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Wednesday 6 January 2016
Three Sentenced for Promoting Interstate ProstitutionRead the Press Release
Acting United States Attorney Gregory J. Haanstad announced that Charles Nash (28) and Brandon Smith (40) of Appleton, WI and Elizabeth Johnson (27) of Two Rivers, WI were recently sentenced by Chief Judge William C. Griesbach. Smith was sentenced on December 10, 2015, to 48 months imprisonment following his guilty plea to three counts of using a telephone to promote, manage and carry on a prostitution business in violation of Title 18, United State Code, Section 1952. Smith was ordered to serve three years of federal supervised release following his prison term. Nash was sentenced on November 25, 2015, to 46 months prison following his guilty plea to two counts of using a telephone to promote, manage and carry on a prostitution business. Nash will also serve a three year term of federal supervised release after the service of his prison term. Johnson was sentenced on November 23, 2015, to “time served” meaning a six month sentence but credited for that same amount of time that she was held in jail both before and following her guilty plea to the charge of using a telephone to promote, manage and carry on a prostitution business. Johnson is currently serving a three year term of federal supervised release.
According to court documents, in February 2015, Nash and Smith arranged for Johnson and Jane Doe to travel from the Fox Valley area to Iowa and then Nebraska for purposes of engaging in prostitution. Johnson had previously worked as a prostitute and instructed Jane Doe, prior to the travel, in how to commit such offenses without being detected by law enforcement. Johnson and Jane Doe were arrested in Nebraska on February 26, 2015, pursuant to an undercover prostitution sting operation. Prior to their arrest, Nash was in continual contact with Johnson for purposes of persuading and inducing her to commit acts of prostitution in order to raise money so he could hire an attorney for his pending drug charge. Smith was in regular contact with Jane Doe for purposes of persuading and inducing her to commit acts of prostitution. Jane Doe later stated that any money made would have been given to Smith, her pimp. Jane Doe also confirmed that Johnson instructed her on how to conduct acts of prostitution. The investigation confirmed that Johnson performed acts of prostitution at Nash’s direction for many months and also attempted to persuade others to work as prostitutes for Nash. Further, the investigation revealed several other prostitutes that worked under the direction of both Nash and Smith.
In pronouncing sentence, Judge Griesbach noted the aggravated nature of the case including the negative impact such conduct has on the community. In particular, Judge Griesbach referenced the psychological and often physical trauma sustained by young women through the course of being prostituted by individuals such as Nash and Smith.
The case was investigated by the Wisconsin Department of Justice-Division of Criminal Investigation, Appleton Police Department, Oshkosh Police Department, Outagamie County Sheriff Department, the Lincoln (Nebraska) Police Department, and the Omaha Police Department/FBI Child Exploitation Task Force. The Outagamie County District Attorney’s Office, in particular, Assistant District Attorney Andrew Maier, provided invaluable assistance by initiating and leading the initial investigation of the case. The federal case was prosecuted by Assistant U.S. Attorney William Roach.
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Three Investment Professionals Arrested and Charged in Manhattan Federal Court in Connection with Sophisticated Scheme to Defraud InvestorsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the arrests of CHRISTOPHER CERVINO, a/k/a “Smitty,” LARRY WERBEL, and SHEIK F. KHAN, a/k/a “Abida Khan,” for their involvement in a scheme, between 2009 and March 2015, to defraud at least 100 investors of more than $15 million. CERVINO, WERBEL and KHAN, along with EDWARD DURANTE, a/k/a “Ted Wise,” a/k/a “Efran Eisenberg,” a/k/a “Yulia Svitchkara,” a/k/a “Anthony Walsh,” a/k/a “Ed Simmons,” who arrived by extradition from Germany on December 18, 2015, were charged in a Superseding Indictment unsealed today with various crimes related to a fraudulent scheme principally involving a publicly traded company called VGTel, Inc. (“VGTL”), which was secretly controlled by DURANTE. DURANTE, who was previously convicted in December 2001 of securities fraud, wire fraud, and money laundering in this District and barred by the U.S. Securities and Exchange Commission (“SEC”) from any association with the sale of securities, in concert with CERVINO, WERBEL, and KHAN, executed the scheme through false and misleading representations about how private investor monies would be used, as well as omissions in connection with the sale of VGTL securities, and through the manipulation of the public market in VGTL’s stock.
In addition, Mr. Bharara announced the unsealing of guilty pleas earlier this week by WALTER REISSMAN and KENNETH WISE, who admitted to their own involvement in the fraudulent scheme. REISSMAN pled guilty to conspiracy, securities fraud, wire fraud, and making false statements to law enforcement officials. WISE pled guilty to conspiracy, securities fraud, wire fraud, and money laundering. REISSMAN and WISE are cooperating with the Government in this investigation.
CERVINO, who is charged with conspiracy, securities fraud, wire fraud, and perjury, was arrested this morning in Franklin Lakes, New Jersey, and was presented this afternoon in federal court in Manhattan before United States Magistrate Judge Andrew J. Peck. WERBEL, who is charged with conspiracy, securities fraud, wire fraud, investment adviser fraud, and making false statements, was arrested this morning in Solon, Ohio, and was presented today in federal court in the Northern District of Ohio. KHAN, who is charged with conspiracy, securities fraud, wire fraud, and investment adviser fraud, was arrested last night in Las Vegas, Nevada, and will be presented later today in federal court in the District of Nevada. The case is before United States District Judge Andrew L. Carter, Jr.
In a separate action, the SEC filed civil charges against CERVINO, WERBEL, KHAN, REISSMAN, and WISE. The SEC previously charged DURANTE on December 18, 2015.
U.S. Attorney Preet Bharara said: “No sooner had Edward Durante gotten out of jail for securities fraud than he allegedly headed up another criminal scheme. As alleged, Durante and his network of scammers spun a web of lies, inducing victims into investing in phony private placement opportunities, manipulating the price and trading volume of a publicly traded stock, and conspiring to defraud more than one hundred investors out of over $15 million.”
FBI Assistant Director Diego Rodriguez said: “Over six years, Cervino, Werbel, and Khan allegedly conspired with recidivist securities fraud defendant Edward Durante to defraud more than 100 investors out of millions in a scheme of misleading representations and stock manipulation. The FBI is committed to investigating and bringing to justice those who prey upon trusting individuals for their own personal gain.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “These individuals took advantage of their manipulation of the market to con investors into purchasing stock at inflated prices. Postal Inspectors remind investors to thoroughly review all investment opportunities, especially whenever great returns are offered, to avoid becoming a victim of a scam.”
According to the allegations in the Superseding Indictment unsealed today in Manhattan federal court,[1] and statements made in court proceedings:
From in or about 2009 up through and including in or about March 2015, DURANTE, CERVINO, WERBEL, KHAN, REISSMAN, and WISE (the “Defendants”) perpetrated a multi-pronged scheme to defraud more than 100 investors of at least $15 million by soliciting funds in public and private shares of various securities, including VGTL, through false and misleading representations and omissions and by failing to invest investors’ funds as promised. The Defendants further manipulated the public Over-The-Counter market of VGTL stock by controlling a majority of the public shares, inducing investors to buy stock based on false representations and omissions, and engaging in trades in which the Defendants controlled both the accounts that purchased the stock and the accounts that sold the stock in order to artificially inflate the stock price and trading volume. Moreover, DURANTE, with the knowledge of WERBEL, REISSMAN and WISE, among others, used numerous aliases in order to conceal his true identity and regulatory bar from investors, compliance personnel, regulators and law enforcement. Of the approximately $15 million invested in the fraudulent scheme, more than $9 million was funneled to the Defendants and other co-conspirators.
2001 Securities Fraud Conviction
In December 2001, DURANTE was convicted in federal court of conspiracy to commit securities fraud, wire fraud, and money laundering, as well as making false statements in connection with a market manipulation scheme in which the defendant also used the alias “Ed Simmons.” The defendant was sentenced to 121 months in prison and was released in or about 2009, the year he began the current scheme. In connection with that scheme, DURANTE was ordered by a United States District Court to pay disgorgement and prejudgment interest totaling over $39 million. DURANTE was also barred from certain activities in connection with the securities industry, including the sale of securities.
Private Placement Securities Fraud Involving VGTL
Among other fraudulent and illicit conduct, between 2009 and in or about March 2015, DURANTE, CERVINO, WERBEL, KHAN, REISSMAN, and WISE and others fraudulently induced victims to invest in private shares of VGTL by, among other things, concealing from investors that DURANTE controlled the entities selling the shares; that DURANTE was prohibited from any association with the sale of securities; and that DURANTE was previously convicted of crimes related to a similar scheme to defraud. Furthermore, some of the Defendants lied to investors by (a) representing that their investments would be used to fund the operations and growth of VGTL in connection with potential reverse mergers, when in reality no reverse merger was ever consummated and the investments were instead used primarily to personally benefit the Defendants; and (b) representing that the investors would receive an eight-percent dividend on their investments until their private shares could be sold at a promised premium on the public market, when, in reality, no interest payments were ever provided to the investors and many investors never received VGTL stock certificates or were not permitted to sell the stock.
In order to fund his illegal scheme, DURANTE used a network of brokers, including WERBEL and KHAN, investment advisers in Cleveland, Ohio, and Los Angeles, California, respectively, to induce investors to buy shares of VGTL. Although WERBEL knew DURANTE’s true identity and that he had been previously convicted of securities fraud, WERBEL did not disclose this information to any of his clients he solicited to invest in VGTL. Moreover, DURANTE provided WERBEL with kickbacks of as much as 20 percent of monies invested by his clients, which WERBEL did not disclose to his clients. WERBEL also failed to disclose to his clients that the investors were purchasing shares of VGTL from entities controlled by DURANTE, not from the issuer itself. Similarly, KHAN also received kickbacks in return for inducing her clients to invest in private shares of VGTL, which she did not disclose to her clients. KHAN also did not disclose to her investors that their private shares of VGTL were purchased from DURANTE-controlled entities. In total, WERBEL received more than $300,000 and KHAN received more than $100,000 in undisclosed kickbacks from DURANTE for inducing clients to invest in private shares of VGTL.
Manipulation of the Market for Shares of VGTL
The Defendants further engaged in a scheme to control and manipulate the public stock of VGTL in order to artificially inflate the stock price and trading volume so as to profit from their own sales of VGTL stock and to further induce investments in private shares of VGTL. To that end, through entities he controlled, DURANTE held a majority of the publicly-traded stock of VGTL. DURANTE recruited CERVINO, a broker, to open brokerage accounts associated with DURANTE-controlled entities and investors who were clients of WERBEL’s and KHAN’s, many of whom did not know they had accounts with CERVINO. WERBEL and KHAN, along with DURANTE, induced their clients to purchase VGTL stock through CERVINO – sometimes without the clients’ knowledge or permission – while DURANTE and CERVINO ensured that many of these purchases were matched with sales of VGTL stock by DURANTE-controlled accounts. The result of these transactions was that the Defendants were effectively taking both sides of a single transaction in VGTL stock in order to artificially control VGTL’s stock price. The Defendants’ efforts to artificially inflate the market for VGTL increased the stock price from approximately $.25 per share in April 2012 to as much as $1.90, and dramatically inflated the trading volume, which increased the Defendants’ abilities to raise private investments in VGTL. To compensate CERVINO for his efforts to control and manipulate the market in VGTL, DURANTE made at least two cash payments to CERVINO totaling $35,000. Moreover, DURANTE personally siphoned more than $4 million in profits, which he concealed through the use of wire transfers among multiple accounts in the names of other individuals, including WISE.
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DURANTE, 63, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, one count of conspiracy to commit money laundering, one count of money laundering and one count of perjury. Counts One and Seven each carry a maximum sentence of five years in prison. Counts Two through Six each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
CERVINO, 43, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of perjury. Counts One and Five each carry a maximum sentence of five years in prison. Counts Two through Four each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
WERBEL, 67, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, one count of investment adviser fraud, and one count of making false statements to federal officers. Counts One and Six each carry a maximum sentence of five years in prison. Counts Two through Five each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
KHAN, 52, is charged with one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of investment adviser fraud. Count One carries a maximum sentence of five years in prison. Counts Two through Five each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
On January 4, 2016, WISE, 75, pled guilty before Judge Peck to one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, one count of conspiracy to commit money laundering, and one count of money laundering. Count One carries a maximum sentence of five years in prison. Counts Two through Six each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
On January 5, 2016, REISSMAN, 58, pled guilty before Judge Carter to one count of conspiracy to commit securities fraud, one count of securities fraud, one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of making false statements to federal officers. Counts One and Five each carry a maximum sentence of five years in prison. Counts Two through Four each carry a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Bharara praised the work of the FBI and the Postal Inspection Service, and thanked the Securities and Exchange Commission for its assistance.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Edward Y. Kim, Daniel S. Goldman, and Andrea M. Griswold are in charge of the prosecution.
The allegations contained in the Superseding Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and the description of the Superseding Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Thoreau Man Sentenced to Prison for Federal Assault ConvictionRead the Press Release
ALBUQUERQUE – Anthony J. Hamilton, 30, an enrolled member of the Navajo Nation who resides in Thoreau, N.M., was sentenced this morning in federal court in Albuquerque, N.M., to 41 months in federal prison for his assault conviction. Hamilton will be on supervised release for three years following his term of incarceration.
Hamilton was arrested on June 11, 2015, on a criminal complaint charging him with assault with a dangerous weapon and assault resulting in serious bodily injury in Indian Country. Court documents indicate that the investigation of this matter began on May 18, 2015, when law enforcement officers were notified that Hamilton had assaulted his girlfriend, a Navajo woman, and two Navajo men in McKinley County, N.M.
On Sept. 29, 2015, Hamilton pled guilty to a felony information charging him with two counts of assault resulting in serious bodily injury. In entering the guilty plea, Hamilton admitted that on May 18, 2015, he repeatedly struck two individuals on the face, head and body with his fists and elbows. As a result of Hamilton’s criminal acts, one of the victims suffered an acute depressed fracture and a concussion and the other victim suffered an acute bilateral fracture to the bones within his orbital and sinus structures.
This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety and the Gallup office of the FBI and was prosecuted by Assistant U.S. Attorney Niki Tapia-Brito.
This case was brought as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Texas man charged with illegally transporting three minors into the United StatesRead the Press Release
An information was filed charging Arely Gonzalez-Corea, 37, of Katy, Texas, with transporting illegal aliens with the United States, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Corea was stopped in Sandusky County last month and found to have three juveniles who were in the United States illegally, two from Guatemala and one from Nicaragua, according to the information.
If convicted, the defendant’s sentence will be determined by the court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Bureau of Customs & Border Protection, Sandusky, Ohio. The case is being handled by Assistant United States Attorney Tracey B. Tangeman.
An information is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Texas Man Guilty of Federal Child Sex OffenseRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Shilo Watts age 40 of New Braunfels, Texas appeared today in The United States District Court in Fayetteville before The Honorable Timothy L. Brooks and pleaded guilty to the charge of Interstate Transportation of a Minor with the intent to engage in criminal sexual activity in violation of 18 U.S.C. § 2423(a).
According to court records, on or about October of 2012, Special Agents with the Homeland Security Office in San Antonio, Texas, began investigating the sexual abuse of a minor Marshallese male living in Northwest Arkansas by Shilo Watts. Based on this investigation, Homeland Security Agents were able to determine that Watts had lived in the Marshall Islands for several years, and had helped bring several young Marshallese males to the United States. A subsequent interview of one of the minors revealed that WATTS began sexually abusing him at a young age and continued when the minor was living in Springdale, Arkansas. Specifically, the minor stated that between 2008 and 2012, Watts would take him and other young men from Arkansas to a residence in Texas. On at least one occasion, Watts sexually abused the minor while there.
The charge carries a mandatory minimum sentence of 10 years imprisonment and a maximum sentence of life imprisonment. Sentencing will be held on a later date.
This case was investigated by Homeland Security Investigation and the Springdale Police Department. Assistant United States Attorney Dustin Roberts is prosecuting the case for the United States.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Statement of United States Attorney Charles M. Oberly, III, Regarding Indictment of Wilmington Trust CorporationRead the Press Release
WILMINGTON, Del. – Today, a federal grand jury returned a Second Superseding Indictment adding the Wilmington Trust Corporation as a defendant to the indictment already pending against four former senior bank executives, David Gibson, Robert V.A. Harra, William North, and Kevyn Rakowski, for their respective roles in concealing from the Federal Reserve, the Securities and Exchange Commission (SEC) and the investing public the total quantity of past due loans on Wilmington Trust’s books from October 2009 through November 2010. The Nineteen-Count Second Superseding Indictment (15-23-RGA) charges defendants with making false statements in securities filings and to agencies of the United States government.
Wilmington Trust was required to report in its quarterly filings with both the SEC and the Federal Reserve the quantity of its loans for which payment was past due for 90 days or more. Investors and banking regulators consider the amount of past due loans at a bank as an important metric in evaluating the health of a bank’s loan portfolio. According to the Second Superseding Indictment, Wilmington Trust, through the actions of the charged senior executives, concealed the truth about the health of its loan portfolio from the SEC, the investing public and from Wilmington Trust’s regulators. During the course of the alleged conspiracy, in February 2010, Wilmington Trust raised approximately $273.9 million through a public stock offering.
In November 2010, Wilmington Trust announced an agreement to be acquired by M&T Bank Corporation, at a price of $3.84 per share, a discount of approximately 46% from the bank’s share price the prior trading day, and approximately $9.41 per share less than at the time of Wilmington Trust’s capital raise in February 2010. This decline in price, between February and November 2010, represented a loss of $204 million in total market value of the shares bought during the capital raise. The acquisition was completed on May 16, 2011, and Wilmington Trust Corporation became a wholly owned subsidiary of M&T Bank, which assumed both its assets and liabilities. The criminal conduct set forth in the Second Superseding Indictment predated M&T Bank’s acquisition of Wilmington Trust and related solely to Wilmington Trust’s commercial banking operations.
I did not make the decision lightly to seek charges against the Wilmington Trust Corporation. Ultimately, I have determined that bringing the Second Superseding Indictment is necessary to achieve justice and attempt to make whole those members of our community who suffered significant financial harm as a result of the alleged criminal conduct perpetrated by Wilmington Trust Corporation and its multiple senior bank officers. Wilmington Trust Corporation had an obligation, to its shareholders and to the public, to accurately report the important financial metrics which enable investors to make informed decisions. Difficult financial times may present significant business challenges, but they do not excuse anyone or any entity from complying with the law. Wilmington Trust received $330 million in TARP funds and is the first TARP recipient institution to be indicted.
I am grateful to the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program, the Internal Revenue Service’s Criminal Investigative Division, the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau for their diligent and thorough investigation of these matters, as well as to the staff of the United States Attorney’s Office for their hard work and commitment to achieving justice.
Finally, I remind everyone that, as always, the charges contained in an indictment are merely accusations, and a corporate defendant, like an individual, is presumed innocent unless and until proven guilty.
Shooter of Off-Duty MPD Officer Pleads to Felony Firearm PossessionRead the Press Release
Memphis, TN – A man responsible for fatally shooting an off-duty Memphis Police officer has pled guilty to felony possession of a firearm. The defendant’s wife has also pled guilty to disposing of a firearm to a felon. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty pleas today.
According to the indictment, Lorenzo Clark, 36, of Memphis, unlawfully possessed a Glock 9mm pistol on Sunday, October 11, 2015. The firearm was reportedly used by the defendant in the fatal shooting of 31-year-old Terence Olridge, an officer with the Memphis Police Department (MPD). Olridge was off duty at the time of the shooting.
According to the federal complaint, MPD officers responded to a shooting call at Lorenzo Clark’s Cordova residence. Officers later recovered the Glock 9mm alleged to be used in the shooting from the defendant. Lorenzo Clark admitted to possessing the Glock 9mm prior to and during the shooting with Olridge.
In October 2015, Lorenzo Clark was charged with felony firearm possession.
On Wednesday, January 6, 2016, Lorenzo Clark pled guilty to one count of felony firearm possession. He is scheduled to be sentenced by Judge Sheryl H. Lipman on April 15, 2016. He faces up to 10 years imprisonment and a fine of up to $250,000 when sentenced.
Lorenzo Clark’s wife, Natalie Clark, 37, of Memphis, was also charged in the October indictment for providing a firearm to Lorenzo Clark despite knowing he had been convicted of a felony.
On Wednesday, January 6, 2015, Natalie Clark pled guilty to one count of disposing of a firearm to a felon. She is scheduled to be sentenced by Judge Lipman on April 15, 2016. She faces up to 10 years imprisonment and a fine of up to $250,000 when sentenced.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), along with the MPD.
Assistant U.S. Attorney Marques Young is prosecuting this case on the government’s behalf.
Seven New York National Guard Soldiers Charged in Fraudulent Recruitment Bonus SchemeRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of EVETTE MERCED, DARRYL HARRISON, SIUL CELESTE, JEANETTE ARIZAGA, YESENIA ADAMES, RENETTA EDWARDS, and JEFFERSON SIMBANAMUZO, all current members of the New York Army National Guard, in connection with a scheme to obtain fraudulent recruiting bonuses. Defendant YESENIA ADAMES was arrested today and will be presented in the Eastern District of Virginia. The remaining defendants were arrested today and will be presented in Manhattan federal court before Magistrate Judge Andrew J. Peck.
Manhattan U.S. Attorney Preet Bharara said: “Those who join the National Guard nobly serve their fellow citizens. But as alleged, these defendants used their positions in the National Guard to steal. I would like to thank our partners at the FBI, Army CID, and NYPD for their work in uncovering this fraud.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Those charged today, in one form or another, took advantage of an Army National Guard incentive program established to encourage soldiers to recruit civilians into the service. While some of the defendants blatantly lied about signing up new recruits, others, already serving as recruiters, we're altogether ineligible for payment by the program. This scheme resulted in hundreds of thousands of dollars in losses to the government. While the majority of our respected military personnel remain committed to serving and protecting our great country, this select few served only to protect their own interests. As we are reminded today, there will be no reward for this type of behavior.”
Police Commissioner William J. Bratton said: “The NYPD has no tolerance for any member of the service who violates the law. We will hold them fully responsible for their actions.”
According to the allegations in the Complaint[1] unsealed today in Manhattan federal court:
In September 2005, the Army National Guard established a recruiting bonus program, referred to as the Guard Recruiting Assistance Program (“G-RAP”), and administered by a private company, Document and Packaging Broker, Inc. (“Docupak”). The G-RAP was designed to offer referral bonus payments to Army National Guard soldiers who were not otherwise involved in Army National Guard recruitment efforts for civilians whom the soldiers successfully convinced to serve in the Army National Guard. A participating soldier, also known as a Recruiting Assistant (“RA”), could receive up to $2,000 in bonus payments for referring another individual to join. To participate in the program, soldiers were required to establish an online account in their name to record their referral and recruitment efforts. The RA would input the personal identifying information of each recruit into the account. Based on certain milestones achieved by the referred soldier, a participating soldier could then receive payment through direct deposit into the participating soldier’s designated bank account. Soldiers who were themselves serving as paid recruiters for the Army National Guard as part of the National Guard’s standard recruitment program were not eligible to participate in the G-RAP or to receive a referral bonus payment, as the G-RAP was intended to be a supplement to the National Guard’s standard recruiting program.
Beginning in 2007, MERCED and HARRISON, who then served as full-time salaried recruiters for the Army National Guard, abused their positions as officers by providing the personal identifying information of potential soldiers to CELESTE, ARIZAGA, ADAMES, and EDWARDS, in exchange for thousands of dollars in kickbacks. CELESTE, ARIZAGA, ADAMES, and EDWARDS then used their respective online RA accounts to falsely claim that they were responsible for referring those soldiers to the New York Army National Guard. After making those false claims, CELESTE, ARIZAGA, ADAMES, and EDWARDS received referral bonus payments totaling over $62,000 from the G-RAP and kicked back a significant portion of those payments to MERCED and HARRISON.
In a similar but separate scheme, SIMBANAMUZO, a current NYPD police officer, used his online RA account to falsely claim that he was responsible for referring soldiers to the New York Army National Guard whose information he had obtained from various paid recruiters.
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MERCED, 45, of East Stroudsburg, Pennsylvania, currently a Staff Sergeant in the National Guard, is charged with one count of conspiracy to commit bribery, one count of solicitation and receipt of bribes, and one count of theft of government funds, which carry maximum sentences of five years, 10 years, and 10 years in prison, respectively. MERCED is also charged with one count of aggravated identity theft which carries a mandatory sentence of two years in prison.
HARRISON, 51, of East Stroudsburg, Pennsylvania, currently a Sergeant First Class in the National Guard, is charged with one count of conspiracy to commit bribery, one count of solicitation and receipt of bribes, and one count of theft of government funds, which carry maximum sentences of five years, 10 years, and 10 years in prison, respectively. HARRISON is also charged with one count of aggravated identity theft which carries a mandatory sentence of two years in prison.
The following defendants were each charged with one count of conspiracy to commit bribery, which carries a maximum sentence of five years in prison, and one count of theft of government funds, which carries a maximum sentence of 10 years in prison:
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CELESTE, 29, Bronx, New York, currently a Staff Sergeant in the National Guard
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ARIZAGA, 41, Bronx, New York, currently a Staff Sergeant in the National Guard
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ADAMES, 43, Bronx, New York, currently a Sergeant in the National Guard
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EDWARDS, 40, Brooklyn, New York, currently a Sergeant in the National Guard
SIMBANAMUZO, 41, of the Bronx, New York, currently a NYPD police officer and a Sergeant in the National Guard, is charged with one count of theft of government funds, which carries a maximum sentence of 10 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by a judge.
Mr. Bharara praised the investigative work of the FBI, the Army CID, and the NYPD.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorney Robert L. Boone is in charge of the prosecution.
The charges contained in the Complaints are merely accusations and the defendants are presumed innocent unless and until proven guilty.
16-004
1 As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints set forth below constitute only allegations, and every fact described should be treated as an allegation.
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Seattle Man Pleads Guilty in Idaho to Distributing 50 Kilograms or More of MarijuanaRead the Press Release
BOISE – Walter Terry, 56, of Seattle, Washington, pleaded guilty today to distributing 50 kilograms or more of marijuana, U.S. Attorney Wendy J. Olson announced. Terry waived his right to be indicted by a grand jury and agreed to be charged in federal court in the District of Idaho.
According to court documents, Terry began advertising marijuana for sale over the internet in 2011. Terry admitted to distributing approximately 146 kilograms of marijuana throughout the United States, including Idaho, Massachusetts, New Hampshire, New York, New Jersey, Rhode Island, Virginia, Tennessee, Georgia, Florida, Illinois, Wisconsin, and Texas. An undercover DEA Special Agent contacted Terry in January 2013, and Terry agreed to mail marijuana to the undercover agent. Between January 2013, and March 2014, Terry sent six shipments of marijuana to Idaho. In May 2014, Terry agreed to sell the undercover agent five pounds of marijuana. Terry met the undercover agent in Seattle and was arrested after providing the undercover agent with the five pounds of marijuana. Terry told DEA agents that he began his marijuana distribution operation in 2010 or 2011. Terry stated that after the State of Washington legalized medicinal marijuana, his business was negatively affected and he began advertising his marijuana distribution business on websites to out-of-state customers. Terry consented to a search of his residence in Seattle, and law enforcement seized approximately 15 pounds of marijuana and $30,000 in drug proceeds. Terry also admitted to a forfeiture allegation, in which he has agreed to forfeit at least $500,000 in cash proceeds and forfeit his personal residence in Seattle.
Distributing 50 kilograms or more of marijuana is punishable by up to 20 years in prison, at least three years of supervised release, and a maximum fine of $1,000,000.
Sentencing is set for April 26, 2016, before Senior U.S. District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Drug Enforcement Administration, the Seattle Police Department, King County Sheriff’s Office, and the United States Postal Inspectors.
Sanford C. Coats to Step Down After Serving Six Years as United States AttorneyRead the Press Release
Oklahoma City, Oklahoma -- United States Attorney Sanford C. Coats has announced his resignation effective on January 15, 2016. Coats plans on taking some time to determine his next professional endeavor.
"First, I would like to thank the President for giving me this incredible opportunity to serve as the U.S. Attorney," said U.S. Attorney Coats. "Second, I would like to thank the women and men of the US Attorney’s Office for the Western District of Oklahoma for your commitment to justice. You are true public servants and I was consistently in awe of your work and dedication. Finally, I would like to thank federal, state, tribal and local law enforcement for your partnership and friendship over the last twelve years."
Coats was nominated by President Barack Obama to become United States Attorney for the Western District of Oklahoma on September 30, 2009. The nomination was confirmed by the United States Senate on December 24, 2009, and Coats was sworn-in on December 30, 2009.
As United States Attorney, Coats also successfully prosecuted many civil and criminal cases. In addition, Coats served in many key positions in the Department of Justice, including on the Attorney General’s Advisory Committee (AGAC), Vice-Chair of the AGAC Native American Issues Subcommittee, Co-Chair of the Domestic Terrorism Executive Committee, Co-Chair the AGAC Terrorism and National Security Subcommittee, and Co-Chair of the AGAC Crimes Against Children Subcommittee.
Prior to serving as United States Attorney, Coats served as Assistant United States Attorney (AUSA) from 2004-2009. He worked in all areas of the Criminal Division where he prosecuted a variety of cases, including child prostitution, child pornography, banking fraud, tax evasion, crimes in Indian Country, illegal immigration, complex drug conspiracies, firearm crimes and violence associated with illegal street gangs. As an AUSA, has served as Team Leader of the Major Crimes Team and office Project Safe Childhood Coordinator.
In 2007, Coats volunteered for short-term assignment to the U.S. Attorney’s Office in New Orleans as part of a special initiative by the Department of Justice following the devastation of Hurricane Katrina to assist in the prosecution of violent, firearm and drug crime. Also in 2007, Coats received a national Director’s Award for Superior Performance as an Assistant United States Attorney for his work in the prosecution of multiple child prostitution cases.
Prior to joining the U.S. Attorney’s Office, Coats was in private practice in Oklahoma City representing corporations and individuals in litigation. Coats has been a practicing attorney since 1999, after receiving a Juris Doctorate from the University of Oklahoma College of Law in 1998. Prior to law school, Coats attended Tulane University of Louisiana where he received a Bachelor of Arts degree in 1994.
Richmond Businessman Sentenced for Health Care Fraud ConspiracyRead the Press Release
RICHMOND, Va. – Ronald Tucker, 46, of Lawrenceville, was sentenced today to 37 months in prison for conspiracy to commit health care fraud for submitting false and fraudulent claims for reimbursement to the Virginia Medicaid program. Tucker was also sentenced to three years of supervised release and ordered to pay $442,148 to the Virginia Medicaid Program.
Tucker pleaded guilty on Aug. 26, 2015. According to court documents, Tucker owned and operated Quality Healthcare Inc. (Quality), a Richmond-based Medicaid provider of Intensive In-Home and Mental Health Support services. Intensive In-Home Therapy services, one of the many mental health services offered by Medicaid in Virginia, are designed to assist youth and adolescents who are at risk of being removed from their homes or are being returned to their homes after removal because of significant mental health, behavioral, or emotional issues. Mental Health Support services are designed to enable individuals with significant psychiatric functional limitations to achieve and maintain community stability and independence.
In a statement of facts filed with the plea agreement, Tucker acknowledged that, through Quality, he billed Medicaid for services that were never performed and falsified patient eligibility criteria that was submitted to Medicaid’s prior-authorization service, falsely representing Medicaid recipients’ mental health statuses to qualify them for services they did not need.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after sentencing by U.S. District Judge James R. Spencer.
The case was investigated by the FBI and the Virginia Attorney General’s Medicaid Fraud Control Unit. This case was prosecuted by Special Assistant U.S. Attorney and Virginia Assistant Attorney General Joseph E.H. Atkinson, and Assistant U.S. Attorney Jessica D. Aber.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-150.
Reinbeck Man Pleads Guilty to Receiving Child PornographyRead the Press Release
A man who received child pornography pled guilty on January 5, 2016, in federal court in Cedar Rapids.
Robert Turner, age 34, from Reinbeck, Iowa, formerly from Cedar Falls, was convicted of one count of receipt of child pornography. At the plea hearing, Turner admitted that, between 2001 and 2013, he knowingly used the Internet to receive child pornography.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Turner remains in custody of the United States Marshal pending sentencing. Turner faces a mandatory minimum sentence of 5 years’ imprisonment and a possible maximum sentence of 20 years’ imprisonment, a $250,000 fine, a $100 special assessment, and supervised release for 5 years to life following any imprisonment.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Cedar Falls Police Department and the Iowa Division of Criminal Investigation.
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.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 15-2049.
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Palm Beach County Resident Sentenced to 16 Years in Prison for his Role in Massive Identity Theft Tax Refund Fraud SchemeRead the Press Release
Lukner Blanc, 33, of Royal Palm Beach, was sentenced to 192 months in prison, to be followed by three years of supervised release, and was ordered to pay joint and several restitution in the amount of $733,563 for his role in a massive 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), Ric Bradshaw, Sheriff, Palm Beach County Sherriff’s Office, and Amos Rojas, Jr., United States Marshals, United States Marshals Service Regional Fugitive Task Force, made the announcement.
After a ten day trial, Blanc and co-defendant Benoit Placide, a/k/a “Snow,” a/k/a “Mario,” 27, of West Palm Beach, were each convicted of conspiracy to receive, conceal or retain monies stolen from the United States, wire fraud, and aggravated identity theft. Blanc was also convicted of receiving, concealing and retaining monies stolen from the United States. On October 5, 2015, co-conspirator Benoit Placide was sentenced to 120 months in prison, to be followed by three years of supervised release, and was ordered to pay joint and several restitution in the amount of $742,955.
At trial, the government presented evidence that the federal investigation began with the arrest of Blanc, on October 29, 2012, for an unrelated state crime. Agents recovered four bank debit cards out of Blanc’s pants pocket, all in the names of other persons. While incarcerated in the state case, Blanc made recorded calls from the Palm Beach County Jail. Based on information obtained during the course of the monitored and recorded jail calls, law enforcement officials obtained a state search warrant for the residence of co-conspirator Jean Juste, a/k/a “Junior,” a/k/a “Shorty,” 26, of West Palm Beach. Inside Juste’s residence, agents discovered items used to facilitate identity theft crimes, including computers, more than sixty-nine Western Union debit cards, lists of employers, and the names, Social Security numbers, and dates of birth of various individuals. During the course of the investigation, law enforcement learned that Blanc and Juste were associates in the identity theft fraud scheme, alongside co-conspirator Placide.
During the course of the identity theft fraud scheme investigation federal agents obtained additional warrants to search the computers recovered from Juste’s residence. Forensic examinations of the computers revealed that more than 1,000 fraudulent federal personal income tax returns had been filed using the operating system. The returns were submitted over the internet to the Internal Revenue Service (“IRS”) using TaxHawk.com and TurboTax. Co-conspirators of the fraud scheme opened bank accounts in Florida, in order receive the fraudulently obtained federal income tax refunds.
The co-conspirators attempted to obtain more than $1,200,000 in fraudulent, unauthorized income tax refunds. As a result of the fraudulent scheme, the government was induced to pay out more than $730,000 in unauthorized refunds that were later determined to have been filed by the co-conspirators and not the legitimate taxpayers. The co-conspirators received the fraudulent tax refund payments, which were sent to bank accounts and pre-paid debit cards they controlled. After the fraudulent refunds were sent by wire transfer to the bank accounts and debit cards, the defendants and their co-conspirators withdrew the funds at automatic teller machines (ATMs) and point of sale electronic terminals at various retail establishments.
Co-conspirator Jean Juste previously pled guilty to conspiracy, theft of government funds, wire fraud, and aggravated identity theft. On February 17, 2015, Juste was sentenced to 84 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $668,947 for his participation in the conspiracy.
Co-conspirator Shelda Phadael, 29, of Lake Worth, previously pled guilty to conspiracy and theft of government funds. On May 29, 2015, Phadel was sentenced to 18 months in prison, followed by 3 years of supervised release, and was ordered to pay restitution in the amount of $13,327.
Co-Conspirators Marie Claude, 27, of Lantana, and Marie Demesyeux, 31, of Lake Worth, previously pled guilty. On April 16, 2015, both defendants were sentenced to time served.
Co-conspirator Frank Fleuzinord, 30, of Cape Coral, is a fugitive.
Mr. Ferrer commended the investigative efforts of IRS-CI, the United States Marshals Service Regional Fugitive Task Force, and the Palm Beach County Sheriff’s Office. This case was prosecuted by Assistant U.S. Attorney Stephen Carlton.
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
Oklahoma Man Pleads Guilty to Conveying False Information Regarding a Bomb at Church in RogersRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Allen Ward, age 51, of Muskogee, Oklahoma, pleaded guilty today to one count of Maliciously Conveying False Information in violation of 18 U.S.C. § 844(e) . According to the plea agreement, On October 21, 2012, Ward used a cell phone to knowingly provide false information to the Bentonville Police Department by telling a dispatcher that there might be a bomb located at the Fellowship Bible Church, a church located in Rogers, Arkansas that Ward’s ex-wife attended. The change of plea was accepted by the Honorable Timothy L. Brooks, in the U.S. District Court in Fayetteville.
The offense to which Ward pleaded guilty carries a maximum sentence of 10 years imprisonment. Sentencing will occur at a later date.
This case was investigated by the Federal Bureau of Investigations-Joint Terrorism Task Force (FBI-JTTF), the Bentonville Police Department, and the Rogers Police Department. Assistant United States Attorney Brice White prosecuted the case for the United States.
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New Orleans Woman Sentenced for Aiding and Abetting Health Care FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that EVELYN ODOMS, age 65, of New Orleans, was sentenced today after previously pleading guilty to aiding and abetting health care fraud.
U.S. District Judge Susie Morgan sentenced ODOMS to three years probation, a special assessment of $100, and restitution in the amount of $2,055.
On March 12, 2015, ODOMS was indicted along with 18 other defendants in a 26-count indictment charging approximately $30,052,295 in Medicare fraud and the BP fraud.
According to court documents, Abide billed Medicare for providing home health services to a patient at Abide for about five years. During that time period, ODOMS, a licensed practical nurse, was supposed to teach the patient how to treat and handle different diagnoses. But ODOMS never observed the patient exhibit symptoms of the diagnoses and never taught the patient about the diagnoses. ODOMS falsely documented services she was supposed to provide to the patient, documentation that Medicare relied upon to regulate Medicare providers. Abide relied on ODOMS’s compromised independent medical observations and ethics to participate in the ongoing health care fraud scheme perpetrated by Abide and Odoms’s co-defendants.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant U.S. Attorneys Patrice Harris Sullivan, Sharan Lieberman, and Andre Lagarde are in charge of the prosecution.
New Orleans Man Sentenced to 13 Years in Prison for Bank RobberyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that THOMAS EUGENE, age 54, of New Orleans, was sentenced today after previously pleading guilty to one count of bank robbery.
U.S. District Court Judge Sarah S. Vance sentenced EUGENE to serve 160 months imprisonment, to be followed by three years of supervised release, restitution in the amount of $5,269, and a $100 special assessment.
According to the court documents, on February 25, 2009, EUGENE entered the Iberia Bank located in the Pan-American building at 601 Poydras Street in New Orleans, and approached a teller with a note demanding money. The teller gave EUGENE all the $10s, $20s, and $100s from her drawer which an audit by the bank later determined was $5,269.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and the New Orleans Police Department in investigating this matter. Assistant U.S. Attorney Emily K. Greenfield was in charge of the prosecution.
Nevada Man Sentenced to 10 Years for Traveling to Colorado to Engage in Sexual Acts with a MinorRead the Press Release
A Nevada man was sentenced to 120 months in prison today in Denver for traveling across state lines with the intent to engage in illicit sexual conduct with a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John F. Walsh of the District of Colorado.
Brian Franklin Howard, 38, of Las Vegas, pleaded guilty on Sept. 11, 2015, to one count of travel with intent to engage in illicit sexual conduct with a 10-year-old minor child in violation of 18 U.S.C. § 2423(b). He has been in custody since his arrest on April 2, 2015. U.S. District Judge Christine M. Arguello of the District of Colorado also ordered Howard to 10 years of supervised release.
According to the plea agreement, a U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) agent, posing undercover as a single mother of two minor children, came into contact with Howard online. Howard then arranged to meet the mother and her children and flew from Las Vegas to the Denver International Airport, where he met the undercover agent, confirmed his intent to have sex with children and was arrested.
ICE-HSI investigated this case. Trial Attorney James E. Burke IV of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Alecia Riewerts of the District of Colorado prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Ms-13 Gang Member Admits Plans to Kill Rival Gang Members and WitnessesRead the Press Release
NEWARK, N.J. – An MS-13 gang member from Union County, New Jersey, today admitted that after being arrested on charges of plotting to kill rival gang members, he and others planned to murder suspected government witnesses from prison, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.
Julio Adalberto Orellana-Carranza, a/k/a “Player,” 27, of Plainfield, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of an indictment charging him with conspiring to engage in a racketeering enterprise known as La Mara Salvatrucha, or MS-13.
According to the documents filed and statements made in court:
MS-13 is a national and international gang composed primarily of immigrants or descendants from El Salvador. Branches, or “cliques,” of MS-13 operate throughout the United States, including Plainfield. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang.
According to statements made by Orellana-Carranza in court, he was a member of the Plainfield Locos Salvatrucha (PLS) clique of MS-13 from at least August 2011. Orellana-Carranza admitted that he conspired with other members of MS-13 to engage in racketeering activity including murder, robbery, extortion and drug trafficking.
Orellana-Carranza stated that in June 2011, he and other members of the PLS clique plotted to kill members of rival gangs on the streets of Plainfield. Orellana-Carranza further admitted that after being arrested on those charges, he and other jailed MS-13 members hatched a plan to intimidate and/or kill individuals they believed were cooperating with law enforcement in the prosecution of MS-13 members.
Orellana-Carranza faces a maximum potential penalty of 20 years in prison and a $250,000 fine. Orellana-Carranza will remain detained pending sentencing, which is currently scheduled for May 4, 2016.
Eleven additional members and associates of the PLS clique of MS-13 are scheduled for trial in front of Judge Chesler on Feb. 9, 2016. The charges include several counts of murder, conspiracy to commit murder, robbery, extortion, witness retaliation and sexual assault.
U.S. Attorney Fishman and Assistant Attorney General Caldwell credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, and ICE’s Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris, with the investigation leading to today’s plea. They also thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park, and the Plainfield Police Department, for their work on the case.
The government is represented by Assistant United States Attorneys James Donnelly and
Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark as well as Trial
Attorney Kevin L. Rosenberg with the Justice Department Criminal Division’s Organized Crime and Gang Section.
Defense counsel: Bruce Rosen Esq., Roseland, New Jersey
Monroe tax preparer sentenced to 57 months in prison for filing false returnsRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Monroe tax preparer was sentenced Monday to 57 months in prison for filing multiple false tax returns.
Richard Allan Scott, 38, of Monroe, was sentenced by U.S. District Judge Robert G. James for multiple counts of aiding or subscribing a false tax return. He was also sentenced to one year of supervised release and was ordered to pay $338,380 restitution. Evidence admitted at the three-day trial, which ended on September 11, 2015, revealed that more than 50 false tax returns for years 2011 and 2012 were prepared. Many of the returns contained fictitious information pertaining to W-2 withholdings, dependent care expenses and tax credits. The total amount stolen during the scheme was approximately $338,380.
IRS-Criminal Investigations and Monroe Police Department conducted the investigation. Assistant U.S. Attorney Earl M. Campbell prosecuted the case.
Mobridge Man Sentenced for Child AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mobridge, South Dakota, man convicted of Child Abuse was sentenced on January 4, 2016, by U.S. District Judge Charles B. Kornmann.
Gabe Dubois, age 27, was sentenced to 6 months in custody, followed by 3 years of supervised release, and a special assessment of $100 to the Federal Crime Victims Fund.
Dubois was indicted by a federal grand jury on July 14, 2015. He pled guilty on September 21, 2015.
The conviction stems from an incident on June 8, 2015, when an employee of Lucky’s Gas & More in Mobridge called the Mobridge Police Department to report that someone had stolen four cans of beer from Lucky’s. Law enforcement was dispatched to Lucky’s and spoke with the employee who reported that Dubois took four cans of beer from a cooler, stuck them down his pants, walked up to the cash register, requested a book of matches from the clerk, and left the store without paying for his items. After reviewing video surveillance, law enforcement determined that Dubois had arrived and left the store in a black, four-door, Oldsmobile Alero.
Shortly after 5:30 PM on June 8, 2015, the Mobridge Police Department received a call from an employee at G&R Body Shop who informed law enforcement that a black Oldsmobile Alero with a male driver and female passenger kept speeding past the body shop. The employee also stated the driver was wearing a black baseball cap. While law enforcement and the employee were speaking, the car in question approached the shop and was identified by the employee.
Law enforcement pursued the vehicle and identified Dubois as the driver. Law enforcement further noticed the driver was wearing a black hat, and saw a female in the passenger seat. The vehicle had a North Dakota license plate, which was later found to be registered to Dubois. At this point, the officer turned his squad car around and activated his emergency lights and siren.
Dubois fled from law enforcement through several streets in Mobridge, driving 47 miles per hour in a 35 mile per hour zone and driving around a road block comprised of two police squad cars. Law enforcement continued to pursue Dubois, who drove at speeds of up to 100 miles per hour, heading west across the Highway 12 bridge near Mobridge onto the Standing Rock Indian Reservation. Dubois continued to flee once he entered the reservation, turning north on Highway 1806, heading towards Kenel, South Dakota. Because the chase had entered Tribal lands, Mobridge law enforcement notified the Bureau of Indian Affairs (BIA) Law Enforcement.
Dubois continued north toward Kenel at speeds of 70 to 100 miles per hour in a 55 mile per hour zone. South of Kenel, Dubois lost control of the vehicle. The vehicle spun to face south and continued into the ditch, rolling over multiple times, and landing upside down. Multiple law enforcement officers and agencies responded to the crash. The officers were able to extract Dubois from the driver’s seat, an adult female from the passenger seat, and a 17-month-old child, who is Dubois’s daughter. There was a strong odor of alcohol emanating from the vehicle and the officers observed numerous open and empty cans and bottles of alcoholic beverages.
Dubois was interviewed by a Special Agent with the BIA. Dubois admitted to not stopping for the officers when they engaged their lights because he did not want to go to jail. When asked how fast he was going, Dubois said 100 miles per hour, but thought he had dropped down to 75. He also admitted that his driving and eluding police placed his daughter’s life at risk of death or serious bodily injury. He recognized that his actions would be considered a form of child abuse or neglect.
This case was investigated by the BIA, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Dubois was immediately turned over to the custody of the U.S. Marshals Service.
Missouri Man Sentenced to More Than 14 Years in Prison for Fraud, Money Laundering, and Firearms ChargesRead the Press Release
Fort Smith, AR - Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Travis Allen Blount, Jr., age 57, of Kirbyville, Missouri formerly of Harrison, Arkansas, was sentenced to 175 months in federal prison and three years of supervised release on five counts to include: Mail Fraud; Wire Fraud; two counts of Money Laundering; and Possession of a Firearm by a Prohibited Person. Blount was also ordered to pay victim restitution totaling more than $900,000 to more than 80 victims. The Honorable P.K. Holmes, III presided over the sentencing hearing in the U.S. District Court in Fort Smith on January 5, 2016.
According to court records, from approximately 2012 until January 2015, Blount operated car lots in Malvern and Hot Springs, Arkansas, Corvettes and Classics in Harrison, Arkansas and Al’s Hot Rod’s in Kirbyville, Missouri. Blount solicited owners of classic and vintage vehicles to place their valuable vehicles with him on consignment, promising to pay the owners after the sale of their cars. Blount defrauded the owners by selling their cars and keeping the money for himself. Blount also defrauded car buyers by accepting payment for the cars he sold and not delivering the vehicles or the car titles to the buyers. Blount was previously convicted of a crime punishable by imprisonment exceeding one year, and therefore, was prohibited by federal law from possessing a firearm.
This case was investigated by the Financial Crimes Task Force in the Western District of Arkansas, the Internal Revenue Service - Criminal Investigation Division, Homeland Security Investigations, the Fayetteville Police Department, the Harrison Police Department, and the Taney County, Missouri Sheriff’s Office. Assistant U.S. Attorney Kyra Jenner prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Mission Woman Sentenced for Assaulting a Federal OfficerRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, woman convicted of Assaulting, Resisting, Opposing, and Impeding a Federal Officer was sentenced on January 4, 2016, by U.S. District Judge Roberto A. Lange.
Alvina Leader Charge, age 30, was sentenced to time served, at least 4 months in a residential re-entry program, followed by 2 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Leader Charge was indicted by a federal grand jury on July 14, 2015. She pled guilty on October 9, 2015.
The conviction arose from a June 30, 2015, incident when a Rosebud Sioux Tribe Law Enforcement Services Officer responded to a call near the Maverick Motel in Mission. At the scene, the officer arrested Leader Charge for contempt of court and making a false statement. At first, Leader Charge was cooperative, but then she began calling the officer names and threatening to get her fired. The officer tried to calm Leader Charge and warned her they would need to use a security chair if she did not settle down. When the officer was taking Leader Charge out of the squad car, Leader Charge pulled away from the officer and hit the officer in the face and chest. Leader Charge told the officer, “You’re going to get killed,” and said she was going to be on a 24-hour search for the officer.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Leader Charge was immediately turned over to the custody of the U.S. Marshals Service.
Mexican Cartel Leader Edgar Valdez-Villareal, A/K/A "La Barbie," Pleads Guilty to Drug Trafficking and Money LaunderingRead the Press Release
ATLANTA - Edgar Valdez-Villareal, a/k/a La Barbie, who was born in the United States and rose to be a high-level leader of Mexico's Beltran-Leyva Cartel, has pleaded guilty to charges of cocaine importation and distribution, and money laundering.
“Valdez’s conviction is a victory for the people in both the United States and Mexico whose lives were affected by his cocaine trafficking, through drug addiction and community decay or through the violence and corruption associated with the cartel’s daily business,” said U. S. Attorney John Horn. “Valdez stands as a prime example of the Mexican cartels’ influence over the U.S. drug trade, as truckload after truckload of his cocaine traveled across the border to Atlanta for further transport to cities throughout the eastern United States. We are grateful for the cooperation of the Mexican government in securing Valdez’s arrest and extradition to Atlanta to face these charges.”
“Since 2004, Edgar Valdez-Villarreal (La Barbie) was responsible for the distribution of 1000’s of kilograms of Cocaine throughout the Southeast, and more specifically the Northern District of Georgia. This is a great day for DEA, the Government of Mexico and literally hundreds of DEA’s federal, state and local partners throughout the United States. I want to thank the US Attorney in the Northern District of Georgia, and his staff for their outstanding efforts throughout this investigation. This is a victory for this great Nation and our partners in the Republic of Mexico.” Said Atlanta’s DEA Special Agent in Charge Daniel R. Salter.
According to U.S. Attorney Horn, the charges and other information presented in court: As early as the year 2000, Valdez began his drug trafficking career as a marijuana distributor in Laredo, Texas. He soon developed cocaine customers in New Orleans, Louisiana, Memphis, Tennessee, and Mississippi, and his activities escalated into regular shipments of 150-180 kilograms of cocaine to his customers. Valdez eventually entered into a relationship with Arturo Beltran-Leyva, who was then associated with the Sinaloa Cartel in Mexico, and began coordinating shipments of cocaine into Mexico from Colombia and other South American countries using speedboats and airplanes, while also paying bribes to local law enforcement officials. The cocaine was then transported across the border into the United States.
In 2004, Valdez and his partners sought out a more formalized distribution organization for their cocaine customers in Memphis and Atlanta. Valdez obtained cocaine from Colombia, exported the cocaine from Mexico to customers located in the United States in tractor trailer loads of up to 300 kilograms twice per week, then arranged for currency to be smuggled back across the border to the organization’s supervisors in Mexico. In Atlanta alone, the organization distributed a total of 1,500 kilograms of cocaine in just six months in 2005. DEA agents were able to build the case against Valdez using wiretaps, seizures of over 100 kilograms of cocaine and $4 million of drug proceeds, and witness testimony.
Each of the drug trafficking charges in this case carries a maximum sentence of life in prison, a fine of up to $10,000,000, a lifetime term of supervised release, and a $100 special assessment, and requires a mandatory minimum sentence of 10 years imprisonment and five years of supervised release.
The money laundering charge carries a maximum sentence of 20 years in prison, a fine of up to $500,000 or twice the amount of funds that were laundered, a three-year term of supervised release, and a $100 special assessment. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Sentencing for Edgar Valdez-Villareal, a/k/a La Barbie, 42, has not yet been scheduled.
This case is being investigated by the Drug Enforcement Administration.
United States Attorney John Horn and Assistant United States Attorneys Elizabeth M. Hathaway and Garrett L. Bradford are prosecuting the case. The Justice Department’s Office of International Affairs provided assistance with this case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Man Sentenced to 39 Months in Prison for Role in Tax and Bank Fraud ConspiraciesRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Victor Kwabenda Adofo Asante, a.k.a.Victor Asante, age 25, formerly of Newark, Delaware, was sentenced today by the Honorable Leonard P. Stark, United States District Judge for the District of Delaware, to 39 months imprisonment and full restitution in the amount of $259,342.00. The defendant pleaded guilty to False Claims and Bank Fraud Conspiracy in June 2015.
According to court filings and statements at the sentencing hearing, the defendant and others used stolen identities to file fraudulent federal income tax returns with the Internal Revenue Service. The defendant obtained some of the stolen identities by convincing an associate to steal personal information from patients of her employer, a neuro-rehabilitation center. The defendant also participated in bank fraud activities. He and others compromised, and stole money from, unsuspecting victims’ credit card, annuity, and other financial accounts.
The defendant concealed his involvement in the fraudulent activity by, among other things, receiving fraud proceeds into bank accounts he opened or controlled in other people’s names, withdrawing the proceeds in cash, transferring the funds to other bank accounts, and exchanging the funds with others through money orders and checks.
Two of the defendant’s separately charged co-conspirators were previously sentenced by the court. In February 2015, James Ekeke, age 26, of Smyrna, Georgia, pleaded guilty to false claims conspiracy and access device fraud. Ekeke was sentenced in June 2015 to serve 54 months in prison. In May 2015, Festus Frimpong, age 20, of Newark, Delaware, pleaded guilty to false claims conspiracy and access device fraud. Frimpong was sentenced in October 2014, to serve 46 months imprisonment.
An additional co-conspirator, Natasha Pollard, awaits sentencing. She pleaded guilty to aiding and abetting receipt of stolen government property, and bank fraud conspiracy, in October 2015.
A fourth co-conspirator, Amaserwaah Asante, awaits trial on March 28, 2016. She was charged by a Superseding Indictment dated March 12, 2015, with false claims conspiracy, money laundering, and bank fraud conspiracy.
U.S. Attorney Oberly gave the following comments: “Frauds like this have become all too common and are costing the government huge sums of money. My office is committed to prosecuting those engaged in this kind of criminal behavior and to seeking substantial periods of imprisonment to serve as a deterrent to others who might want to attempt to commit the same or similar frauds. I personally want to thank the federal agencies, investigators and Assistant United States Attorney who worked diligently to bring Mr. Asante and his co-defendants to justice.”
“Defendant Victor Ofosu-Asante demonstrated a blatant disregard of the integrity of the United States tax system. Rest assured that IRS Criminal Investigation, along with our law enforcement partners, and the U.S. Attorney's Office, will hold those who engage in similar behavior fully accountable." said Akeia Conner, Special Agent in Charge.
These cases are the result of an ongoing investigation conducted by the Internal Revenue Service Criminal Investigation, the United States Postal Inspection Service, and the Social Security Administration Office of the Inspector General.
MS-13 Member Admits Plan to Kill Rival Gang Members and WitnessesRead the Press Release
A Plainfield, New Jersey, man pleaded guilty today to one count of conspiring to engage in a racketeering enterprise known as La Mara Salvatrucha, or MS-13.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Acting Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division made the announcement.
Julio Adalberto Orellana-Carranza, aka Player, 27, pleaded guilty before U.S. District Judge Stanley R. Chesler of the District of New Jersey, who scheduled sentencing for May 4, 2016. Orellana-Carranza remains detained pending sentencing.
According to court documents, MS-13 is a national and international gang with branches or “cliques” operating throughout the United States, including in Plainfield. In connection with his plea, Orellana-Carranza admitted that he was a member of the Plainfield Locos Salvatrucha (PLS) Clique of MS-13 for a period of time continuing through at least August 2011. Orellana-Carranza admitted that in June 2011, he and other members of the PLS clique plotted to kill rival gang members in Plainfield. Orellana-Carranza also admitted that after local authorities arrested him for that plot, he and other jailed MS-13 members hatched a plan to intimidate and/or kill individuals they believed were cooperating with law enforcement in the prosecution of MS-13 members.
Eleven other members and associates of the PLS Clique are scheduled for trial in front of Judge Chesler on Feb. 9, 2016. The charges include several counts of murder, conspiracy to commit murder, robbery, extortion, witness retaliation and sexual assault.
Co-defendant Jose Romero-Aguirre, aka Conejo, pleaded guilty on Dec. 2, 2015.
FBI’s Newark Division, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations’s Newark Field Office, ICE-Enforcement and Removal Operations, the Plainfield Police Department and the Union County, New Jersey, Prosecutor’s Office investigated the case. Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys James Donnelly and Jamari Buxton of the District of New Jersey are prosecuting this case.
Leader of Baltimore Heroin Distribution Organization Sentenced to 12 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Richard Smith, age 31, of Baltimore, Maryland today to 12 years in prison, followed by four years of supervised release, for conspiracy to distribute and possess with the intent to distribute heroin.
Also today, Judge Quarles sentenced Derek Shorts, age 51, of Baltimore to six years in prison, followed by three years of supervised release, for conspiracy to distribute and possess with intent to distribute heroin. On January 5, 2016, Judge Quarles also sentenced co-conspirator Dedrick Coates, age 26, of Baltimore to six years in prison, followed by three years of supervised release, for the same charges.
The sentences were 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; Commissioner Kevin Davis of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to their plea agreements, beginning in at least January 2014 and continuing through December 10, 2014, Smith, Shorts and Coates conspired with others to distribute heroin in Baltimore. During the conspiracy, Smith and Bruce Jeffries met with other co-conspirators, including Coates, to provide heroin for distribution by members of the conspiracy. Smith was the supervisor of this conspiracy and was responsible for providing the heroin distributed by the co-conspirators. Shorts was responsible for “running” the narcotics to the distributors and for watching over the narcotics “stash.” Once Coates received heroin from another member of the organization, he would either distribute the heroin to other co-conspirators or to his personal use customers.
Between September and November of 2014, law enforcement intercepted telephone conversations between Smith, Jeffries, and other conspirators. During these calls, Smith, Jeffries, Coates, and others were heard discussing the distribution and payment for various amounts of heroin. Shorts was overheard discussing the quantity of narcotics available for distribution. Smith was also intercepted giving members of the conspiracy instructions regarding the distribution of narcotics. On November 14, 2014, law enforcement executed a search warrant at a “stash” house used by members of the conspiracy. During the search, law enforcement recovered 400 gel capsules of heroin from inside the stash house, along with another 100 gel capsules of heroin from Shorts. This seizure precipitated intercepted phone conversations between Jeffries, Smith, and another co-conspirator regarding the seizure.
Smith, Shorts and Coates agree that during their participation in the conspiracy, the conspirators were responsible for the distribution of between one and three kilograms of heroin.
Ten other co-conspirators have pleaded guilty to their roles in the heroin distribution conspiracy. Bruce Jeffries, age 27; Brian Nettles, age 24; Kevin Gray, age 32; Brian Carr, age 26; Walter Timmons, age 27; Darrell Randolph, age 27; Pernell Randolph, age 28; Marvin Germany, age 26; and Vincent Jones, age 52, all of Baltimore, have been sentenced to between 70 and 84 months in prison. The remaining defendant is awaiting sentencing.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore City Police Department, and the Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Matthew Hoff, a cross-designated Baltimore City Assistant State’s Attorney, part of the Baltimore initiative to combat violent crime, who is prosecuting the case.
Justice Department Announces Resolution under Swiss Bank Program with Union Bancaire Privée, UBP SARead the Press Release
The Department of Justice announced today that Union Bancaire Privée, UBP SA (UBP), reached a resolution under the department’s Swiss Bank Program. UBP will pay a penalty of more than $187 million.
“Today’s agreement marks the final resolution with UBP, which acknowledges its role in conspiring with U.S. taxpayers to evade U.S. tax through an array of sham entities, structured transactions, nominees and bank services designed to disguise the true ownership of foreign accounts and other assets,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Under the terms of the agreement, UBP pays a heavy price for its criminal conduct and must cooperate fully in all matters relating to the conduct described in the agreement until all civil or criminal examinations, investigations or proceedings are concluded.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, UBP agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a penalty in return for the department’s agreement not to prosecute UBP for tax-related criminal offenses.
UBP is a corporation organized under the laws of Switzerland with its headquarters in Geneva, Switzerland. It was originally founded in 1969 under the name Compagnie de Banque et d’Investissements CBI. In 1990, CBI merged with TBD-American Express Bank. The merged entity was re-named UBP. UBP operates a financial services business in Geneva, Zurich, Basel and Lugano, Switzerland. It primarily offers private banking and wealth management services for individual clients around the world, including U.S. citizens, legal permanent residents and resident aliens. However, UBP also provides investment management and hedge fund services with a focus on institutional clients.
Over the past two decades, UBP has made a number of acquisitions, including NordFinanz Bank (1995), Discount Bank and Trust (2002), ABN AMRO (Switzerland) AG (2011), a portion of the assets associated with Banco Santander (Switzerland) SA’s private banking business (2012), Nexar Capital Group (Luxembourg) (2012), the assets associated with Lloyds Banking Group’s international private banking business (2013) and the assets associated with Coutts’s Swiss private banking activities (2015).
For decades prior to and through 2013, UBP aided and assisted U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts. Over 200 private bankers were responsible for managing at least one U.S. client account during the period since Aug. 1, 2008. These private bankers, referred to as relationship managers, served as the points of contact for U.S. clients at UBP and were responsible for opening and servicing U.S. client accounts at UBP. Certain relationship managers assisted or otherwise facilitated some U.S. individual taxpayers in establishing and maintaining undeclared accounts in a manner that concealed the U.S. taxpayers’ ownership or beneficial interest in said accounts.
UBP assisted U.S. clients with undeclared accounts at UBP by placing and maintaining their assets in the names of non-U.S. structures, rather than the actual beneficial owner of the funds. During the period since Aug. 1, 2008, UBP held 502 U.S.-related accounts in the names of non-U.S. structures formed in jurisdictions such as the British Virgin Islands, the Cayman Islands, Liechtenstein and Panama. Because Swiss law requires UBP to identify the true beneficial owner of structures on a document called a Form A, it knew or should have known that these were U.S. clients. Nonetheless, UBP accepted and included in UBP’s account records Internal Revenue Service (IRS) Forms W-8BEN (or UBP’s substitute forms) provided by the directors of the offshore companies that falsely stated under penalty of perjury or implied that such companies were the beneficial owners of the assets in the UBP accounts for U.S. federal income tax purposes. This aided and assisted the U.S. clients in concealing these assets and income from the IRS.
Prior to UBP’s acquisition, former ABN AMRO employees advised U.S. clients to conceal their U.S. nexuses from bank documentation. For example, in September 2011, one relationship manager sent an email to a client with dual U.S. citizenship, while she was completing her account opening documents, recommending that the client provide her non-U.S. passport and not her U.S. passport. In another instance in September 2008, a relationship manager instructed a U.S. resident client to sign bank documents using a non-U.S. place and date and to provide a utility bill reflecting a non-U.S. residence.
Prior to 2001, UBP provided formation and administration services for offshore structures through a Geneva-based affiliate. However, in 2001, UBP formed an internal Wealth and Estate Planning unit (WEP Unit) and transferred the administration of these structures to the WEP Unit. The WEP Unit did not form structures but did administer them by liaising with entity agents such as foreign law firms, paying administrative fees and keeping corporate documents up-to-date. UBP coordinated with external trust companies and attorneys to form and administer offshore structures for U.S. clients, for example, with a Geneva-based consultant, a Geneva-based law firm and a Zurich-based individual company. These companies opened numerous accounts for U.S. clients at UBP in the names of offshore structures. For those potential and current U.S. clients interested in creating nominee offshore entities, UBP employees contacted and/or referred U.S. clients to these companies.
UBP maintained undeclared accounts at UBP for U.S. clients in the nominee names of non-U.S. insurance companies. Such accounts, known commonly as insurance wrappers, were titled in the names of insurance companies but were funded with assets that were transferred to the accounts for the beneficial owners of the insurance products. Insurance wrappers were marketed to Swiss Banks by third-party providers in the wake of the UBS investigation as a means of disguising the beneficial ownership of U.S. clients. For example, in November 2009, UBP worked with a third-party service provider to assist a U.S. beneficial owner in restructuring three existing accounts he held at UBP in the names of nominee Panamanian entities into three accounts owned by the insurance company.
UBP employees assisted numerous U.S. clients in concealing their undeclared account funds by making fictitious donations to other accounts at UBP controlled in whole or in part by the U.S. client but held by non-U.S. persons. Typically, the former U.S. customers either maintained signature authority over the donee’s account or had the funds returned to them in the future. For example, in December 2009, the U.S. beneficial owners of a UBP bank account informed UBP of their intent to donate their assets to the remaining non-U.S. beneficial owner of their account. UBP executed a new Form A reflecting sole ownership by the remaining non-U.S. person. However, when the non-U.S. person closed the account in 2012, UBP executed a $491,000 transfer to the personal bank account of the former U.S. beneficial owners at another bank.
UBP offered a variety of other traditional Swiss banking services, including hold mail and code name or numbered accounts, that it knew could assist, and did in fact assist U.S. clients in concealing assets and income from the IRS. UBP used or accepted the use of a variety of other means to assist U.S. clients in concealing their undeclared accounts, including by assisting U.S. clients to repatriate undeclared funds via fictitious donations, by making remote debit or credit card withdrawals, by converting the account funds into precious metals, through nominees, or by structuring transfers of funds from undeclared accounts to evade currency transaction reporting requirements.
Effective January 2001, UBP entered into a Qualified Intermediary (QI) Agreement with the IRS. The QI Agreement was designed to help ensure that, with respect to U.S. securities held in an account with UBP, non-U.S. persons were subject to the proper U.S. withholding tax rates and U.S. persons were properly paying U.S. tax. As a consequence of UBP entering into a QI Agreement with the IRS, UBP allowed U.S. clients to create and open accounts in the name of sham offshore entities and insurance wrappers. Certain UBP employees caused UBP to certify compliance with the QI Agreement event though the true beneficial owners were not reflected in the IRS Forms W-8BEN in the account files. UBP also divested U.S. securities from its undeclared U.S. accounts for the purpose of subverting its QI Agreement.
During the period since Aug. 1, 2008, UBP held and managed approximately 2,919 U.S.-related accounts, which included both declared and undeclared accounts, with aggregate peak of assets under management of $4.895 billion. However, 1,282 of the 2,919 U.S.-related Accounts were acquired through the acquisitions of other banks, including ABN AMRO, and bank assets. UBP will pay a penalty of $187.767 million.
In accordance with the terms of the Swiss Bank Program, UBP mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at UBP must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today’s agreement is significant on several fronts,” said Chief Richard Weber of IRS-Criminal Investigation. “UBP, as one of the largest private banks in Switzerland, held nearly 3,000 U.S related accounts. This agreement will have far-reaching implications, expanding our understanding about the depth, breadth, tactics and techniques employed by the UBP private bankers and external asset managers who assisted U.S. taxpayers to conceal assets not only in Switzerland, but in other jurisdictions as well.”
“Today’s resolution with Union Bancaire Privée, UBP SA, reflects the effectiveness of the Department of Justice’s Swiss Bank Program,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International Division. “Financial institutions are being held accountable for their past actions and are now cooperating by providing us information that will let us track and pursue those who have not complied with the law. U.S. taxpayers who have failed to report their foreign accounts and pay their income taxes need to resolve this non-compliance or face the consequences.”
Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Acting Assistant Attorney General Ciraolo also thanked Kevin F. Sweeney, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Jicarilla Apache Man Pleads Guilty to Federal Assault ChargesRead the Press Release
ALBUQUERQUE – Shane Lewis Vigil, 29, an enrolled member of the Jicarilla Apache Nation who resides in Dulce, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to assault charges. Under the terms of his plea agreement, Vigil will be sentenced within the range of 60 to 71 months in federal prison followed by a term of supervised release to be determined by the court. Vigil also will be required to pay restitution to the victims of his crimes.
Vigil was arrested on July 24, 2015, on a criminal complaint charging him with assault with a dangerous weapon and assault resulting in serious bodily injury. According to the complaint, Vigil assaulted his girlfriend, a Jicarilla Apache woman, with an aluminum baseball bat on July 20, 2015. According to court records, law enforcement authorities learned about the assault when a social worker reported that the victim had been admitted to a hospital after being severely beaten with a baseball bat.
Vigil was indicted on Aug. 12, 2015, and charged with assault with a dangerous weapon, an aluminum baseball bat, and assault resulting in serious bodily injury. The indictment alleged that Vigil committed the crime on July 20, 2015, in Indian Country in Rio Arriba County, N.M.
During today’s proceedings, Vigil pled guilty to a three-count felony information. With respect to Counts 1 and 2, which charged Vigil with assault with a dangerous weapon and assault resulting in serious bodily injury, Vigil admitted assaulting a female victim with a baseball bat on July 20, 2015, in Rio Arriba County, causing the victim to suffer multiple serious injuries. With respect to Count 3, Vigil admitting assaulting a male victim on Nov. 21, 2014, in Rio Arriba County, and causing him to suffer serious bodily injury.
Vigil remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Farmington office of the FBI and the Jicarilla Apache Tribal Police Department. Assistant U.S. Attorneys Raquel Ruiz-Velez and Kyle T. Nayback are prosecuting the case.
This case was brought as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native American women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Iranian Company Sentenced for U.S. Export ViolationRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania and the Office of Export Enforcement of the United States Department of Commerce announced that FIMCO, an Iranian corporation, was sentenced today to pay a $100,000 criminal fine by United States District Court Judge Yvette Kane in Harrisburg for conspiracy to evade export licensing requirements.
The conspiracy was in connection with an attempt to smuggle to Iran a machine with possible military as well as civilian applications.
According to U.S. Attorney Peter Smith, in December 2012, a federal grand jury in Harrisburg charged FIMCO in a sealed indictment made public in July 2015. In April 2014, an American company, Hetran, Inc., an engineering and manufacturing corporation in Orwigsburg, Schuylkill County, Pennsylvania, and its President, Helmut Oertmann, were charged with participating in the conspiracy. A guilty plea was entered on behalf of the corporation in July 2015 before United States Magistrate Judge Susan E. Schwab.
Hetran manufactured a large horizontal lathe, also described as a bar peeling machine (“peeler”), valued at more than $800,000 and weighing in excess of 50,000 pounds. The machine is used in the production of high grade steel for the manufacture of automobile and aircraft parts.
Under U.S. law and regulations, American companies are forbidden to ship “dual use” items (items with civilian as well as military or proliferation applications), such as the peeler, to Iran without first obtaining a license from the U.S. Government. Aware that it was unlikely that such a license would be granted, FIMCO, which does business in Dubai, United Arab Emirates, and other alleged co-conspirators agreed to falsely state on the shipping documents that the end-user of the peeler was Crescent International Trade and Services FZE (Crescent), an affiliated company, knowing that the machine would subsequently be shipped to Iran after being off-loaded in Dubai.
In June 2012, Hetran caused the peeling machine to be shipped from Pennsylvania to Dubai in the United Arab Emirates, fraudulently listing Crescent as the end-user, knowing that the shipment was ultimately being sent by FIMCO to Iran in violation of federal law. The Office of Export Enforcement, Bureau of Industry and Security (BIS), U.S. Department of Commerce detected the shipment and ordered that it be re-delivered to the United States. The seizure of key shipping documents, emails and correspondence from Hetran to Iran revealed the scheme, and was critical to the success of the case, and to shutting down the contemplated shipment.
As part of its plea agreement with the United States, FIMCO agreed that the government would recommend a criminal fine. The company also has agreed under a settlement with BIS to pay a $837,500 civil penalty to the U.S. Department of Commerce, of which it paid $587,500 out-of-pocket, with the remaining $250,000 suspended for two years. The suspended portion of the civil penalty will be waived thereafter so long as FIMCO complies with the terms of the plea agreement and any criminal sentence and satisfies certain additional conditions. FIMCO will also be made subject to a two-year suspended denial of its export privileges.
"The penalty imposed today, together with the six-figure administrative penalty being paid by FIMCO to the Department of Commerce, reflects the seriousness of the violation, said Under Secretary of Commerce Eric L. Hirschhorn. The Office of Export Enforcement will continue to pursue and fully prosecute those who violate our export control laws and threaten our national security."
During the investigation by the Department of Commerce’s Bureau of Industry and Security (BIS), FIMCO and Crescent were placed on BIS’s Entity list in August 2014. The Entity List identifies foreign parties that are prohibited from receiving listed items unless the exporter secures a license. Those persons present a greater risk of diversion to weapons of mass destruction (WMD) programs, terrorism, or other activities contrary to U.S. national security or foreign policy interests. By publicly listing such persons, the Entity List serves as an important tool to prevent unauthorized trade in such items.
In December 2014, Helmut Oertmann and Hetran were sentenced by Judge Kane to 12 months’ probation; Oertmann and Hetran were ordered as part of a settlement with BIS to pay a penalty of $837,500 with $337,500 of that amount paid out-of-pocket and the remainder conditionally suspended, which penalty Judge Kane adopted as to Oertmann and Hetran. The other indicted company, Crescent International Trade and Services FZE, and the three Iranian individuals who served as officers of FIMCO, Khosrow Kasraei, Reza Ghoreishi, and Mujahid Ali, are presently fugitives.
The case was investigated by the New York Field Office of the Office of Export Enforcement, Bureau of Industry and Security, Department of Commerce. The Department of Commerce’s Office of the Chief Counsel for Industry and Security handled the civil proceedings. The prosecution was handled by Assistant U.S. Attorney Christy H. Fawcett and was overseen by the National Security Division of the U.S. Department of Justice.
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In-home Caretaker Sentenced for Stealing More Than $80,000 from her Client’s EstateRead the Press Release
Memphis, TN – An in-home caretaker has been sentenced to 27 months for executing a scheme that defrauded a deceased woman’s estate of more than $80,000. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentencing today.
According to the indictment, Shirley Hardaway, 60, of Memphis, was the owner and operator of Companion Plus, an in-home health and respite care provider to sick, disabled, and elderly people. Hardaway served as the daily in-home caretaker of the deceased victim for approximately four-to-five years, according to information presented in court. The home services ceased when the victim died in September 2009 at the age of 91. The deceased victim left behind more than $80,000 in two investment accounts at Franklin Templeton Investments, an investment managing company headquartered in California.
Nearly two years after the victim’s death, in June 2011, Hardaway mailed fraudulent change of address requests to Franklin Templeton on the decedent’s investment accounts, changing the address used for future correspondence between the parties to Hardaway’s address.
Hardaway and a co-conspirator then opened a fraudulent bank account online in the decedent’s name at Bank of America. The victim’s name, social security account number, and address were used to open the account.
After the Bank of America account was activated, Hardaway and her co-conspirator mailed several fraudulent documents to Franklin Templeton in the decedent’s name requesting that the company liquidate the victim’s two investment accounts and transfer the money within them to the fraudulently opened bank account. Upon receiving the request to liquidate both of the deceased victim’s accounts, Franklin Templeton electronically transferred more than $80,000 to the bank account. Hardaway then transferred the money to her personal Bank of America savings account and withdrew it all via cashier’s check.
On Thursday, October 8th, 2015, Hardaway pled guilty to one count of bank fraud and one count of conspiracy to commit mail fraud.
On Wednesday, January 6, 2016, Judge Jon Phipps McCalla sentenced Hardaway to 27 months in federal prison. She has also been ordered to pay $124,630.54 in restitution. In addition to the approximate $80,000 Hardaway stole from the victim’s investment accounts, she stole more than $40,000 in social security checks and pension dividend checks.
The case was investigated by the United States Secret Service.
Assistant U.S. Attorney Leetra Harris prosecuted this case on the government’s behalf.
Idaho Man Sentenced to Five Years in Prison for Conspiracy to Distribute Meth in MissoulaRead the Press Release
MISSOULA – Stephon Elijah Coakley, 20, of Coeur d’Alene, Idaho, was sentenced today in Missoula federal court for conspiracy to possess with intent to distribute methamphetamine. Coakley was indicted on two drug related charges on March 20, 2015. On September 23, 2015, Coakley pleaded guilty to count I: conspiracy to possess with the intent to distribute controlled substances. Chief U.S. District Court Judge Dana Christensen sentenced Coakley to 60 months’ incarceration. Following his release, Coakley will be subject to four years of supervised release.
In an offer of proof filed by Assistant U.S. Attorney Cyndee Peterson, the government stated that if the case had proceeded to trial, the government would have demonstrated that between February and November of 2014, Coakley supplied meth to co-conspirator Yusuf Reeves and conspired with Reeves and two other co-conspirators to bring methamphetamine into Missoula County for distribution. During that time, the co-conspirators possessed and distributed 50 grams or more of a substance containing a detectable amount of methamphetamine.
This case was prosecuted by Assistant U.S. Attorney Cyndee Peterson and investigated by the Federal Bureau of Investigation, Montana Violent Crime Task Force, Missoula Street Crimes Unit, Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Honolulu Businessman Sentenced to 46 Months in PrisonRead the Press Release
HONOLULU – Albert S.N. Hee, 61, of Kailua, Hawaii, was sentenced today to 46 months in prison for engaging in a ten-year scheme of corruptly interfering with the Internal Revenue Service (IRS) in the calculation and collection of his taxes, and for filing six false individual tax returns which underreported his income for the years 2007-2012, announced Florence T. Nakakuni, United States Attorney for the District of Hawaii. Senior U.S. District Judge Susan Oki Mollway also ordered Hee to pay $431,793 in restitution to the IRS, and to pay a fine of $10,000.
Hee was convicted of all counts in the Indictment on July 10, 2015, after an eleven day jury trial. According to court documents and the evidence introduced at trial, Hee owned Waimana Enterprises, Inc., a telecommunications company based in Honolulu, Hawaii. Hee used his company to pay approximately $2.9 million of his personal expenses. The bulk of the expenses were falsely claimed as business deductions on Waimana’s corporate income tax returns, or falsely characterized as “loans” to Hee, Waimana’s sole shareholder. Hee did not report the receipt of the payments as income on his personal income tax returns, and did not pay tax on it.
Information presented to the court reflected that Hee’s lavish spending included $96,000 for personal massages which were deducted as “consulting fees,” $1.6 million in salaries and benefits for his wife and children who were not real employees of the company, and more than $736,900 in college tuition, housing and other expenses for his children. In 2008, Hee bought a $1.3 million dollar home in Santa Clara, California with corporate money and told his accountants that the property would be used by employees of the company. Instead, Hee’s children lived in the home from 2008-2012, which was within skateboarding distance of Santa Clara University, where they attended college. Hee’s children lived at the home, rent-free, and collected rent from others, without paying the amounts over to Waimana. Waimana also paid for vacations for Hee’s family to DisneyWorld, Tahiti, France, and Switzerland, which he falsely characterized as business related. Hee also directed Waimana to pay $17,000 for a five-day family vacation at the Mauna Lani resort on the Big Island of Hawaii, which Hee falsely characterized as a “stockholder’s meeting” even though he was the sole shareholder of the company.
The case was investigated by the Internal Revenue Service-Criminal Investigation, and prosecuted by Assistant U.S. Attorney Larry Tong and Trial Attorney Quinn P. Harrington of the Tax Division of the Department of Justice.
Honduran National Pleads Guilty to Illegal Use of Social Security NumberRead the Press Release
U.S. Attorney Kenneth A. Polite announced that NOE FRANCISCO MARADIAGA-MIRANDA, a/k/a Isaac Lisboa Morales, a/k/a Noe Francisco Maradiaga, a/k/a Noe Francisco, a/k/a Isaac Lisboa, age 34, a Honduran citizen, pled guilty today to falsely representing as his own a Social Security Number in order to obtain employment.
According to the court documents, from on or about April 30, 2012, until on or about September 15, 2015, MARADIAGA-MIRANDA falsely represented that Social Security Number XXX-XX-5102 was assigned to him by the Commissioner of Social Security to obtain employment when in truth and in fact it was not.
MARADIAGA-MIRANDA faces not more than five years of imprisonment, to be followed by three years of supervised release, and a $250,000 fine. U.S. District Judge Sarah S. Vance set sentencing on April 20, 2016.
U.S. Attorney Polite praised the work of the Immigration and Customs Enforcement in investigating this matter. Assistant U.S. Attorney Emily K. Greenfield is in charge of the prosecution.
Glendale Man Found Guilty of 32 Counts of Stealing and Distributing Avionics Trade Secrets Belonging to Former EmployerRead the Press Release
LOS ANGELES – An electrical engineer from Glendale has been convicted of 32 counts of violating the Economic Espionage Act for stealing trade secrets belonging to his former employer – a Pasadena-based aircraft avionics company – and distributing the proprietary material to three competitors.
Derek Wai Hung Tam Sing, 44, was found guilty by United States District Judge Christina A. Snyder, who presided over a bench trial in September. Judge Snyder yesterday issued a 28-page ruling in which she convicted Sing of 32 counts and acquitted him of one charge.
Sing worked at Rogerson Kratos (RK) in 2012. Until he was fired by the company, Sing had access to RK trade secrets, and he signed a confidentiality agreement that prohibited him from disclosing any confidential information and trade secrets that belonged to the company. According to Judge Snyder’s ruling, Sing’s “performance at RK was marked by delays in completing assignments, late attendance and an unprofessional attitude.”
After being terminated, Sing retained materials that he had collected while working at RK, despite being specifically asked to return all trade secrets. Instead, Sing “packaged the trade secrets with sufficient supporting documentation and instructions so that other competitor companies would be able to use the trade secrets and reverse engineer RK’s products,” according to Judge Snyder’s ruling, which noted that Sing testified at trial that he “wanted to get back at Rogerson Kratos” for not appreciating his work as an employee.
Sing prepared packages that included schematics of RK products and prepared a “readme” document that explained the importance of the proprietary information and instructed competitors to reverse engineer the products. Using email addresses created under a false name and a public wi-fi connection at a Starbucks, Sing sent the stolen trade secrets in early 2013 to other companies that produced avionics, including a company outside of the United States. Sing also used physical flash drives to send the trade secrets to companies. Judge Snyder found that Sing illegally sent seven schematics to three different companies, and that he illegally possessed four of those schematics.
“Sing attempted to hurt his former employer by stealing its trade secrets, making the material easily understood by engineers at other companies, and using an assumed identity to send the propriety information in the hope it would be used to develop a product to compete with his former employer,” said United States Attorney Eileen M. Decker. “If not for the ethical conduct of one competitor, Mr. Sing might have succeeded in delivering a crippling blow to the company that once employed him. The Department of Justice recognizes that intellectual property is a vital part of the economy of both Southern California as well as the nation.”
Judge Snyder acquitted Sing of one count of illegally possessing trade secrets from Precision Engine Controls Corporation, where Sing worked as a contract employee in 2010 and 2011. Judge Snyder wrote that there was no evidence that Sing had shared the trade secret information with third parties.
At a hearing Monday afternoon in which Judge Snyder announced her tentative decision in the case – a ruling that was made final with Tuesday’s written order – the court modified Sing’s $20,000 bond to impose conditions of home detention with electronic monitoring.
Judge Snyder is scheduled to sentence Sing on March 21, at which time the defendant will face a statutory maximum penalty of 10 years in federal prison for each of the 32 counts on which he was found guilty.
The case against Sing was investigated by the Federal Bureau of Investigation.
Glassport Woman Admits Defrauding Local Funeral HomeRead the Press Release
PITTSBURGH - A resident of Glassport, Pennsylvania pleaded guilty in federal court to charges of issuing forged checks, theft of government money and access device fraud, United States Attorney David J. Hickton announced today.
Deborah A. Mattie, 48, pleaded guilty to the three felony counts before United States District Judge Gustave Diamond.
According to information presented to the Court at the guilty plea, Mattie defrauded the Finney Funeral Home.
Judge Diamond scheduled sentencing for May 4, 2016. The law provides for a maximum total sentence of 30 years in prison, a fine of $750,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Pending sentence, the court released Mattie on bond.
Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Office of Inspector General of the U.S. Department of Housing and Urban Development and the Allegheny County Police Department conducted the investigation leading to the Information in this case.
Franklin Man Sentenced to 25 Years for Heroin and Gun CrimesRead the Press Release
NORFOLK, Va. – Phillip Jerome Murphy, 41, of Franklin, was sentenced today to 300 months in prison for conspiracy to distribute heroin and possessing a firearm during a drug trafficking crime.
Murphy pleaded guilty on Sept. 23, 2015. According to court documents, Murphy, who is a convicted felon, and a co-conspirator, Collie Sanks, 37, of Emporia, were leaders of a Bloods street gang known as the Red Stone Rydahs, which operated in the Franklin area. Murphy and Sanks began distributing significant quantities of heroin in Franklin, Smithfield, and Emporia in approximately 2012. As frequently as twice per month, Murphy and Sanks would travel to New York to purchase bulk quantities of heroin and then travel back to southeastern Virginia to distribute the drug. Both men sold heroin themselves, and also employed other individuals to assist them in their distribution activities. On several occasions, Murphy completed heroin sales within extremely close proximity to an elementary school that was in session. In addition to numerous undercover heroin purchases from both Murphy and Sanks, search warrants executed at residences associated with each man yielded heroin, cocaine, narcotics packaging materials, and firearms. At one point during the investigation, Murphy sold an assault rifle with a 30-round magazine to an undercover source.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office; and Phillip Hardison, Chief of the Franklin Police Department, made the announcement after Murphy’s plea was accepted by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorneys William D. Muhr and V. Kathleen Dougherty are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case Nos. 2:15cr103 (Murphy) and 2:15cr115 (Sanks).
Four Arrested on Federal Mail Fraud Charges Related to $8 Million Embezzlement from Southland Commercial Laundry CompanyRead the Press Release
LOS ANGELES – Four men from Southern California have been arrested on charges that they embezzled more than $8 million from an industrial launderer based in Gardena that provided finishing services for Citizens of Humanity, a manufacturer of high-end designer jeans.
Luis Mariano Rodriguez, 48, of East Los Angeles, the one-time president of CM Laundry, LLC, and three associates were taken into custody yesterday morning for allegedly causing the laundry to pay fraudulent invoices that contained fictitious and inflated charges, and concealed Rodriguez’s role in the underlying transactions.
Since 2007, CM Laundry has been owned by Citizens of Humanity, LLC, a Huntington Park company that manufactures more than 1 million pairs of high-end denim jeans every year.
The other three defendants arrested yesterday by special agents with the FBI and officers with the Los Angeles Police Department are:
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Antonio Anguiano, 48, of Riverside, the owner of FI Products, which sold personal protective equipment;
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Terry Jay Mink, 62, of Rancho Palos Verdes, the owner of H&T Industrial Products, a hardware company that serviced CM Laundry; and
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Rene Exequiel Bautista, 43, of Sylmar, the owner of Valley Star Realty, which was used in the scheme under the fictitious business name “K&R Industrial Supplies.”
All four defendants made their initial appearances late yesterday afternoon in United States District Court in downtown Los Angeles. All four defendants were released on bond and were ordered to return to court for arraignments on February 1.
According to a criminal complaint filed on December 30, Rodriguez caused CM Laundry to pay more than $8 million after fraudulent invoices were submitted to the company.
“Mr. Rodriguez allegedly orchestrated a long-running scheme that took millions of dollars from his employer,” said United States Attorney Eileen M. Decker. “The scheme involved other defendants who also allegedly stole proceeds generated through fraudulently issued bills. All of these individuals must now face the criminal justice system for their criminal conduct.”
According to the affidavit in support of the criminal complaint, Anguiano, through his company, FI Products, billed CM Laundry for over $3.6 million during the period of the scheme, which allegedly ran from about May 2007 to about September 2013. During this period, FI Products transferred approximately $2.3 million to Rodriguez and his company, Genesis Electronics, Inc.
Mink, through his company, H&T Industrial Products, billed CM Laundry for over $5.5 million and transferred approximately $3.6 million to Rodriguez and Genesis.
Bautista, a real estate agent participated in this scheme through his company, K&R Industrial Supplies, which he established in 2012 at the behest of Rodriguez and was used to submit invoices from Genesis to CM Laundry. Over an 18-month period, K&R Industrial Supplies billed CM Laundry for approximately $640,000 and transferred approximately $493,000 to Rodriguez and Genesis. “Bautista admitted Rodriguez produced and submitted all of the K&R Industrial Supplies invoices that were submitted to CM Laundry and paid by Citizens,” according to the complaint affidavit. “Bautista stated [in a deposition related to a civil lawsuit] that he did not create any of the K&R Industrial Supplies invoices, did not know what any of the invoiced items were, and did not supply anything to CM Laundry.”
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The complaint charges Rodriguez with three counts of mail fraud. The other three defendants are charged with one count of mail fraud. If they are convicted, each of the four defendants would face a statutory maximum sentence of 20 years in federal prison for each count.
As a result of civil litigation brought by CM Laundry and Citizens of Humanity, a Los Angeles Superior Court judge in November 2015 ordered Rodriguez and several other defendants to pay a total of $9,563,786, according to the criminal complaint.
The investigation into the embezzlement scheme was conducted by the Federal Bureau of Investigation and the Los Angeles Police Department, Major Crimes Division, Criminal Investigations Section.
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Former Louisville Teacher Sentenced to 504 Months in Prison for Violating Child Exploitation Laws Including Enticement, Production, Distribution and Possession of Child PornographyRead the Press Release
Defendant met in person with three minors from the Louisville area to engage in sexual activity
Defendant used 16 different minors to produce child pornography using social media
LOUISVILLE, Ky. – The former Louisville teacher and assistant football coach, previously employed by a parochial high school, was sentenced today in U.S. District Court by United States District Judge David J. Hale, to 504 months in prison and a lifetime of supervised release, for violating child exploitation laws, announced United States Attorney John E. Kuhn, Jr.
Patrick Newman, age 33, previously pleaded guilty to 16 counts of producing child pornography, one count of online enticement of a minor, one count of transporting child pornography, and one count of possessing child pornography. The charges involved 16 different victims, all boys. The ages of the children ranged from 12 to 17. Newman engaged in sexual activity with three minors from the Louisville area and recorded the sexual activity with one of the minor aged victims. According to information exchanged during online communications, the remaining victims are from Texas, Ohio, Indiana, Colorado, North Carolina, New York, Utah, Oregon, and the United Kingdom.
“This significant sentence reflects the severity of Mr. Newman’s crimes and is an appropriate punishment in light of the terrible harm he caused the multitude of vulnerable 12 to 17 year-old victims, their families, and a high school community,” stated U.S. Attorney John Kuhn. “Protecting our children will always be the highest priority of this office, and we will continue to prosecute those who exploit children as vigorously as the law allows.”
According to the Affidavit attached to a previous criminal complaint, the investigation started in early 2015, when the National Center for Missing and Exploited Children received a CyberTip from Twitter, Inc. regarding the upload of child pornography materials to VINE (a video sharing website owned by Twitter) from the same IP address in Texas, between 12-28-2014 and 12-30-2014. Law enforcement officials in Texas identified the child depicted in the images and later identified Newman as an adult who had been communicating with the child and obtaining sexually explicit images of the child.
Law enforcement officials executed a federal search warrant on Newman’s Louisville home in early June. Homeland Security Investigations (HSI) within the Department of Homeland Security (DHS) arrested Newman that same day. During a recorded, post-Miranda interview, Newman admitted a sexual interest in boys 13-17 years of age. He also admitted to communicating with minors through social media tools/applications such as KIK, VINE, Snapchat and Topix for the past two years.
Forensic examination of Newman’s cellular telephone revealed electronic communications between him and many other individuals involving the sexual exploitation of minors. Based on representations during those communications, Newman solicited and obtained sexually explicit images from 16 boys under the age of 18. He gave specific directions to some of the children as to what he wanted them to do, record, and send to him. With one child, he specifically asked for sadistic images. Newman met at least three boys in person and one (age 15) on several occasions. Newman and the minor boy engaged in sexual activity which Newman recorded – using his phone. He told other people, via social media, about his sexual activities with the boy and transported/distributed the videos to them. He also shared other images and videos of child pornography with people via social media. According to a review of his phone, he transported/distributed child pornography to 56 people, in addition to the 16 minors. Also, a review of Newman’s “Dropbox” account, found that he possessed 87 videos depicting child pornography involving boys.
Newman has been in federal custody since his arrest on June 1, 2015.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The investigation was led by HSI Louisville Division of the Department of Homeland Security, with assistance from state, local, and federal law enforcement entities in Kentucky, Indiana and Texas.
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."
Former Finance Manager for the Salvation Army Metro Atlanta Area Command Pleads Guilty to Embezzlement of Charitable FundsRead the Press Release
ATLANTA - Gary Hilliard has pleaded guilty to embezzling more than $272,000 from the Salvation Army Metro Atlanta Area Command while serving as its finance manager.
“The Salvation Army provides a wide range of charitable programs and services to needy citizens in our community,” said U. S. Attorney John Horn. “Unfortunately, Mr. Hilliard chose to disregard his former employer’s motto of ‘Doing the Most Good’ by fraudulently diverting charitable funds to his own use without regard for the underprivileged who are in such desperate need of this help.”
“The United States Secret Service will continue to collaborate with its law enforcement partners to target and arrest individuals who violate the trust of our community to further their personal financial gain,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office.
According to U.S. Attorney Horn, the charges and other information presented in court: Hilliard was hired as the finance manager for the Metro Atlanta Area Command in June 2008. As the finance manager, Hilliard supervised the accounts payable department and had the authority to approve vendor invoices and countersign checks to vendors. While carrying out these duties between December 2010 and December 2012, Hilliard embezzled more than $272,000.
Hilliard embezzled a significant portion of that money by creating and submitting bogus invoices and documents that purported to be from legitimate vendors and business partners of the Metro Atlanta Area Command to the accounts payable department. He submitted bogus invoices from advertising agencies who conducted fundraising campaigns on behalf of the Metro Atlanta Area Command, consultants, and other business partners. He chose vendors and businesses who submitted invoices to the Salvation Army on a routine basis because it was unlikely that these invoices or payments would be questioned, and because Hilliard was directly involved in the reconciliation of some of these accounts. He approved or caused these bogus invoices to be approved, which led to checks being generated from the Metro Atlanta Area Command’s operating account. Hilliard countersigned these checks in his role as finance manager, obtained or forged the appropriate authorized signature, then deposited them into bank accounts he controlled.
Initially, Hilliard deposited the checks into his personal checking and savings accounts. Beginning in June 2011, Hilliard opened bank accounts in some of the vendors’ names and deposited the fraudulently obtained checks. To accomplish this, Hilliard submitted three separate false sworn applications to Cobb County, Georgia, to register businesses in the names of the vendors.
On each of these applications, Hilliard falsely stated that he was conducting business in Cobb County in the name of the vendor, provided information on the vendor’s line of business, and stated that he was the sole person composing the business. He then presented each business certificate issued by Cobb County to the bank to open a business bank account in the vendor’s name, and deposited checks made out to the vendor into that account. Hilliard’s scheme unraveled in December 2012, when his bank questioned a discrepancy between the name of the payee on a Metro Atlanta Area Command check and the depository account and decided to contact the Metro Atlanta Area Command.
Sentencing for Gary Hilliard, 47, of Mableton, Georgia, is scheduled for March 31, 2016, at 9:00 a.m. before United States District Judge Leigh Martin May.
This case is being investigated by the United States Secret Service. The Salvation Army Metro Atlanta Area Command fully cooperated with the investigation.
Assistant United States Attorney Sally B. Molloy is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Chief of Mount Pleasant Police Department Sentenced in White Plains Federal Court for Possession of Child PornographyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that BRIAN FANELLI, the former Chief of the Mount Pleasant, New York, Police Department, was sentenced to 18 months in prison for possession of child pornography. Fanelli pled guilty in July 2015 to one count of possession of child pornography before United States District Judge Kenneth M. Karas, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara stated: “Brian Fanelli, a former police chief who swore to protect and serve, instead helped fuel a market that victimizes and exploits some of the most vulnerable in our community. As today’s sentencing demonstrates, we will be vigilant in investigating and prosecuting those who sexually exploit children.”
According to materials submitted in connection with today’s sentencing:
From at least as early as October 2013, through January 2014, FANELLI used a Peer-to-Peer File Sharing Program (“P2P Network”) to download more than 120 files containing images and videos believed to be child pornography, many of which contained depictions of graphic sexual abuse of young, pre-pubescent victims. During the course of FANELLI’s criminal conduct, in addition to serving as police chief, FANELLI taught classes to children about sexual abuse awareness. Certain of the files downloaded by FANELLI were made available to other P2P Network users through FANELLI’s computer’s shared folder on the P2P Network program. On three occasions, agents with the Department of Homeland Security, Homeland Security Investigations (“HSI”), acting in an undercover capacity, used the P2P Network to download from FANELLI’s computer files containing images and videos believed to contain child pornography.
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In addition to a prison term, Judge Karas sentenced FANELLI, 56, of Mahopac, New York, to five years of supervised release. He was ordered to forfeit his computer and hard drives, which were used to commit the offense, to the United States, and to pay a $100 special assessment fee.
Mr. Bharara praised the outstanding investigative work of the Department of Homeland Security.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-DHS-2ICE. Investigators staff this hotline around the clock. Suspected child sexual exploitation or missing children may also be reported to the National Center for Missing and Exploited Children, an Operation Predator partner, at 1-800-843-5678 or http://www.cybertipline.com.
The prosecution is being overseen by the Office’s White Plains Division and the Public Corruption Unit. Assistant United States Attorneys Anden F. Chow and Andrew D. Goldstein are in charge of the prosecution.
Florida Woman Sentenced for Aggravated Identity Theft and Wire FraudRead the Press Release
BOISE - Yinet Quintana Isalgue, 28, of Homestead, Florida, was sentenced today in United States District Court to 33 months in prison followed by three years of supervised release for wire fraud and aggravated identity theft, U.S. Attorney Wendy J. Olson announced. Senior U.S. District Judge Edward J. Lodge also ordered Quintana Isalgue to pay $97,496 in restitution and to complete 100 hours of community service. Quintana Isalgue pleaded guilty to the charges on July 21, 2015.
According to the plea agreement, Quintana Isalgue traveled from Florida to Idaho, to commit credit card fraud. On January 9, 2015, law enforcement officers in Boise and Meridian, Idaho, received multiple reports from loss prevention officers at different retail stores identifying Quintana Isalgue through witness and surveillance evidence as attempting credit card fraud.
The next day, Quintana Isalgue was contacted by law enforcement officers when they executed a search warrant on the hotel room where she was staying. Inside the room in Quintana Isalgue’s purse and wallet, officers found 17 counterfeit credit cards, two counterfeit driver’s licenses, and 35 gift cards. The counterfeit credit cards were embossed with real account numbers and a fake name. The two counterfeit driver’s licenses had names matching those on the credit cards, but using Quintana Isalgue’s picture and actual birthdate. Some of the gift cards found in her purse were identified as the gift cards Quintana Isalgue fraudulently purchased earlier in the day.
Based upon video surveillance, loyalty card records, GPS, and credit card records, law enforcement officers discovered that Quintana Isalgue made similar fraudulent purchases in Oregon and Washington. She admitted $97,496.11 in actual fraudulent purchases, and an additional $19,288.24 in attempted purchases, for a total of $116,784.35. The fraudulent purchases and attempts occurred between November 28, 2014, and January 9, 2015. She also admitted that she knowingly and fraudulently used the credit card number of a real person.
The case was investigated by the United States Secret Service, Boise Police Department, and Meridian Police Department.
Florida Man Who Sexually Exploited Escondido Middle Schoolers Sentenced to 27 Years in PrisonRead the Press Release
Assistant U.S. Attorneys Charlotte Kaiser (619) 546-7282 and David Leshner (619) 546-7921
NEWS RELEASE SUMMARY – January 7, 2015
SAN DIEGO – Tony McLeod of Tampa, Florida, was sentenced in federal court today to 324 months in custody and a lifetime of supervised release for multiple sexual crimes against two Escondido children.
Following an eight-day trial and less than two hours of deliberation, McLeod was convicted by a federal jury in June of 2015 of seven counts of sexual exploitation of a child, one count of attempted sexual exploitation of a child, one count of travel with intent to engage in illicit sexual conduct, and one count of transportation of a minor with intent to engage in criminal sexual activity as to a 14-year-old victim, and one count of attempted sexual exploitation of a child as to a 15-year-old victim. McLeod has been in custody since his arrest in Tampa, Florida in June 2013.
According to evidence presented to the jury, in spring 2013, McLeod struck up a friendship with the minor victims through on-line gaming. These friendships spilled over into phone calls, texts, and video chats between McLeod and the minors in which they discussed their personal lives and McLeod learned they were in middle school. Around May of 2013, McLeod’s relationships with these minors turned sexual in nature, which involved the exchange of sexually explicit photographs and videos. After one of the minor’s family members discovered the illicit relationship, McLeod traveled from his home in Tampa, Florida to Los Angeles, California, picked up that minor from his middle school in Escondido, and then transported that minor (under an alias) on a flight from California to Florida. On arrival of the flight, McLeod was arrested and taken into custody.
During the sentencing hearing before U.S. District Judge Janis L. Sammartino, the victims and their parents testified about the impact of McLeod’s actions. One of the minors, who was 14 years old when he travelled on the plane with McLeod, told Judge Sammartino, “I lost my childhood and lost my innocence.” The other victim, who had just turned 15 years old at the time of the offense, told the judge that McLeod’s actions and the aftermath “almost completely destroyed my family.” The mother of the 14-year-old victim testified that “we as a family have lost our sense of security.”
In handing down the sentence, Judge Sammartino described McLeod’s conduct as “horrendous” and imposed a lifetime of supervised release. As part of the conditions of release, McLeod will be subject to search at any time by any law enforcement or probation officer with reasonable suspicion concerning a violation, he cannot use or possess any electronic devices that would allow him to communicate with others, and he cannot be in the presence of a child under age 18 unless he receives prior approval from his probation officer and only in the presence of a supervising adult who knows of his convictions. A restitution hearing is scheduled for February 26.
“McLeod was a master manipulator who ingrained himself in these kids’ lives despite being thousands of miles away. He then exploited them for his own illicit sexual desire,” said U.S. Attorney Laura Duffy. “We will work tirelessly to bring to justice those who prey on our children and rob them of their innocence.”
“Protecting our children from sexual predators is a priority to the FBI,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI will continue to work with our law enforcement partners to protect our nation’s children from those who would seek to exploit their innocence.”
McLeod’s arrest and prosecution was the result of coordination between multiple federal and state agencies in both San Diego, California and Tampa, Florida.
DEFENDANT Case Number: 13CR2297-JLS
Tony Lee McLeod Age: 38 Tampa, Florida
SUMMARY OF CHARGES
Title 18, United States Code, Section 2221(a) and (e) – Sexual Exploitation of a Child (Counts 2-9)
Title 18, United States Code, Section 2251(a) and (e) – Attempted Sexual Exploitation of a Child (Count 13)
Title 18, United States Code, Section 2423(b) – Travel with Intent to Engage in Illicit Sexual Conduct (Count 10)
Title 18, United States Code, Section 2423(a) – Transportation of a Minor with the Purpose of Engaging in Criminal Sexual Activity (Count 11)
LEAD INVESTIGATIVE AGENCY
San Diego FBI
INVESTIGATIVE AGENCIES
Escondido Police Department
Tampa Police Department
San Diego Regional Computer Forensics Laboratory
San Diego District Attorney’s Office
San Diego Internet Crimes Against Children Task Force
San Diego Sheriff’s Department
Tampa FBI
United States Marshal’s Service Task Force (Tampa)
Tampa International Airport Police
Florida State’s Attorney’s Office
U.S. Attorney’s Office for the Middle District of Florida
Federal Authorities Seize Nearly 90,000 Bottles of a Beverage Containing the Herbal Ingredient KratomRead the Press Release
CHICAGO — United States Marshals, acting with investigators from the U.S. Food and Drug Administration, today seized nearly 90,000 bottles of a beverage containing the herbal ingredient kratom.
The beverages were manufactured for and held by Dordoniz Natural Products LLC, of South Beloit, and marketed under the brand name RelaKzpro. The product is estimated to be worth more than $400,000.
The bottles were seized after the U.S. Attorney’s Office in Chicago filed a civil forfeiture complaint on behalf of the FDA. The complaint alleges that kratom is a new dietary ingredient for which there is inadequate information to provide reasonable assurance that it does not present a significant or unreasonable risk of illness or injury.
Mitragyna speciosa, commonly known as kratom, is a botanical substance that grows naturally in Thailand, Malaysia, Indonesia and Papua New Guinea. The complaint, which was filed yesterday in U.S. District Court in Chicago, alleges that serious concerns exist about the toxicity of kratom in multiple organ systems. Consumption of kratom can lead to a number of health impacts, including respiratory depression, vomiting, nervousness, weight loss and constipation, the complaint states. Kratom has been indicated to have both narcotic and stimulant-like effects. Withdrawal symptoms may include hostility, aggression, excessive tearing, aching of muscles and jerky limb movements, according to the complaint.
The complaint states that dietary supplements containing kratom are adulterated under the Federal Food, Drug, and Cosmetic Act.
The seizure and complaint were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Melinda Plaisier, the FDA’s Associate Commissioner for Regulatory Affairs. The government is represented by Assistant U.S. Attorney Donald Lorenzen.
The public is reminded that a complaint contains only allegations and is not evidence of liability. The government has the burden of proving a civil case by a preponderance of the evidence.
Health care professionals and consumers should report any adverse events related to products containing kratom to the FDA by logging on to its website: www.fda.gov/medwatch/report.htm.
Complaint
Eight Members and Associates of Violent Mount Vernon Street Gang Known as “Boss Playa Family” or “BPF” Charged in Superseding Indictment with Racketeering OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Janet DiFiore, Westchester County District Attorney, and Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Superseding Indictment charging eight members and associates of a Mount Vernon-based street gang, “Boss Playa Family” or “BPF,” with participation in a racketeering conspiracy and firearms offenses, and charging certain of those BPF members and associates with murder in aid of racketeering and narcotics conspiracy.
Six of the eight defendants were charged in the original Indictment, filed in August 2015, and have previously been taken into custody. Today’s Superseding Indictment charges two additional BPF affiliates, SAMUEL CARLOS and ANTHONY JONES. Both CARLOS and JONES were arrested today in Mount Vernon, New York, and will be presented this afternoon in White Plains federal court before U.S. Magistrate Judge Judith C. McCarthy.
U.S. Attorney Preet Bharara said: “As alleged, members and associates of the BPF street gang wreaked havoc in and around Mount Vernon, engaging in shootings, attempted shootings, larcenies, and narcotics trafficking. A scourge on Mount Vernon, the BPF gang allegedly unleashed a wave of violence in the city’s streets. The indictment unsealed today brings charges against two more associates of the BPF gang, and serves as a reminder that the perpetrators of gang violence in Mount Vernon will not escape the reach of law enforcement. I want to praise and thank the FBI, Westchester County District Attorney’s Office and Mount Vernon Police Department for their outstanding work in this investigation.”
Westchester County District Attorney Janet DiFiore stated: “As evidenced by these most recent indictments, our priority has been and will continue to be enhancing the safety, security and quality of life for all of the hard working residents of the City of Mount Vernon. We have worked continuously over the past several years to pursue members and associates of this gang and now as a result of the collaborative efforts of federal, state and local law enforcement authorities these defendants are being held accountable for the years of criminal activity they now stand accused of.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “As noted in the superseding indictment, although it may take time, the facts will come out. Persons, such as Carlos and Jones, who have allegedly engaged in a racketeering conspiracy and firearms offenses, will have to answer for their crimes. I would like to recognize the FBI special agents and task force officers who tirelessly work to ensure those who threaten the peace and safety of our communities are held accountable for their actions.”
According to the allegations in the Superseding Indictment[1] and other documents in the public record:
The BPF street gang was a criminal enterprise that operated principally in and around the City of Mount Vernon, New York, from at least 2007 up to and including 2014. BPF members and associates sought to enhance the gang’s power, protect and expand its territory, and enrich its members through a wide array of criminal activities, including murder, attempted murder, larceny, arson, and the distribution of cocaine and marijuana. BPF members and associates expressly acknowledged and celebrated their gang affiliation through various means, including by wearing clothing emblazoned with “Boss Playa Family” and “BPF,” and by creating and posting on the Internet rap videos that promoted BPF.
One of BPF’s principal objectives was to maintain and exercise control over its territory, the area of Seventh Avenue and Sandford Boulevard in Mount Vernon. To that end, BPF sought to assert its dominance over rival gangs, particularly the “Goonies,” a gang based in a neighboring area of Mount Vernon. During the time period relevant to the Superseding Indictment, BPF members and associates were responsible for numerous acts of violence targeting members of the rival Goonies gang, including multiple murders and many other shootings. In furtherance of such violence, firearms were maintained in stash locations by certain BPF members and associates for shared use by other members and associates of the gang when guns were needed to strike or retaliate against the Goonies.
The violence perpetrated by BPF turned deadly on two occasions in 2008. On or about August 13, 2008, JAMEL UPSON, one of BPF’s lead enforcers or “shooters,” aided and abetted by others known and unknown, murdered Shomari Knox, a member of the Goonies, by shooting Knox in the area of Ninth Avenue and Third Street in Mount Vernon. Several months later, on or about December 14, 2008, UPSON, again aided and abetted by others known and unknown, murdered another member of the Goonies, Cory Cabiness, by shooting him in the vicinity of the Ebony Gardens apartment complex in Mount Vernon. As alleged in the Superseding Indictment, UPSON committed these murders in order to maintain and increase his position in the BPF gang.
* * *
Counts One and Two of the Superseding Indictment charge all eight defendants, JAMEL UPSON, SAMUEL CARLOS, ANTHONY JONES, ANTOINE LITTLE, TYRONE McCALLUM, PORTLAND RAMSEUR, GORHAM VALENTINE, and JASON WHITE, with a BPF racketeering conspiracy and firearms offenses in connection with that conspiracy. As alleged, various combinations of those defendants committed, among other acts of racketeering, at least eight shootings in furtherance of the BPF conspiracy. Counts Three and Four of the Superseding Indictment charge UPSON with murder in aid of racketeering activity and a related firearms offense in connection with the August 2008 murder of Shomari Knox, and Counts Five and Six charge UPSON with murder in aid of racketeering activity and a related firearms offense in connection with the December 2008 murder of Cory Cabiness. Finally, Count Seven of the Superseding Indictment charges UPSON, CARLOS, RAMSEUR, and WHITE with conspiring to distribute cocaine and marijuana in and around BPF territory.
Charts containing the names, ages, residences, charges, and maximum penalties for the defendants are set forth below. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI and the Mount Vernon Police Department. He also thanked the Westchester County District Attorney’s Office for its participation and support in this ongoing investigation.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys George Turner and Daniel Filor are in charge of the prosecution.
The charges contained in the Superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Jamel Upson, et al., S2 15 Cr. 570
COUNT
CHARGE
DEFENDANTS
MAX. PENALTIES
1
Racketeering conspiracy
18 U.S.C. § 1962(d)
JAMEL UPSON
SAMUEL CARLOS
ANTHONY JONES
ANTOINE LITTLE
TYRONE McCALLUM
PORTLAND RAMSEUR
GORHAM VALENTINE
JASON WHITE
UPSON: Life in prison
Other Defendants: 20 years in prison
2
Using or carrying a firearm during and in relation to, or possessing a firearm in furtherance of, a crime of violence or drug trafficking crime
18 U.S.C. § 924(c)
JAMEL UPSON
SAMUEL CARLOS
ANTHONY JONES
ANTOINE LITTLE
TYRONE McCALLUM
PORTLAND RAMSEUR
GORHAM VALENTINE
JASON WHITE
Life in prison
Mandatory minimum of 10 years in prison
3
Murder in aid of racketeering activity
18 U.S.C. § 1959(a)(1)
JAMEL UPSON
Death penalty, or mandatory life in prison
4
Murder through use of a firearm
18 U.S.C. §§ 924(j), 924(c)(1)(A)(iii), 924(c)(1)(C)(i)
JAMEL UPSON
Death penalty, or life in prison
Mandatory minimum of 25 years in prison
5
Murder in aid of racketeering activity
18 U.S.C. § 1959(a)(1)
JAMEL UPSON
Death penalty, or mandatory life in prison
6
Murder through use of a firearm
18 U.S.C. §§ 924(j), 924(c)(1)(A)(iii), 924(c)(1)(C)(i)
JAMEL UPSON
Death penalty, or life in prison
Mandatory minimum of 25 years in prison
7
Narcotics conspiracy
21 U.S.C. §§ 846, 841(b)(1)(C), 841(b)(1)(D)
JAMEL UPSON
SAMUEL CARLOS
PORTLAND RAMSEUR
JASON WHITE
20 years in prison
Defendant
Age
Residence
JAMEL UPSON
31
Mount Vernon, NY
SAMUEL CARLOS
27
Mount Vernon, NY
ANTHONY JONES
26
Mount Vernon, NY
ANTOINE LITTLE
32
Bedford, TX
TYRONE McCALLUM
28
Mount Vernon, NY
PORTLAND RAMSEUR
30
Mount Vernon, NY
GORHAM VALENTINE
30
Mount Vernon, NY
JASON WHITE
32
Mount Vernon, NY
[1] As the introductory phrase signifies, the entirety of the text of the Superseding Indictment and the description of the Superseding Indictment forth herein constitute only allegations, and every fact described should be treated as an allegation.
Eagle Butte Man Sentenced for Sexual AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Sexual Abuse of a Person Incapable of Consenting was sentenced on January 4, 2016, by U.S. District Judge Roberto A. Lange.
Ronnie Keith Circle Bear, age 52, was sentenced to 121 months in custody, followed by 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Circle Bear was indicted by a federal grand jury on November 13, 2014, for one count of Aggravated Sexual Abuse by Force and one count of Sexual Abuse of a Person Incapable of Consenting. He pled guilty to one count of Sexual Abuse of a Person Incapable of Consenting on October 6, 2015.
The conviction arose from a June 2014 incident when Circle Bear was living in Rapid City and traveled to Eagle Butte as part of his job. Circle Bear contacted the victim’s mother and asked if the victim could go with him to Eagle Butte so they could later attend a pow-wow in McLaughlin. The victim was 17-years old at the time.
The victim rode with Circle Bear from Rapid City to Eagle Butte. When they arrived in Eagle Butte, Circle Bear got a motel room. He then purchased some peppermint schnapps and flavored vodka that he mixed with cranberry juice and provided to the victim. The victim drank the alcohol and after several hours, passed out on the bed with her clothes on. Circle Bear knew the victim was incapacitated and was incapable of declining any sexual advances, but he removed her pants and underwear and proceeded to have sexual intercourse with her anyway. The victim woke up while Circle Bear was having intercourse with her. When he stopped, she asked Circle Bear for her clothes, got dressed, and went to the front desk at the motel to ask for help. The motel clerk called the Cheyenne River Sioux Tribe Police Department.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
Circle Bear was immediately turned over to the custody of the U.S. Marshals Service.
Dominican National Guilty of Making A False Claim to U.S. CitizenshipRead the Press Release
CONCORD, N.H. – Pedro Julio Alcantar-Bernabel a/k/a Francis Villar de la Santos, a citizen of the Dominican Republic, pleaded guilty today in United States District Court for the District of New Hampshire to one count of Social Security Number Misuse and one count of Making a False Claim to United States Citizenship, announced Acting United States Attorney Donald Feith.
On July 1, 2015, Alcantar-Bernabel applied for a driver’s license at the Department of Motor Vehicles in Manchester, New Hampshire using another person’s name, date of birth, and Social Security number. He also indicated on the application that he was a United States citizen. The Social Security card Alcantar-Bernabel produced as a means of identification appeared to have been altered, and the New Hampshire State Police were called to investigate. Upon further investigation, it was discovered that Alcantar-Bernabel was encountered by the United States Coast Guard in August 2000 off the coast of Puerto Rico, at which time he admitted that he was a citizen of the Dominican Republic and was given a voluntary return to that country. Fingerprint analysis confirmed that the individual claiming United States citizenship on the New Hampshire driver’s license application was the same individual who was returned to the Dominican Republic in 2000.
Alcantar-Bernabel is scheduled to be sentenced on April 13, 2016. He is facing a maximum sentence of five years’ imprisonment.
The case was investigated by the United States Department of Homeland Security Immigration and Customs Enforcement, and prosecuted by Special Assistant United States Attorney Karen Burzycki.
Doctor Who Pre-Signed Thousands of Prescriptions in $20 Million Health Care Fraud Scheme Sentenced to Nine Years in PrisonRead the Press Release
LOS ANGELES – The medical doctor at the center of a conspiracy linked to a sham medical clinic in Glendale was sentenced today to nine years in federal prison for his role in a $20 million scheme to defraud the Medicare and Medi-Cal programs.
Dr. Kenneth Johnson, 49, of Ladera Heights, received a 108-month prison term from United States District Judge S. James Otero.
Johnson was sentenced for his role in a scheme that, among other things, fraudulently prescribed expensive anti-psychotic medications and then re-billed the government for those drugs over and over. Johnson pre-signed thousands of prescriptions that were later used to fill millions of dollars in fraudulent prescriptions for anti-psychotic drugs.
Observing that Johnson’s involvement in the conspiracy caused “significant loss by any measure,” Judge Otero stated that the sentence was necessary to “deter others from engaging in this type of conduct, especially physicians.”
Johnson is one of three people found guilty after a trial in 2014 – and one of a total of 16 defendants who have been convicted – in relation to the scheme run out of Manor Medical Imaging in Glendale. The scheme generated fraudulent billings of more than $20 million, of which Medi-Cal and Medicare actually paid more than $9 million.
Using prescriptions that were pre-signed by Johnson, employees of Manor Medical generated thousands of prescriptions for identify theft victims – such as elderly Vietnamese beneficiaries of Medicare and Medi-Cal, military veterans who were recruited from drug rehab programs, and denizens of Skid Row. Members of the conspiracy created or doctored patient files to make it falsely appear the drugs were necessary and the patients were legitimately treated. After the prescriptions were filled at pharmacies and paid for by Medicare and Medi-Cal, they were sold on the black market and redistributed to pharmacies, where the drugs would be subject to new claims made to Medicare and Medi-Cal as though they were new bottles of drugs.
“Dr. Johnson essentially sold his prescription pad when he became part of the conspiracy that defrauded the government out of millions of dollars,” said United States Attorney Eileen M. Decker. “Johnson played a crucial role in this scheme, which could not have functioned without his medical license lending an air of legitimacy to the clinic.”
The case was the first in the nation involving an organized scheme to defraud government health care programs through fraudulent claims for expensive anti-psychotic medications. At a prior hearing, Judge Otero noted that the conspiracy was “particularly devious,” because the participants believed they targeted “under-the-radar” drugs in an effort to evade the attention of law enforcement.
In its sentencing brief, the government argued that Johnson “used his skill and professional licensure – issued in order to help people – to fraudulently take millions of dollars from programs designed to help the nation’s most vulnerable citizens.”
Previously in this case, another leader of the conspiracy – Lianna “Lili” Ovsepian, 35, of Tujunga, the manager and owner of Manor Medical – was sentenced to eight years in prison after pleading guilty to health care fraud charges. Her brother Artak Ovsepian, 34, of Tujunga – who was convicted with Johnson at trial – received a 15-year prison term in August. The third person convicted at trial – Nuritsa Grigoryan, 51, of Glendale – the holder of an Armenian medical license, who pretended to be an American doctor when she saw homeless “patients” and who filled out the bogus prescriptions pre-signed by Johnson – fled the United States after being found guilty and remains a fugitive.
The investigation in this case, which was called Operation “Psyched Out,” was conducted by the San Marino Police Department; the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; the United States Food and Drug Administration, Office of Criminal Investigations; IRS-Criminal Investigation; the United States Department of Health and Human Services, Office of the Inspector General; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Glendale Police Department, Organized Crime Team; and the California Department of Health Care Services, Audits and Investigations Branch.
Convicted Felon Sentenced for Scheme to Defraud BanksRead the Press Release
PHILADELPHIA – Leonard Herrington, 42, of Philadelphia, PA, was sentenced last night to 75 months in prison for his role in a bank fraud conspiracy that also involved identity theft. On September 4, 2015, a federal jury found Herrington guilty of conspiracy to commit bank fraud, attempted bank fraud, and aggravated identity theft.
Herrington was a mid-level participant who recruited and managed other co-conspirators in the extensive identity theft and fraud ring that spanned two states and defrauded seven financial institutions. The extensive fraud ring victimized numerous people whose personal information was compromised and used without their knowledge and who were victimized financially and emotionally. Herrington and his eight co-defendants obtained or attempted to obtain at least $279,875.93, through fraudulent means, from Third Fed Bank, TD Bank, Santander Bank, PNC Bank, M&T Bank, Wells Fargo Bank and Andrews Credit Union.
In addition to the prison term, U.S. District Court Judge Wendy Beetlestone ordered, a special assessment of $300 and 4 years of supervised release. A hearing on restitution will be held at a later date.
This case was investigated by Immigration and Customs Enforcement Homeland Security Investigations, the United States Secret Service, the Burlington County (NJ) Prosecutor’s Office, the Bucks County District Attorney’s Office, the Bordentown Township (NJ) Police Department, the Burlington City (NJ) Police Department, the Burlington County (NJ) Sheriff’s Department, the Camden County (NJ) Prosecutor’s Office High Tech Crimes Unit, the Camden County (NJ) Sheriff’s Department, the Cherry Hill (NJ) Police Department, the Lehigh County Auto Theft Task Force, the Mount Holly (NJ) Police Department, the Pennsauken Township (NJ) Police Department, the Plumstead Township Police Department, the Willingboro Township (NJ) Police Department, the Winslow Township (NJ) Police Department, and the West Whteland Police Department. It is being prosecuted by Assistant United States Attorney Melanie Babb Wilmoth.
Cocaine Trafficker Sentenced to 18 Years in Federal PrisonRead the Press Release
DALLAS — A Dallas man, Jesus Garcia, 42, has been sentenced by U.S. District Judge Sam A. Lindsay to 218 months in federal prison for his role in a cocaine distribution conspiracy, announced U.S. Attorney John Parker of the Northern District of Texas.
Garcia pleaded guilty in 2014 to one count of conspiracy to possess with intent to distribute cocaine base. A total of 19 defendants were charged in the conspiracy; most have been convicted and sentenced to prison terms ranging from 18 months to 20 years in federal prison.
According to documents filed in the case, during the course of the investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) intercepted telephone calls of several of the conspirators, including Garcia. Garcia admits that on numerous occasions he used various cell phones to contact co-conspirators to coordinate the distribution of quantities of crack and powder cocaine. Garcia is responsible for the distribution of 1,054.64 grams of crack cocaine and 3,022.48 grams of powder cocaine during the course of the conspiracy.
ICE HSI and the Dallas Police Department’s Gang Unit investigated. Assistant U.S. Attorney Cara Pierce prosecuted.
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Cleveland women sentenced to prison for stealing identities and filing false tax returnsRead the Press Release
Two Cleveland women were sentenced to prison for a conspiracy in which they stole other people’s identities and collected more than $326,000 in false tax returns, law enforcement officials said.
Michelle D. Pugh, a/k/a Michelle Morman, 39, was sentenced to four years in prison. Joi C. Tate, 38, was sentenced to two years and eight months in prison. They were ordered to pay $326,265 in restitution.
They were previously found guilty of conspiracy to defraud the government, making false, fictitious and fraudulent claims for income tax refunds, theft of public funds and aggravated identity theft.
“This duo is stole money from the government and identifying information from customers,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
“These unscrupulous defendants thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers by posing as legitimate income tax preparers,” said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Today they are being held accountable for their criminal actions.”
Pugh and Tate, acting together and with others, engaged in a false tax refund scheme in which they prepared at least 25 false income tax returns for the years 2010 and 2011, for approximately 20 people including Pugh, which claimed income tax refunds that were greater than the actual refunds, if any, to which the taxpayers were entitled, according to court documents.
Pugh, Tate and others gathered personal identification information used in filing the returns either by posing as legitimate tax preparers working through Pugh’s company, MP Tax Services, or through a network of associates. In some cases, Pugh and Tate obtained and used personal identification information of individuals without their knowledge of consent. Pugh and Tate did not list themselves as the actual tax preparer on any of the tax returns they filed in others’ names.
On each return, Pugh, Tate and their cohorts generated false refund claims, at least in part, by reporting a falsely inflated or fictitious wage income and a resulting false earned income credit. On some returns, Pugh, Tate and their confederates also claimed false dependents and/or reported false education and child tax credits, as reflected on fictitious Forms 8863 and 8812 filed with the IRS.
Pugh and Tate filed the returns electronically on behalf of taxpayers, through private and public internet connections. Generally, they did not provide a copy of the return to the taxpayer, and the taxpayer did not know the amount of the refund claimed or was told an incorrect amount. In the case of those individuals whose identities were used without their knowledge or permission, Pugh and Tate did not inform them that they received funds from the IRS and instead kept the proceeds for themselves, according to court documents.
The electronic filings included requests that the IRS direct-deposit refunds into bank accounts owned or controlled by Pugh. After receiving the refunds, Pugh, Tate and their co-conspirators paid only a portion of the refund, if any, to the taxpayer.
Pugh’s, Tate’s and their co-conspirators’ falsely inflated refund claims on the returns filed in the scheme resulted in the delivery of approximately $326,265 in illicit refunds to the conspirators, according to court documents.
This case is being prosecuted by Assistant U.S. Attorney Om Kakani, following an investigation by the IRS – Criminal Investigations.