field Office, made the announcement after sentencing by Senior U.S. District Judge Robert G. Doumar. Assistant U.S. Attorneys William D. Muhr and V. Kathleen Dougherty prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15cr117.
Carmichael Man Sentenced to 5 Years in Prison for Possessing Biological Toxin and Selling Machine GunsRead the Press Release
SACRAMENTO, Calif. — James Christopher Malcolm, 31, of Carmichael, was sentenced today to five years in prison for possessing abrin, a biological toxin; unlawful dealing in firearms; and possession and transfer of a machine gun, United States Attorney Benjamin B. Wagner announced.
United States District Judge Troy L. Nunley also ordered Malcolm to pay $30,918 in restitution.
According to court documents, Malcolm met with a confidential informant to discuss a plan to sell fully automatic rifles. At the meeting, Malcolm told the informant that distributing firearms was only a side business, and his main business was distributing explosives and poison. Later, Malcolm sold four short-barrel AR-15-style machine guns, 1.5 pounds of improvised explosive material, three blasting caps, and a firearm silencer to undercover agents posing as arms dealers for drug trafficking organizations. Additionally, Malcolm told undercover law enforcement agents that he could manufacture parts to convert Glock pistols into fully automatic machine guns. Malcolm actually demonstrated the process of converting pistols to machine guns and over the course of various meetings, sold the agents parts to convert 10 pistols.
In addition to face-to-face sales, Malcolm also utilized the online moniker “Dark_Mart.” Using the Dark_Mart moniker, Malcolm opened a seller’s account on Black Market Reloaded (BMR), an online marketplace accessed via TOR network. Malcolm’s Dark_Mart page on BMR provided a menu of items for sale, including Glock auto-sears, explosives, ricin, and abrin.
Abrin is a natural poison found in the seed of the rosary pea, a tropical plant. Similar to ricin, abrin is a protein inhibitor that prevents cells from making the proteins they need to survive. A dose as small as several micrograms may be fatal. The cause of death is typically internal bleeding or organ failure within three days. Abrin can be injected, inhaled, or swallowed. Abrin is classified as a “Select Agent and Toxin” by the United States Department of Health and Human Services because of the potential severe threat to public health and safety.
On BMR, Malcolm was contacted by two separate individuals who desired to purchase abrin, one in New York and one in San Francisco. Malcolm agreed to ship abrin to the two individuals in exchange for payment in bitcoin. On December 5, 2013, Malcolm shipped two packages from Vacaville, one to New York and one to San Francisco. Both shipments contained small glass vials filled with a rudimentary form of abrin concealed within flashlights.
This case was the product of an investigation by the Bureau of Alcohol Tobacco, Firearms and Explosives and the Federal Bureau of Investigation. Assistant United States Attorney Justin Lee prosecuted the case.
Caddo Parish Commissioner Michael Williams found guilty of stealing from nonprofitRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a federal grand jury indicted Caddo Parish Commissioner Michael Dwayne Williams for defrauding the Caddo Parish Commission and stealing from a nonprofit meant to help at-risk youth.
Williams, 54, of Shreveport, was indicted on 12 counts of wire fraud. The indictment alleges that from October 1, 2012 through July 1, 2014, Williams devised a scheme to take more than $2,000 from a nonprofit’s bank account. Williams urged the parish commission to appropriate public funds for the nonprofit SWAG Nation. Once those funds were allocated from the parish’s budget to SWAG Nation, Williams caused a bank debit card to be issued for the nonprofit. Between April of 2013 and July of 2014, Williams used an ATM card to remove money on numerous occasions. According to the indictment, he took $100 to $200 each time that he made a withdrawal initializing 12 transactions from August 2013 to June 2014 for personal use. SWAG Nation’s declared purpose is to partner with local institutions to help mentor and counsel at-risk individuals ages 7 to 17 so that they can better function in society.
“The Caddo Parish Sheriff’s Office investigated Michael Williams for several months and is pleased with the return of this indictment,” said Caddo Sheriff Steve Prator. “Unfortunately, there are people elected to office who will abuse the public’s trust. This money was meant for children, not politicians.”
Williams faces up to 20 years in prison, five years of supervised release, and a $250,000 fine for each count.
The FBI and Caddo Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorneys Joseph G. Jarzabek and Brandon B. Brown are prosecuting the case.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Bulgarian Man Arrested and Charged in Manhattan Federal Court with $400 Million Market Manipulation Scheme Involving Avon Stock, as Well as Market Manipulation and Insider Trading of Two Other SecuritiesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest and unsealing of an eight-count indictment charging NEDKO NEDEV, 38, a citizen of Bulgaria and the United States, with various crimes related to market manipulation, insider trading, and aggravated identity theft for devising and carrying out a series of schemes (1) to manipulate the public market for two securities – Rocky Mountain Chocolate Factory, Inc. (“Rocky Mountain”), and Avon Products, Inc. (“Avon”) – through sham tender offers filed publicly with the Securities and Exchange Commission (the “SEC”), and (2) to trade on material, nonpublic information about an impending tender offer by Bulgarian company Euroins Insurance Group AD (“Euroins”) for U.S.-based insurer Tower Group International Ltd. (“Tower Group”), which NEDEV knew about because of his role advising the proposed acquirer. The sham offer for Avon, a company with more than 400 million shares outstanding, caused a 400-percent increase over the average per-day trading volume, resulting in a manipulation of the market by hundreds of millions of dollars, and caused the New York Stock Exchange (“NYSE”) to halt trading three times in Avon shares in the half-hour period following the sham offer. NEDEV was arrested in Bulgaria and his extradition to the U.S. will be sought. The case has been assigned to Judge Kimba M. Wood.
In a separate action, the SEC previously filed civil charges against NEDEV for market manipulation in June 2015.
U.S. Attorney Preet Bharara said: “As alleged, Nedko Nedev engaged in elaborate schemes to manipulate the market in various publicly traded securities. His alleged lies caused massive swings in share prices and trading volume, including a sham tender offer that required the New York Stock Exchange to halt trading in Avon shares. Nedev’s alleged securities fraud schemes also involved purchasing shares of a U.S. insurance company he knew, through inside information, to be the acquisition target of a European company he was advising. If you manipulate the U.S. securities markets with disinformation and deception, whether from New York or from Bulgaria, as Nedev is alleged to have done, you will be held to account.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “As alleged, Nedko Nedev created and carried out a market manipulation scheme not once but twice to profit himself. Today, he faces charges for those schemes as well as identity theft and insider trading. The FBI will continue to work with our partners in an effort at ensuring that our financial markets are legal, fair, and equitable.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:[1]
From at least in or about January 2012 through at least in or about December 2012, NEDEV devised and carried out a scheme to manipulate the public market for Rocky Mountain stock, enrich himself, and mitigate trading losses. In furtherance of the scheme, NEDEV artificially inflated the share price and trading volume of Rocky Mountain through a sham tender offer he caused to be filed on December 18, 2012, on EDGAR, the Electronic Data Gathering, Analysis and Retrieval System, which is the means by which companies and others file public documents with the SEC (the “Rocky Mountain Offer”).
Three years later, from at least in or about April 2015 through at least in or about May 2015, NEDEV devised and carried out a similar scheme to manipulate the public market for Avon stock, enrich himself, and mitigate trading losses. In furtherance of the scheme, NEDEV inflated the share price and trading volume of Avon stock through a sham tender offer he caused to be filed on EDGAR (the “Avon Offer”). In making the Avon Offer, NEDEV used nearly identical means and methods to those used in the Rocky Mountain Offer filed on EDGAR in 2012. Unlike the Rocky Mountain Offer, however, the Avon Offer was filed early in the trading day, causing a significant impact on Avon’s trading volume and share price and permitting NEDEV to sell a portion of his Avon holdings for a profit.
In between the Rocky Mountain Offer and the Avon Offer, from in or about October 2013 through at least in or about May 2014, NEDEV carried out a scheme to enrich himself by trading on material, nonpublic information concerning an offer by Euroins to acquire Tower Group, which NEDEV obtained from the Chairman of Euroins’ parent company, Eurohold (the “Eurohold Chairman”) and which he understood was nonpublic at the time, and which he was duty-bound not to misappropriate for his own personal benefit. In May 2014, after Euroins publicly offered to acquire Tower Group, NEDEV sold a portion of his shares of Tower Group for a profit.
Nedev’s Brokerage Accounts
Between in or about June 2008 and in or about at least June 2015, NEDEV traded equities, options, and Contracts for Difference of publicly traded companies through U.S.-based online broker-dealers at which NEDEV maintained certain accounts, including: (a) Strategic Wealth Investments Inc. (the “Strategic Wealth Account”); (b) SWIP Capital Partners, Inc. (the “SWIP Account”); (c) Strategic Capital Partners Muster Limited (the “Strategic Capital Account”); and (d) Strategic Capital Partners Muster Limited CFD Account (the “Strategic Capital CFD Account,” collectively with the Strategic Capital Account, the “Strategic Capital Accounts”).
The Rocky Mountain Market Manipulation
From at least in or about December 2008, NEDEV caused the Strategic Accounts to hold shares of Rocky Mountain stock. When NEDEV opened the Strategic Capital Account in July 2012, Rocky Mountain was the first stock purchased. As of August 2012, the Strategic Accounts held shares of Rocky Mountain valued at more than $1.1 million. After reaching a peak share price of almost $14.00 per share in August 2012, Rocky Mountain’s share price began to decline steadily. By November 2012, the price had dropped to approximately $10.36 per share. By that time, NEDEV’s Rocky Mountain holdings in the Strategic Accounts had accumulated a total of approximately $250,000 in unrealized losses as well as approximately $278,000 in realized losses.
To effectuate the scheme to manipulate the market in Rocky Mountain, NEDEV created a fictitious entity to make a sham tender offer for Rocky Mountain. Previously, on or about January 28, 2012, NEDEV had registered the email account [email protected] (the “Bali Email Account”) at a U.S.-based email provider (the “Provider”). Between January 2012 and May 2015, NEDEV used the Bali Email Account to send and receive emails in the name of “Peter Bali,” a name he used in the course of the scheme, as well as other names. On or about November 21, 2012, NEDEV caused Rocky Mountain to receive a voicemail from an individual who purported to be named “Peter Bali.” The voicemail indicated that Bali had mailed a tender offer to purchase Rocky Mountain on behalf of a company purportedly called “PST Capital Group” (“PST”). One week later, on or about November 28, 2012, NEDEV caused Rocky Mountain to receive a letter of intent from PST (the “PST Letter of Intent”), which identified Bali as the “Chairman” of PST and indicated that PST was based in London, England. The PST Letter of Intent offered, among other things, to purchase all outstanding shares of Rocky Mountain at a price of $13.50 per share. On or about December 6, 2012, NEDEV caused Rocky Mountain to receive another voicemail from the individual purporting to be Bali asking if Rocky Mountain had received the PST Letter of Intent. In truth and in fact, PST did not exist, as it had been invented for the purpose of effecting the market manipulation scheme.
Approximately two weeks later, on or about December 13, 2012, NEDEV caused a Form ID (the “PST Form ID”) to be filed with the SEC from Bulgaria. The PST Form ID, which requested that PST be allowed to file documents on EDGAR, indicated that PST was based in London, England, and contained a notary stamp purporting to be associated with a particular California-based registered notary (the “PST Notary”). In truth and in fact, the stamp was forged, as the PST Notary neither notarized the PST Form ID, nor authorized anyone to use the PST Notary’s name or notary credentials to do so, as NEDEV well knew.
To further effectuate the market manipulation scheme, NEDEV caused the Rocky Mountain Offer to be filed on EDGAR on or about December 18, 2012, after the close of the trading day. As with the PST Form ID, the Rocky Mountain Offer was filed from Bulgaria. As with the PST Letter of Intent, the Rocky Mountain Offer was made in the name of PST, listed Bali as PST’s Chairman, and proposed to acquire all of Rocky Mountain’s stock at $13.50 per share, which represented an approximately 27 percent premium above the stock’s closing price as of December 18, 2012. The Rocky Mountain Offer also contained certain specific language regarding certain terms of the Rocky Mountain Offer.
Rocky Mountain’s share price was approximately $10.60 when the market closed at 4:00 p.m. on December 18, 2012. As intended by NEDEV, Rocky Mountain’s share price began to increase following the release of the Rocky Mountain Offer.
Before the markets opened on December 19, 2012, Rocky Mountain issued a press release publicly filed on EDGAR as a Form 8-K (the “Rocky Mountain Press Release”) indicating that the Rocky Mountain Offer appeared to be fake. Rocky Mountain’s share price opened at approximately $11.00 per share. Although the Rocky Mountain Press Release diminished the impact of the Rocky Mountain Offer, inasmuch as the release was issued before the trading day began, the stock price nonetheless rose approximately 4.6 percent during market hours on December 19, 2012, to a high of $11.09 per share, and the trading volume increased approximately 1,775 percent on that day.
NEDEV did not cause any shares of Rocky Mountain to be sold from the Strategic Accounts on December 19, 2012.
The Avon Market Manipulation
From at least in or about February 2012, the Strategic Accounts held Avon stock and Avon derivatives, specifically options and CFDs. As of April 2015, NEDEV caused the Strategic Accounts to hold positions in Avon valued at more than $225,000. After reaching a share price of $15.28 per share in April 2014, Avon’s share price began to decline steadily. By April 2015, the share price had dropped to $8.17 per share. By that time, NEDEV had suffered a total of approximately $46,000 in unrealized losses on his Avon holdings.
To effectuate the scheme to manipulate the market in Avon, NEDEV created a fictitious entity to make a sham tender offer for Avon. Thus, on or about April 16, 2015, NEDEV caused the email account [email protected] (the “PTG Email Account”) to be registered with the Provider. The PTG Email Account was registered in the name “Steve Kohe.”
Five days later, on April 21, 2015, NEDEV caused a Form ID (the “PTG Form ID”) to be filed with the SEC requesting access to file documents on EDGAR on behalf of the purported entity PTG Capital Partners Ltd. (“PTG”). The PTG Form ID provided the PTG Email Account and listed “Steve Kohe,” a name NEDEV used to execute the scheme, as PTG’s Chief Compliance Officer. In truth and in fact, PTG did not exist, as it had been invented by NEDEV for the purpose of effecting his market manipulation scheme. Like the PST Form ID, the PTG Form ID indicated that PTG operated in London, England. Also like the PST Form ID, the PTG Form ID contained a notary stamp purporting to be associated with another California-based registered notary (the “PTG Notary”). In truth and in fact, the PTG Notary neither notarized the PTG Form ID, nor authorized anyone to use the PTG Notary’s name or notary credentials to do so, as NEDEV well knew.
To further effectuate the market manipulation scheme, NEDEV caused the Avon Offer to be filed on EDGAR on May 14, 2015, at approximately 11:34 a.m., in the first half of the trading day. The Avon Offer proposed to acquire all of Avon’s stock at $18.75 per share, which represented an approximately 181 percent premium above the stock’s closing price on May 13, 2015. As with the Rocky Mountain Offer, the Avon Offer was filed from Bulgaria. In addition, the Avon Offer contained nearly identical language as was contained in the Rocky Mountain Offer.
The Avon Offer significantly affected the share price and trading volume of Avon, a company with more than 400 million publicly trading shares. Approximately half an hour after the Avon Offer was publicly filed at 11:34 a.m., Bloomberg released an article (the “Bloomberg Article”) indicating that Avon had stated the Avon Offer was fake. During the approximate half hour after the public release of the Avon Offer but before the Bloomberg Article, the share price of Avon increased to a high of $8.00 per share from a low of $6.60 per share, the effect of which was to manipulate the market by hundreds of millions of dollars. The total trading volume during just this approximate half-hour period was more than 17 million shares, more than the average per-day trading volume for the three-month period before the Avon Offer. In total, the trading volume on the day of the Avon Offer was more than 69 million shares, an increase of more than 400 percent over the average per-day trading volume for the three-month period before the Avon Offer. As a result of this significant increase in the volume of trading, the NYSE halted trading three times in Avon shares in the half-hour period following the Avon Offer.
Approximately 25 minutes after the Avon Offer was filed on EDGAR, NEDEV sold a portion of his Avon holdings at the artificially inflated price. Through these sales, NEDEV earned profits in the Strategic Capital Accounts. The Avon Offer also caused the value of his unsold Avon positions to increase significantly during the time period of the manipulation.
Despite the release of the Bloomberg Article reporting that the Avon Offer was a sham, the unusually high trading volume continued as the market adjusted to the news, including as certain individuals who purchased shares at an artificial price as a result of the Avon Offer sought to unwind those positions.
The Insider Trading Scheme
In or about October 2013, through a pre-existing relationship with the Eurohold Chairman, NEDEV learned that Euroins was interested in acquiring a U.S.-based insurance company and that Tower Group was one of the target companies under consideration. NEDEV encouraged the Eurohold Chairman to make an offer for Tower Group and offered to act as an external consultant to help bring the deal to fruition. NEDEV and the Eurohold Chairman agreed that NEDEV would act as an external consultant and that NEDEV would be compensated if a deal were consummated.
In or about October 2013, possessing the Inside Information that Euroins was considering a business combination with Tower Group, NEDEV began purchasing Tower Group stock in the Strategic Accounts.
On or about January 6, 2014, Tower Group announced that it had entered into a merger agreement in which Tower Group was to be acquired by another insurer, ACP Re, for $3.00 per share. Because NEDEV believed the price of Tower Group stock would increase if a competing offer by Euroins were made at a higher price, he took steps to prevent the merger with ACP Re from being consummated so that an offer from Euroins would be viable. To further effectuate his insider trading scheme, NEDEV participated in numerous emails and phone calls to encourage Euroins to continue to pursue an offer for Tower Group, notwithstanding Tower Group’s announcement of a different deal.
Between January and May 2014, NEDEV continued to accumulate Tower Group stock in the Strategic Accounts. By May 13, 2014, the Strategic Accounts held more than 385,000 shares of Tower Group stock valued at approximately $863,000, which represented the second largest position by value in the Strategic Accounts. At that time, the Tower Group position also represented an unrealized loss of approximately $258,000, as the share price of Tower Group had declined from a high of approximately $2.98 per share on January 6, 2014, to a low of $1.67 per share on May 7, 2014.
Between May 8, 2014, and May 13, 2014, NEDEV took specific steps to encourage Euroins to make a tender offer for Tower Group, despite NEDEV’s knowledge, which he acquired during the scheme, that Euroins’s proposed offer lacked certain detail considered essential in such a transaction, such as information about how Euroins would finance any offer for Tower Group stock. On or about May 13, 2014, at the direction of NEDEV, Euroins sent a letter of intent (the “Euroins Letter of Intent”) to Tower Group offering to acquire all of Tower Group’s outstanding stock for $3.75 per share (the “Tower Group Offer”). The Tower Group Offer represented a premium of approximately 67 percent over the then-current Tower Group share price and a premium of $.75 per share over the pending ACP Re offer.
At approximately 12:26 p.m. on May 13, 2014, Euroins issued a press release (the “Euroins Press Release”) through a U.S.-based newswire service stating that Euroins had submitted an acquisition offer to Tower Group. The language contained in the Euroins Press Release was nearly identical to the language contained in the December 2012 Rocky Mountain Offer, which would later be included in the Avon Offer.
Almost immediately after the Euroins Press Release was issued at approximately 12:26 p.m. on May 13, 2014, Tower Group’s share price increased to $2.91 per share. At approximately 12:50 p.m., NEDEV received email confirmation that the Euroins Press Release had been released and immediately began selling shares of Tower Group held in the Strategic Accounts. In total, on or about May 13, 2014, NEDEV caused the Strategic Accounts to sell approximately 90,000 shares of Tower Group for a gain of approximately $26,100. When Euroins received questions from investors on the day the Euroins Press Release was released, the questions were routed to NEDEV via email. NEDEV did not advise the Eurohold Chairman or anyone at Euroins that he sold Tower Group stock after the Tower Offer was made.
Two days later, on or about May 15, 2014, Tower Group issued a press release acknowledging receipt of the Euroins Letter of Intent but announcing that Tower Group’s Board of Directors had unanimously determined that Euroins’s proposal “[did] not constitute and could not reasonably be expected to lead to a superior proposal” to the contemplated merger with the other insurer.
Finally, in or about June 2015, following media reports that the SEC and the FBI were investigating NEDEV in connection with the Rocky Mountain, Avon, and Tower Group Offers, the Eurohold Chairman met with NEDEV in Sofia, Bulgaria. During their meeting, the Eurohold Chairman confronted NEDEV about his stock holdings in Tower Group at the time NEDEV was advising on a potential acquisition of Tower Group by Euroins. NEDEV acknowledged that he had owned Tower Group stock at the time of the Tower Group Offer and apologized.
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NEDEV, 38, is charged in eight counts. In connection with the Rocky Mountain market manipulation scheme, NEDEV is charged with one count of securities fraud (Count One), one count of wire fraud (Count Two), and one count of aggravated identity theft (Count Three). In connection with the Avon market manipulation scheme, NEDEV is also charged with one count of securities fraud (Count Four), one count of wire fraud (Count Five), and one count of aggravated identity theft (Count Six). In connection with the Tower Group insider trading scheme, NEDEV is charged with one count of fraud in connection with a tender offer (Count Seven) and one count of securities fraud (Count Eight). Counts One, Two, Four, Five, Seven, and Eight each carry a maximum sentence of 20 years in prison. Counts Three and Six, the aggravated identity theft charges, carry a mandatory sentence of two years each, that must be imposed in addition to the sentence imposed on other counts. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the FBI, and thanked the SEC Division of Enforcement and Office of Inspector General for their assistance. Mr. Bharara also thanked the Office of International Affairs and Bulgarian law enforcement for their assistance in the arrest and apprehension of NEDEV.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Andrea M. Griswold is in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Broward County Resident Convicted of Illegally Possessing a Firearm and AmmunitionRead the Press Release
A Broward County resident was convicted today by a jury in federal court for being a felon in possession of a firearm and ammunition.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Carlos Canino, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, and Scott Israel, Sheriff, Broward Sheriff’s Office (BSO), made the announcement.
Derek Danard Slade, 25, of Hollywood, was convicted, following a four-day jury trial before U.S. District Judge William P. Dimitrouleas, of being a felon in possession of a firearm and ammunition. Slade faces a maximum sentence of up to 10 years in federal prison for the crime of conviction. Slade is scheduled to be sentenced by Judge Dimitrouleas on May 20, 2016, at 1:45 p.m. in Fort Lauderdale.
According to evidence presented at trial, a deputy with the Broward County Sheriff’s Office observed a “hand-to-hand” narcotics transaction take place in a vehicle in the area of Dania Beach. In addition to Slade, the vehicle had three other occupants. After being stopped by law enforcement, Slade refused to show his hands to the deputies and kept them hidden under a hat. The other occupants of the vehicle complied with law enforcement’s directives. Once he finally complied with the deputy’s orders, Slade was handcuffed. After he was handcuffed, Slade broke away from the deputies and fled the scene on foot. Slade was eventually apprehended and deputies located, under the hat in the vehicle, a .380 caliber Beretta firearm, fully loaded with fourteen rounds of .380 caliber ammunition.
This case is, in large part, the result of the Violence Reduction Partnership, launched by the U.S. Attorney’s Office. Through this Partnership, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks in various neighborhoods, while simultaneously working with community leaders and concerned citizens to mentor at-risk youths, provide jobs and job training to young families, and help probationers and parolees successfully re-enter society.
Mr. Ferrer commended the investigative efforts of ATF and BSO. The case is being prosecuted by Assistant U.S. Attorneys Rosa Rodriguez-Mera and Randy Katz.
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.
British Man Indicted for Wire Fraud, Identity Theft and Money Laundering That Victimized Hundreds of Thousands Across United StatesRead the Press Release
A British man living in Las Vegas, Nevada, was indicted by a Nevada grand jury for withdrawing money from the bank accounts of hundreds of thousands of victims without authorization, Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division and Acting Inspector in Charge Daniel Brubaker of the U.S. Postal Inspection Service– Criminal Investigations announced today.
Gareth David Long, 37, is charged in a 39-count indictment with wire fraud, aggravated identity theft and money laundering. The indictment alleges that Long, operating through his company, V Internet Corp LLC, deposited unsigned remotely created checks (RCCs aka demand drafts) drawn on the accounts of hundreds of thousands of unwitting account holders. Although Long had no authorization to charge the accounts, he represented to his victims’ banks that the victims had authorized the debits. Long used the proceeds of his fraud scheme to purchase airplanes, vehicles, farm equipment and other property.
“Gareth David Long abused the sensitive personal and financial information of hundreds of thousands of Americans in a brazen scheme to steal millions of dollars from unwitting account holders,” said Principal Deputy Assistant Attorney General Mizer. “As this case makes clear, we will investigate and pursue charges against individuals who abuse the financial information of American consumers.”
“American consumers expect e-commerce providers will protect their sensitive financial information,” said Acting Inspector in Charge Brubaker. “Mr. Long betrayed that trust for his own self-interest. With this case, Postal Inspectors continue their long history of protecting consumers by demonstrating our protection of e-commerce transitions extend beyond the stamp.”
According to the indictment, from 2008 through 2013, Long operated a third-party payment processing company, V Internet Corp, which also did business as “Altcharge” and “Check Process.” As a payment processor, Long specialized in the creation and deposit of RCCs. A RCC is a check created not by the account holder but by the third-party payee. In place of a signature, a RCC contains a typed statement claiming that the check was authorized by the account holder. On behalf of his merchant clients, Long created and deposited RCCs drawn on the bank accounts of American consumers. Because of this payment processing activity, Long possessed the personal and financial information of hundreds of thousands of consumers whose accounts had been debited by Long’s merchants.
In January 2013, Long allegedly created the facade that he was operating an Internet merchant business matching consumers with online payday loans. He registered the websites www.fastloanfast.com, www.loan4utoday.com and www.fastloan4me.com, which purported to help consumers find online payday loans. From January through July 2013, Long allegedly deposited hundreds of thousands of RCCs, each for $30 and each of which stated that the account holder had authorized a payment to Long’s company.
The indictment alleges that, in reality, Long simply debited the accounts of victims who had never visited his websites, never requested any service and never authorized any payment. Long obtained the personal and financial information of his victims from two sources. First, he allegedly purchased large spreadsheets, referred to as “lead lists,” each of which contained detailed personal and financial information of thousands of American consumers. Second, Long used the data stored in his payment processing system to debit more than a hundred thousand accounts that had previously been debited by Long’s prior merchants. When he ran out of unique accounts to charge, Long allegedly created and deposited hundreds of thousands of additional, repeat charges against accounts he had already charged.
By the time Long’s scheme ended in July 2013, he allegedly had created and deposited more than 750,000 RCCs totaling more than $22 million. Approximately 50 percent of the RCCs were returned by account holders’ banks. Many RCCs were returned because the account holder saw the debit and realized that an unauthorized charge was being imposed on his or her account. Other RCCs were returned because they were drawn on accounts that were nonexistent, closed or did not contain sufficient funds to cover the debit. As alleged in the indictment, many victims did not notice the charge and therefore did not dispute it.
The Department of Justice’s Consumer Protection Branch uncovered Long’s fraudulent activity in connection with an investigation of Long’s bank, CommerceWest Bank. Based upon its conduct in processing unauthorized transactions for Long, CommerceWest Bank entered into a civil and criminal settlement with the Department of Justice.
The U.S. Postal Inspection Service seized more than $2.9 million from V Internet’s accounts at CommerceWest Bank. Postal Inspectors also seized property that Long purchased with the proceeds of his fraudulent activity, including five airplanes, a Land Rover, a Dodge Charger, multiple tractors, five all-terrain vehicles and a fire truck. In addition, the criminal indictment seeks forfeiture of a house and other property Long purchased in Cedar Hill, Texas.
The case is being handled by Trial Attorney John W. Burke and Ehren Reynolds of the Civil Division’s Consumer Protection Branch in coordination with Assistant U.S. Attorneys Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office for the District of Nevada and with substantial investigative support from the U.S. Postal Inspection Service.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
Boston Interagency Committee on Violence Prevention Announces Boston’s 3rd Annual National Youth Violence Prevention Week EventsRead the Press Release
BOSTON – The Boston Interagency Committee on Violence Prevention will host events and competitions for young people in the Boston community in recognition of National Youth Violence Prevention Week, April 4-8, 2016.
“I’m thrilled to once again be a part of this event, which showcases how young people channel their incredible talents to resist and prevent violence in their schools and communities,” said United States Attorney Carmen M. Ortiz. “Each year, I’m awed by the strength of Boston’s young people to stand up for peace and defend their right to violence-free communities. With the activism and advocacy that youth have been demonstrating, I’m sure this year will be no different!”
National Youth Violence Prevention Week aims to raise awareness and to educate young people, parents, and communities as a whole, about effective ways to prevent and reduce youth violence. The campaign, which is held in cities across the country, features activities, competitions and events that bring young people together to make their schools and communities safer by using peaceful forms of self-expression.
DJs from JAM’N 94.5 will host a city-wide Peace Rally at the Reggie Lewis Center at Roxbury Community College on April 7th from 5:30 to 7:30 pm, which will be the highlight of the week. At the rally, the winners of the anti-violence themed contests for Boston students will be announced, and the Floorlords, Vine Street Dancers, and Seekers of Knowledge dance groups will perform. There will also be surprise audience-participation contests with prizes, and guest-appearances by top officials. Over 500 people attended the 2015 Peace Rally.
The Boston Interagency Committee on Violence Prevention recently announced the creative anti-violence themed contests in schools and community centers. Boston students in grades K-5 will submit posters with a theme of “Youth Standing STRONG Against Violence;” grades 6-8 will enter poetry with the same theme; and high school students are invited to create hip-hop music videos with an anti-violence message.
Prizes for the top three entries in each category include Target gift cards, Red Sox tickets, and a spotlight on JAM’N 94.5’s “Saturday Night Jump Off.” Sponsoring agencies will also receive Staples gift cards in recognition of their support.
Another event taking place in Boston during National Youth Violence Prevention Week will be held at the Umana Barnes Middle School in East Boston on April 4th. The U.S. Attorney’s Office and the Suffolk County District Attorney’s Office will team up to present a combined program encouraging positive decision-making and alternatives to violence.
The Boston Interagency Committee on Violence Prevention consists of representatives from the U.S. Attorney’s Office, the Office of the Governor of Massachusetts, the Massachusetts Attorney General’s Office, Suffolk County District Attorney’s Office, Suffolk County Sheriff’s Department, City of Boston Mayor’s Office, Boston Police Department and Boston Centers for Youth & Families.
Sponsors of the event include JAM’N 94.5 Radio, Roxbury Community College, MassHousing, Crystal Rock Beverages, Boston Police Athletic/Activities League and the Youth Violence Prevention Funders Learning Collaborative.
For further information, visit www.cityofboston.gov/bcyf/programs and click on “Youth Standing Strong Against Violence,” or send an email to [email protected].
Albuquerque Man Sentenced to Seven Years for Stealing Prescription Painkillers and Brandishing Firearm During Robbery of Retail PharmacyRead the Press Release
ALBUQUERQUE – Eddie Gallegos, 39, of Albuquerque, N.M., was sentenced today in federal court for his conviction on theft of medical products and firearms charges arising out of the armed robbery of an Albuquerque-area retail pharmacy in June 2013. Gallegos was sentenced to 84 months in federal prison followed by three years of supervised release.
Gallegos was arrested in June 2015, on an indictment charging him with violating the Hobbs Act by robbing a business engaged in interstate commerce, using and carrying a firearm during a crime of violence, violating the Safe Doses Act by stealing medical products, and possession of Oxycodone with intent to distribute. The charges against Gallegos arose out of the robbery of Phil’s Pills, a retail pharmacy in Albuquerque, on June 21, 2013.
On Dec. 1, 2015, Gallegos pled guilty to brandishing a firearm in furtherance of a crime of violence and violating the Safe Doses Act by stealing medical products. In entering his guilty plea, Gallegos admitted that on June 21, 2013, he entered the pharmacy called Phil’s Pills located at 5510 Lomas Blvd. in Albuquerque, pointed a firearm at an employee and the store owner, and demanded they fill his backpack with Oxycodone, OxyContin and Fentanyl. After the store owner complied with his demand, Gallegos fled the scene.
This case was investigated by the Albuquerque office of the FBI, the Tactical Diversion Squad of the DEA in Albuquerque and the Albuquerque Police Department. Assistant U.S. Attorneys Joel R. Meyers and Shaheen P. Torgoley prosecuted the case.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
The Controlled Substance Registrant Protection Act was enacted in 1984, to combat the theft of prescription drugs from individuals and businesses registered with the DEA. It created penalties for entering a pharmacy’s premises for the purpose of stealing controlled substances, and includes enhanced punishment for using a dangerous weapon. The Safe Doses Act was enacted in Oct. 2012, to fight medical theft and protect patients from unknowingly using stolen and mishandled drugs. It provides for enhanced sentences for those who rob pharmacies of controlled substances; individuals who steal medical products; and “fences” who knowingly obtain stolen medical products for resale in the supply chain.
This case was prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
Albuquerque Felon Pleads Guilty to Violating Federal Firearms Laws and the Hobbs ActRead the Press Release
ALBUQUERQUE – Vincent Steven Martinez, 38, of Albuquerque, N.M., pleaded guilty late yesterday afternoon in federal court to violating the Hobbs Act by robbing a commercial business involved in interstate commerce and being a felon in possession of firearms and ammunition. He also acknowledged violating the terms of his supervised release on a previous felony conviction. Under the terms of his plea agreement, Martinez will be sentenced to 139 months in federal prison followed a term of supervised release to be determine by the court.
The sentence was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division and Bernalillo County Sheriff Manuel Gonzales, III.
Martinez was arrested on Dec. 4, 2015, on an indictment charging him with being a felon in possession of a firearm and ammunition on Sept. 15, 2015, in Bernalillo County, N.M. The indictment was subsequently superseded on Jan. 14, 2016, to include charging Martinez with violating the Hobbs Act on Sept. 12, 2015, by robbing a business engaged in interstate commerce in Bernalillo County. At the time, Martinez was prohibited from possessing firearms or ammunition because he previously had been convicted of aggravated battery, armed bank robbery and bank robbery.
During yesterday’s proceedings, Martinez pled guilty to the superseding indictment. Martinez also entered a guilty plea a petition charging him with violating the terms of his supervised release on a prior felony conviction for use of a controlled substance and possession of a firearm. In pleading guilty to the superseding indictment, Martinez admitted robbing three businesses in addition to the business identified in the superseding indictment. To that end, Martinez admitted the following criminal conduct:
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On Aug. 14, 2015, Martinez entered the Valero gas station at 1715 Moon Street in Albuquerque, pointed a gun at and threatened the cashier and stole cash and cigarettes before fleeing the store.
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On Sept. 5, 2015, Martinez entered the Holiday Inn at 4501 Alameda Blvd. in Albuquerque, showed the hotel employee a knife and demanded money, stole cash and a camera and fled.
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On Sept. 10, 2015, Martinez entered the La Quinta Inn at 5241 San Antonio Dr. in Albuquerque, pointed a gun at and threatened a hotel employee, took money and fled.
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On Sept. 12, 2015, Martinez entered the Family Dollar at 7900 Second St. in Albuquerque, showed the cashier a gun and demanded money.Martinez admitted that, as he was grabbing money from the cash register at the Family Dollar, he dropped his wallet which had his driver’s license in it.
Martinez was arrested on Sept. 15, 2015, for the Family Dollar robbery. At the time of his arrest, Martinez possessed a firearm and multiple rounds of ammunition. Martinez admitted that prior to his arrest he had been convicted of aggravated battery, armed bank robbery and bank robbery. He admitted violating the conditions of his supervised release by committing the aforementioned robberies and by possessing the firearm and ammunition.
In entering his guilty plea to the supervised release violation, Martinez admitted that on April 28, 2010, he was convicted of armed bank robbery and was sentenced to 71 months of imprisonment followed by three years of supervised release which commenced on June 13, 2014. Martinez admitted that by Jan. 2015, he had failed to submit to drug testing and counseling sessions as required under the conditions of his supervised release and the United States Probation Office filed a petition seeking to revoke his supervised release.
Martinez remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and the Bernalillo County Sheriff’s office. Assistant U.S. Attorney Shana B. Long is prosecuting the case under a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rate, on a per capita basis, is one of the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, N.M., under this initiative.
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20 Arrested and Charged Federally in Connection with Drug Trafficking in Central TexasRead the Press Release
Today, federal, state and local authorities arrested 20 individuals in connection with a methamphetamine trafficking operation in central Texas announced United States Attorney Richard L. Durbin, Jr., Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, Houston Division, and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
A federal grand jury indictment, returned in Waco and unsealed today, charges 17 of those arrested with either conspiracy to distribute a controlled substance or distribution of a controlled substance. Other charges contained in the indictment include use of a communication device (cell phone) in furtherance of a drug trafficking crime; and, possession of a firearm during a drug trafficking crime. The indictment alleges that the defendants have distributed controlled substances, including methamphetamine, cocaine and marijuana, in the Austin/Temple/Killeen areas since January 2013.
Defendants who are charged in this indictment include:
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Ramon Rodriguez, Jr. (aka “Bacon”), age 30, of Temple, TX, 500 grams or more of methamphetamine, cocaine, marijuana;
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Elias Mendoza (aka “Big E”), age 35, of Temple, 500 grams or more of methamphetamine, cocaine, marijuana;
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Eliodoro Denova Lopez, age 28, of Pflugerville, TX, 500 grams or more of methamphetamine, cocaine, marijuana;
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Joel Jaimes Denova, age 30, of Austin, TX, 500 grams or more of methamphetamine, cocaine, marijuana;
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Gabriel Rangel, age36, of Cameron, TX, 50 grams or more of methamphetamine;
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Jose Salomon, age 29, of Cameron, marijuana;
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Kenneth Montgomery (aka “Wege”) , age 57, of Cameron, cocaine;
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Nora Tijerina, age 35, of Temple, 500 grams or more of methamphetamine;
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Oscar Rodriguez, age 34, of Cameron, marijuana;
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Thomas Lee, age 30, of Temple, marijuana;
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Atilano Felipe Garcia, age 33, of Temple, less than 50 grams of methamphetamine;
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Crystal Beck Diggs, age 36, of Belton, TX, less than 50 grams of methamphetamine;
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Douglas Junior Taylor, age 37, of Temple, cocaine;
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Jonathan Salazar, age 29, of Cameron, 50 grams or more of methamphetamine;
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Kevin Kuehnle, age 50, of Killeen, less than 50 grams of methamphetamine;
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Tawuan Stewart (aka “Gator”), age 37, of Temple, cocaine; and,
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Rodney Jerome, age 46, of Temple, less than 50 grams of methamphetamine;
The indictment also charges Ramon Rodriguez, Elias Mendoza, Eliodoro Denova Lopez, Joel Jaimes Denova and Thomas Lee with one count of using a cell phone in furtherance of a drug trafficking crime; and, Jose Salomon with one count of possession of a 12 gauge shotgun in furtherance of a drug trafficking crime.
Upon conviction of the drug trafficking charge: Ramon Rodriguez, Mendoza, Lopez, Denova, and Tijerina face between ten years and life in federal prison; Rangel, Rollins, Salazar and Arthur face between five and 40 years in federal prison; Diggs, Garcia, Montgomery, Stewart, Kuehnle, Jerome, and Taylor face up to 20 years in federal prison; and, Salomon, Oscar Rodriguez and Lee face up to five years in federal prison based on their involvement, drug type and drug amount involved. Ramon Rodriguez, Mendoza, Lopez, Denova and Lee face up to four years in federal prison upon conviction of the use of a cell phone during a drug trafficking crime. Salomon faces five years in federal prison upon conviction for possession of a firearm during a drug trafficking crime.
In addition to those named above, authorities arrested three other Temple residents today. They are: Jerry Alexander, age 39; Carlos Brown, age 41; and, T.J. Olivarri, age 28.
Alexander is charged in a separate, but related, federal indictment with one count of possession of a firearm by a convicted felon. Allegedly, on August 18, 2015, Alexander was in possession of .380 caliber pistol. Alexander’s criminal history revealed three Bell County convictions—cocaine possession in 2000; cocaine possession in 2006; and, evading arrest in 2014. Upon conviction, he faces up to ten years imprisonment.
Olivarri is charge by a federal criminal complaint with making a false statement during the acquisition of a firearm. According to the affidavit, on January 8, 2016, Olivarri provided a false address on the ATF Form 4473 when purchasing a 9mm pistol from a local firearms dealer. Upon conviction, Olivarri faces up to five years in federal prison.
Brown is charged by a federal criminal complaint with one count of possession of a firearm by a convicted felon. According to the affidavit, on March 10, 2016, Brown was found in possession of a .40 caliber handgun. His criminal history reveals a 2008 felony conviction in Bell County for Tampering or Fabricating Physical Evidence. Upon conviction, he faces up to ten years imprisonment.
During this investigation, authorities seized approximately two pounds of “crystal” methamphetamine, several ounces of heroin, approximately ½ pound of cocaine, several pounds of marijuana; approximately $45,000 in U.S. Currency; and between 10-15 firearms. Previously, authorities have seized approximately one kilogram of “crystal” methamphetamine and smaller amounts of cocaine and marijuana.
All of the defendants remain in federal custody. Detention hearings are expected to occur over the next two weeks before U.S. Magistrate Judge Jeffrey C. Manske in Waco.
It is important to note that a criminal complaint is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
This case resulted from an investigation conducted by the DEA and the FBI together with the Texas Department of Public Safety, Temple Police Department, United States Marshals Service, Texas Department of Criminal Justice Office of Inspector General and the Bell County Task Force. Assistant United States Attorneys Stephanie Smith-Burris and Chris Blanton are prosecuting this case on behalf of the Government.
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9 March 2016
Youngstown man charged with robbing bank in CampbellRead the Press Release
A federal grand jury returned a one-count indictment charging Orlando Popa, 26, of Youngstown, with bank robbery, said Acting U.S. Attorney Carole S. Rendon.
The indictment alleges that on or about February 1, 2016, Popa robbed the Huntington Bank, in Campbell, Ohio, of approximately $1,000.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Campbell Police Department, the Federal Bureau of Investigation and the FBI Violent Crimes Task Force. The matter is being prosecuted by Assistant United States Attorney Jason M. Katz.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Yakima Man Sentenced to Thirty Years Imprisonment for Production of Child PornographyRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Raul Ulises Badillo-Guzman, age 49, of Yakima, Washington, was sentenced today for one count of Production of Child Pornography and one count of Attempted Production of Child Pornography. Chief United States District Court Judge Thomas O. Rice sentenced Badillo-Guzman to a thirty year term of imprisonment, to be followed by a life term of court supervision after he is released from federal prison. Badillo-Guzman will also be required to register as a sex offender.
According to information disclosed during the court proceedings, on October 30, 2013, a 14-year old female and her mother reported to the Yakima Police Department that they had discovered a black object, similar to a car door key fob, in the bathroom of their residence. The black object contained a small camera. They believed Badillo-Guzman had placed the camera in order to surreptitiously record the minor female when she was undressed. Yakima Police detectives obtained a search warrant to view the contents of the device. A recording on the device clearly showed Badillo-Guzman placing the camera in the bathroom. The camera contained images of the minor naked as she prepared to take a shower.
The Yakima Police Department searched Badillo-Guzman’s residence pursuant to a lawfully obtained search warrant and they seized several electronic devices. The Federal Bureau of Investigation subsequently searched the devices and discovered they contained child pornography images of other known victims. The FBI also found a great number of videos and images of Badillo-Guzman engaging in sexual acts with a prepubescent girl. They also discovered what appeared to be a school photo of this young girl. The Yakima Police Department and the FBI conducted a search of yearbooks from various local schools until the photo of the young girl was located and the victim was identified. The victim was between the ages of 8 and 10 years old at the time of the sexual abuse by Badillo-Guzman.
Michael C. Ormsby stated, “Badillo-Guzman raped and sodomized a child repeatedly and produced videos and images memorializing that abuse. Through his actions, Badillo-Guzman has proven himself a great danger to the community. The sentence handed down today provides fair and just punishment for this abhorrent offense.” Ormsby went on to note, “The lasting and devastating effects on the victims of these cases cannot be overstated. Prosecuting these difficult cases has been and continues to be a priority for the United States Attorney’s Office for the Eastern District of Washington.” He further stated, “This joint federal, state and local agency investigation demonstrates the dedication of the officers and the willingness to utilize resources at every level of law enforcement to bring those who would victimize children to justice.”
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative launched in
May 2006 by the United States 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. The Project Safe Childhood Initiative (“PSC”) has
five major components:
· Integrated federal, state, and local efforts to investigate and prosecute child
exploitation cases, and to identify and rescue children;
· Participation of PSC partners in coordinated national initiatives;
· Increased federal enforcement in child pornography and enticement cases;
· Training of federal, state, and local law enforcement agents; and
· Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For
information about internet safety education, please visit www.usdoj.gov/psc and click on the tab
"resources."
This investigation was conducted by the Federal Bureau of Investigation and the Yakima Police
Department. The case was prosecuted by Alison L. Gregoire, an Assistant United States Attorney
for the Eastern District of Washington, and Jared Boswell, a Deputy Prosecuting Attorney for
Yakima County.
Wichita Woman Pleads Guilty in Sex Trafficking CaseRead the Press Release
WICHITA, KAN. - A Wichita woman pleaded guilty Wednesday in a sex trafficking case in which a 17-year-old girl was the victim, U.S. Attorney Barry Grissom said.
Natasha L. Harper, 33, Wichita, Kan., pleaded guilty to one count of transporting the girl across state lines for the purpose of prostitution. In her plea, Harper admitted she transported the girl from Kansas to Michigan, Illinois and Iowa and back to Kansas so the girl could engage in sex acts for money. Harper, who placed ads on an adult Web site offering the girl’s services, received part of the money.
Sentencing is set for July 7, 2016. The parties have agreed to recommend a sentence of 90 months in federal prison followed by 10 years on supervised release. Grissom commended the Wichita Police Department and Assistant U.S. Attorney Jason Hart for his work on the case.
Whitaker Man Charged with Distributing Drugs Resulting in DeathRead the Press Release
PITTSBURGH – Justin Thornton has been indicted by a federal grand jury in Pittsburgh for acetylfentanyl and fentanyl trafficking resulting in the death of one person, United States Attorney David J. Hickton announced today.
The indictment charges Thornton, 32, of Whitaker, Pa., with distributing acetylfentanyl and fentanyl on August 7 and 8, 2015, that killed one person. The indictment also charges Thornton with possession with intent to distribute heroin, acetylfentanyl, fentanyl, crack cocaine and cocaine on August 13, 2015.
The law provides for a maximum total sentence of at least 20 years and up to life in prison, a fine of up to $6,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Ryan K. Hart is prosecuting this case on behalf of the United States.
The Allegheny County Police Department, the West Mifflin Police Department and the Allegheny County Medical Examiner’s Office conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Weslaco Man Heads to Prison for Trafficking MarijuanaRead the Press Release
LAREDO, Texas – Santiago Martinez, 39, of Weslaco, has been ordered to prison for 10 years following his conviction of conspiracy to possess with the intent to distribute in excess of 1,000 kilograms of marijuana, announced United States Attorney Kenneth Magidson. Martinez pleaded guilty April 3, 2014.
Today, U.S. District Judge Marina Garcia Marmolejo, who accepted the guilty plea, handed Martinez a 120-month sentence to be immediately followed by five years of supervised release. The court also ordered that the judgment reflect that an order of forfeiture was entered against Martinez in the amount of $11,555,000 which was based on the amount of marijuana transported by the organization during the span of the conspiracy.
A Laredo grand jury returned an indictment Dec. 3, 2013, which alleged Martinez acted as a leader and organizer within a drug trafficking organization that purchased and transported marijuana from the United States-Mexico border to regional distributors in Memphis, Tenn., and Tampa, Fla.
According to court documents, the organization used “low boy” trailers and recreational camping trailers with hidden compartments to transport the marijuana, in 300 to 500 kilogram loads, twice per month. Proceeds from the sale and transportation of this marijuana were collected and sent back to South Texas. These proceeds were placed in hidden compartments in tractor trailers or recreational camping trailers or were deposited into numerous bank accounts.
Since 2001, law enforcement has seized more than 3,500 kilograms of marijuana and more than $1.3 million tied to this drug trafficking organization. The largest seizure of marijuana occurred on Jan. 7, 2011, at which time two tractors, hauling trailers, arrived approximately one hour apart at the U.S. Border Patrol checkpoint on Highway 1017 east of Hebbronville. Inside hidden compartments in the trailers, agents found more than a 1000 kilograms of marijuana. One tractor was headed to Memphis and the other to Tampa.
The largest cash seizure occurred on Aug. 4, 2012, in Florida when law enforcement officers found seven bundles of money, totaling $831,539 in a lead-lined hidden compartment in a camping trailer.
Martinez admitted he purchased marijuana and arranged for its transportation and that a number of the vehicles used by this organization were titled in his name. Martinez further admitted he conspired to move more than 10,000 kilograms of marijuana.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case is being investigated by the Drug Enforcement Administration with the assistance of the FBI. Former Assistant United States Attorney (AUSA) Elizabeth R. Rabe prosecuted the case. AUSA Toni L. Trevino handled the sentencing today.
Walter Porter Found Guilty of Murder-For-Hire, Faces Mandatory Life SentenceRead the Press Release
U.S. Attorney Kenneth A. Polite announced that this afternoon, a jury returned a guilty verdict against WALTER PORTER, a/k/a “Moonie,” a/k/a “Urkel,” for his participation in the November 2010 murder of Christopher “Tiger” Smith.
The jury found PORTER, age 40, of New Orleans, guilty as charged for use of interstate commerce facilities in the commission of murder-for-hire, causing death through the use of a firearm, and conspiracy to possess firearms.
According to court documents, on Sunday, November 21, 2010 at 8:10 pm, Christopher Smith was found by Jefferson Parish Sheriff (“JPSO”) deputies lying in the doorway of his Gretna apartment, after having been shot at least twenty times. Smith was pronounced dead at the scene. JPSO’s investigation ultimately revealed that NEMESSIS BATES paid co-defendants, PORTER and AARON SMITH, a/k/a “Beadie,” a/k/a “Beedie,” $20,000 to murder Christopher Smith. AARON SMITH previously pled guilty and awaits sentencing. BATES was sentenced to life in prison.
“Today’s jury verdict ensures that Walter Porter, one of the city’s most lethal hit men, will spend the rest of his life behind bars,” stated U.S. Attorney Polite.
U.S. District Judge Sarah S. Vance set sentencing on June 29, 2016. PORTER faces a mandatory penalty of life imprisonment.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorneys Liz Privitera and Greg Kennedy were in charge of the prosecution.
United States Settles Claim Against Surgeon Who Refused to Operate on an HIV- Positive PatientRead the Press Release
Robert L. Capers, United States Attorney for the Eastern District of New York, announced today a settlement with Dr. William Sher, an otolaryngologist in Port Jefferson, New York, under title III of the Americans With Disabilities Act, 42 U.S.C. § 12181- 12189 (ADA). Title III prohibits discrimination against people with disabilities in places of public accommodation such as hospitals. Individuals with HIV fall within the protection of the ADA.
The settlement resolves claims made by J.P.[1], who is HIV positive, that Dr. Sher refused to operate on him after Dr. Sher learned that J.P. was HIV positive. J.P. alleged that Dr. Sher was scheduled to perform a biopsy on a growth on his neck but cancelled minutes before the procedure was to begin, citing J.P.’s HIV status. Approximately three weeks later, another physician performed the biopsy on the growth, which turned out to be cancerous.
Under the settlement, Dr. Sher will pay $75,000 to J.P. and attend training on title III of the ADA, including training about HIV/AIDS and discrimination. Under the terms of the settlement, Dr. Sher does not admit to violating J.P.’s rights under the ADA.
“Discrimination against individuals with HIV is not permissible,” stated United States Attorney Capers. “The ADA requires that doctors and other health care professionals provide appropriate care and treatment to patients without regard to their HIV status. The settlement makes clear that this office will vigorously enforce the ADA against those who seek to discriminate against patients who fall under its protection.”
The matter was handled by Assistant U.S. Attorneys Jolie Apicella and Michael Goldberger.
[1] J. P. has asked that his identity remain confidential.
Two men charged with credit card fraudRead the Press Release
A two-count indictment was filed charging two men with crimes related to counterfeit credit cards, said Acting U.S. Attorney Carole S. Rendon.
Luis Diaz-Cordova, 43, of Phoenix, and Yandy Martinez-Guerra, 25, if Miami, were both indicted on one count each of possession of at least 15 unauthorized access devices (credit cards) and trafficking in unauthorized access devices.
This case is being prosecuted by Assistant U.S. Attorneys Megan Miller and Robert Kern following an investigation by the Bureua of Immigration and Customs Enforcement.
If convicted, their sentence will be determined by the court after review of factors unique to this case, including prior criminal records, if any, their role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Two Cayman Island Financial Institutions Plead Guilty in Manhattan Federal Court to Conspiring to Hide More Than $130 Million in Cayman Bank AccountsRead the Press Release
Cayman Companies Admit to Helping U.S. Taxpayer-Clients Hide Assets in Offshore Accounts, and Agree to Produce Account Files of Non-Compliant U.S. Taxpayers
First Conviction of Non-Swiss Financial Institution For Tax Evasion Conspiracy
U.S. Attorney Preet Bharara for the Southern District of New York, Acting Deputy Assistant Attorney General Stuart Goldberg of the Justice Department’s Tax Division, and Chief Richard Weber for the Internal Revenue Service – Criminal Investigation, (IRS-CI), announced today the guilty pleas of Cayman National Securities Ltd. (CNS) and Cayman National Trust Co. Ltd. (CNT), two Cayman Island affiliates of Cayman National Corporation, which provided investment brokerage and trust management services to individuals and entities within and outside the Cayman Islands, including citizens and residents of the United States (U.S. taxpayers). CNS and CNT pleaded guilty to a criminal Information charging them with conspiring with many of their U.S. taxpayer-clients to hide more than $130 million in offshore accounts from the U.S. Internal Revenue Service (IRS) and to evade U.S. taxes on the income earned in those accounts. CNS and CNT entered their guilty pleas pursuant to plea agreements requiring the companies to, among other things, produce through the treaty process account files of non-compliant U.S. taxpayers who maintained accounts at CNS and CNT, and pay a total of $6 million in financial penalties. The plea proceeding took place today before the Honorable U.S. District Judge Thomas P. Griesa for the Southern District of New York.
“The guilty pleas of these two Cayman Island companies today represent the first convictions of financial institutions outside Switzerland for conspiring with U.S. taxpayers to evade their lawful and legitimate taxes,” said U.S. Attorney Bharara. “The plea agreements require these Cayman entities to provide this office with the client files, because we are committed to finding and prosecuting not only banks that help U.S. taxpayers evade taxes, but also individual taxpayers who find criminal ways not to pay their fair share. We will follow them no matter how far they go to hide their accounts, whether it is Switzerland, the Cayman Islands, or some other tax haven.”
“Today’s convictions make clear that our focus is not on any one bank, insurance company or asset management firm, or even any one country,” said Acting Deputy Assistant Attorney General Goldberg of the Justice Department’s Tax Division. “The Department and IRS are following the money across the globe – there are no safe havens for U.S. citizens engaged in tax evasion or those actively assisting them.”
“The veil of secrecy has been lifted from what was once a common place for criminals to hide their money offshore,” said Chief Weber. “The IRS and DOJ work aggressively to require banks to follow the laws and not turn a blind eye to criminal activity. When individuals and entities hide behind shell corporations and numbered bank accounts, they are not only cheating the U.S. government, they are cheating the honest taxpaying citizens who are obeying the law and doing the right thing.”
According to the information, statements made during the proceedings today and other documents filed in Manhattan federal court, including the statement of facts to the plea agreements:
From at least 2001 through 2011, CNS and CNT, which are both located in Grand Cayman and organized under the laws of the Cayman Islands, assisted certain U.S. taxpayers in evading their U.S. tax obligations to the IRS and otherwise hiding accounts held at CNS and CNT from the IRS (hereinafter, undeclared accounts). CNS and CNT did so by knowingly opening and maintaining undeclared accounts for U.S. taxpayers at CNS and CNT. Specifically, and among other things, in furtherance of a scheme to help U.S. taxpayers hide assets from the IRS and evade taxes:
- CNS and CNT opened, and/or encouraged many U.S. taxpayer-clients to open accounts held in the name of sham Caymanian companies and trusts (collectively, structures), thereby helping U.S. taxpayers conceal their beneficial ownership of the accounts.
- CNS and CNT treated these sham Caymanian structures as the account holders and allowed the U.S. beneficial owners of the accounts to trade in U.S. securities.
- CNS failed to disclose to the IRS the identities of the U.S. beneficial owners who were trading in U.S. securities, in contravention of CNS’s obligations under its Qualified Intermediary Agreement (QI) with the IRS.
- After learning about the investigation of Swiss bank UBS AG (UBS), in or about 2008, for assisting U.S. taxpayers to evade their U.S. tax obligations, CNS and CNT continued to knowingly maintain undeclared accounts for U.S. taxpayer-clients and did not begin to engage in any significant remedial efforts with respect to those accounts until 2011 and 2012.
The sham Caymanian structures that CNT set up for U.S. taxpayer-clients included trusts, which were nominally controlled by CNT trust officers, but which in fact were controlled by the U.S. taxpayer-clients; managed companies, for which CNT ostensibly provided direction and management services, but which in truth were shell companies that served only to hold the assets of the U.S. taxpayer-clients; and registered office companies, which were shell companies for which CNT simply supplied a Caymanian mailing address. CNS treated these sham Caymanian structures as the account holders and then permitted the U.S. taxpayer-clients to trade in U.S. securities, without requiring them to submit Form W-9s, which are IRS forms that identify individuals as U.S. taxpayers, as CNS was obligated to do under its QI obligations for accounts held by U.S. persons that held U.S. securities. CNS and CNT agreed to maintain these structures for U.S. taxpayer-clients after many of them expressed concern that their accounts would be detected by the IRS.
In or about April 2008, it became publicly known that the U.S. Department of Justice was investigating UBS for assisting U.S. taxpayers to evade their U.S. tax obligations. Thereafter, despite the public disclosure of the UBS case, and CNS’s awareness of it, CNS continued to assist U.S. taxpayer-clients in concealing their accounts from the IRS by, among other things, failing to require them to complete Form W-9s. Likewise, up through at least 2010, CNT continued to rely on account opening documentation that, rather than barring the creation of non-tax compliant structures, simply assigned higher “risk” points to such structures. In or about June 2011, CNT hired a new president, who spearheaded a review of CNT’s files. In the course of that review, not a single file was found to be complete and without tax or other issues. Moreover, with respect to the structures that had U.S. beneficial owners, CNT’s files contained little, if any, evidence of tax compliance.
At their high-water mark in 2009, CNS and CNT had approximately $137 million in assets under management relating to undeclared accounts held by U.S. taxpayer-clients. From 2001 through 2011, CNS and CNT earned more than $3.4 million in gross revenues from the undeclared U.S. taxpayer accounts that they maintained.
As part of their plea agreements with the U.S. Attorney’s Office for the Southern District of New York (the office), CNS and CNT have agreed to cooperate fully with the office’s investigation of the companies’ criminal conduct. To date, CNS and CNT have already made substantial efforts to cooperate with that investigation, including by: (1) facilitating interviews that the office conducted of CNS and CNT employees, including top level executives; (2) voluntarily producing documents in response to the office’s requests; (3) providing, in response to a treaty request, unredacted client files for approximately 20 percent of the U.S. taxpayer-clients who maintained accounts at CNS and CNT; and (4) committing to assist in responding to a treaty request that is expected to result in the production of unredacted client files for approximately 90 to 95 percent of the U.S. taxpayer-clients who maintained accounts at CNS and CNT.
In connection with their guilty pleas, CNS and CNT have agreed to pay the United States a total of $6 million, which consists of the forfeiture of gross proceeds of their illegal conduct, restitution of the outstanding unpaid taxes from U.S. taxpayers who held undeclared accounts at CNS and CNT, and a fine.
U.S. Attorney Bharara praised the outstanding investigative work of IRS-CI and thanked the Justice Department’s Tax Division for their assistance in the investigation.
This case is being handled by the office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. Paul and Niketh Velamoor for the Southern District of New York are in charge of the prosecution.
Two Cayman Island Financial Institutions Plead Guilty in Manhattan Federal Court to Conspiring to Hide More Than $130 Million in Cayman Bank AccountsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Stuart Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, and Richard Weber, Chief, Internal Revenue Service – Criminal Investigation, (“IRS-CI”), announced today the guilty pleas of Cayman National Securities Ltd. (“CNS”) and Cayman National Trust Co. Ltd. (“CNT”), two Cayman Island affiliates of Cayman National Corporation, which provided investment brokerage and trust management services to individuals and entities within and outside the Cayman Islands, including citizens and residents of the United States (“U.S. taxpayers”). CNS and CNT pleaded guilty to a criminal information charging them with conspiring with many of their U.S. taxpayer-clients to hide more than $130 million in offshore accounts from the United States Internal Revenue Service (the “IRS”) and to evade U.S. taxes on the income earned in those accounts. CNS and CNT entered their guilty pleas pursuant to plea agreements requiring the companies to, among other things, produce through the treaty process account files of non-compliant U.S. taxpayers who maintained accounts at CNS and CNT, and pay a total of $6 million in financial penalties. The plea proceeding took place today before the Honorable Thomas P. Griesa, United States District Judge for the Southern District of New York.
Manhattan U.S. Attorney Preet Bharara said: “The guilty pleas of these two Cayman Island companies today represent the first convictions of financial institutions outside Switzerland for conspiring with U.S. taxpayers to evade their lawful and legitimate taxes. The plea agreements require these Cayman entities to provide this Office with the client files, because we are committed to finding and prosecuting not only banks that help U.S. taxpayers evade taxes, but also individual taxpayers who find criminal ways not to pay their fair share. We will follow them no matter how far they go to hide their accounts, whether it is Switzerland, the Cayman Islands, or some other tax haven.”
Acting Deputy Assistant Attorney General Stuart Goldberg said: “Today’s convictions make clear that our focus is not on any one bank, insurance company or asset management firm, or even any one country. The Department and IRS are following the money across the globe –there are no safe havens for US citizens engaged in tax evasion or those actively assisting them.”
IRS Chief Richard Weber said: “The veil of secrecy has been lifted from what was once a common place for criminals to hide their money offshore. The IRS and DOJ work aggressively to require banks to follow the laws and not turn a blind eye to criminal activity. When individuals and entities hide behind shell corporations and numbered bank accounts, they are not only cheating the U.S. government, they are cheating the honest taxpaying citizens who are obeying the law and doing the right thing.”
According to the Information, statements made during the proceedings today, and other documents filed in Manhattan federal court, including the Statement of Facts to the plea agreements:
The Offense Conduct
From at least 2001 through 2011, CNS and CNT, which are both located in Grand Cayman and organized under the laws of the Cayman Islands, assisted certain U.S. taxpayers in evading their U.S. tax obligations to the IRS, and otherwise hiding accounts held at CNS and CNT from the IRS (hereinafter, “undeclared accounts”). CNS and CNT did so by knowingly opening and maintaining undeclared accounts for U.S. taxpayers at CNS and CNT. Specifically, and among other things, in furtherance of a scheme to help U.S. taxpayers hide assets from the IRS and evade taxes:
-
CNS and CNT opened, and/or encouraged many U.S. taxpayer-clients to open, accounts held in the name of sham Caymanian companies and trusts (collectively, “structures”), thereby helping U.S. taxpayers conceal their beneficial ownership of the accounts.
-
CNS and CNT treated these sham Caymanian structures as the account holders and allowed the U.S. beneficial owners of the accounts to trade in U.S. securities.
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CNS failed to disclose to the IRS the identities of the U.S. beneficial owners who were trading in U.S. securities, in contravention of CNS’s obligations under its Qualified Intermediary Agreement (“QI”) with the IRS.
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After learning about the investigation of Swiss bank UBS AG (“UBS”), in or about 2008, for assisting U.S. taxpayers to evade their U.S. tax obligations, CNS and CNT continued to knowingly maintain undeclared accounts for U.S. taxpayer-clients, and did not begin to engage in any significant remedial efforts with respect to those accounts until 2011 and 2012.
The sham Caymanian structures that CNT set up for U.S. taxpayer-clients included trusts, which were nominally controlled by CNT trust officers, but which in fact were controlled by the U.S. taxpayer-clients; managed companies, for which CNT ostensibly provided direction and management services, but which in truth were shell companies that served only to hold the assets of the U.S. taxpayer-clients; and registered office companies, which were shell companies for which CNT simply supplied a Caymanian mailing address. CNS treated these sham Caymanian structures as the account holders and then permitted the U.S. taxpayer-clients to trade in U.S. securities, without requiring them to submit Form W-9s, which are IRS forms that identify individuals as U.S. taxpayers, as CNS was obligated to do under its QI obligations for accounts held by U.S. persons that held U.S. securities. CNS and CNT agreed to maintain these structures for U.S. taxpayer-clients after many of them expressed concern that their accounts would be detected by the IRS.
In or about April of 2008, it became publicly known that the United States Department of Justice (“DOJ”) was investigating UBS for assisting U.S. taxpayers to evade their U.S. tax obligations. Thereafter, despite the public disclosure of the UBS case, and CNS’s awareness of it, CNS continued to assist U.S. taxpayer-clients in concealing their accounts from the IRS by, among other things, failing to require them to complete Form W-9s. Likewise, up through at least 2010, CNT continued to rely on account opening documentation that, rather than barring the creation of non-tax compliant structures, simply assigned higher “risk” points to such structures. In or about June of 2011, CNT hired a new president, who spearheaded a review of CNT’s files. In the course of that review, not a single file was found to be complete and without tax or other issues. Moreover, with respect to the structures that had U.S. beneficial owners, CNT’s files contained little if any evidence of tax compliance.
At their high-water mark in 2009, CNS and CNT had approximately $137 million in assets under management relating to undeclared accounts held by U.S. taxpayer-clients. From 2001 through 2011, CNS and CNT earned over $3.4 million in gross revenues from the undeclared U.S. taxpayer accounts that they maintained.
CNS and CNT’s Cooperation with the Government Investigation
As part of their plea agreements with the Office of the United States Attorney for the Southern District of New York (the “Office”), CNS and CNT have agreed to cooperate fully with the Office’s investigation of the companies’ criminal conduct. To date, CNS and CNT have already made substantial efforts to cooperate with that investigation, including by: (1) facilitating interviews that the Office conducted of CNS and CNT employees, including top level executives; (2) voluntarily producing documents in response to the Office’s requests; (3) providing, in response to a treaty request, unredacted client files for approximately 20 percent of the U.S. taxpayer-clients who maintained accounts at CNS and CNT; and (4) committing to assist in responding to a treaty request that is expected to result in the production of unredacted client files for approximately 90 to 95 percent of the U.S. taxpayer-clients who maintained accounts at CNS and CNT.
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In connection with their guilty pleas, CNS and CNT have agreed to pay the United States a total of $6 million, which consists of the forfeiture of gross proceeds of their illegal conduct, restitution of the outstanding unpaid taxes from U.S. taxpayers who held undeclared accounts at CNS and CNT, and a fine.
Mr. Bharara praised the outstanding investigative work of IRS-CI, and thanked the Justice Department’s Tax Division for their assistance in the investigation.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. Paul and Niketh Velamoor are in charge of the prosecution.
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Two California Men Plead Guilty to Conspiracy to Distribute Oxycodone and HydromorphoneRead the Press Release
BOISE – Michael Kulikoff, 30, and Kenneth Miller, 57, both of California City, California, pleaded guilty yesterday to conspiracy to distribute oxycodone and hydromorphone, U.S. Attorney Wendy J. Olson announced. Co-defendants Diane Miller, 41, and Crystal Clark 43, also of California City, California, previously pleaded guilty to conspiracy to distribute oxycodone and hydromorphone. Diana Miller was sentenced on January 15, 2016, to 15 months in prison, to be followed by five years of supervised release. All four were indicted by a federal grand jury in Boise on May 12, 2015.
According to the plea agreement and court proceedings, Kenneth Miller, Diane Miller, and Crystal Clark sold their prescriptions of oxycodone to Michael Kulikoff. Kulikoff admitted to distributing those and other prescription pills to Boise, Idaho. Kulikoff admitted that he distributed between 500 and 1750 30mg pills of oxycodone to a confidential informant and an undercover officer in Idaho.
The charge of conspiracy to distribute oxycodone and hydromorphone is punishable by not more than twenty years in prison, a maximum fine of $1,000,000, and at least three years of supervised release.
Sentencing for Clark is set for April 4, 2016, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise. Judge Winmill will sentence Kenneth Miller and Michael Kulikoff on May 5, 2016.
The case was investigated by the Drug Enforcement Administration and the Boise Police Department as an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation. OCDETF partners include the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement’s (ICE); Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service.
The case was initiated and investigated by the Boise Police Department, and the Drug Enforcement Administration (DEA) led Tactical Diversion Squad which is comprised of law enforcement personnel from the DEA, Ada County Sheriff’s Office, Boise Police Department, Idaho State Police, Meridian Police Department, Nampa Police Department and U.S. Department of Health and Human Services Office of Inspector General.
Townsend Woman Pleads Guilty to Stealing over $200,000 in Government BenefitsRead the Press Release
BOSTON – Lucy Girard, 78, of Townsend, Mass., pleaded guilty today in U.S. District Court in Boston to stealing over $200,000 in Social Security and federal housing benefits.
In February 2016, Girard was charged in a felony information. U.S. District Court Senior Judge Rya W. Zobel scheduled sentencing for June 1, 2016.
In 1994, Girard was listed as the informant of death on her mother’s death certificate when she passed away in Massachusetts. Girard did not properly notify the Social Security Administration of her mother’s death so the agency continued to mail her monthly checks. Although Girard was not entitled to this money, she routinely signed her late mother’s name on the back of the checks, cashed them, and spent the money. In January 2009, the payments were converted to a monthly direct deposit into an account that Girard controlled, and she spent the money after it was deposited each month for her own personal benefit. In 2014, in response to inquiries from Social Security, Girard falsely stated that her mother died very recently in Florida. In total, from 1994 to 2014, Girard stole $208,868.
In 2014, Girard applied to live at housing subsidized by the U.S. Department of Housing and Urban Development. Although the application directed Girard to disclose all of her income, she did not disclose the Social Security money that she was illegally receiving on behalf of her late mother. Girard would have been ineligible for subsidized housing if she had disclosed that income.
This case was brought as part of an ongoing effort by the U.S. Attorney’s Office, in partnership with the Social Security Administration, to investigate and prosecute the posthumous fraud of Social Security benefits. In many of these cases, family members, knowing they are not entitled to government benefits, continue to withdraw and spend the funds after a relative has died. In the past year, the U.S. Attorney’s Office has prosecuted several similar cases involving a total of more than $1 million in stolen government money.
Last week, Brian Sandiford, of Jamaica Plain, was sentenced for stealing $70,811 from Social Security from 2010 to 2014.
On April 11, 2016, Richard Alan Hersey, of Winthrop, will be sentenced for stealing $444,287 in Social Security and federal pension benefits from 1991 to 2015. Hersey pleaded guilty in November 2015.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Office of Inspector General, Social Security Administration, Office of Investigations, Boston Field Division; and Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Regional Office, made the announcement today. The Girard case is being prosecuted by Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit.
Todd County, Kentucky Resident Sentenced to 228 Months in Prison for Possession and Distribution of Methamphetamine and Carrying A Firearm During A Drug Trafficking CrimeRead the Press Release
Defendant obtained 67 pounds of crystal meth (with an estimated street value of $3 million) in California and shipped the drug to his Todd County home
BOWLING GREEN, Ky. – A Todd County, Kentucky resident, was sentenced today in United States District Court by District Judge Greg N. Stivers to 228 months in prison followed by five years of supervised release, for multiple charges associated with firearms, possession and distribution of methamphetamine announced U.S. Attorney John E. Kuhn, Jr. There is no parole in the federal system.
Scott Windell Harris, age 45, living in Allensville, purchased 67 pounds of crystal meth during approximately nine trips to California, then shipped the schedule II controlled substance to a residence off Russellville Road in Todd County. Harris, an unlawful user of methamphetamine, also carried a firearm during and in relation to a drug trafficking offense.
"Methamphetamine is a highly addictive drug with devastating consequences to users, their families and communities,” stated U.S. Attorney John Kuhn. “This prosecution closes a significant pipeline for dangerous drugs running from California to the streets of Western Kentucky. We are grateful to the many law enforcement agencies whose coordinated efforts assisted my Office in achieving this sentence.”
Law enforcement officials became aware of Harris’ criminal conduct in February 2015, when a package was intercepted at the Louisville hub of UPS. A search warrant executed on the package revealed 19.6 pounds of suspected methamphetamine being shipped from California to Todd County. Later forensic testing of the methamphetamine at the Drug Enforcement Administration Laboratory in Chicago, Illinois, revealed a purity level exceeding 100%. State and federal law enforcement officials conducted a controlled delivery of the package, and observed Harris taking possession of the package and placing it inside a black van. Later, a search of the van revealed a loaded Kel-Tec CNC Industries, Model P3AT, .380 caliber pistol with seven rounds of .380 ammunition in the van’s glove box. At the time, Harris was an unlawful user of methamphetamine and, therefore, prohibited from possessing a firearm.
According to Harris, he made multiple trips to Los Angeles, California, where he obtained a total of 67 pounds of crystal methamphetamine, with an estimated street value of approximately $3 million. Once he had the methamphetamine, Harris packaged the drugs and shipped them to his residence in Allensville, Kentucky. When law enforcement officials arrested Harris, they searched the residence and found an additional one and one-half pounds of crystal methamphetamine, scales, baggies and just over $14,000.00 in cash.
Harris previously pled guilty to the charges on October 13, 2015, in Bowling Green, before Judge Stivers.
This case was prosecuted by Assistant United States Attorney Jo E. Lawless and was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Kentucky State Police Drug Enforcement/Special Investigations West, with assistance from the Drug Enforcement Administration Laboratory.
Texas Men Sentenced to Combined Total of 200 Months in Federal Prison for Drug TraffickingRead the Press Release
Fort Smith, Arkansas - Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Adan Sanchez, age 45, of Rosenberg, Texas, and Omar Sanchez-Vasquez, age 49, of Guy, Texas, were sentenced today on one count each of Distribution of more than 50 Grams of a Mixture or Substance Containing Methamphetamine. Sanchez and Sanchez-Vasquez were sentenced to 100 months each in federal prison followed by four years of supervised release. The Honorable P. K. Holmes, III presided over the sentencing hearing in the United States District Court in Fort Smith.
Sanchez and Sanchez-Vasquez were both indicted by a federal grand jury on September 16, 2015 and both pleaded guilty to the charges in November, 2015.
This case was investigated by the Drug Enforcement Administration. Assistant United States Attorney Brandon Carter prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Tax charges added to conspiracy involving undocumented workers at Akron restaurantRead the Press Release
A 13-count superseding indictment was unsealed in which tax charges were added to a conspiracy involving harboring undocumented and illegal aliens in relation to their operation of a restaurant in Akron, said Carole S. Rendon, Acting U.S. Attorney for the Northern District of Ohio
Named in the indictment are Chau Fang Lam, 57; Rui Xu, 28; Xin Hsu, 34, and Zhou Qiang Zou, 33, all of Akron. Added to the indictment is Yuan Lin, 24, of Fairlawn.
Lam, Xu, Hsu, and Zou owned and operated the Royal Buffet and Grill restaurant in the Chapel Hill area of Akron, Ohio. Lam, Xu, Hsu, and Zou conspired to harbor and harbored at least 10 undocumented workers for the purpose of commercial advantage and private financial gain. The conspiracy included employing the undocumented workers at the Royal Buffet and Grill, where they worked for below minimum wage or only for tips, according to the indictment.
The defendants also housed the undocumented worker at one of their residences on Annapolis Avenue in Akron and transporting them to and from the Royal Buffet and Grill as part of the conspiracy. At one time, Lam, Xu, Hsu, and Zou housed as many as 14 undocumented workers inside a single-family resident on Annapolis Avenue, according to the indictment.
Count 1 charges Lam, Xu, Hsu, and Zou with conspiracy to harbor illegal aliens, Count 2 charges Lam with harboring illegal aliens at her residence on Annapolis Avenue. Count 3 charges Xu with harboring illegal aliens at his residence on Annapolis Avenue. Count 4 charges Hsu and Xu with harboring illegal aliens by permitting them to be transported to and from their work at the Royal Buffet and Grill in their 2006 Dodge Caravan.
Lin also operated the Royal Buffet and Grill. Counts 5 alleges the defendants conspired between 2002 and 2013 to defraud the government by impeding the collection of federal taxes. They did this by not reporting the majority of cash receipts on their taxes, according to the indictment.
Counts 6 through 13 relate to the filing of false tax returns.
The indictment also seeks to seize more than $92,000 in U.S. currency seized as part of the investigation.
The case is being prosecuted by Assistant U.S. Attorney Teresa Riley following an investigation by the U.S. Department of Homeland Security Investigations and the Internal Revenue Service – Criminal Investigations.
If convicted, their sentence will be determined by the court after review of factors unique to this case, including prior criminal records, if any, their role in the offenses and the unique characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
South Portland Man Sentenced to 16½ Years for Sexually Exploiting a MinorRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Wayne Niski, 29, of South Portland, Maine, was sentenced today in U.S. District Court by Judge Jon D. Levy to 16½ years in prison to be followed by 10 years of supervised release for sexually exploiting a minor. Niski pleaded guilty to the charge on September 10, 2015.
According to court records, in 2013, Niski took several sexually explicit photographs of an eight-year-old girl. In March 2015, investigators executed a search warrant at Niski’s residence in South Portland. Among the items found in the residence was a USB flash drive that contained copies of the images that Niski had taken in 2013.
The investigation was conducted by the Maine State Police Computer Crimes Unit and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Smithfield Man Sentenced to 235 Months for Distribution of Child PornographyRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that yesterday in federal court, Senior United States District Judge James C. Fox sentenced james owen hagins, 44, of Smithfield, North Carolina, to 235 months imprisonment, followed by a lifetime of supervised release.
HAGINS was named in a three count Indictment filed on September 9, 2015, charging him with one count of Distribution of Child Pornography and two counts of Receipt And Possession Of Child Pornography. On November 30, 2015, HAGINS pled guilty to the Distribution of Child Pornography.
The investigation revealed that on July 2, 2015, agents with the U.S. Marshal’s Service questioned HAGINS in regard to his relationship with an individual under investigation in Tennessee for the kidnapping and sexual abuse of a minor female. HAGINS is a registered sex offender who had been convicted previously of Indecent Liberties with a Child and Third Degree Sexual Exploitation of a Minor in Johnston County in 1995 and 2004, respectively. HAGINS admitted that he had been in contact with the suspect in Tennessee and met him in a chat room. The suspect has since been arrested and the minor child safely located and returned to her family.
On July 5, 2015, HAGINS admitted that he had exchanged images of child pornography for several months. He also admitted to exchanging images of child pornography with several other individuals he met in a chat room.
On July 10, 2015, agents with the Federal Bureau of Invetigation (FBI) executed a search warrant on HAGINS home in Smithfield and seized a computer, multiple cell phones, and multiple media storage devices. Forensic examination of these devices uncovered more than 2,000 images and 487 videos of child pornography.
Investigation of this case was conducted by the United States Marshal’s Service, the Federal Bureau of Investigation, and the Johnston County Sheriff’s Office. Assistant United States Attorney Ethan Ontjes represented the government.
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.
Sheriff and lieutenant colonel of New Iberia, Louisiana, charged in conspiracy to assault inmatesRead the Press Release
LAFAYETTE, La. – Principal Deputy Assistant Attorney General Vanita Gupta, head of the Department of Justice’s Civil Rights Division, and United States Attorney Stephanie A. Finley announced today that Iberia Parish, Louisiana, Sheriff Louis Ackal and Lieutenant Colonel Gerald Savoy were charged today with civil rights violations arising out of the beatings of five pre-trial detainees at the Iberia Parish Jail (IPJ) on April 29, 2011. Ackal is charged with one count of conspiracy against rights and two counts of deprivation of rights under color of law, and Savoy is charged with one count of conspiracy against rights and one count of deprivation of rights under color of law.
The indictment alleges that Ackal and Savoy conspired with each other and with other officers to assault five inmates, identified by the initials C.O., S.S., A.T., A.D. and H.G., and that members of the conspiracy failed to intervene and stop the assaults.
Eight former Iberia Parish Sheriff Office employees have previously entered guilty pleas in related cases before U.S. District Judge Patricia Minaldi of the Western District of Louisiana. The eight officers are former IPJ Warden Wesley Hayes, former IPJ Assistant Warden Jesse Hayes, former Lieutenant Bret Broussard of the Narcotics Unit, former narcotics agent Wade Bergeron, former narcotics agent Jason Comeaux, former narcotics agent David Hines, former narcotics agent Byron Benjamin Lassalle and former K-9 handler Robert Burns.
An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty. If convicted, Ackal and Savoy each face a maximum sentence of 10 years in prison for each of the civil rights violations, as well as a potential $250,000 fine for each count.
The case is being investigated by the FBI’s Lafayette Resident Agency. The case is being prosecuted by Assistant U.S. Attorney Joseph G. Jarzabek of the Western District of Louisiana, Special Litigation Counsel Mark Blumberg and Trial Attorney Tona Boyd of the Civil Rights Division’s Criminal Section.
Sex Offender Convicted AgainRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Michael E. Fisher, age 39, was convicted yesterday after a jury trial in Burlington of attempting to persuade, induce, entice or coerce a minor to engage in illegal sex, using a facility of interstate commerce.
In late February 2015, Fisher contacted several area middle school girls, aged 12-14, through Facebook. The girls reported the contacts to their parents and to the Burlington Police Department. Fisher has a 2003 State of Vermont felony conviction for luring minors, and a 2010 federal conviction for failing to register as a sex offender. In March 2015, the Internet Crimes Against Children Task Force (“ICAC”) initiated an investigation. An ICAC official and South Burlington Police Sergeant Andrew Chaulk made undercover contact with Fisher on Facebook, posing as a 13-year-old middle school student. Over the course of three days, Fisher sent a multitude of Facebook messages to the purported student, pressing her to have sex with him. He urged her to meet him at Dorset Street Park in South Burlington at noon on April 3, 2015, to have sex in a public restroom. Among other things, Fisher promised the girl that he would bring cigarettes, a beer, and a condom. He also sent her a Google Maps link to the location. Upon arrival at the park on April 3 at noon, he was arrested by a U.S. Secret Service agent assisting in the investigation, and Sgt. Chaulk. Along with the two mobile phones that Fisher had used to access the Internet and send the Facebook messages, he had brought cigarettes, a beer, and a condom.
At a jury trial this week before Chief United States District Court Judge Christina Reiss in Burlington, Vermont, the jury heard testimony from the three area middle school girls. The jury also heard testimony from Burlington Police officers, South Burlington Police officers, and the assisting U.S. Secret Service agent. The government also provided evidence of the many Facebook messages that Fisher sent to the undercover officer, along with evidence of Fisher contacting numerous young girls in early 2015. Yesterday the jury returned a guilty verdict.
Fisher has been detained by the U.S. Marshal’s Service since his arrest. Chief Judge Reiss scheduled sentencing for June 2016. Fisher was represented by Federal Public Defender Michael Desautels. The United States was represented by Assistant U.S. Attorneys William Darrow and Kunal Pasricha.
Senior Auction Official at Beverly Hills Gallery Pleads Guilty in Connection with $1 Million Wildlife Smuggling ConspiracyRead the Press Release
Joseph Chait, the senior auction administrator of a Beverly Hills, California, gallery and auction house, pleaded guilty to conspiring to smuggle wildlife products made from rhinoceros horn, elephant ivory and coral with a market value of at least approximately $1 million, announced Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division, U.S. Attorney Preet Bharara for the Southern District of New York and Director Dan Ashe for the U.S. Fish & Wildlife Service (FWS). Chait, 38, of Beverly Hills, pleaded guilty to a two-count information before U.S. District Judge J. Paul Oetken for the Southern District of New York.
“Rhinos and elephants have been on earth for millennia but are now at grave risk due to the illegal wildlife trade,” said John C. Cruden, Assistant Attorney General for the Environment and Natural Resources Division. “The United States and other destination markets have a special responsibility to help save these beloved creatures from extinction. Those in the auction industry need to be responsible and not turn a blind eye to the fact that trade in protected animal parts is highly regulated. Illegal wildlife trafficking takes many forms and those who deliberately break the rules and engage in smuggling will be prosecuted to the full extent of the law.”
“Joseph Chait and his co-conspirators trafficked in wildlife worth a market value of at least $1 million, deliberately flouting laws put in place to protect endangered species such as rhinoceros,” said U.S. Attorney Bharara. “We are grateful for the outstanding work of the FWS in this investigation, which is ongoing.”
“This case demonstrates the insidious nature of wildlife trafficking, showing how these activities permeate our society in many social, economic and cultural areas,” said Director Ashe. “One criminal at a time. One guilty plea at a time. Federal prosecutors, our devoted team of law enforcement officers, and their colleagues around the globe are helping reduce trade in illegal wildlife products that is decimating populations of some of our most cherished species.”
According to allegations contained in the Information and statements made in court filings and proceedings:
Chait and his co-conspirators engaged in illegal trafficking of wildlife with a market value of at least $1 million. Chait personally falsified customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood or plastic. For example, during Asia Week in New York City in or about March 2011, Chait was approached about the potential sale of a carving of Guanyin, an East Asian spiritual figure made from rhinoceros horn (the Rhino Carving). Despite knowing that it was not a genuine antique, Chait and his co-conspirators accepted the Rhino Carving for consignment, advertised the sale to foreign clients in China and put the Rhino Carving on the cover of Auction House-1’s catalogue in connection with an auction of Asian art and antiques. After the Rhino Carving sold at auction for $230,000, Chait offered to make a false document for the buyer to help the buyer smuggle the item out of the country. The fake invoice falsely stated that the item cost $108.75 and was made of plastic.
Chait and his co-conspirators also sold ivory carvings to another foreign customer and provided those carvings to that customer’s courier, even after learning that the customer had been arrested in China for smuggling ivory purchased from Chait’s auction house.
In addition to falsifying customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood or plastic, Chait and his co-conspirators conspired to aid smuggling in other ways:
- Wildlife items were shipped to or picked up by third party shippers, who then re-shipped the items out of the country to foreign buyers without the required declaration or permits.
- Members of the conspiracy provided packing materials to foreign wildlife buyers to assist them in hand carrying the wildlife out of the country.
- Foreign wildlife buyers where not charged a state sales tax if they showed a foreign passport and itinerary for an international flight as proof the item would be leaving the country which Chait and his co-conspirators knew was insufficient time to obtain an export permit.
- Protected wildlife was smuggled into the United States without declaration or permits and then sold at auction.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. The trade in rhinoceros horn and elephant ivory has been restricted since 1976 under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world. Trade in protected wildlife such as rhinoceros horn and elephant ivory has been significantly restricted in the last two years as the result of a Presidential Executive Order except for those instances where sellers can prove that the item is a genuine antique that is more than 100 years of age.
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Chait faces a maximum of five years in prison for conspiring to smuggle wildlife products and a maximum of five years in prison for violating the Lacey Act. These statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentence imposed on the defendant will be determined by the judge.
Chait’s sentencing is scheduled for June 22, 2016, in front of Judge Oetken.
This matter is part of Operation Crash, a continuing investigation by the Department of the Interior’s Fish and Wildlife Service, in coordination with the Department of Justice. A “crash” is the term for a herd of rhinoceros. Operation Crash is an ongoing effort to detect, deter, and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns.
Assistant Attorney General Cruden and U.S. Attorney Bharara thanked the U.S. Fish and Wildlife Service for its outstanding work in this investigation as well as the U.S. Attorney’s Office for the District of New Jersey for its assistance on this matter. This case is being prosecuted by the U.S. Attorney Office’s Complex Frauds and Cybercrime Unit and the Environmental Crimes Section of the Department of Justice. Assistant U.S. Attorneys Jennifer Gachiri and Elizabeth Hanft and Senior Litigation Counsel Richard A. Udell with the Environmental Crimes Section are in charge of the prosecution.
- Wildlife items were shipped to or picked up by third party shippers, who then re-shipped the items out of the country to foreign buyers without the required declaration or permits.
Senior Auction Official at Beverly Hills Gallery Pleads Guilty in Manhattan Federal Court in Connection with $1 Million Wildlife Smuggling ConspiracyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, John C. Cruden, the Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, and Dan Ashe, the Director of the United States Fish & Wildlife Service (“FWS”) announced today that JOSEPH CHAIT, the senior auction administrator of a gallery and auction house located in Beverly Hills, California (“Auction House-1”), pled guilty to conspiring to smuggle wildlife products made from rhinoceros horn, elephant ivory, and coral with a market value of at least approximately $1 million. CHAIT pled guilty to a two-count Information before U.S. District Judge J. Paul Oetken.
Manhattan U.S. Attorney Preet Bharara stated: “Joseph Chait and his co-conspirators trafficked in wildlife, including rhinoceros horns, worth a market value of at least $1 million, deliberately violating laws put in place to protect endangered species. Critically endangered, rhinoceros have one primary predator, humans. And it is people like Chait who, through their criminal schemes, have fueled the trade of endangered wildlife products. We are grateful for the outstanding work of the Fish and Wildlife Service in this investigation, which is ongoing.”
Assistant Attorney General John C. Cruden stated: “Rhinos and elephants have been on earth for millennia but are now at grave risk due to the illegal wildlife trade. The United States and other destination markets have a special responsibility to help save these beloved creatures from extinction. Those in the auction industry need to be responsible and not turn a blind eye to the fact that trade in protected animal parts is highly regulated. Illegal wildlife trafficking takes many forms and those who deliberately break the rules and engage in smuggling will be prosecuted to the full extent of the law.”
Fish and Wildlife Service Director Dan Ashe stated: “This case demonstrates the insidious nature of wildlife trafficking, showing how these activities permeate our society in many social, economic and cultural areas. One criminal at a time. One guilty plea at a time. Federal prosecutors, our devoted team of law enforcement officers, and their colleagues around the globe are helping reduce trade in illegal wildlife products that is decimating populations of some of our most cherished species.”
According to allegations contained in the Information and statements made in court filings and proceedings:
CHAIT and his co-conspirators engaged in illegal trafficking of wildlife with a market value of at least $1 million. CHAIT personally falsified customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood or plastic. For example, during Asia Week in New York City in or about March 2011, CHAIT was approached about the potential sale of a carving of Guanyin, an East Asian spiritual figure made from rhinoceros horn (the “Rhino Carving”). Despite knowing that it was not a genuine antique, CHAIT and his co-conspirators accepted the Rhino Carving for consignment, advertised the sale to foreign clients in China, and put the Rhino Carving on the cover of Auction House-1’s catalogue in connection with an auction of Asian art and antiques. After the Rhino Carving sold at auction for $230,000, CHAIT offered to make a false document for the buyer to help the buyer smuggle the item out of the country. The fake invoice falsely stated that the item cost $108.75 and was made of plastic.
CHAIT also sold rhinoceros ivory carvings to another customer, and provided those carvings to that customer’s courier, even after learning that the customer had been arrested in China for smuggling ivory purchased from CHAIT’s auction house.
In addition to falsifying customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood or plastic, CHAIT and his co-conspirators conducted their wildlife smuggling using a variety of methods:
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Wildlife items were shipped to or picked up by third party shippers, who then re-shipped the items out of the country without the required declaration or permits.
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Members of the conspiracy provided packing materials to foreign wildlife buyers to assist them in hand carrying the wildlife out of the country.
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Foreign wildlife buyers were sold protected wildlife items without being assessed a state sales tax if they showed a foreign passport and itinerary for an international flight as proof the item would be leaving the country.
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Protected wildlife was smuggled into the United States without declaration or permits, and then sold at auction by members of the conspiracy.
As a result of a recent Presidential Executive Order, trade in protected wildlife such as rhinoceros horn and elephant ivory has been significantly restricted in the last two years, except for those instances where sellers can prove that the item is a genuine antique that is more than 100 years old.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under U.S. and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (“CITES”), a treaty signed by over 170 countries around the world to protect fish, wildlife, and plants that are or may become imperiled due to the demands of international markets.
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CHAIT, 38, of Beverly Hills, California, faces a maximum of five years in prison for conspiring to smuggle wildlife products, in violation of 18 U.S.C. §§ 371, 554 and 16 U.S.C. §§ 3372(a) and (d) and 3373(d), and a maximum of five years in prison for violating the Lacey Act, 16 U.S.C. §§ 3372(d) and 3373(d)(3)(A)(i). These statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentence imposed on the defendant will be determined by the judge.
CHAIT’s sentencing is scheduled for June 22, 2016, in front of Judge Oetken.
This matter is part of Operation Crash, a continuing investigation by the Department of the Interior’s Fish and Wildlife Service’s Office of Law Enforcement, in coordination with the Department of Justice. A “crash” is the term for a herd of rhinoceros. Operation Crash is an ongoing effort to detect, deter, and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns.
U.S. Attorney Preet Bharara thanked the U.S. Fish and Wildlife Service for its outstanding work in this investigation as well as the U.S. Attorney’s Office for the District of New Jersey for its assistance on this matter. This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit and the Environmental Crimes Section of the Department of Justice. Assistant United States Attorneys Jennifer Gachiri and Elizabeth Hanft, and Senior Litigation Counsel Richard A. Udell with the Environmental Crimes Section of the Department of Justice are in charge of the prosecution.
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Sayre Woman Pleads Guilty to Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced today that DIXIE ANN MORPHIS, age 36, of Sayre, Oklahoma, pled guilty to POSSESSION WITH INTENT TO DISTRIBUTE METHAMPHETAMINE, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A)(viii).
The charge arose from an investigation by the McAlester Police Department and the Drug Enforcement Administration.
The Indictment alleges that on or about December 5, 2015, in the Eastern District of Oklahoma, the defendant, did knowingly and intentionally possess with intent to distribute fifty (50) grams or more of methamphetamine (actual), a Schedule II controlled substance.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is not less than 10 years or more than Life imprisonment, up to a $10,000,000.00 fine or both.
Assistant United States Attorney Edward Snow represented the United States.
Savannah Drug Dealer Convicted of Trafficking Heroin and Possessing FirearmsRead the Press Release
SAVANNAH, GA: Darius Andre “Arnie” Holmes, 41, of Savannah, Georgia, was convicted yesterday by a federal jury after a two-day trial before U.S. District Court Judge William T. Moore, Jr. for distributing heroin and possessing firearms as a felon on August 18, 2015.
According to the evidence presented during at trial, Holmes sold heroin to a confidential police informant on multiple occasions in August 2015. After Holmes expressed to the informant a desire to buy firearms, local law enforcement officers contacted the ATF and arranged for an undercover officer to allow Holmes to exchange drugs for semiautomatic weapons. Immediately after the trade, Holmes was arrested.
United States Attorney Edward J. Tarver stated, “It is appalling to believe that an individual with a criminal history that spanned parts of three decades was somehow able to continue his reign of crime in the community. The Department of Justice and this United States Attorney’s Office will continue to aggressively enforce federal firearms and narcotics laws. We will not surrender any community to drug dealers and individuals who have embraced crime as their life’s work. We will work hand-in-hand with our federal and state law enforcement partners to return to prison dangerous felons who pollute our community with guns, drugs and fear.”
Holmes’s criminal history in the Savannah area stretches back nearly 25 years. His prior felonies include seven separate Sales of Cocaine, Possession of Cocaine with Intent to Distribute, Robbery by Intimidation, Possession of a Firearm in Furtherance of a Felony, Possession of a Sawed-Off Shotgun, Aggravated Battery, Aggravated Assault, Use of a Communication Facility to Facilitate Sales of Controlled Substances, Possession of Tools with Intent to Commit Sales of Controlled Substances, and Obstruction.
If deemed to be an Armed Career Criminal, Holmes faces a mandatory minimum sentence of 15 years to life in prison, a fine of up to $250,000, and 5 years of supervised release on the firearms count. He faces a maximum sentence of 20 years imprisonment, a fine of up to $1,000,000, and three years of supervised release on each of the heroin distribution counts. There is no parole in the federal system.
The case was investigated by the Chatham-Savannah Counter Narcotics Team (CNT) and the ATF. The Savannah-Chatham Metropolitan Police Department SWAT team assisted with Holmes’ arrest, and the GBI and Chatham County Sheriff’s Office provided additional support. The case was prosecuted as part of Project Ceasefire, a joint federal, state and local firearms initiative involving the U.S. Attorney’s Office, ATF and various local police departments.
Assistant United States Attorneys Joseph D. Newman and Theodore S. Hertzberg prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Rock Island Man Sentenced to Prison for Felon in Possession of a Stolen Firearm ChargesRead the Press Release
DAVENPORT, IA – On March 3, 2016, Kelvin Dwayne Shaw, 33, of Rock Island, Illinois, was sentenced by Senior United States District Court Judge James E. Gritzner to 51 months in prison for felon in possession of a firearm and possession of a stolen firearm, announced Acting United States Attorney Kevin E. VanderSchel. Shaw was ordered to serve three years of supervised release following his prison term and to pay $200 to the Crime Victims’ Fund.
Shaw pleaded guilty to felon in possession of a firearm and possession of a stolen firearm on November 30, 2015. According to the Complaint Affidavit, on August 2, 2015, Davenport Police investigated a homicide that occurred at the 400 block of Marquette Street in Davenport, Iowa. During the investigation, officers found a loaded Tisas Zigana American Tactical 9mm firearm near the scene. Shaw was questioned about the gun and admitted he had stolen it from Rock Island, stored it in Davenport, and handled the firearm on the night of the murder.
Shaw has a prior felony conviction for obstruction in Rock Island County in 2013.
This matter was investigated by the Alcohol, Tobacco, Firearms and Explosives and the Davenport Police Department. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Neighborhood Initiative.
Rochester Man Pleads Guilty to Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr. announced today that Ronald Dodd, 32, of Rochester, NY, pleaded guilty before U.S. District Judge Charles J. Siragusa to possession with intent to distribute heroin, and possession and brandishing of a firearm in furtherance of a drug trafficking crime. The charges carry a combined mandatory minimum penalty of seven years in prison, a maximum of life, a fine of $1,250,000 or both.Assistant U.S. Attorney Robert A. Marangola, who is handling the case, stated that shortly after midnight on August 15, 2015, Rochester Police Department Officers responded to a report of gunfire at 431 Lake Avenue in Rochester. Officers spoke to a witness who stated that an unknown black male on a bike had pulled out a handgun from his waist and yelled that this was “his hood” during an argument outside the residence. Shortly afterward, witnesses heard gunshots and the gunman left the area. Responding officers observed Dodd riding a bike a short distance away and pursued him. The defendant fled but officers apprehended him hiding behind a bush at 17 Phelps Avenue. Dodd had three bags of marijuana, two bags of heroin, and two bags of cocaine in his pants. There was a stolen, Bryco Arms .380 semi-automatic handgun on the ground next to a tree where Dodd was apprehended.
The conviction is the culmination of an investigation on the part of on the part of Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives under the direction of Delano A. Reid, Special Agent in Charge, New York Field Division and the Rochester Police Department, under the direction of Chief Michael Ciminelli.
Sentencing is scheduled for June 10, 2016 at 10:45 a.m. before Judge Siragusa.
Rio Arriba Man Pleads Guilty to Failing to Update Sex Offender RegistrationRead the Press Release
ALBUQUERQUE – Glenn Gene Fernandez, 46, of Alcalde, N.M., pleaded guilty yesterday in federal court to violating the Sex Offender Registration and Notification Act (SORNA). The guilty plea was announced by U.S. Attorney Damon P. Martinez and U.S. Marshal Conrad E. Candelaria.
SORNA, also known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register in each jurisdiction where the offender resides, where the offender is employed, or where the offender is a student, and that the sex offender maintain current registrations.
Fernandez was charged in a criminal complaint on Dec. 1, 2015, with violating SORNA by failing to update his sex offender registration. Fernandez was required to register as a sex offender as a result of a 2004 state conviction in Santa Clara, Calif., for criminal sexual battery involving a restrained person. Fernandez last complied with his sex offender registration requirements in California in Aug. 2011. In Nov. 2015, the U.S. Marshals Service received a request to assist the Rio Arriba County Sheriff’s Office with charging Fernandez with a SORNA violation. The U.S. Marshals Services’ investigation revealed that Fernandez had residing in New Mexico since at least Feb. 2013, and had not registered as a sex offender in New Mexico as required by SORNA.
During yesterday’s proceedings, Fernandez pled guilty to a felony information charging him with failing to update his registration between Feb. 2013 and Dec. 2015 in Rio Arriba County, N.M. Fernandez entered the guilty plea without the benefit of a plea agreement.
At sentencing, Fernandez faces a statutory maximum penalty of ten years in federal prison followed by a minimum of five years of supervised release. Fernandez will also be required to register as a sex offender following his term of incarceration. A sentencing hearing has yet to be scheduled.
This case was investigated by the U.S. Marshals Service and is being prosecuted by Assistant U.S. Attorney Raquel Ruiz-Velez.
Previously Convicted Felon Found Guilty of Possession of FirearmsRead the Press Release
ALEXANDRIA, Va. – Josiah John Weiss, 36, of Suitland, Maryland, was convicted today by a federal jury on charges of possession of firearms as a convicted felon.
Weiss was indicted on Dec. 10, 2015. According to court records and evidence presented at trial, on April 25, 2015, Weiss purchased two semiautomatic pistols and an AR-15 rifle, along with magazines and gun cases for each, from a private seller at The Nation’s Gun Show in Chantilly. Weiss was observed doing so by Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives. Due to his suspicious behavior, he was followed by ATF agents as he drove away from the parking lot of the Dulles Expo Center, where the gun show was being held. When Weiss discovered that he was being followed, he began driving erratically and at high speeds and eventually eluded the agents. Later that day agents executed a search warrant at an apartment Weiss had been living in at the time in Alexandria. Neither Weiss nor the three firearms were found there. Law enforcement remained unaware of Weiss’ whereabouts until Nov. 10, 2015, when he was arrested outside one of his two apartments in Suitland. Despite a search of those two apartments, the firearms were not recovered. Weiss had been convicted of aggravated identity theft and passport fraud, both felonies, in 2011, and thus was prohibited from possessing firearms.
Weiss faces a maximum penalty of 10 years in prison when sentenced on May 27, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Michael F. Boxler, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after the verdict was accepted by U.S. District Judge T.S. Ellis III. Assistant U.S. Attorneys Carina A. Cuellar and Michael E. Rich are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-354
Peter Hoffman and Susan Hoffman Sentenced for Roles in Film Infrastructure Tax Credit SchemeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that PETER HOFFMAN and SUSAN HOFFMAN were sentenced today for their roles in a scheme to defraud the State of Louisiana out of film infrastructure tax credits.
U.S. District Judge Martin L.C. Feldman sentenced PETER HOFFMAN to five years probation, $40,000 fine and 300 hours of community service. SUSAN HOFFMAN was sentenced to 3 years probation, $10,000 fine, and 150 hours of community service.
According to evidence presented at trial, more than $13 million in purported expenditures were submitted to the State for tax credits even though the house at the center of the project, 807 Esplanade, was only valued at approximately $5 million after its renovation. In addition to repeated misrepresentations regarding construction expenditures throughout the scheme, the fraudulent expenditures claimed included $1,834,292 in non-existent film equipment, $962,856 in bogus interest payments on a non-existent $10 million dollar loan, $150,000 in fake rent costs, and over $1.5 million in various fraudulent fees.
“I thank the Assistant U.S. Attorneys and agents for their diligent, thorough, and ethical work in investigating and prosecuting this case,” stated U.S. Attorney Polite. “As a result of their collective efforts, a jury convicted Peter Hoffman, Susan Hoffman, and Michael Arata of fraud and conspiracy for their roles in a scheme that utilized bogus invoices, fake expenditures, and varied misrepresentations to defraud the State of Louisiana and its citizens out of millions of dollars. This criminality was compounded by the fact that, as the Court found during sentencing, Peter Hoffman and Michael Arata used sophisticated means and abused positions of trust in committing these felonies, and Hoffman committed perjury during the trial. We will review this matter and consider seeking appeal of the sentences of all three defendants.”
“At a time when Louisiana's state budget is bleeding and many critical government services are endangered, the fraud committed in this case is especially outrageous,” stated Louisiana State Inspector General Stephen Street. “Those who are brazen enough to defraud these tax credit programs should know that we will continue to come after them with every resource at our disposal and do everything in our power to make them suffer the consequences. Again, I want to thank our partners at the FBI and United States Attorney’s Office for their continued outstanding work on this case."
United States Attorney Polite praised the work of the Special Agents of the Federal Bureau of Investigation and the Louisiana Office of the Inspector General in investigating this matter. Assistant U.S. Attorneys G. Dall Kammer, Chandra Menon and James Baehr were in charge of the prosecution.
Odessa Man Sentenced to 15 Years for Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Odessa, Mo., man was sentenced in federal court today for attempting to receive child pornography over the Internet.
Anthony O. Terry, 37, of Odessa, was sentenced by U.S. District Judge Gary A. Fenner to 15 years in federal prison without parole. The court also sentenced Terry to a lifetime of supervised release following incarceration.
On Sept. 16, 2014, Terry pleaded guilty to two counts of attempting to receive child pornography over the Internet.
On multiple occasions in December 2012 and January 2013 a law enforcement officer with the Nixa, Mo., Police Department identified Terry’s computer as making child pornography movies and images available for distribution through a peer-to-peer file-sharing network. Law enforcement officers executed a search warrant at Terry’s residence and seized several computers and hard drives.
Examiners found 300 images and two videos of child pornography on Terry’s computers. Also discovered were forensic artifacts indicating that video titles indicative of child pornography were at least partially downloaded onto one of Terry’s computers. An incomplete download of a video from a file-sharing program was recovered, which depicted a prepubescent girl with her mouth duct-taped being apparently kidnapped and taken to a bedroom where an adult male pulls down her pants.
According to court documents, Terry admitted to using multiple file-sharing programs over several years to obtain child pornography. He supplemented this peer-to-peer activity by using a photosharing option in Yahoo! Messenger to also obtain images of the sexual abuse of children.
There is evidence, say court documents, that Terry admitted to sending photos of underaged girls clothed or in bikinis, pretending to be one of the girls, to other underaged girls. Terry does not dispute that he created Yahoo! profiles of females to get males to chat with him online.
Court documents refer to numerous allegations involving the sexual abuse of his children and other children that have been reported to authorities. Terry’s parental rights were previously terminated.
This case was prosecuted by Assistant U.S. Attorney Teresa A. Moore. It was investigated by the Nixa, Mo., Police Department, the Odessa, Mo., Police Department, the Benton County, Mo., Sheriff’s Department and the FBI Cyber Crimes Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
North Fort Myers Felon Sentenced to Federal Prison for Possessing A Firearm and AmmunitionRead the Press Release
Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell has sentenced Joseph Alan Milkey (38, North Fort Myers) to 3 years and 10 months in federal prison for possessing a firearm and ammunition as a convicted felon. The Court also ordered him to forfeit the .40 caliber pistol and 8 rounds of ammunition that were involved in the commission of the offense. Milkey pleaded guilty in November 2015.
According to court documents, on August 28, 2015, a sergeant from the Fort Myers Police Department responded to a call concerning a male and female engaged in an argument in the parking lot of the Sports Authority store located at 2317 Colonial Boulevard. Upon arrival, the sergeant approached the vehicle and made contact with Milkey and the female, and asked if they were both okay. The sergeant then asked Milkey to exit the vehicle; instead, he attempted to flee. Soon thereafter, he was apprehended by officers. Milkey then pulled his arm free from the officers’ grasp, and reached into the waistband of his pants, where the sergeant observed a handgun. The firearm was secured by the officers and later identified as a Smith and Wesson .40 caliber pistol, loaded with eight rounds of ammunition.
At time of the incident, Milkey had multiple prior felony convictions and therefore was prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Fort Myers Police Department. It was prosecuted by Assistant United States Attorney Yolande G. Viacava.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Regina Lombardo, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Newport News Man Pleads Guilty to Heroin ConspiracyRead the Press Release
NEWPORT NEWS, Va. – Roosevelt Fox, aka Unc, 54, of Newport News, pleaded guilty today to conspiracy to possess with intent to distribute, and distribution heroin.
In a statement of facts filed with the plea agreement, Fox admitted to participating in a conspiracy involving between one kilogram and three kilograms of heroin that were distributed in Newport News and Hampton. On Aug. 27, 2015, Fox supplied heroin to an individual who overdosed and suffered serious bodily injury. The individual survived the overdose and Fox continued to sell the individual heroin.
Fox was indicted by a federal grand jury on Feb. 10, 2016, and faces a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison sentenced on June 17, 2016. 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; Karl C. Colder, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Washington Field Division; and Richard W. Myers, Chief of Newport News Police, made the announcement after the plea was accepted by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorneys Howard J. Zlotnick and Lisa McKeel are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:15-cr-96.