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Monday 11 January 2016
Sacramento Dentist Pleads Guilty to Billing for Unnecessary or Unperformed Dental WorkRead the Press Release
SACRAMENTO, Calif. — David M. Lewis, 62, of Sacramento, pleaded guilty today to health care fraud for his role in a scheme to defraud the health care benefit program used by United Parcel Service (UPS) employees, United States Attorney Benjamin B. Wagner announced.
According to court documents, beginning in late 2008 or early 2009, Lewis, a dentist practicing in Sacramento, began targeting UPS employees for dental treatment because their health care plan under the Northern California General Teamsters Security Fund provided 100 percent coverage without any annual limits. Lewis offered cash and other incentives to UPS patients for receiving dental treatment or for recruiting other UPS employees to receive such treatment.
In some instances, Lewis caused claims to be submitted to Delta Health Systems, which administered the UPS health care plan, that falsely billed the plan for work that was never performed. In many other instances, Lewis performed unnecessary dental work on UPS employees, including root canals, and claims were submitted to Delta for payment for these unnecessary services.
Lewis created false narratives for dental work that was not performed or created false statements about purported pre-existing dental conditions to justify the work performed. In some instances, Lewis drilled into teeth to install temporary filings and instructed his assistants to take X-rays of the temporary filings. Lewis then submitted claims to Delta with X-rays of the temporary fillings, falsely claiming that the X‑rays depicted tooth decay justifying further restorative procedures.
The total loss associated with Lewis’s health care fraud may be as high as $1 million.
An employee at Lewis’s dental practice, Nichol Ramirez aka Nichol Lomack, previously pleaded guilty to one count of health care fraud for her part in the fraud scheme. (2:14-cr-056 MCE)
These cases are the product of an investigation by the U.S. Department of Labor, Office of Inspector General-Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor, Employee Benefits Security Administration, with assistance from the California Dental Board and the California Attorney General’s Office. Assistant United States Attorney Todd A. Pickles is prosecuting the cases.
Lewis is scheduled to be sentenced by United States District Judge Morrison C. England Jr. on March 31, 2016, and Lomack is scheduled to be sentenced on September 1, 2016. Both Lewis and Lomack face a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice the gross loss or gain of the scheme. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Quincy Man Sentenced to 15 Years for Two Bank RobberiesRead the Press Release
Jacksonville, Florida – United States District Judge Marcia Morales Howard today sentenced Kenneth Lamar Ellington (47, Quincy) to 15 years in federal prison for committing two bank robberies. He was also ordered to pay $4,105 in restitution. A federal jury found Ellington guilty in July 2015.
According to evidence presented at trial, on the morning of April 9, 2014, Ellington robbed a branch of TD Bank in Live Oak, Florida using a demand note and indicating that he had a weapon in his waist, which was not recovered. At the time of the robbery, he was wearing a hat and a fake beard. Upon exiting that bank, Ellington dropped the cash after a dye pack exploded.
Approximately three hours after the first robbery, Ellington entered the First Federal Bank of Florida, also in Live Oak, wearing the same disguise. He again presented a demand note to a teller, and stated “Hurry up and no one will get hurt.” Ellington escaped from the second bank with $4,105.
Soon after the robbery, a witness in a nearby business’s parking lot found a garbage bag containing Ellington’s disguise and the shirt that he had worn during both robberies. Florida Department of Law Enforcement analysts located Ellington’s fingerprint on the garbage bag, along with his DNA on the disguise and shirt. In addition, a witness recalled seeing a black Dodge Charger parked before the robbery at the location where Ellington’s disguise was later recovered. When Ellington was arrested on April 14, 2014, he was driving a black Dodge Charger.
Ellington also faces a separate criminal proceeding in federal court in Tallahassee for violating his supervised release. In April 2014, at the time of the Live Oak bank robberies, Ellington was on federal supervised release in the Northern District of Florida for prior felony convictions.
This case was investigated by the Live Oak Police Department, the Suwanee County Sherriff’s Office, the Perry Police Department, the Florida Department of Law Enforcement, and the Jacksonville office of the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Dale R. Campion and Michael J. Coolican.
Postal Employee Gets Probation with Community Confinement for Mail TheftRead the Press Release
PITTSBURGH - A resident of Westmoreland County, Pennsylvania, has been sentenced in federal court to five years of probation and six months community confinement on his conviction of theft of mail matter by postal service employee, United States Attorney David J. Hickton announced today.
United States District Judge Nora Barry Fischer imposed the sentence on Frank J. Rysz, 49, of Latrobe, Pa..
According to the information presented to the court, Rysz engaged in the theft of three first class letters and their valuable contents from the U.S. mails. Rysz also took one advertisement from the U.S. mails.
Assistant United States Attorney Paul E. Hull prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the U.S. Postal Service-Office of Inspector General for the investigation leading to the successful prosecution of Frank J. Rysz.
Payroll Service Company Owner Admits to Stealing Money Set Aside by Clients to Pay Federal and State TaxesRead the Press Release
Baltimore, Maryland – Kevin Carden, age 55, formerly of Bel Air, Maryland, pleaded guilty today to wire fraud and to filing a false tax return, arising from a scheme to steal money from his clients and the IRS. The guilty plea was entered just before Carden’s trial was scheduled to begin.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
“When customers realized that the money they entrusted to AccuPay was not being used as intended to pay their taxes, Kevin Carden misled them with false cover stories,” said U.S. Attorney Rod J. Rosenstein. “What really happened was that Kevin and Beverly Carden took money intended for the IRS and spent it themselves, causing millions of dollars in losses to their customers.”
According to his plea agreement, until its closure in March 2013, Kevin Carden and his wife, Beverly Carden operated AccuPay, Inc. which provided payroll and payroll tax services to small and medium businesses. Kevin Carden ran the company’s “tax department,” which was responsible for handling the employment tax portion of the business. AccuPay received funds from its clients that it held in trust to pay over to the IRS and the Comptroller of Maryland for AccuPay’s clients’ employment taxes. Kevin Carden was responsible for transferring the client funds to make the required tax payments.
During the course of the fraud scheme, which Kevin Carden admitted lasted from 2010 to March 2013, AccuPay withdrew from the clients’ funds the full amount of payroll taxes owed, but then paid the taxing authorities only a portion of the funds. While AccuPay falsely represented to its clients that it paid all of the taxes owed, in fact, Beverly Carden diverted some of those funds to a joint personal bank account that she and her husband maintained which the couple then used to pay personal expenses.
Because of the Cardens’ failure to fully pay existing tax obligations owed by their clients, both the federal and state taxing authorities imposed interest and penalties on AccuPay’s clients, thereby further increasing the magnitude of their tax obligations. Thus, the payments that the Cardens did make to the taxing authorities in part were being applied to pay interest charges and penalties imposed as a result of underpayments earlier in the scheme.
The Cardens used various methods to cover up their diversion of funds and to allay their clients’ concerns when they learned that the taxing authorities had apparently not been paid the full amounts they were supposed to receive. For example, in the instances in which AccuPay’s clients confronted employees at AccuPay about the underpayment of their taxes, Kevin Carden either told those clients that the underpayment would be addressed or (in some cases) avoided their inquiries. Kevin Carden further represented to those clients with whom he spoke that the underpayment was due to (1) a mistake by the taxing authority; (2) an error made by AccuPay employees; and/or (3) problems with the software AccuPay used to file tax returns. These representations were often untrue.
In addition, as a further means of covering up their diversion of funds and allaying their clients’ concerns, in late 2011 AccuPay sent a letter to their clients stating that they had hired a Chief Financial Officer (CFO) to audit all tax deposits and filings for all tax clients back to 2009 “for correctness, compliance, and completeness.” In fact, that individual was not AccuPay’s CFO, but rather was an independent tax preparer the Cardens had hired to prepare their own personal taxes and the corporate taxes of AccuPay, rather than those of the clients.
In 2012, a client of AccuPay confronted representatives of AccuPay with the fact that the company had failed to pay over $300,000 in taxes owed from 2008 to 2012. In response, AccuPay paid the client’s tax deficiencies.
Kevin Carden admits that the amount of loss arising from this scheme is at least $250,000, but the government will argue that the loss amount is approximately $2.6 million.
Carden also admits that he filed a false individual tax return for 2011 in which he did not report the amount of payroll taxes that had been diverted from AccuPay’s clients to the Cardens’ personal account. Kevin Carden admits that the amount of loss arising from the false tax return offense is between $40,000 and $100,000, but the government will argue that the loss amount is approximately $144,720.
As part of his plea agreement, Kevin Carden will be ordered to pay restitution in the full amount of the victims’ losses, including both the IRS and the individual clients of AccuPay.
Kevin Carden faces a maximum penalty of 20 years in prison for wire fraud, and a maximum of three years in prison for filing a false tax return. U.S. District Judge Marvin J. Garbis scheduled sentencing for May 18, 2016, at 10:00 a.m.
Beverly Carden, age 53, formerly of Bel Air, Maryland, previously pleaded guilty to mail fraud and filing a false tax return, and is also scheduled to be sentenced on May 18, 2016, at 10:00 a.m.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the IRS - Criminal Investigation and FBI for their work in the investigation. Mr. Rosenstein praised the Bel Air Police Department for their assistance in the investigation, and thanked Assistant U.S. Attorneys Evan T. Shea and Jefferson M. Gray, who are prosecuting the case.
One Man Sentenced, another Pleads Guilty, in Steroid Manufacturing and Distribution ConspiracyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JASON CHICKOS, 46, of Bridgeport, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to two years of probation for his role in a steroid manufacturing and distribution ring. Judge Chatigny also ordered CHICKOS to perform 120 hours of community service and pay a $1000 fine. Another member of the conspiracy, ALEX KENYHERCZ, 29, of Ansonia, also pleaded guilty today in Hartford federal court.
According to court documents and statements made in court, a long-term investigation led by the Federal Bureau of Investigation, Drug Enforcement Administration and Homeland Security Investigations revealed that Steven Santucci, a former Newtown Police sergeant, and others were receiving shipments of steroid ingredients from China and manufacturing and distributing wholesale quantities of steroids. The investigation also revealed that certain members of the conspiracy were distributing prescription pills, including oxycodone, as well as cocaine.
CHICKOS and KENYHERCZ purchased anabolic steroids from Santucci and distributed them to others. KENYHERCZ also illegally distributed prescription medication, including Roxicodone, Oxycodone, Suboxone and Opana.
At the time of the offense, CHICKOS was employed as a civilian dispatcher with the Newtown Police Department.
During the course of the investigation, law enforcement officers seized hundreds of vials of steroids, approximately 600 grams of raw testosterone powder, approximately 350 grams of powder cocaine, and four long guns.
On October 19, 2015, CHICKOS pleaded guilty to one count of conspiracy to distribute anabolic steroids.
KENYHERCZ pleaded guilty to one count of conspiracy to distribute oxycodone. He is scheduled to be sentenced by Judge Chatigny on April 14, 2016, at which time he faces a maximum term of imprisonment of 20 years.
On December 9, 2015, Santucci pleaded guilty steroid distribution and money laundering offenses. He awaits sentencing.
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations, with the assistance of the U.S. Marshals Service, U.S. Postal Inspection Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant U.S. Attorneys Rahul Kale and Robert M. Spector.
Ohio man sentenced for Federal health care fraudRead the Press Release
HUNTINGTON, W.Va. – An Ohio man was sentenced today in federal court to three years of probation for health care fraud, announced Acting United States Attorney Carol Casto. Joshua Petrie, 36, of Proctorville, Ohio, previously pleaded guilty to the federal crime in September of 2015.
In 2009 and 2010, Petrie admitted that he worked as a sales representative and fitter for several out-of-state companies that sold and distributed back and knee braces from a medical practice in West Virginia. Petrie created fraudulent documents falsely showing that he provided braces to patients. The falsified documents included a certification from a physician indicating that the physician had ordered the braces for individual Medicare patients. In order to further the scheme, Petrie used a copy of the physician’s signature instead of an original signature. The fraudulent documents also included a delivery ticket with a signature line for patients to acknowledge receipt of the braces. Petrie forged patients’ signatures to the delivery tickets to make it appear that patients had actually received the braces. Petrie was paid in part based on the amount of his sales and therefore received additional income for each sale that he falsified. The fraudulent paperwork was used to illegally bill Medicare for approximately $38,000.
The investigation was conducted by the U.S. Department of Health and Human Services’ Office of Inspector General and the West Virginia Medicaid Fraud Control Unit. Assistant United States Attorneys Eric Bacaj and Meredith George Thomas are handling the prosecution. Chief United States District Judge Robert C. Chambers imposed the sentence.
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Neosho Man Pleads Guilty to Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Neosho, Mo., man pleaded guilty in federal court today to receiving and distributing child pornography over the Internet.
Larry Don Hilburn, 29, of Neosho, pleaded guilty before U.S. District Judge M. Douglas Harpool to the charge contained in a June 16, 2015, federal indictment.
According to today’s plea agreement, investigators with the Southwest Missouri Cyber Crimes Task Force identified Hilburn’s computer as sharing videos of child pornography through a peer-to-peer file-sharing network. Officers executed a search warrant at Hilburn’s residence and seized his computer, which contained numerous image and video files depicting the sexual abuse of children.
Under the terms of today’s plea agreement, the government will not seek a sentence of more than 10 years in federal prison without parole and Hilburn will not seek a sentence of less than five years in federal prison without parole. Hilburn may also be ordered to pay restitution to his victims. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and the Southwest Missouri Cyber Crimes Task Force.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Multiple defendants plead guilty to Federal heroin crimes in HuntingtonRead the Press Release
HUNTINGTON, W.Va. – Three defendants pleaded guilty today in federal court to various heroin crimes, announced Acting United States Attorney Carol Casto.
Eddie William Randall, 36, of Detroit, pleaded guilty to possession with intent to distribute 100 grams or more of heroin and to possession of a firearm in furtherance of a drug trafficking crime. Krishauna Deshay Brown, 37, of Huntington, pleaded guilty to possession with intent to distribute a quantity of heroin. From December 2014 until their arrests in 2015, Randall, Brown and others conspired to distribute heroin that was transported from Detroit to the Huntington area.
Brown resided at 209 West 9th Avenue in Huntington, and she allowed Randall to store and distribute heroin from her residence. On February 26, 2015, officers with the Huntington FBI Drug Task Force executed a search warrant at Brown’s residence and seized heroin, along with other paraphernalia used to sell heroin. Brown admitted that she possessed the heroin at her residence and intended to distribute it. She faces up to 20 years in federal prison when she is sentenced on April 11, 2016.
On June 25, 2015, officers executed search warrants at 2736 Rear 4th Avenue and 1128 25th Street in Huntington. Officers utilized a confidential informant to make several controlled purchases of heroin from Randall in and around those residences leading up to the search. Officers located Randall inside the 4th Avenue residence and seized approximately 40 grams of heroin, a loaded 9mm pistol, and $13,030 in cash. During the search of the 25th Street residence, officers seized approximately 280 grams of heroin and a loaded .45 caliber pistol. Randall admitted that he possessed the heroin from both residences for distribution and that he possessed the pistols in an effort to protect himself from theft or robbery of heroin or cash. Randall faces a mandatory minimum of 10 years to life in federal prison when he is sentenced on April 11, 2016.
As the result of a separate drug investigation, Terrance Donte Hensley, 20, of Huntington, pleaded guilty to distribution of heroin. Hensley admitted that on five occasions between June 26 and July 9, 2015, he distributed heroin at various locations in Hurricane and Huntington to a confidential informant working with law enforcement. Hensley faces up to 20 years in federal prison when he is sentenced on April 11, 2016.
The investigation of Brown and Randall was conducted by the Huntington FBI Drug Task Force, the Huntington Police Department and the Cabell County Sheriff’s Department. Assistant United States Attorney Joseph F. Adams is in charge of the prosecutions of Brown and Randall. The investigation of Hensley was conducted by the Metropolitan Drug Enforcement Network Team and the DEA Task Force. Assistant United States Attorney Jennifer Rada Herrald is in charge of the prosecution of Hensley. These plea hearings were held before Chief United States District Judge Robert C. Chambers.
These cases are part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
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Modesto Man Sentenced in Two Mortgage Fraud SchemesRead the Press Release
FRESNO, Calif. — Tony Huy Havens, 42, of Modesto, was sentenced Monday by United States District Judge Lawrence J. O'Neill to three years and five months in prison for his role in two mortgage fraud schemes, United States Attorney Benjamin B. Wagner announced.
Havens had earlier pleaded guilty to committing mail fraud and wire fraud in the two schemes, which were charged in separate criminal cases.
According to the indictment in the first scheme, Havens devised an “advance fee” scheme that targeted victims in at least eight states who were seeking multi-million dollar loans for large construction projects that were in danger of foreclosure. Havens provided the victims with fraudulent documents that showed a third-party lender was prepared to make a loan to the victim. On Havens' instructions, the victims wire-transferred money into a bank account controlled by Havens to pay in advance certain costs associated with the loans. No loans were ever made. In total, Havens represented that he could arrange at least $1.1 billion in financing for at least 15 victim borrowers, and collected at least $248,750 by wire transfers from these victim borrowers.
According to the indictment in the second scheme, Havens arranged to purchase a single family residence in Modesto using two relatives as straw buyers. He obtained a loan in the name of the straw buyers that exceeded the actual selling price of the property, and arranged to have a portion of the purchase price sent back to him, which he used as the down payment for the purchase.
The cases were the product of investigations by the Federal Bureau of Investigation, the Stanislaus County District Attorney's Office, and the Federal Housing Financing Agency, Office of Inspector General. Assistant United States Attorneys Mark J. McKeon and Mia Giacomazzi prosecuted the cases.
Havens was ordered to self-surrender to begin serving his sentence on April 4, 2016.
Marion County, WV man sentenced for unlawful possession of firearmsRead the Press Release
CLARKSBURG, WEST VIRGINIA – Gerald A. Swiger, 31, of Fairmont, West Virginia, was sentenced to 41 months in prison for unlawful possession of firearms, United States Attorney William J. Ihlenfeld, II, announced.
Swiger was previously convicted of the felony offense of “Breaking and Entering” in the Circuit Court of Marion County, West Virginia. As a result of that felony conviction, he is prohibited from possessing firearms. He was discovered in August 2014 in unlawful possession of two firearms. He pled guilty in September 2015 to one count of “Felon in Possession of Firearm.”
Assistant U.S. Attorney David Perri prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. District Judge Irene M. Keeley presided.
Major U.S. Airline Pilot Who Holds Global Entry Card Charged with Bulk Cash Smuggling, Making False StatementsRead the Press Release
NEWARK, N.J. – A United States commercial airline pilot who holds a U.S Customs and Border Protection (CBP) Global Entry Card was arrested yesterday morning after allegedly attempting to smuggle $195,736 in undeclared currency into the country, U.S. Attorney Paul J. Fishman announced.
Anthony Warner, 55, of Dallas, Texas, was arrested at Newark Liberty International Airport by special agents of Immigration and Customs Enforcement’s Homeland Security Investigations after arriving as a passenger on a flight from Mumbai, India. He is charged by complaint with one count of bulk cash smuggling and one count of making false statements. He made his initial appearance before U.S. Magistrate Judge Steven C. Mannion and was released on $100,000 bond.
According documents filed in this case and statements made in court:
Global Entry is a CBP program that allows expedited clearance upon arrival in the United States for pre-approved travelers who have been determined to be low-risk. Pre-approval must be completed before enrollment, and the process includes a background check and an in-person interview. At airports, program members proceed to Global Entry kiosks, present their machine-readable passport or U.S. permanent resident card, place their fingers on the scanner for fingerprint verification, and complete a Customs verification. The kiosk issues the traveler a transaction receipt and directs the traveler to baggage claim and the exit.
When Warner arrived at Newark Liberty International Airport, the Global Entry computer system was not functioning, so he presented his customs declaration to a CBP officer. CBP’s screening determined that he was carrying a laptop-style bag that contained $195,736 in United States currency wrapped in newspaper. He also had 10 rings, four sets of earrings, and other assorted jewelry of undetermined value.
Warner’s possession of currency was contrary to the statements in his customs declaration and verbal statements
Count One of the complaint carries a maximum term of imprisonment of five years and a fine of $250,000. Count two of the complaint, bulk cash smuggling, carries a maximum term of imprisonment of five years and forfeiture of all property involved in the offense.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s Homeland Security Investigations, Newark Division, under the direction of Special Agent in Charge Terence S. Opiola, and U.S. Customs and Border Protection, under the leadership of Robert E. Perez, Director, New York Field Office, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the OCDETF/Narcotics Unit in Newark.
Defense counsel: Jeffrey Altman and Steven Altman Esqs., New Brunswick, New Jersey
Judge Sentences Defendant for Violation of the Computer Fraud and Abuse ActRead the Press Release
Yijia Zhang, a permanent resident of the United States, and a citizen of the People’s Republic of China, today was sentenced to 31 months in prison by the Hon. Legrome D. Davis, for a violation of the Computer Fraud and Abuse Act, announced United States Attorney Zane David Memeger. Zhang had worked for a financial services company and had stolen a large number of electronic documents from his employer. (The documents included some that would have told how to access the company’s computer network. The government found no evidence that the files had been passed to anyone else, nor did it find any evidence that any of the information had been used to harm the company. In addition, no customer information was taken.) To cover his tracks, in July 2010, Zhang deleted a large number of files from the server he had used to effectuate the theft, causing the server to stop working and its log files to be overwritten. The log files would have given evidence of his theft. Zhang pled guilty to the charge in October of 2015.
The sentence imposed by the Court was within the range recommended by the United States Sentencing Guidelines. In addition to the prison term, Judge Davis ordered the defendant to make restitution to his former employer of $100,000.
The case was investigated by the Federal Bureau of Investigation, and was prosecuted by Assistant United States Attorney Michael L. Levy.
Jacqueline Stanfill Pleads Guilty to Fraud and Money Laundering ChargesRead the Press Release
KNOXVILLE, Tenn. – On Jan. 11, 2016, Jacqueline J. Stanfill, 58, of Knoxville, Tenn., pleaded guilty to wire fraud, mail fraud and money laundering, charges contained in a July 2015 federal indictment, before the Honorable Leon Jordan, Senior U.S. District Judge. A date for sentencing has not yet been set.
Stanfill faces potential sentences of: up to 20 years in prison, a fine of up to $250,000, and supervised release of up to three years for the wire fraud charge; up to 20 years in prison, up to a $250,000 fine, and supervised release of up to three years for the mail fraud charge; and up to 10 years in prison, a fine of up to $500,000 or twice the value of the property involved in the transaction (whichever is greater) and supervised release of up to three years for the money laundering violation. According to terms included in the plea agreement, the court will be asked to order the sentences imposed to run concurrently. Restitution to the victims of her crimes as well as forfeiture of assets gained through her illegal acts may also be ordered by the court.
Stanfill was the owner and operator of Stanfill Wealth Management in Knoxville. In the plea agreement on file with the U.S. District Court Clerk, Stanfill admits that she claimed to invest her clients’ money with legitimate investment companies; however, she converted the funds to her own personal use. In order to maintain the confidence of her clients, she created phony documents that had the appearance of account statements and correspondence from Charles Schwab and Co., Inc. She further attempted to maintain the confidence of her clients by making payments either under the guise of returning invested funds and accumulated earnings, and/or by sending funds to the Internal Revenue Service to maintain the illusion that the client’s fictitious investments were tax-deferred.
The investigation, which led to the indictment of Stanfill, was conducted by the FBI and IRS. Assistant U.S. Attorneys Frank Dale and Jennifer Kolman represent the United States.
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IRS Employee Pleads Guilty to Tax FraudRead the Press Release
FRESNO, Calif. — Yolanda Castro, 48, an employee of the U.S. Internal Revenue Service in Fresno, pleaded guilty today to aiding and assisting in the preparation of a false tax return, United States Attorney Benjamin B. Wagner announced.
According to court documents, Castro was employed by the IRS for approximately 20 years, including as a tax examiner and contact representative. Between 2007 and 2013, she prepared and filed false federal income tax returns for herself, her family members and others in which she fraudulently claimed tax deductions and credits. For instance, on her own 2008 tax return, Castro claimed a credit for education expenses that she did not incur, and provided the IRS phony textbook receipts to support the claim. Likewise, in tax returns she prepared for herself and others, Castro claimed child care expenses that had not been incurred.
This case is the product of an investigation by the U.S. Department of the Treasury Inspector General for Tax Administration and the IRS‑Criminal Investigation. Assistant United States Attorney Mark J. McKeon is prosecuting the case.
Castro is scheduled to be sentenced by Judge Dale A. Drozd on April 4, 2016. Castro faces a maximum statutory penalty of three years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Fresno Woman Sentenced to Prison for Embezzling over Half a Million Dollars from Law FirmRead the Press Release
FRESNO, Calif. — Shelley Corkins, aka Shelley Kimbrell, 39, of Fresno, was sentenced Monday by Senior United States District Judge Anthony W. Ishii to two years and three months in prison for three counts of wire fraud in connection with a scheme to embezzle more than $585,000 from the law firm that formerly employed her, United States Attorney Benjamin B. Wagner announced.
According to court documents, Corkins was employed by a Fresno-based law firm as a bookkeeper and accounting department supervisor. Between January 2008 and May 2012, Corkins abused her access and authority to manage the law firm’s finances and embezzled the law firm’s money for her own personal use. Corkins used her company credit card to make personal purchases at various retail outlets, including clothing and toy stores, electronically transferred funds from the law firm’s bank accounts to her own, and embezzled the law firm’s petty cash. Corkins pleaded guilty to three counts of wire fraud on February 10, 2015.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Henry Z. Carbajal III and Christopher D. Baker prosecuted the case.
Fremont Woman Sentenced for Mail FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that Marian Korbelik, age 67, of Fremont, Nebraska, was sentenced today to one year and one day imprisonment by the Honorable Laurie Smith Camp, for mail fraud. On October 19, 2015, she pled guilty to the charge in federal district court. Ms. Korbelik was also ordered to serve a three-year term of supervised release upon her release from prison and to pay $64,022.11.00 in restitution.
Korbelik, while living in Nebraska, was the part-time bookkeeper for Piedmont Orthopedic Lab, a company in South Carolina. On numerous occasions from 2006 through 2011 she sent falsified financial reports to the owners of Piedmont. The reports indicated certain amounts had been expended in particular months for legitimate expenses of Piedmont when in fact the expenditures had not been made. Ms. Korbelik wrote checks to herself disguised as legitimate business expenses.
This case was investigated by the Federal Bureau of Investigation.
Fort Worth Man Sentenced to 210 Months in Federal Prison for Distributing Child PornographyRead the Press Release
FORT WORTH, Texas — Erick Mayorga, of Fort Worth, Texas, was sentenced this morning by U.S. District Judge Reed C. O’Connor to 210 months in federal prison, following his guilty plea in June 2015 to one count of distribution of a visual depiction of a minor engaged in sexually explicit conduct. Today’s announcement was made by U.S. Attorney John Parker of the Northern District of Texas.
Mayorga, 36, has been in custody since his arrest in May 2015 on a related federal criminal complaint.
According to documents filed in the case, FBI special agents received information that the subject of a separate child pornography investigation had received child pornography via email from a specific hotmail.com email user, later determined to be Mayorga. A search warrant was executed at Mayorga’s residence in early May 2015, and Mayorga admitted that he used his email account to distribute child pornography.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s 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 sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The FBI investigated and Assistant U.S. Attorney A. Saleem prosecuted.
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Former State Representative’s Cash Stash GrowsRead the Press Release
BOSTON – The U.S. Attorney’s Office, working with the U.S. Marshals Service and the Internal Revenue Service, have recovered more than an additional $1 million in cash as well as jewelry and luxury watches as a result of seizures Thursday, Jan. 7, 2016 and in late December 2015. In total, more than $2.5 million in concealed cash and other valuables have been recovered from safe deposit boxes controlled by John George, a former Dartmouth Selectman and State Representative. George was convicted and sentenced in 2015 on federal charges related to his embezzlement from a taxpayer-subsidized bus company which he controlled.
Thursday, special agents with the IRS seized over $800,000 in cash, as well as four Rolex watches and jewelry from three safe deposit boxes controlled by George. In several related seizures in December, U.S. Marshals discovered over $1.6 million in cash.
The money was recovered from seven safe deposit boxes filled with cash tied up in rolls of $100s, $50s, and other denominations. The safe deposit boxes were located at three banks in New Bedford and Fairhaven. Thursday’s actions followed court authorization to recover the additional funds discovered while executing the original search and seizure warrants in December.
George, 68, was sentenced to 70 months in prison in July 2015 for embezzling hundreds of thousands of dollars from the Southeastern Regional Transit Authority (SRTA).
George owned Union Street Bus Company (USBC), a New Bedford-based company that operated public buses. During the same period, George operated John George Farms (JG Farm), a large produce farm based in Dartmouth. From approximately 1991 to 2011, USBC was awarded the Southeastern Regional Transit Authority (SRTA) contract to operate the SRTA public bus system that served a region that included New Bedford, Fall River, and several other neighboring towns.
While USBC had the SRTA contract, George conspired to have USBC employees work at JG Farm during their assigned USBC work hours. Such farm work included plowing, loading produce, and operating a produce stand at JG Farm, all during USBC business hours. As part of the conspiracy, George deployed USBC workers to JG Farm to repair farm equipment and used USBC equipment and labor to provide personal out-of-state roadside assistance. George also inflated his final yearly salary from $75,000 to $275,000 in an attempt to fraudulently boost his SRTA pension.
From 2007 to 2011, George deposited only $5,000 in cash into his JG Farm business checking account despite the fact that JG Farm was the largest retail produce farm in Southeastern Massachusetts and did most of its business in cash.
Prior to his July 2015 sentencing, George was required to disclose his financial status to the Court. At that time, he stated that his liquid assets only consisted of about $160,000 in bank accounts and approximately $28,000 in cash.
United States Attorney Carmen M. Ortiz, William P. Offord, Special Agent in Charge of the IRS-Criminal Investigation and John Gibbons, U.S. Marshal for the District of Massachusetts, made the announcement today. The criminal forfeiture was handled by Assistant U.S. Attorney Doreen Rachal of Ortiz’s Asset Forfeiture Unit working in conjunction with the U.S. Marshal’s Asset Forfeiture Unit. The criminal case was investigated by the U.S. Department of Transportation, Office of the Inspector General, and was prosecuted by Assistant U.S. Attorneys Dustin Chao and Ryan M. DiSantis of Ortiz’s Public Corruption Unit.
Former SCHOOL TEACHER Pleads guily in child pornography caseRead the Press Release
GREENVILLE – The United States Attorney’s Office for the Eastern District of North Carolina announces that in federal court today, WILLIAM EDWARDSON, JR., 56, of Jacksonville, pled guilty before United States Magistrate Judge Kimberly A. Swank to receipt of child pornography, in violation of Title 18, United States Code, Section 2252 (a) (2).
On September 2, 2015, a Federal Grand Jury returned a Criminal Indictment charging EDWARDSON. At the time, EDWARDSON was a teacher and soccer coach at Trexler Middle School in Richlands, North Carolina.
According to the investigation, law enforcement identified an IP address downloading and sharing child pornography via the peer-to-peer network, Shareaza. As the investigation progressed, the address and user were identified as EDWARDSON. EDWARDSON was interviewed and admitted to downloading visual depictions of minor children engaging in sexually explicit conduct.
Investigation of this case was conducted by the NC State Bureau of Investigation. Assistant United States Attorney Ethan Ontjes represented the government. This case was accepted for federal prosecution as part of Project Safe Childhood.
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News releases are available on the U. S. Attorney’s webpage at www.usdoj.gov/usao/nce within 48 hours of release.
Former Real Estate Associate Convicted of Bank Fraud in Tampa Mortgage SchemeRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Joseph L. Pasquale (39, Fort Myers) guilty of one count of conspiracy to commit bank fraud and four counts of bank fraud. He faces a maximum penalty of 30 years’ imprisonment for each count. His sentencing hearing has been scheduled for April 8, 2016.
According to testimony and evidence presented at trial, Pasquale worked as a real estate sales associate for a brokerage firm based in Cape Coral. Between October 2007 and March 2008, he was involved in the negotiation and sale of four condominium units at the Arbors of Carrollwood, to clients in California and Massachusetts. Pasquale engaged in a conspiracy to conceal sales incentives from mortgage lenders, which these clients received from the seller, along with private loans that Pasquale made to the buyer-clients enabling them to bring cash to their respective real estate closings. As a consequence of his actions, Pasquale helped to cause a loss of approximately $937,000 to Wells Fargo Bank when the mortgages involved in the case went into foreclosure.
This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency-Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay L. Hoffer.
Former Police Chief Convicted of Selling Ammunition to Illegal AlienRead the Press Release
Montgomery, Ala. – The former Chief of Police for the town of Franklin, Alabama, was convicted of selling ammunition to an illegal alien after a three-day jury trial in federal court last week, announced George L. Beck, Jr., the United States Attorney for the Middle District of Alabama.
The evidence presented at trial showed that Michael T. Clements (57) ran a side business out of his home selling computers, iPhones, flat screen TV’s, and various other items while working as the Franklin Police Chief. Franklin is a small community located near Tuskegee in Macon County. Clements became the target of a federal investigation after the FBI, working with the Auburn Police Department, received information that he was selling stolen property and firearms. Through the use of a confidential informant, the FBI was able to purchase a stolen laptop and obtain a video of Clements brokering the sale of a firearm and ammunition to an illegal alien.
At trial, the evidence revealed that Clements negotiated the sale of a firearm to a Mexican national illegally in the country even after the alien had provided Clements with an identification card written entirely in Spanish and issued by a Mexican governmental entity. The evidence further proved that Clements then sold the ammunition after the alien told him that he attempted to purchase ammunition for the gun at a store, but could not do so because he was in the country illegally.
“For citizens to have confidence in their government, public corruption cannot be tolerated,” stated U.S. Attorney Beck. “As a public official, Mr. Clements was a guardian of the public trust. Thankfully, an overwhelming majority of law enforcement officers honorably serve their communities every day.”
Clements faces a maximum sentence of 10 years in prison, a $250,000 fine, and three years of supervised release. His sentencing hearing is scheduled for April 28, 2016.
The investigation of this case was a joint effort of the FBI and the Auburn Police Department working on the FBI’s Safe Streets Task Force. The Tuskegee Police Department and the Alabama Bureau of Investigation also provided support for this investigation. The case was prosecuted by Assistant United States Attorneys Brandon K. Essig and John Geer.
Former Idaho Construction Company President Sentenced to Prison for Fraud SchemeRead the Press Release
The former president and majority stockholder of a construction company was sentenced to five years in prison today following her plea of guilty to filing a false tax return and her conviction by a jury of conspiracy to defraud the United States, wire fraud, mail fraud, false statements, interstate transportation of property taken by fraud, conspiracy to obstruct justice and obstruction of justice, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Wendy J. Olson for the District of Idaho.
Elaine Martin, 69, of Meridian, Idaho, was the president of MarCon Inc., a construction company based in Meridian. In September 2013, after a 26-day jury trial, Martin was convicted of tax and fraud charges and sentenced to 84 months in prison. In August 2015, the U.S. Court of Appeals for the Ninth Circuit vacated Martin’s sentence and her tax conviction and remanded for resentencing and further proceedings on the tax charge. Today, Martin pleaded guilty to filing a false tax return and U.S. District Judge B. Lynn Winmill of the District of Idaho sentenced her to 60 months in prison on both the tax and fraud charges. In addition to the prison term, Judge Winmill ordered Martin to pay restitution to the Internal Revenue Service (IRS) and Idaho Department of Transportation in the amount of $131,400.48, costs of prosecution in the amount of $22,859.60 and a forfeiture money judgment of $3,084,038.05, amounts Martin previously paid.
In the plea agreement, Martin admitted that she willfully signed false and fraudulent corporate income tax returns for Marcon Inc. for tax years 2005 and 2006. Martin also admitted that she caused these tax returns to be false and fraudulent by keeping the unreported income off of the books and that she falsely told an IRS revenue agent, who was conducting a civil audit of Marcon, that all of Marcon’s gross receipts were deposited into its Wells Fargo operating account, when in fact, Martin was diverting and depositing gross receipts into Marcon’s Bank of Cascades account. Martin withheld the records for Marcon’s Bank of Cascades from the individual who prepared her and Marcon’s tax returns for tax years 2005 and 2006. Martin admitted that the total tax loss was $73,678.
Martin also admitted to conspiring to defraud the SBA 8(a) Program and the U.S. Department of Transportation, Disadvantaged Business Enterprise (DBE) Program, by submitting fraudulent tax returns and making false statements concerning her finances that caused Marcon to qualify and/or remain eligible for these programs. Martin further admitted that her behavior affected the award of contracts pursuant to the 8(a) Program and DBE Programs. For example, Marcon’s status as an Idaho DBE affected how and what DBE goals were set for particular construction projects and helped Marcon maintain a virtual monopoly in its geographic region between 2000 and 2006. Marcon participated in the SBA 8(a) Program pursuant to direct negotiations with the awarding agency, rather than through fair and open competition. Martin admitted that during the relevant time period, she would not have been awarded the 33 contracts at issue in the case but for the fraud.
As part of the plea agreement that Martin entered into today, she waived her right to further appeal.
Assistant Attorney General Ciraolo and U.S. Attorney Olson thanked special agents of IRS-Criminal Investigation, the FBI, the Office of Inspector General for the U.S. Small Business Administration and the Office of Inspector General for the U.S. Department of Transportation, who investigated the case and Trial Attorney Gregory Bernstein and former Trial Attorney Katherine Wong of the Tax Division and Assistant U.S. Attorney Raymond Patrico of the District of Idaho, who prosecuted the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Former Allentown Finance Director Admits to Rigging City Contract AwardRead the Press Release
PHILADELPHIA – Garret Strathearn, 68, of Sea Girt, NJ, pleaded guilty today to conspiracy to commit mail and wire fraud while serving as the Finance Director for the City of Allentown, PA.
Strathearn admitted that he personally and directly interfered with the awarding of a city contract, at the behest of Public Official #3 who was receiving campaign contributions from the eventual contract awardee. Strathearn and Assistant City Solicitor Dale Wiles, who previously pleaded guilty, corruptly manipulated the process for awarding the City of Allentown’s 2014 revenue collection contract with the approval of, and for the benefit of, Public Official #3. Strathearn and Wiles both falsified certain paperwork in order to create public records which gave the false impression that the contract awardee had earned the revenue collection contract on the merits. Strathearn and Wiles also made statements to FBI agents which were materially false with respect to the revenue collection contract award process for 2014.
After accepting the guilty plea, United States District Judge Juan R. Sanchez scheduled a sentencing hearing for April 14, 2016. Wiles in scheduled to be sentenced on March 2, 2016. Strathearn and Wiles each face a maximum possible sentence of 20 years in prison, a fine, three years of supervised release, and a $100 special assessment.
This case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police. It is being prosecuted by Assistant United States Attorneys Joe Khan and Nancy Beam Winter.
Federal inmate pleads guilty to possessing weapon in prisonRead the Press Release
BLUEFIELD, W.Va. – An inmate at the Federal Correctional Institution at McDowell pleaded guilty today to possessing a weapon in prison, announced Acting United States Attorney Carol Casto. Tyrell Saunders, 22, entered his guilty plea in federal court to possession of a weapon by an inmate at the institution. Saunders admitted that on May 11, 2015, he possessed a handcrafted metal weapon known as a “shank.” He faces up to five years in federal prison when he is sentenced on April 5, 2016.
This case was investigated by the Federal Bureau of Prisons. Assistant United States Attorney John File is handling the prosecution. The defendant entered his guilty plea before Senior United States District Judge David A. Faber.
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Federal Jury Convicts Sioux City Man for Meth Distribution ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was convicted on January 8, 2016, after a two-day jury trial in federal court in Sioux City.
Alberto Sanchez, 46, from Sioux City, Iowa, was convicted of one count of conspiracy to distribute methamphetamine and two counts of distribution of methamphetamine. The verdict was returned January 8, 2016, following about three hours of jury deliberations.
The evidence at trial showed that from 2014 through June 2015, Sanchez was involved in a conspiracy that distributed more than 50 grams of actual (pure) methamphetamine in the Sioux City, Iowa area. Evidence at trial also showed that on March 30, 2015, and April 10, 2015, Sanchez distributed 83.4 grams and 51.1 grams of actual (pure) methamphetamine, respectively, to an individual cooperating with law enforcement. Further evidence at trial showed Sanchez utilized a minor to distribute methamphetamine for him.
Sentencing before United States District Court Judge Mark W. Bennett will be set after a presentence report is prepared. Sanchez remains in custody of the United States Marshal pending sentencing. On the conspiracy conviction Sanchez faces a mandatory minimum sentence of 10 years’ imprisonment and a maximum sentence of life imprisonment, a $10,000,000 fine, a $100 special assessment, and at least five years of supervised release following any imprisonment. On each distribution conviction, Sanchez faces a mandatory minimum sentence of 5 years’ imprisonment, a maximum sentence of 40 years’ imprisonment, a $5,000,000 fine, a $100 special assessment, and at least four years of supervised release following any term of imprisonment.
The case is being prosecuted by Special Assistant United States Attorney Nathan Nelson and was investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-4037. Follow us on Twitter @USAO_NDIA.
Federal Court Permanently Shuts Down Colorado Tax Preparation BusinessRead the Press Release
A federal court has permanently barred a Colorado man and his tax preparation business from preparing federal tax returns, the Justice Department announced today. The United States filed a civil complaint against Gerardo Herrera and his business, El Lobo Multiservicios Professionales Inc., contending that they fraudulently reduced their customers’ tax liabilities by reporting extra dependents and claiming bogus deductions. After the defendants failed to respond to the complaint, on Jan. 7, 2016, Judge John L. Kane entered an order permanently banning Herrera from preparing returns.
According to the government’s civil complaint, Herrera and his staff repeatedly claimed their customers’ extended family members as dependents, even though they do not qualify for dependent status under federal law, and have improperly claimed deductions for personal expenses like cell phones and car insurance. In addition, according to the complaint, audits have shown that Herrera and his workers exaggerated deductions, reported fraudulent charitable contribution deductions and claimed improper head of household filing status. The complaint alleges that the Internal Revenue Service (IRS) audited more than 200 returns prepared by Herrera’s business and found misrepresentations on more than 99 percent of them.
Return-preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Federal Charges Brought in Interstate Armed Jewelry Theft CaseRead the Press Release
PANAMA CITY, FLORIDA – Abigail Lee Kemp, 24, of Smyrna, GA, was charged by criminal complaint on Friday with conspiracy to interfere with commerce by threats or violence. The criminal complaint was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
The complaint alleges that, between April 2015 and the present, Kemp conspired with others to commit armed robberies of six jewelry stores in Panama City Beach, Florida, Georgia, South Carolina, North Carolina, and Tennessee. The complaint alleges that, in each robbery, the robber or robbers displayed a handgun, ordered the employees to the back of the store, ordered them to lie face-down on the floor, and bound their hands behind their backs with zip ties. The robber or robbers then removed hundreds of thousands of dollars-worth of jewelry from the jewelry display cases.
The punishment for the alleged crime is a maximum of 20 years in prison. The initial appearance is expected to take place at noon today in Judge Walker’s courtroom in the Northern District of Georgia in Atlanta. The next court appearance will take place at a date to be determined in the U.S. District Court in Panama City, Florida, in the Northern District of Florida.
This case resulted from an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Kathryn D. Risinger is prosecuting the case.
A criminal complaint is merely an allegation that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Federal Charges Brought Against Codefendant in Interstate Armed Jewelry Theft CaseRead the Press Release
PANAMA CITY, FLORIDA – Lewis Jones III, 35, of Atlanta, GA, was charged today by criminal complaint with conspiracy to interfere with commerce by threats or violence. The criminal complaint was announced by Christopher P. Canova, Acting United States Attorney for the Northern District of Florida.
Jones and Abigail Lee Kemp were arrested together in the Smyrna, Georgia, area on Friday, January 8, 2016, on charges related to the armed robberies of six jewelry stores in Panama City Beach, Florida, Georgia, South Carolina, North Carolina, and Tennessee. The complaint alleges that, in each robbery, the robber or robbers displayed a handgun, ordered the employees to the back of the store, ordered them to lie face-down on the floor, and bound their hands behind their backs with zip ties. The robber or robbers then removed hundreds of thousands of dollars-worth of jewelry from the jewelry display cases.
The punishment for the alleged crime is a maximum of 20 years in prison. The initial appearance for Lewis Jones III is expected to take place tomorrow in the Northern District of Georgia in Atlanta. The next court appearance will take place at a date to be determined in the U.S. District Court in Panama City, Florida, in the Northern District of Florida.
This case resulted from an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Kathryn D. Risinger is prosecuting the case.
A criminal complaint is merely an allegation that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. The office strives to protect and serve the citizens of the Northern District of Florida through the ethical, vigorous, and impartial enforcement of the laws of the United States, to defend the national security, to improve the safety and quality of life in our communities through the protection of civil rights, and to protect the public funds and financial assets of the United States. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Emily Gray Rice Sworn in as United States AttorneyRead the Press Release
CONCORD – The United States Attorney’s Office for the District of New Hampshire announced that the Honorable Emily Gray Rice was sworn in today as the United States Attorney for the District of New Hampshire. U.S. Attorney Rice is the 56th United States Attorney for the district and is the first woman to hold the position after having been nominated by the President and confirmed by the United States Senate.
U. S. Attorney Rice has been a trial lawyer for thirty years. She began her legal career at the New Hampshire Attorney General’s Office, representing the State of New Hampshire before the state and federal courts and administrative bodies. During her final three years there, she served as a senior assistant attorney general and chief of the bureau of civil law. After leaving the Attorney General’s Office, U. S. Attorney Rice spent more than two decades in private litigation practice, handling both trials and appeals. Immediately prior to becoming United States Attorney, she was a shareholder with Bernstein, Shur, Sawyer & Nelson, working in its Manchester, New Hampshire office.
U. S. Attorney Rice has been recognized by the New Hampshire Bar Association with the E. Donald Dufresne Award for Outstanding Professionalism; by the New Hampshire Women’s Bar Association with the Marilla Ricker Achievement Award; and by the New Hampshire Bar Association as an Honorary Fellow. Before becoming United States Attorney, she was the co-chair as of the New Hampshire Governor’s Judicial Selection Commission; the chair of the Leadership Council of the New Hampshire Campaign for Legal Services; and a member of the adjunct faculty at the UNH School of Law. U. S. Attorney Rice is a product of the Philadelphia public schools and earned her B.A. and M.A. degrees from Boston University. She is a proud graduate of the Northeastern University School of Law.
Doctor and Owner of Bronx Clinics Involved in Illegal Distribution of More Than Five Million Oxycodone Pills Is Sentenced to 12 Years in PrisonRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced the conviction of KEVIN LOWE, the owner of “Astramed,” a purported medical clinic with multiple locations in the Bronx, New York, and from which more than five million tablets of the prescription painkiller oxycodone were unlawfully distributed over a three-year period. On May 4, 2015, LOWE was convicted of a conspiracy to distribute narcotics following a two-week jury trial presided over by U.S. District Judge Lorna G. Schofield. Today, Judge Schofield sentenced LOWE to a term of 144 months in prison.
Manhattan U.S. Attorney Preet Bharara said: “Kevin Lowe and his co-defendants used a network of bad doctors and street-level dealers to flood the streets of New York City with millions of highly addictive, potent opioids, all under the guise of a legitimate medical clinic. Instead of medical care, Lowe and others illegally dispensed opioids, enabling a vicious cycle of addiction that affects too many in our communities. Thanks to the Drug Enforcement Administration and the New York City Police Department, this so-called ‘clinic’ is out of business and those responsible are been held accountable.”
According to the allegations contained in the Indictment and the evidence presented by the government during LOWE’s trial:
From approximately January 2011 until February 2014, a drug distribution ring operated out of “Astramed,” a purported medical clinic with multiple locations in the Bronx that LOWE owned and operated. At these clinics, doctors working under LOWE’s direction wrote tens of thousands of medically unnecessary prescriptions for oxycodone, a highly addictive, prescription opioid used to treat severe and chronic pain conditions. Oxycodone prescriptions, once written, have enormous cash value to street-level drug dealers, who can fill prescriptions at most pharmacies and resell the resulting pills at vastly inflated rates. Indeed, a single prescription for 180 30-milligram oxycodone pills has an average resale value in New York City of more than $6,000, and far more in nearby states.
LOWE capitalized on the black market for oxycodone by employing board-certified, state-licensed doctors who were willing to write medically unnecessary prescriptions for large quantities of oxycodone in return for cash. LOWE’s clinics, which accepted no insurance from patients seeking oxycodone prescriptions, typically charged $300 in cash for “doctor visits” that usually lasted just a minute or two, involved no actual physical examination, and consistently resulted in the issuance of a prescription for large doses of oxycodone, typically 180 30-milligram tablets, or a daily dosage of six 30-milligram tablets.
LOWE’s clinics bore little resemblance to a standard medical office. For example, on a daily basis, crowds of up to 100 people gathered outside the Astramed office on Southern Boulevard (the “Clinic”) clamoring to see one of the doctors at the clinic in order to obtain a prescription for oxycodone. Virtually none of these individuals had any medical need for oxycodone, or any legitimate medical record documenting an ailment for which oxycodone would be prescribed. Instead, most of these individuals were members of “crews” – that is, they were recruited and paid by high-level drug traffickers, oxycodone distributors (the “Crew Chiefs”), to pose as “patients” in order to receive medically unnecessary prescriptions from the doctors. The Crew Chiefs then arranged for, and oversaw the filling of, the resulting prescription at various pharmacies and took possession of the oxycodone pills to be resold on the street. Crew Chiefs also paid the Clinic’s employees hundreds of dollars in cash at a time to get their Crew Members into the Clinic to see one of the doctors.
In total, between approximately January 2011 and February 2014, Astramed doctors issued 34,925 medically unnecessary prescriptions for oxycodone, comprising nearly 5.5 million oxycodone tablets with a street value of more than $165 million. LOWE alone collected more than $7 million in cash for these sham “doctor visits” during this time period.
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On May 4, 2015, after a two-week jury trial, LOWE, 55, of Melville, New York, was convicted of one count of conspiracy to distribute and possess with intent to distribute oxycodone, which carries a maximum sentence of 20 years in prison. In addition to the prison sentence, LOWE was ordered to forfeit $2,338,661. LOWE has previously forfeited $455,351 in proceeds earned from his unlawful operation of the Astramed clinics and seized at the time of his arrest.
Twenty-three additional participants in the drug distribution ring – including doctors, clinic employees, and drug traffickers who oversaw crews of “patients” whom they sent into the clinics in order to obtain medically unnecessary prescriptions – have previously been sentenced by Judge Schofield pursuant to guilty pleas and are included in the chart below. Two defendants have pled guilty but have not yet been sentenced, and one defendant entered into a deferred prosecution agreement.
Mr. Bharara thanked the Drug Enforcement Administration and the New York City Police Department for their work on the investigation. Mr. Bharara also thanked the Town of Orangetown Police Department, the Westchester County Police Department, the United States Department of Health and Human Services, the New York State Health Department’s Bureau of Narcotic Enforcement, the Office of the Medicaid Inspector General, New York City's Human Resources Administration, the New York State Attorney General’s Office Medicaid Fraud Control Unit, the Internal Revenue Service-Criminal Investigation, and the El Dorado Task Force for their assistance.
The case is being prosecuted by the Office’s Narcotics Unit. Assistant U.S. Attorneys Edward B. Diskant and Tatiana R. Martins are in charge of the prosecution.
DEFENDANT
CHARGE
SENTENCE
Robert Terdiman
Pled guilty to conspiring to distribute oxycodone on March 20, 2015
Sentenced October 20, 2015, to time served, followed by one year of supervised release. As part of his plea, DR. TERDIMAN also forfeited $355,086
David Moody
Pled guilty to conspiring to distribute oxycodone on July 15, 2014
Sentenced November 14, 2014, to 90 months in prison, followed by three years of supervised release
Rashawn Whidbee
Pled guilty to conspiring to distribute oxycodone on July 29, 2014
Sentenced December 1, 2014, to 18 months in prison, followed by three years of supervised release
Robert Williams
Pled guilty to conspiring to distribute oxycodone on July 11, 2014
Sentenced October 14, 2014, to 48 months in prison, followed by three years of supervised release
Donald Carr
Pled guilty to conspiring to distribute oxycodone on July 14, 2014
Sentenced November 21, 2014, to 132 months in prison, followed by three years of supervised release
George Barrow
Pled guilty to conspiring to distribute oxycodone on July 29, 2014
Sentenced February 24, 2015, to 102 months in prison, followed by three years of supervised release
Bradley Mitchell
Pled guilty to conspiring to distribute oxycodone on August 3, 2014
Sentenced March 4, 2015, to 132 months in prison , followed by three years of supervised release
Elijah Pinckney
Pled guilty to conspiring to distribute oxycodone on September 29, 2014
Sentenced January 6, 2015, to 46 months in prison, followed by three years of supervised release
Evelyn White
Pled guilty to conspiring to distribute oxycodone on February 24, 2015
Sentenced August 10, 2015, to 12 months in prison, followed by three years of supervised release
Cedric White
Pled guilty to conspiring to distribute oxycodone on February 13, 2015
Sentenced August 3, 2015, to 24 months in prison, followed by three years of supervised release
Sheila Carter
Pled guilty to conspiring to distribute oxycodone on March 3, 2015
Sentenced July 27, 2015, to 40 months in prison, followed by three years of supervised release
Jonathan Huertas
Pled guilty to conspiring to distribute oxycodone on March 16, 2015
Sentenced August 27, 2015, to 32 months in prison, followed by three years of supervised release
OLGA MENDOZA DELAROSA
Pled guilty to conspiring to distribute oxycodone on September 12, 2014
Sentenced on February 18, 2015, to 30 months in prison, followed by three years of supervised release
BRYAN RIVERA
Pled guilty to conspiring to distribute oxycodone on March 2, 2015
Sentenced on June 4, 2015, to 12 months and a day in prison, followed by three years of supervised release
SAMANTHA LIVINGSTON
Pled guilty to conspiring to distribute oxycodone on April 2, 2015
Sentenced on December 1, 2015 to three years of probation
BRIDGET HIGGINS
Completed the term of a deferred prosecution agreement on November 13, 2015.
DAVID STEWART
Pled guilty to conspiring to distribute oxycodone on December 17, 2014
Sentenced on June 10, 2015, to four months in prison, followed by three years of supervised release
VOKART ALSAIDI
Pled guilty to conspiring to distribute oxycodone on December 17, 2014
Sentenced on April 24, 2015, to 60 months in prison, followed by three years of supervised release
KENRICK CHANDLER
Pled guilty to conspiring to distribute oxycodone on October 9, 2014
Sentenced on May 11, 2015 to 130 months in prison, followed by three years of supervised release
DARRYL BRATHWAITE
Pled guilty to conspiring to distribute oxycodone on September 9, 2014
Sentenced on December 11, 2014 to 52 months in prison, followed by three years of supervised release
THEODORE ROOSEVELT JOHNSON
Pled guilty to conspiring to distribute oxycodone on July 8, 2014
Sentenced on January 30, 2015, to 34 months in prison, followed by three years of supervised release
WALEED ALSAIDI
Pled guilty to conspiring to distribute oxycodone on February 4, 2015
Sentenced on July 8, 2015, to 30 months in prison, followed by 3 years of supervised release
RONALD CARR
Pled guilty to conspiring to distribute oxycodone on August 4, 2014
Sentenced on November 18, 2014 to 34 months in prison, followed by three years of supervised release
District Court Enters Permanent Injunction to Prevent Dallas Compounding Pharmacy and Three Individuals from Distributing Adulterated DrugsRead the Press Release
The U.S. District Court for the Northern District of Texas entered a consent decree for permanent injunction against Downing Labs LLC, Ashley Michelle Downing, Christopher Van Downing and Roger E. Mansfield to prevent them from distributing adulterated drugs in interstate commerce, the Department of Justice announced today.
The department filed a complaint in the U.S. District Court for the Northern District of Texas on Jan. 4, 2016, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, Downing Labs manufactures, packs, labels and distributes drugs in interstate commerce. As noted in the complaint, Downing Labs has been engaged in manufacturing drugs that, by virtue of their labeling and/or route of administration, purport to be or are intended to be sterile. The complaint alleges that Downing Labs has a long history of manufacturing drug products under conditions that fall short of the minimum requirements to ensure safety and quality.
“The permanent injunction requires Downing Labs and the individual defendants to bring their processes into compliance with the law, which is essential to ensuring that Downing Labs’ drug products are safe for the American public,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will remain vigilant in protecting consumers from pharmaceutical drugs that do not meet the safety protections provided under federal law.”
The federal Food, Drug, and Cosmetic Act defines adulterated drugs as those that are prepared or held under conditions where the drugs may become contaminated with filth or may become injurious to health. The Act also defines drugs as adulterated if the facilities or controls used for the drugs’ manufacture are not in conformity with current good manufacturing practices (CGMP).
The complaint alleges, among other things, that Downing Labs, its owners - Ashley and Christopher Downing - and pharmacist-in-charge, Roger E. Mansfield, violate the Act by introducing or delivering for introduction into interstate commerce sterile drugs that are adulterated in that they are prepared, packed, or held under insanitary conditions whereby they may have been contaminated with filth and/or rendered injurious to health. The complaint also alleges that defendants violate the Act by introducing or delivering for introduction into interstate commerce drugs that are adulterated in that the methods used in, or the facilities or controls used for, their preparation do not comply with CGMP requirements.
According to the complaint, the FDA conducted multiple inspections of Downing Labs and its predecessor, NuVision Pharmacy Inc. (NuVision), during the past three years. These inspections revealed numerous deficiencies, many of which had to do with the firm’s sterile drug production. The complaint alleges, for example, that test records obtained from the company pursuant to a September to October 2015 inspection showed excessively high levels of endotoxins in recently manufactured drug products. These products were not distributed. Endotoxins are substances found in certain bacteria that can cause a wide variety of serious reactions in humans, including high fever and shock.
FDA identified additional sterility problems during inspections in 2013 and 2014, according to the complaint. In 2014, Downing Labs’ records showed that 19 lots of supposedly sterile drugs had tested positive for various microorganisms, including the pathogens Staphylococcus haemolyticus, which can cause septicemia, peritonitis and urinary tract infections and Nocardia nova, which can cause pneumonia, sinusitis and skin infections. These products were not distributed. According to the complaint, however, FDA found that the company had failed to adequately investigate the cause of the sterility problems in the 19 lots.
According to the complaint, Downing Labs was formed in December 2013, purchased NuVision in January 2014 and obtained its pharmacy license from the state of Texas in June 2014. Defendant Ashley Michelle Downing serves as Downing Labs’ director and vice-president. She is responsible for all operations of the company. She previously held several positions at NuVision, including director, production manager, and quality manager. Defendant Christopher Van Downing, husband of Ashley Michelle Downing, is Downing Labs’ president, with responsibilities that include overall business management and compliance. Defendant Roger E. Mansfield became the pharmacist-in-charge at Downing Labs on Dec. 30, 2014, and is responsible for all pharmacy operations, including sterile drug production and oversight. He was a staff pharmacist at Downing Labs prior to becoming the pharmacist-in-charge.
The permanent injunction entered by U.S. District Judge Sam A. Lindsay for the Northern District of Texas enjoins the defendants from manufacturing, holding, or distributing drugs manufactured at or from their McEwen Road facility (located at 4001McEwen Road, Suite 110, Dallas, Texas) unless the defendants comply with the Act and associated drug manufacturing regulations. Under the injunction, Downing Labs will need to stop manufacturing, holding or distributing human drugs from its McEwen Road facility until it complies with the Act and regulations and the Decree. In addition, the permanent injunction authorizes the FDA to order Downing Labs to stop drug manufacturing should FDA determine that Downing Labs has violated the terms of the decree. The decree also authorizes the FDA to order Downing Labs to recall drugs that have been distributed by the firm or to destroy drugs that are in the process of being manufactured. Certain provisions of the injunction do not apply to drugs that defendants manufacture, hold, and/or distribute for animal use.
The government is represented by Trial Attorneys David A. Frank and Raquel Toledo of the Civil Division’s Consumer Protection Branch, with assistance of Associate Chief Counsel Michael D. Shane of the Department of Health and Human Services’ Office of General Counsel-Food and Drug Division and Assistant U.S. Attorney Mary M. (Marti) Cherry of the Northern District of Texas.
Detroit man convicted of oxycodone traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Sharod D. Nickelson, 44, of Detroit, Michigan, was convicted of oxycodone trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Nickelson conspired with other individuals to possess and sell oxycodone throughout the Ohio Valley. He pled guilty today to one count of “Conspiracy to Possession with Intent to Distribute and to Distribute Oxycodone.” He faces up to 20 years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Robert McWilliams prosecuted the case on behalf of the government. The Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Department of Justice and Federal Trade Commission Support Reform of South Carolina Laws that Curb Competition, Limit Consumer Choice and Stifle Innovation for Health Care ServicesRead the Press Release
Agencies Submit Joint Statement Regarding Proposed Legislation Addressing the State’s Certificate-of-Need Laws
The Department of Justice’s Antitrust Division and the Federal Trade Commission (FTC) have recommended that South Carolina repeal its laws regulating the building of hospitals and other health care facilities and the provision of health care services.
In response to a request by South Carolina Governor Nikki R. Haley for views on South Carolina House Bill 3250, which would narrow the application of and ultimately repeal South Carolina’s certificate-of-need (CON) laws, the joint statement suggests the state consider whether its CON program best serves the needs of its citizens.
“South Carolina lawmakers have the opportunity to help health care consumers in the state,” said Assistant Attorney General Bill Baer of the Antitrust Division. “CON laws raise the cost of investment in new health care services and can shield incumbents from competition that would benefit consumers and lower costs. Repeal of South Carolina’s CON laws could invigorate competition in this important sector, to the benefit of patients, employers and other health care consumers.”
Although CON laws vary considerably by state, these laws, including South Carolina’s CON laws, typically require certain health care providers to obtain state approval before expanding, establishing new facilities or services or making certain large capital expenditures.
According to the joint statement, the Justice Department and FTC historically have urged states to consider repeal or reform of their CON laws because they can prevent the efficient functioning of health care markets and thereby harm consumers. CON laws can create barriers to entry and expansion, limit consumer choice, deny consumers the benefit of an effective remedy for antitrust violations, facilitate anticompetitive agreements, and stifle innovation.
SC CON Letter to Governor Haley (279.77 KB)
Denver Man Sentenced to over 12 Years in Federal Prison for Sex Trafficking of Minors Across State LinesRead the Press Release
DENVER – Terrell Layne Smith, aka “Swiss”, age 35 of Denver, Colorado, was sentenced by U.S. District Court Judge Christine M. Arguello to serve 151 months (over 12 years) in federal prison for Transportation with Intent to Engage in Criminal Sexual Activity, U.S. Attorney John Walsh, and FBI Denver Division Special Agent in Charge Thomas Ravenelle announced. The sentenced was handed down last Thursday, January 7, 2016. In addition to the prison sentence, Judge Arguello ordered Smith to serve 5 years on supervised release and once released from prison, he is to register as a sex offender. The defendant, who appeared at the sentencing hearing in custody, was remanded at its conclusion.
Smith was first charged by Criminal Complaint on April 10, 2014. He was indicted by a federal grand jury on May 7, 2014. He pled guilty before Judge Arguello on September 10, 2015. He was sentenced on January 7, 2016.
According to court documents, including the stipulated facts contained in the plea agreement, two minor girls, Minor #1 and Minor #2 met through high school. In early August 2012, Defendant Smith became acquainted with the mother of Minor #2. The defendant began to live at the home of the mother of Minor #2, along with Minor #2 and her four siblings. Minor #1 also came to live at the home of Minor #2 sometime during the late summer of 2012. The defendant knew that Minor #1 was 16 or 17 years of age and knew that Minor #2 was 17 years of age. While the defendant was living with Minor #1 and Minor #2, he told them they could earn money by going out on “dates,” referring to prostitution or commercial sex acts.
The defendant used his cell phone to take pictures of Minor #1 in Colorado and in Arizona. In the pictures, Minor #1 was posed in sexual poses in various sorts of attire, including lingerie. Minor #1 took pictures of Minor #2 posed in sexual poses while partially nude. The photographs were used to advertise the availability of Minor #1 and Minor #2 for prostitution on a website named “Backpage.com.” The defendant used his cell phone to access the Internet and post the images on “Backpage.com,” advertising the availability of the minors in the ad. In many of the “Backpage.com” postings, the number for the defendant’s cell phone was listed as the contact number for individuals who wanted to respond to the ads. The ads implied that the images of Minor #1 and Minor #2 posted in conjunction with the advertisements were 20 or 21 years of age. Minor #1 also started posting her own ads on “Backpage.com” using the defendant’s phone, although she did not have a “Backpage.com” account. On those occasions, Minor #1 was given a pre-paid credit card either by the defendant or by an adult prostitute associated with the defendant to post the ads.
From September 19, 2012, to approximately October 4, 2012, the defendant transported the minors to various locations in Colorado, including private homes and hotels, so that one or both minors could participate in prostitution. Beginning on October 4, 2012, the defendant, Minor #1, and Minor #2 embarked upon a trip to the Phoenix, Arizona metropolitan area, in a vehicle rented by the mother of Minor #2. Prior to the trip from Colorado to Arizona, both minors understood that they would be engaging in prostitution in Arizona based on communications with the defendant. Advertisements were posted on “Backpage.com” in the Phoenix, Arizona, metropolitan area advertising that the Minors were available for prostitution during the time period they were in Arizona. Minor #1 engaged in prostitution in Arizona during this time period. The defendant, and the two minors then returned to Colorado on approximately October 10, 2012.
The defendant transported Minor #1 to Arizona again on approximately October 11, 2012 so that she could participate in prostitution. Minor #1 engaged in at least one act of prostitution on the trip. On October 14, 2012, Minor #1 was arrested on a runaway warrant in Phoenix, Arizona. The investigation revealed that the defendant prostituted the minors, receiving a percentage of the money paid to the minors by the prostitution customers for commercial sex acts. The defendant also bought the minors clothing, food, and provided them with marijuana during the above-described time period.
“This case involved one of the worst forms of human trafficking – sex trafficking of minors across state lines,” said U.S. Attorney John Walsh. “Thanks to the hard work of the FBI’s Innocence Lost Task Force and federal prosecutors, Defendant Smith was captured, convicted and sentenced to an appropriately heavy sentence.”
“Terrell Smith’s sentence is an illustration of the FBI’s commitment to protect our most vulnerable citizens, our children,” said FBI Denver Special Agent in Charge Thomas Ravenelle. “The FBI’s Rocky Mountain Innocence Lost Task force will continue to diligently work with our local, state, and federal partners to identify and prosecute child predators.”
This case was investigated by the FBI’s Innocence Lost Task Force.
Smith was prosecuted by Assistant U.S. Attorney Alecia Riewerts.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Delaware Men Charged in $440,000+ Car Battery HeistRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that an Indictment was unsealed today, charging Ishmael Rodriquez, age 30, of Wilmington, Delaware, with wire fraud, and conspiracy. The Indictment also charges Christopher Ross, age 47, of Seaford, Delaware with wire fraud, conspiracy, interstate transportation of stolen property, and money laundering. Both men face up to 20 years in prison on the wire fraud and conspiracy charges, in addition to possible fines and restitution. Ross faces up to 10 years on the remaining counts.
The Indictment alleges that, from April through October 2014, Rodriquez, Ross, and others, conspired with one another to devise a fraudulent scheme involving the delivery of stolen automobile batteries to local recycling businesses. It is alleged that the two men used rental trucks to remove thousands of used automobile batteries from the warehouse of a trucking company in Middletown, Delaware. It is further alleged that they delivered the used batteries to recycling businesses in Delaware and Maryland, in exchange for at least $449,000, in cash and checks.
According to the Indictment, Ross transported thousands of pounds of stolen batteries across state lines, to a recycling business in Maryland. It is specifically alleged that he transported more than 24,000 pounds of batteries to Maryland on October 8, 2014, in exchange for payment of $6,960 in cash. It is alleged that he transported more than 34,000 pounds of batteries to Maryland October 15, 2014, for payment of $22,011 in cash; and he transported more than 38,000 pounds of batteries to Maryland October 16, 2014, for payment of $10,685 in cash. The Indictment alleges that Ross used $20,200 in cash proceeds to purchase a commercial tractor trailer from a dealership in New Castle, Delaware.
This case is the result of an investigation conducted by the United States Postal Inspection Service and the Internal Revenue Service.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Dallas Man Sentenced to Serve a Total of 326 Months in Federal Prison for Sex Trafficking a Developmentally Disabled Teenage GirlRead the Press Release
DALLAS — Kenneth Laray White, 26, of Dallas, was sentenced this morning by U.S. District Judge David C. Godbey to serve a total of 326 months in federal prison on felony convictions stemming from a plan to recruit a developmentally disabled teenage girl to engage in commercial sex acts, announced U.S. Attorney John Parker of the Northern District of Texas.
Kenneth White pleaded guilty in March 2015 to one count of using a facility of interstate commerce in aid of a racketeering enterprise and one count of being a felon in possession of a firearm. Kenneth White’s brother, Damion Kentrell White, 24, who was also charged, pleaded guilty to one count of using a facility of interstate commerce in aid of a racketeering enterprise and one count of illegal receipt of a firearm by a person under indictment. Damion White is scheduled to be sentenced later this month.
A February 2016 trial date is currently set for the other defendant charged in the case, their cousin, Mecose Mendale Shorter, 31, also of Dallas, who is also alleged to have participated in the scheme to traffic the victim.
According to documents filed in the case, Kenneth and Damion White knew the victim since she was 15 years old. When she was 18 years old, they devised a plan to recruit her to engage in commercial sex acts for them by taking advantage of her diminished mental capacity. In late June 2013, Damion White established a friendship with the victim, and then, in early July of 2013, he used false pretenses to convince her to leave her home with him.
Later that night, Kenneth and Damion White drove the victim to a motel in Dallas where Damion White had rented a room. Kenneth White used his cell phone to take provocative photos of the victim that they later used in advertisements they posted on backpage.com. They deprived her of food and prevented her from leaving the room to encourage her to engage in commercial sex acts for them. Kenneth White had sex with the victim, and the victim eventually engaged in commercial sex acts and provided the money she earned to Kenneth White. Kenneth and Damion White used the Internet and a cell phone to coordinate the victim’s commercial sex acts with potential customers.
Later, Kenneth and Damion White moved the victim to another motel in Dallas where they continued to compel her to engage in commercial acts during the latter part of July 2013. Officers with the Dallas Police Department rescued the victim from this motel on July 22, 2013.
Kenneth and Damion White were arrested on federal sex trafficking charges on February 25, 2014. Kenneth White was found at his girlfriend’s apartment, and during a protective sweep of the apartment, agents located a Romar/Cugir 7.62 caliber rifle, along with three extended magazines under the mattress in the master bedroom. Damion White admitted that he had possessed firearms recently, including the firearm that Kenneth White was caught with that day. Damion White further admitted that he had been under indictment for a felony marijuana case for quite some time.
Today is National Human Trafficking Awareness Day. Join us in fighting modern-day slavery: http://go.usa.gov/cnADj and learn how to recognize the signs: http://go.usa.gov/cnADH
The North Texas Trafficking Taskforce, including the FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives and the Dallas Police Department, investigated. Assistant U.S. Attorney Cara Foos Pierce is prosecuting the case.
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Court of Appeals Affirms Tonawanda Coke ConvictionsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. — U. S. Attorney William J. Hochul, Jr. announced today that the United States Court of Appeals for the Second Circuit has affirmed the convictions and sentence of the Tonawanda Coke Corporation (TCC). TCC was convicted of 11 counts of violating the Clean Air Act and three counts of violating the Resource Conservation and Recovery Act by a federal jury in March 2013, was sentenced to pay a $12.5 million fine and five years probation during which they would have to fund two community service projects at a cost of $12.2 million.“Today’s decision by the Court of Appeals represents a complete victory for the community and country,” said U.S. Attorney Hochul. “No one should be allowed to intentionally poison the public, and our prosecutions of both Tonawanda Coke and Mark Kamholz make this abundantly clear. Second, this Office will pursue all available means to remedy the harm caused by the actions of criminals of any type, whether individual or corporate.”
Tonawanda Coke Environmental Control Manager, Mark L. Kamholz was convicted of 11 counts of violating the Clean Air Act, one count of obstruction of justice and three counts of violating the Resource Conservation and Recovery Act and was sentenced to 12 months in prison and a $20,000 fine. Kamholz however did not appeal his conviction.
The charges involved Tonawanda Coke releasing coke oven gas containing benzene into the air through an unreported pressure relief valve. In addition, a coke-quenching tower was operated without baffles, a pollution control device required by TCC’s Title V Clean Air Act permit designed to reduce the particulate matter that is released into the air during coke quenches.
Prior to an inspection conducted by the U.S. Environmental Protection Agency in April of 2009, defendant Kamholz told another TCC employee to conceal the fact that the unreported pressure relief valve, during normal operations, emitted coke oven gas directly into the air, in violation of the TCC’s operating permit.
The defendants also stored and disposed of hazardous waste without a permit to do so, in violation of the Resource Conservation and Recovery Act. These offenses related to TCC’s management of hazardous materials on the ground next to two large deteriorating tanks, and TCC’s practice of mixing its coal tar sludge, a listed hazardous waste that is toxic for benzene, on the ground in violation of hazardous waste regulations.
“The Court’s affirmance is also significant for two other reasons,” Hochul continued. “The prosecution of Tonawanda Coke and Mark Kamholz represents only the second time in the nation’s history that a jury convicted for a violation of the Clean Air Act. This law was passed by Congress in 1970. Second, a sentence which includes financing of a public health study represents the first time in this District that such a remedy was sought by the Office, and ordered by the Court.”On appeal, the Government was represented by Assistant U.S. Attorney John Arbab from the Department of Justice Environment and Natural Resources Division. The prosecution was handled by Assistant U.S. Attorney Aaron J. Mango and Senior Counsel Rocky Piaggione.
Charleston man pleads guilty to illegal possession of a firearmRead the Press Release
Charleston, W.Va. – A Charleston man pleaded guilty today to a federal gun crime, announced Acting United States Attorney Carol Casto. Richard Howard King II, 20, entered his guilty plea in federal court to possession of a firearm by an unlawful user of a controlled substance.
King admitted that on July 16, 2015, he was carrying a concealed handgun when he was approached by Charleston Police Department officers. After King informed the officers that he was armed, the officers removed a Glock Model 22, .40 caliber pistol from his waistband. King also admitted that he possessed four other firearms from July 5, 2013, through July 16, 2015, one of which was stolen. At the time he possessed each of these firearms, King admitted that he was a habitual, unlawful user of marijuana.
King faces up to 10 years in federal prison and a $250,000 fine when he is sentenced on April 11, 2016.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Charleston Police Department. Assistant United States Attorney Haley Bunn is in charge of the prosecution. The defendant entered his guilty plea before United States District Judge Thomas E. Johnston.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
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Carthage Man Pleads Guilty to Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Carthage, Mo., man pleaded guilty in federal court today to receiving and distributing child pornography over the Internet.
Jerry Batchelor, 51, of Carthage, pleaded guilty before U.S. District Judge M. Douglas Harpool to the charge contained in an April 1, 2015, federal indictment.
By pleading guilty today, Batchelor admitted that he received and distributed child pornography over the Internet between Aug. 10, 2012, and April 4, 2014.
Under federal statutes, Batchelor is subject to a mandatory minimum sentence of five years in federal prison without parole, up to a sentence of 20 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney James J. Kelleher. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the Southwest Missouri Cybercrimes 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."
California Man Sentenced to 75 Months in Prison for Role in Large-Scale Drug Trafficking ConspiracyRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced today that a California man has been sentenced by U.S. District Judge Sharon Gleason to serve 75 months in prison for his role in a conspiracy to sell large quantities of cocaine and methamphetamine to Alaska-based drug dealers.
Tomas Gutierrez Ayala of California previously pled guilty to conspiring with others to distribute methamphetamine and cocaine. As part of his guilty plea, Ayala admitted that he was personally responsible for the distribution or attempted distribution of ten pounds of methamphetamine. Ayala further admitted that he had been involved in several other previous methamphetamine and cocaine sales. Upon being released from prison, Ayala will be on supervised release for five years.
According to Assistant U.S. Attorney Stephanie C. Courter, who prosecuted the case, the conspiracy began in February 2013 and continued until Ayala was indicted in October 2014. Ayala’s involvement came to the attention of law enforcement in July 2013 when ten pounds of methamphetamine was found in his garage in close proximity to mail bearing his name. Ayala had received the drugs from co-conspirators in Mexico and admitted intending to sell them to an Alaska-based co-conspirator who planned to mail them back to Anchorage for distribution. Law enforcement ultimately seized the methamphetamine before the deal could occur.
As part of his guilty plea, Ayala admitted that, during his involvement in the conspiracy, he had distributed both methamphetamine and cocaine to an Alaska-based co-conspirator on multiple occasions. At sentencing, the parties discussed the harm that methamphetamine causes in our community, noting that the ten pounds of methamphetamine seized from Ayala in July 2013 equated to more than 33,000 individual doses of the drug.
During the sentencing hearing, Judge Gleason found it significant that Ayala had intended to sell the drugs not in his home state of California but instead chose to ensure their delivery to Alaska where profits are higher. She also raised concerns about the large quantity of methamphetamine at issue, calling Ayala’s crime a serious offense from which the public needs to be protected. In pronouncing sentence, Judge Gleason also emphasized the importance of handing down sentences that deter future criminal conduct.
The sentencing hearing is related to a string of indictments returned in late 2014 and early 2015 as part of ongoing efforts to dismantle and prosecute several large scale drug trafficking rings with ties to Alaska, California, Texas, Arizona, and Mexico. To date, the following individuals have been sentenced as part of these efforts:
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Timothy Alex, an Anchorage drug distributor, previously sentenced to 108 months in prison;
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Daniel Harris, an Anchorage drug distributor, previously sentenced to 135 months in prison;
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Jose Ramon Canales, of Texas, previously sentenced to 70 months in prison for laundering drug money out of the United States and into Mexico;
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Genaro Gutierrez-Reyes, of California, previously sentenced to 18 months in prison for laundering drug money out of the United States and into Mexico;
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Jorge Armando Zaragoza-Soto, of Mexico, previously sentenced to 96 months in prison for drug trafficking; and
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Geronimo Arellano Velarde, of California, previously sentenced to 120 months in prison for drug trafficking.
Several other defendants are set to be sentenced in the coming months for their roles in trafficking heroin, cocaine, and methamphetamine to Alaska and then transporting the cash proceeds of their trafficking activities back to Mexico.
This and the related cases were investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF). In announcing the sentence, U.S. Attorney Loeffler praised the work of the law enforcement agencies involved, including the Drug Enforcement Administration (DEA), the Internal Revenue Service Criminal Investigation (IRS-CI), the Federal Bureau of Investigation (FBI), the U.S. Postal Inspection Service (USPIS), U.S. Immigration and Customs Enforcement (ICE), which oversees Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Anchorage Police Department (APD), the Alaska State Troopers (AST), and the Anchorage Airport Police Department. Additional assistance was provided by the U.S. Attorney’s Offices for the Western District of Texas, the Eastern and Central Districts of California, and the District of Arizona, as well as federal agents in all three states.
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Broward County Resident Sentenced to More than 5 Years in Prison for Extensive Identity Theft Tax Refund Fraud SchemeRead the Press Release
A Broward County Resident was sentenced to 63 months in prison, to be followed by five years of supervised release, and was ordered to pay restitution in the amount of $119,080.95 for his participation in an extensive identity theft tax refund fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Dezman Dunbar Zama, 34, of Fort Lauderdale, previously pled guilty to one count of conspiracy to commit wire fraud, one count of conspiracy to commit bank fraud, and one count of aggravated identity theft, in violation of Title l8, United States Code, Sections 1343, 1344, 1349 and 1028A.
Co-defendant Brandi Mary Janice Stroman, 30, of Oakland Park, was sentenced on October 14, 2015 to 61 months in prison, to be followed by five years of supervised release, and was ordered to pay restitution in the amount of $119,080.95. Stroman previously pled guilty to one count of conspiracy to commit wire fraud, one count of conspiracy to commit bank fraud, one count of aggravated identity theft, and one count of conspiracy to commit mail fraud, in violation of Title l8, United States Code, Sections 1343, 1344, 1349, 1028A, 1341 and 1349.
Co-defendant Jerrod Dashon Bosket, 26, of Orlando, previously pled guilty to one count of unauthorized use of an access device and one count of aggravated identity theft, in violation of Title 18, Sections 1029(a)(2) and 1028A. On September 23, 2015, he was sentenced to time served.
According to court documents, from March 2012 through August 2012, Stroman obtained the bank account information of Zama and Jerrod Bosket. Stroman then provided the bank account information to another individual who filed false tax returns using the personally identifiable information (PII) of patients of a medical services provider. The fraudulent refunds from these tax returns were deposited into one of the bank accounts controlled by Zama, Jerrod Bosket, or others. After the money was deposited into the account, Stroman contacted the co-defendants and directed them to withdraw the funds. During the course of the conspiracy, at least 27 false returns were filed requesting $105,313 in fraudulent refunds. Each one of the 27 false returns listed one of the defendant’s bank account numbers.
Court documents also state that a member of the conspiracy obtained the names, Social Security numbers, and bank account numbers of three other individuals. A member of the conspiracy transferred or attempted to transfer $62,000, $92,716, and $135,482.46, respectively, from these three individuals’ bank accounts into a bank account controlled by Stroman or Zama. Stroman and Zama then withdrew or attempted to withdraw the transferred funds. Four fraudulent tax refunds in the name of incarcerated individuals were also deposited into Stroman’s bank account.
Mr. Ferrer commended the investigative efforts of the Identity Theft Strike Force, with special commendation to IRS-CI and the FBI. This case is being prosecuted by Assistant U.S. Attorney Cynthia R. Wood.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. 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.
Broward County Resident Sentenced to 4 1/2 Years in Prison for Supplying Personal Identifying Information in a Stolen Identity Tax Fraud SchemeRead the Press Release
Bryan Sainte-Rose, 39 of Plantation, Florida, was sentenced to 54 months in prison, to be followed by three years of supervised release for supplying personal identifying information (PII) to other individuals who were involved in a stolen identity tax fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and William Hernandez, Chief, North Miami Beach Police Department (NMBPD), made the announcement.
Sainte-Rose previously pled guilty to one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Sections 1029(a)(3) and 2, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2.
According to court documents, law enforcement learned that an Electronic Filing Identification Number (EFIN) was used to file 345 tax returns from January 23, 2014 through February 26, 2014 from an address in North Miami, Florida requesting approximately $1,151,482 in tax refunds. The EFIN was assigned to “L.W.,” who incorporated a business called Lil Mama Tax Services. These tax returns contained numerous indicators of identity theft tax fraud, including repeat addresses, the use of deceased or incarcerated individuals, taxpayers under the age of eighteen, and numerous repeated occupations.
On June 11, 2014, law enforcement executed a search warrant at the address used to file the returns. Inside the premises was an office containing evidence indicative of tax fraud: printers, tax documents, notepads containing lists of personal identifying information or “PII” (including the Social Security numbers of more than 15 individuals), stacks of pre-paid debit cards with account numbers, laminate material used for making false identification cards, and two fraudulent State of Florida driver's licenses. On a sheet of paper was EFIN information used to file income taxes, including taxes filed by Lil Mama Tax Services. Also found at the location was electronic equipment used to access the Internet.
Mr. Ferrer commended the investigative efforts of IRS-CI, FBI and NMBPD. This case was prosecuted by Assistant U.S. Attorney John R. Byrne.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. 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.
Bliss Sentenced to 12 Months in Federal Prison After Efforts to Obstruct SEC Case Pending Against HimRead the Press Release
SALT LAKE CITY – Roger Stanley Bliss, age 57, of Bountiful, Utah, will serve 12 months and one day in federal prison for his efforts to corruptly influence and obstruct the administration of justice in a Securities and Exchange Commission case filed against him in U.S. District Court in Salt Lake City.
U.S. District Court Chief Judge David Nuffer imposed the sentence Monday morning. Judge Nuffer also ordered that the sentence be served consecutive to any sentence imposed in a related state criminal matter. Bliss will be on probation for 24 months when he completes his federal prison sentence.
Bliss was charged with obstruction of justice and false declaration before a Court of the United States in an indictment returned in August 2015. He pleaded guilty to both counts of the indictment in September. A co-defendant in the case, Kevin Carl Fortney, age 55, of Washington, Utah, was charged with one count of false declaration before a Court of the United States and one count of making a false statement to a federal agent. The case against Fortney is pending.
Federal prosecutors sought the indictment after U.S. District Judge Robert Shelby referred the case to their office requesting a criminal perjury and obstruction investigation be opened against Bliss and Fortney. Judge Shelby made the request following an evidentiary hearing in his court where it was proven that Bliss and Fortney violated his order freezing defendant Bliss’ assets and that they had made false declarations to the Court to conceal the conduct.
As a part of his guilty plea, Bliss admitted that he understood that the Court had issued an ordering freezing all of his assets and that assets purchased with funds from any bank account in his name were subject to that order. He admitted that he arranged to have a third party to whom he owed money, take control of a sailboat that had been purchased with funds from a bank account in his name and was subject to the Court’s order freezing his assets. Bliss admitted he transferred the sailboat so it could be liquidated by the third party and the proceeds used to reduce a debt he owed to the third party. He also admitted making a false statement while under oath as a part of a subsequent hearing. Bliss knew the declaration was not consistent with the facts when he made it, according to a statement made as a part of his guilty plea.
“The integrity of our judicial system is paramount in our civilized society. Those who attempt to obstruct the work of the Court by giving false testimony or who knowingly violate orders of the Court will face vigorous prosecution,” U.S. Attorney John W. Huber said today.
In a sentencing document filed in the criminal case prior to Monday’s hearing, Assistant U.S. Attorney Jacob Strain noted that protecting investors is a component of the SEC’s mission and it satisfies its mission through filing civil lawsuits in federal court. “The public’s deference to, respect for, and compliance with orders issued from the federal judiciary are vital to the SEC’s ability to perform its statutory mandates,” Strain wrote.
Asset freeze orders, like the one violated in the Bliss case, serve to prevent the unfair dissipation of assets and ensure the availability of funds for restitution to victims. “Bliss lacks the resources to repay the investor-victims of his Ponzi scheme. Bliss victimized them yet again by recruiting his brother-in-law, Kevin Fortney, to liquidate Bliss’ catamaran sailboat and then to lie about it to the Court and to investigators. Bliss deliberately violated Judge Shelby’s asset freeze order, recruited a co-conspirator to his cause, and then provided false and misleading information to influence the Court’s decision on the matter. Bliss circumvented the SEC’s efforts to protect investors,” Strain said in the sentencing document.
Berkeley County, WV man sentenced for cocaine traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – Thomas Edward King, Jr., 43, of Falling Waters, West Virginia, was sentenced today to 21 months in prison for cocaine trafficking, United States Attorney William J. Ihlenfeld, II, announced.
King sold cocaine in Berkeley County, West Virginia. He pled guilty in October 2015 to one count of “Distribution of Cocaine Base.”
Assistant U.S. Attorney Paul Camilletti and Special Assistant U.S. Attorney Stephanie Taylor, also of the Berkeley County Prosecuting Attorney’s Office, prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
Chief U.S. District Gina M. Groh presided.
Bakersfield Man Pleads Guilty to Laser Strikes on Sheriff HelicopterRead the Press Release
FRESNO, Calif. —Pablo Cesar Sahagun, 26, of Bakersfield, pleaded guilty today to aiming the beam of a laser pointer at a Kern County Sheriff’s helicopter, United States Attorney Benjamin B. Wagner announced.
In pleading guilty, Sahagun acknowledged that on February 26, 2015, he repeatedly struck and tracked a Kern County Sheriff’s Office helicopter, Air-1, with the beam of a green laser pointer. According to court documents, the laser pointer was key activated and labeled as a Laser 301, a device that purports to emit a one-watt laser beam, which is 2,000 times more powerful than what is legally permissible for a laser pointer.
Reports of laser attacks on aircraft have increased dramatically in recent years as powerful laser devices have become more affordable and widely available to the public. From 2011 to 2015, there have been over 23,000 laser illumination incidents in the United States reported to the Federal Aviation Administration (FAA). In 2015, in the Eastern District of California, which encompasses 34 counties in the eastern portion of California, there were 213 reported laser incidents. Lasers can completely incapacitate pilots who are trying to fly safely to their destinations, endangering their crew members, passengers and people on the ground.
Sahagun is scheduled for sentencing before U.S. District Judge Dale A. Drozd on April 4, 2016. Sahagun faces a maximum prison term of five years and a fine of up to $250,000. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The case against Sahagun was investigated by the Federal Bureau of Investigation, the Kern County Sheriff’s Office, and Bakersfield Police Department. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.
If you have information about a lasing incident, or see someone pointing a laser at an aircraft, call your local FBI field office or dial 911.
Friday 8 January 2016
Woman Pleads Guilty in Fraud SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that a Jennifer L. Cadwallader, 39, pleaded guilty to wire fraud and filing false tax returns before Chief U.S. District Judge Frank P. Geraci. The chargeS carry a maximum penalty of 20 years in prison and a $250,000 fine.According to Assistant U.S. Attorney Trini E. Ross, who is handling the case, the defendant was employed as the Office Manager for American Paving and Excavating, LLC (“American Paving”) from 2009 to 2015. Cadwallader responsibilities included accounts payable, maintaining books and records, the accounting system, paying bills, payroll, and deposits.
Between 2012 and 2014, the defendant accessed American Paving’s bank account and electronically transferred $338,329.12 from the corporate bank account to her personal credit card accounts. These electronic transfers were not authorized by American Paving and were done without American Paving’s knowledge or consent. In an attempt to conceal the theft, Cadwallader recorded the payments to her personal credit card accounts as credit card and fuel expenses on American Paving’s books and records.
In that same time period, the defendant failed to report the income from the electronic transfers totaling $338,329.12 to the Internal Revenue Service. Taxes due on the income totaled $108,026.00.
The plea is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen.
Sentencing is scheduled for April 13, 2016 at 10:30 a.m. before Judge Geraci.
Upper Marlboro Man Sentenced to 15 Years in Prison for Gun and Drug OffensesRead the Press Release
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Mahdi Lawson, age 27, of Upper Marlboro, Maryland, today to 15 years in prison followed by three years of supervised release for being a felon in possession of a gun; possession with intent to distribute crack cocaine; and possession of a firearm in furtherance of a drug trafficking offense.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to his plea agreement, law enforcement executed a search at Lawson’s residence in Upper Marlboro and recovered a black semi-automatic handgun from a backpack in the living room, marijuana and crack cocaine from the bathroom and MDMA (ecstasy) from an organizer next to the bed in the basement. Lawson admitted that the handgun and drugs recovered from the residence belonged to him and that he had carried the firearm to conduct a drug transaction. Lawson had several previous felony convictions and was prohibited from possessing a firearm or ammunition.
United States Attorney Rod J. Rosenstein commended the ATF and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Deborah A. Johnston and Lindsay Eyler Kaplan, who prosecuted the case
Two Men Sentenced on Federal Firearms ChargesRead the Press Release
Rock Island, Ill. – Two men were sentenced today to federal prison in separate cases for being felons in possession of firearms, as announced by U.S. Attorney Jim Lewis, Central District of Illinois.
Chief U.S. District Judge James E. Shadid ordered Brandon McNeal, 24, of the 1600 block of 12th Avenue, Moline, Ill., to serve 10 years in federal prison, to be followed by a three year term of supervised release. At the conclusion of the sentencing hearing, McNeil was remanded to the custody of the U.S. Marshals. On Sept. 11, 2015, McNeil entered a plea of guilty to a single count indictment charging him with being a felon in possession of a firearm.
In a separate case, Chief Judge Shadid ordered Hasan Stoner, 23, of 16000 block of Glen Oak Drive, Country Club Hills, Ill., to serve 37 months in federal prison to be followed by two years of supervised release. Stoner was also remanded to the custody of the U.S. Marshals at the conclusion of the sentencing hearing. On Sept. 11, 2015, Stoner entered a plea of guilty to a single count indictment charging him with being a felon in possession of a firearm.
Both cases were prosecuted by Assistant U.S. Attorney John Mehochko, and the charges were the result of investigations by the Moline Police Department, the Federal Bureau of Investigation’s Quad Cities Federal Gang Task Force, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Two Men Plead Guilty to Charges in Murder of Man in Southwest WashingtonRead the Press Release
WASHINGTON – Dominique Holmes, 25, and Gregory Smithwick, 23, both of Washington, D.C., have pled guilty to charges stemming from the murder of a man in Southwest Washington, U.S. Attorney Channing D. Phillips announced.
Both men pled guilty on Jan. 7, 2016, in the Superior Court of the District of Columbia. Holmes pled guilty to one charge of second-degree murder while armed as well as a charge of armed robbery in an unrelated case. Smithwick pled guilty to acting as an accessory after the fact to armed carjacking in a crime leading up to the murder.
The guilty pleas, which are contingent upon the Court’s approval, call for prison sentences of between 25 and 30 years for Holmes and between five and eight years for Smithwick. The Honorable Lynn Leibovitz scheduled a sentencing hearing for March 18, 2016.
According to the government’s evidence, on Oct. 10, 2014 at approximately 6:30 a.m., Holmes carried out a carjacking in the 2000 block of 37th Street SE. Holmes picked up Smithwick almost immediately after the carjacking. Smithwick got into the driver’s seat and drove away, helping Holmes escape from the area. Approximately 40 minutes after the carjacking, Holmes arrived in the carjacked vehicle in the 100 block of Ivanhoe Street SW. Holmes went up to the apartment unit of the victim, Ricky Kelly. Mr. Kelly, 29, was about to take his children to school, and they were in his car parked just outside of the apartment building. Mr. Kelly was alone inside the apartment. Holmes shot Mr. Kelly nine times with a 9mm handgun inside his apartment. He and Smithwick then fled the scene in the carjacked vehicle.
Shortly after the murder, the carjacked vehicle was spotted, and Smithwick and Holmes led officers on a high-speed chase that ended near Alabama Avenue and 32nd Place SE. Holmes and Smithwick were both immediately arrested.
The armed robbery charge stems from an attack carried out by Holmes early Sept. 27, 2014, in he area of 41st Street and Alabama Avenue SE. The victim was walking toward his parked car. Holmes, who was carrying what appeared to be a firearm, approached the man and demanded that he empty his pockets. The victim turned over his iPhone, some cash, and the keys to the vehicle. Holmes then drove away in the car with the victim’s belongings.
In announcing the pleas, U.S. Attorney Phillips commended the work of the detectives, officers, and others who investigated the case from the Metropolitan Police Department. He also expressed appreciation to the District of Columbia Office of the Medical Examiner. Finally, he acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Lashone Samuels; Victim/Witness Advocates M. Laverne Forrest, Wanda Queen, and Marcia Rinker; Investigative Analyst Zachary McMenamin; Assistant U.S. Attorneys Stephen Rickard and Lauren Bates, who provided appellate guidance, and Assistant U.S. Attorneys Kendra Briggs, Richard DiZinno, and Jeffrey Nestler, who prosecuted the case.
Three Methamphetamine Distributors for Sinaloa Cartel Sentenced to Lengthy Federal Prison TermsRead the Press Release
LUBBOCK, Texas — Three men who were sent by the Sinaloa Cartel to Lubbock, Texas, to distribute methamphetamine for the cartel were sentenced this morning to lengthy federal prison sentences, announced U.S. Attorney John Parker of the Northern District of Texas.
Senior U.S. District Judge Sam R. Cummings sentenced Juan Carlos Pinales, 23, to 151 months in federal prison, Ramon Osvaldo Escobar-Robles, 25, to 78 months in federal prison, and Jesus Mario Moreno-Perez, 24, to 120 months in federal prison. Each pleaded guilty last year to one count of possession with intent to distribute 500 grams or more of methamphetamine and aiding and abetting. Escobar-Robles and Moreno-Perez are in the U.S. illegally.
According to documents filed in the case, a joint investigation by the FBI, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Texas Department of Public Safety (DPS), the Lubbock County Sheriff’s Office and the Lubbock Police Department revealed that the Sinaloa cartel had sent three individuals to Lubbock to distribute methamphetamine for the cartel. In June 2015, a search warrant was executed at their residence on Birch Avenue in Lubbock.
At the time the warrant was executed, the three defendants were home. The search by law enforcement yielded several containers or bags of suspected methamphetamine in the attic, to include: two red Tupperware containers that contained a total of approximately 5.06 pounds of suspected methamphetamine, 19 clear plastic bags that contained a total of approximately 1.42 pounds of suspected methamphetamine, two clear plastic bags that contained a total of approximately 17.2 grams of suspected methamphetamine, and one clear plastic bag that contained approximately 31.2 grams of suspected methamphetamine; as well as a black pouch that contained approximately $3,783 in cash; numerous cell phones; money transfer receipts; and a spiral notebook that contained writings consistent with a drug ledger, showing amounts distributed to and owed by various persons.
A DPS crime laboratory analysis confirmed that the substance in the two red Tupperware containers was, in fact, methamphetamine with a net weight of 1,797.92 grams and a purity level of at least 91.7%. All three defendants admitted they jointly possessed the methamphetamine found in the attic.
Assistant U.S. Attorney Jeffrey Haag prosecuted the case.
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