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11 February 2016
Readout of Attorney General Lynch's Meeting with Major County Sheriffs' AssociationRead the Press Release
Today, Attorney General Loretta E. Lynch met with representatives from the Major County Sheriffs’ Association (MCSA) at their Winter Meeting at the JW Marriott Hotel, in Washington, D.C. The meeting began with a moment of silence led by Sandra Hutchens, President of the MCSA, in honor of law enforcement officials killed in the line of duty, including Harford County, Maryland Senior Sheriff’s Deputies Mark Logsdon and Patrick Dailey, who were killed yesterday.
Attorney General Lynch remarked that yesterday’s tragic events highlighted the dangers public safety officers face every day – and the courage and commitment they routinely demonstrate in the fulfilment of their duties. She thanked the sheriffs and their deputies for their hard work, acknowledging the difficulty of their jobs and the immense sacrifices they have made for the people they serve.
During the meeting, Attorney General Lynch also discussed challenges facing law enforcement officials today, such as countering violent extremism, treatment of mental health issues, and challenges presented by technology. She noted with appreciation the work that MCSA had done with the Stepping Up Initiative, which exemplifies goals identified in the final report of the President’s Task Force on 21st Century Policing.
The MCSA is a professional law enforcement association of elected sheriffs representing counties or parishes with populations of 500,000 or more. MCSA is dedicated to preserving the highest integrity in law enforcement and the elected office of the Sheriff. The association identifies and works to address challenges facing law enforcement. It also pursues the development of innovative education along with prevention and enforcement strategies and programs.
Property Manager at Section 8 Apartment Complex Arrested for Embezzling Government FundsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development - Office of Inspector General (“HUD-OIG”), announced the unsealing of a Complaint against the property manager, CARL IMMICH, for engaging in fraudulent schemes to embezzle funds from Harriet Tubman Terrace Apartments (“Tubman Terrace”), a Section 8 housing complex in Poughkeepsie, New York. IMMICH was arrested today and presented in White Plains federal court before United States Magistrate Judge Judith C. McCarthy. As alleged, IMMICH fraudulently obtained hundreds of thousands of dollars belonging to Tubman Terrace.
U.S. Attorney Preet Bharara said: “As alleged, Carl Immich stole federal taxpayer dollars intended to subsidize housing costs for lower income individuals. I commend the work of HUD-OIG in safeguarding the people’s money and policing those who seek to pocket it for themselves.”
HUD-OIG Special Agent in Charge Christina Scaringi said: “The arrest and charges today of Carl Immich serve to remind the taxpayer that law enforcement will continue to pursue corruption, in all forms, especially those that impact the integrity of HUD-assisted housing. Mr. Immich’s charges disclosed today prove our continuing resolve to root out crime in all forms, especially when the funds involved should have been used to help the neediest families.”
According to the allegations in the criminal complaint (the “Complaint”) unsealed today in White Plains federal court[1]:
Tubman Terrace is a large low-income apartment complex in Poughkeepsie, New York. The rental payments for nearly all of the apartments are subsidized by HUD pursuant to Section 8 of the United States Housing Act of 1937, 42 U.S.C. § 1437f. From in or about June 2010 through in or about November 2014, HUD provided approximately $150,000 to $160,000 each month to Tubman Terrace.
Since in or about 2009, Tubman Terrace has been managed by a management company, of which IMMICH is the principal and sole owner. In that capacity, IMMICH has served as the management agent and property manager of Tubman Terrace since in or about 2009.
From at least in or about December 2010 until at least in or about March 2015, IMMICH fraudulently obtained hundreds of thousands of dollars belonging to Tubman Terrace, which were paid to him or used for personal expenditures. IMMICH did so through at least three different schemes: (1) he used credit cards intended for Tubman Terrace business expenses for personal expenses, which were then paid through Tubman Terrace’s operating bank account; (2) he obtained check payments from the Tubman Terrace operating bank account to cover other personal expenses; and (3) he obtained payroll checks for himself and his daughter reflecting no work or other entitlement by them to such salary.
* * *
IMMICH, 53, of Rhinebeck, New York, is charged with one count of embezzling government property, and one count of theft of property from programs receiving government funds, each of which carries a maximum sentence of 10 years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as the judge will determine any sentence imposed on the defendant.
Mr. Bharara praised the outstanding investigative work of HUD-OIG.
The case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys Lauren Schorr and Benjamin Allee are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Pharmaceutical Executive Defrauds Investors Out of Millions by Selling Fake Stock in Medical Research CompanyRead the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738 and Aaron Arnzen (619) 546-8384
NEWS RELEASE SUMMARY – February 11, 2016
SAN DIEGO – Oceanside businessman Greg Ruehle today admitted swindling more than 160 people out of investments totaling nearly $2 million.
As part of his plea to securities fraud charges, Ruehle admitted being hired by local medical research firm ICB International, Inc., to identify investors who could fund their research. Instead, Ruehle collected millions of dollars from investors and used the money for his own gambling and other personal expenses. Ruehle disguised and concealed his fraud by issuing the investors fake stock certificates and failing to report the purported “investment” to the company.
In a parallel action, the Securities and Exchange Commission today announced civil charges against Ruehle. For further information, please see http://www.sec.gov/news/pressrelease/2016-28.html.
Ruehle, who lives in Oceanside, targeted investors both locally and from his hometown in Minnesota. In 2015, some of the investors asked for proof that their money was being used at ICBI. In response, Ruehle sent them a letter on what appeared to be company letterhead, and purportedly signed by the company’s CEO. In fact, the letter was a forgery, which was borne out by the fact that Ruehle misspelled the CEO’s name. ICBI remained unaware of these “investors,” and never received a penny of their $1.9 million investments.
San Diego-based ICBI’s mission is to develop technologies to transport therapeutic treatments through the blood-brain barrier to treat neuro-degenerative diseases like Parkinson’s and Alzheimer’s disease. According to ICBI’s website, the company develops techniques for early diagnosis, monitoring of disease progression, and increased therapeutic efficacy of drugs for neuro-degenerative diseases and various cancers that currently cannot be reached by drugs.
Ruehle’s plea agreement requires that he forfeit the $1.9 million in proceeds and pay restitution to the victim investors.
In addition to the securities fraud charges, Ruehle pleaded guilty to possession of a stolen firearm. In his plea, Ruehle admitted that he owned three stolen firearms, including two semi-automatic pistols and a revolver. He has agreed to forfeit these weapons and another revolver to federal law enforcement.
“Business professionals who use their knowledge of industries and securities to prey on unsuspecting lay investors undermine the public’s confidence and ability to participate in the markets,” said U.S. Attorney Laura E. Duffy. “As this case demonstrates, they also jeopardize innovation and the success of small businesses. This type of egregious securities fraud is simply unacceptable.”
“Mr. Ruehle engaged in a pattern of lies and deceitful acts while violating the trust of family, friends, and associates,” said FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is committed to investigating and seeking the prosecution of those who steal money through fraudulent investment schemes.”
“Firearms must be obtained through proper procedures by eligible recipients.” said ATF Special Agent in Charge Eric D. Harden. “This investigation is a reminder that the illegal use of firearms permeates all spectrums of crime.”
Ruehle’s sentencing is set for May 2, 2016 at 9:30 before U.S. District Judge Michael M. Anello.
This investigation was started with a call to the FBI. The FBI encourages the public to report fraudulent investment schemes to the FBI at telephone number 1-800-CALL FBI (1-800-225-5324).
DEFENDANT Case Number 16cr0231-MMA
Greg Ruehle Age: 64 Oceanside, CA
CHARGES
Securities Fraud, in violation of 15 U.S.C. §§ 78j, 78ff
Maximum Penalties: 20 years’ imprisonment, $5,000,000 fine, $100 special assessment, restitution.
Possession of stolen firearms, in violation of 18 U.S.C. § 922(j)
Maximum Penalties: 10 years’ imprisonment, $250,000 fine, $100 special assessment.
AGENCIES
Federal Bureau of Investigation
Bureau of Alcohol, Tobacco, Firearms, and Explosives
Petaluma Slaughterhouse Owner Sentenced to 12 Months and One Day of Imprisonment for Conspiring to Distribute Adulterated MeatRead the Press Release
SAN FRANCISCO – Jesse “Babe” Amaral, Jr., owner of the now-defunct Petaluma slaughterhouse Rancho Feeding Corporation, was sentenced today to 12 months and one day of imprisonment for leading a conspiracy to distribute adulterated, misbranded, and uninspected meat, announced Acting United States Attorney Brian J. Stretch and Special Agent in Charge of the Western Region of the U.S. Department of Agriculture (USDA), Office of Inspector General, Investigations, Lori Chan.
Amaral, 78, of Petaluma, was indicted on August 14, 2014, in connection with two separate schemes: the first scheme involved a conspiracy to distribute adulterated, misbranded, and uninspected meat while the second scheme involved defrauding farmers with false invoicing.
With respect to the first scheme, Amaral was indicted along with Rancho employees Eugene Corda, 66, of Petaluma, and Felix Cabrera, 56, of Santa Rosa, with distribution of adulterated, misbranded, and uninspected meat, in violation of the Federal Meat Inspection Act (FMIA), 21 U.S.C. §§ 610(c) & 676(a), conspiracy to commit the same, in violation of 18 U.S.C. § 371, and conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349. For his part in the scheme, a fourth defendant, Robert Singleton, 79, owner of Petaluma-based Rancho Veal Corporation, was charged in a separate information on August 18, 2014, with one count of distributing adulterated, misbranded, and uninspected meat in violation of the FMIA.
Amaral pleaded guilty to the conspiracy charge on February 18, 2015. In connection with his guilty plea, Amaral admitted that from 2012 through January 10, 2014, he directed Rancho employees to process cattle for human consumption that had been condemned by the USDA veterinarian. Amaral also admitted he sought to circumvent inspection procedures for certain cattle exhibiting symptoms of cancer eye and to process these cancer eye cattle for human consumption without full inspection. Cabrera, Rancho’s “kill floor” supervisor, also pleaded guilty to the conspiracy charge. Corda, Rancho’s yardman, pleaded guilty to one of the underlying distribution counts. Singleton pleaded guilty to the information, admitting that he participated in a scheme by which Rancho employees were instructed to carve “USDA Condemned” stamps out of cattle carcasses, to conceal from USDA inspection cows showing signs of cancer eye by switching the diseased heads with healthy heads, and to process the adulterated and uninspected carcasses for human consumption.
With respect to the second scheme, Amaral was indicted for mail fraud, in violation of 18 U.S.C. § 1341, and conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349. As part of his plea agreement, Amaral admitted that he caused Rancho to submit fraudulent cattle invoices to farmers between at least 2012 and January 2014. Singleton, as part of his plea agreement, also admitted participating in this scheme.
The sentence was handed down by the Honorable Charles R. Breyer, U.S. District Judge. In addition to the prison term, Judge Breyer sentenced Amaral to two years’ supervised release, one of which will be served in a residential re-entry facility. Judge Breyer concluded that Amaral had reached out of court settlements with nearly all of his fraud victims, and ordered restitution to the remaining two victims. Amaral was ordered to surrender by March 25, 2016, to begin serving his sentence.
The sentencing hearings for Singleton and Corda are set for March 2, 2016, and the sentencing hearing for Cabrera is set for March 23, 2016. The sentencings will be held before Judge Breyer.
Assistant U.S. Attorney Hartley M.K. West is prosecuting this case with the assistance of Rosario Calderon and Bridget Kilkenny. The prosecution is the result of an investigation by agents of the USDA’s Office of Inspector General, Investigations and USDA’s Food Safety Inspection Service, Office of Investigation, Enforcement and Audit, Compliance and Investigations.
Perry County Man Sentenced on Explosives and Firearm ChargesRead the Press Release
A Perry County man was sentenced on February 10, 2016, to federal prison on explosives and firearms charges, James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today.
Samuel L. Dunson, 19, of DuQuoin, IL, was sentenced to 52 months in federal prison, to be followed by two years’ supervised release, and fined $300. Dunson had previously pleaded guilty to three counts in a federal indictment which charged (Count 1) on August 5, 2015, around 5:00 a.m., in Perry County, Illinois, Dunson did knowingly possess a destructive device, described as an Improvised Explosive Incendiary Device, which had not been registered in the National Firearms Registration and Transfer Record, and, (Count) 2 on August 5, 2015, around 5:30 a.m., in Perry County, Illinois, Dunson did knowingly possess a destructive device, further described as an Improvised Explosive Incendiary Device, which had not been registered, and, (Count 3) on August 5, 2015, in Perry County, Illinois, Dunson did knowingly possess a firearm, that is, a weapon made from a Revelation model 350M shotgun, with a barrel length of less than 18 inches, commonly referred to as a sawed-off shotgun, which had not been registered.
The investigation in this case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the DuQuoin, IL Police Department, and the Illinois State Police Department.
The case is being handled by Assistant United States Attorney George Norwood.
Pennsylvania Man Sentenced to Two Years for Interstate StalkingRead the Press Release
Contact: Darcie N. McElwee
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Makwan Jaff, 36, of Mechanicsburg, Pennsylvania, was sentenced yesterday in U.S. District Court by Judge Nancy Torresen to two years in prison and three years of supervised release which will include up to one year of home confinement for interstate stalking. He pled guilty on September 29, 2015.
According to the criminal complaint affidavit and evidence introduced at the plea hearing, Jaff previously attended medical school in Basseterre, Saint Kitts and Nevis (“St. Kitts”). Between February 11, 2014 and June 25, 2014, with the intent to harass or intimidate a female former medical school classmate, Jaff created about five Facebook accounts in the victim’s name (or variations of her name with added words, such as “slut” and “whore”) and put pictures of her in them without her knowledge or permission. Once the Facebook accounts were deleted by the victim, Jaff sent threatening email and Facebook private messages to her and her immediate family. During these communications from St. Kitts, Jaff threatened to harm the victim and another classmate who were attending school in Scarborough, Maine from May 2014 until June 2014.
During some of the communication sent to the victim while she was in Maine, Jaff threatened: “Let me tell you what I am gonna do when I get home; rent a car first thing and come to [M]ain[e]….It is only a 24 hours drive...I won’t stop believe me I will f**k your world upside down!...I will turn your life in to a living hell…I will not go away I will f**k with you for the rest of your f**ken life…Keep thinking I am playing game till I hit where it f**ken hurts!”Jaff’s conduct caused substantial emotional distress to the victim and her immediate family. Jaff also sent hundreds of email messages to the classmate about the victim, many of which were similarly threatening and harassing.
The investigation was conducted by the Federal Bureau of Investigation.
Payroll Administrator Sentenced for Tax Evasion Scheme for Diverting Employees’ Wage Payments into her Personal Bank Account and Not Reporting the Money to the IRSRead the Press Release
A payroll administrator was sentenced to 42 months in prison, followed by three years of supervised release for her participation in a tax evasion scheme where she diverted employees’ wage payments into bank accounts under her control and failed to report the money as gross income to the Internal Revenue Service (IRS).
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Rodolfo Llanes, Chief, Miami Police Department (MPD), made the announcement.
Marilyn McDaniel, 67, of Garner, North Carolina, previously pled guilty to one count of attempting to evade or defeat tax, in violation of Title 26, United States Code, Section 7201.
According to court documents, McDaniel was the payroll administrator for a company and her sole responsibility was to report the employee hours and pay to the company’s payroll service provider. In early 2010, a former employee contacted the company’s accountant regarding a letter from the IRS indicating that the individual worked at the company in 2008 and that the individual failed to pay taxes on that income. The company’s payroll records revealed that in 2008 there were wage payments being made to the employee, but the wage payments were not deposited into the employee’s account. Instead, the wages were deposited into McDaniel’s personal bank account.
In addition, the company’s payroll records also showed that McDaniel had submitted false wage reports on behalf of sixteen other former employees and that approximately $1.7 million in wage payments in the names of those former employees were diverted from the company’s bank accounts into accounts controlled by McDaniel and her daughter. The company’s employees did not give McDaniel permission to have checks issued in their names or have those checks deposited into her personal bank account.
McDaniel did not report or pay taxes on the stolen money that was diverted from the company into her and her daughter’s account, as she failed to file an individual tax return with the IRS for calendar year 2009. In total, McDaniel’s total tax due and owing is $547,792.14.
Mr. Ferrer commended the investigative efforts of IRS-CI, Miami Police Department and Miami-Dade State Attorney’s Office. This case is being prosecuted by Assistant U.S. Attorney Maurice A. Johnson.
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.
Pawankumar Jain Pleads Guilty to Unlawfully Dispensing Prescription Painkillers and Health Care FraudRead the Press Release
ALBUQUERQUE – Pawankumar Jain, 63, a physician whose license has been revoked, entered a guilty plea this morning in federal court in Las Cruces, N.M., to unlawfully dispensing controlled substances and health care fraud. The guilty plea was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division, and Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division.
Jain initially was charged in a 111-count indictment filed in April 2014. The indictment charged Jain with 61 counts of unlawfully dispensing controlled substances and 50 counts of healthcare fraud. A 138-count second superseding indictment filed in June 2015 added new charges for a total of 79 unlawful dispensing charges and 59 healthcare fraud charges. The superseding indictment alleged that Jain committed the offenses charged between April 2009 and June 2010, in Doña Ana County, N.M. During that time, Jain was a licensed physician with a neurology subspecialty who operated a pain management medical practice in Las Cruces. Jain’s medical license was suspended in June 2012, and subsequently revoked in Dec. 2012 by the New Mexico Medical Board.
The 79 dispensing counts in the superseding indictment charged Jain with unlawfully dispensing prescription painkillers, primarily Oxycodone and methadone, to patients outside the usual course of medical practice and without a legitimate medical purpose. The 59 healthcare fraud counts alleged that Jain engaged in a scheme to defraud two federal health care benefit programs, Medicare and Medicaid, by submitting claims for payment for prescription medications he dispensed to patients outside the usual course of medical practice and without legitimate medical purpose. The superseding indictment included allegations that Jain’s criminal conduct resulted in the deaths of four patients.
Today Jain pled guilty to one count of unlawfully dispensing a controlled substance and one count of health care fraud. In his plea agreement, Jain acknowledged that from June 2007 through Feb. 2012, he was a licensed physician who practiced medicine in Las Cruces, and operated a “high volume practice, which included ‘pain management’ treatment for many patients.”
In his treatment of one patient identified as “M.E.B.,” Jain admitted conducting “cursory exams and [that he] did not document a therapeutic benefit from the narcotics he was prescribing for her.” Jain’s plea agreement states that he last saw M.E.B. as a patient on Nov. 25, 2009 when he “conducted a superficial exam … [and] wrote two prescriptions, each for 270 tablets of methadone 10 mg, one dated November 25, 2009, and the second dated December 23, 2009. M.E.B. filled each of these prescriptions, which were issued outside the usual course of medical practice and without a legitimate medical purpose. . . . Two days after she filled the second prescription, M.E.B. died on December 25, 2009.”
Jain also admitted committing health care fraud in connection with his treatment of M.E.B. Jain’s plea agreement states that he knew M.E.B. was insured by Medicare and that claims to cover the costs of the medication he prescribed for her would be submitted to Medicare for payment, which was in keeping with his scheme to defraud Medicare. It further states that each of the two prescriptions Jain wrote for M.E.B. on Nov. 25, 2009, were submitted to Medicare for payment, which was consistent with his intent.
Jain has been in federal custody since April 2014, and remains detained pending his sentencing hearing, which has yet to be scheduled. Under the terms of his plea agreement, Jain will be sentenced to a prison term within the range of 42 to 108 months followed by a term of supervised release to be determined by the court.
“This guilty plea should put health care providers who operate pill mills on notice that the authority to prescribe highly addictive controlled substances comes with accountability and responsibility. Doctors take an oath to ‘first, do no harm.’ To fulfill that oath, health care providers who prescribe opioid painkillers must be vigilant not only in their prescribing practices but also in the follow-up care they provide to their patients. Failure to do so can result in addiction and even death for their patients,” said U.S. Attorney Damon P. Martinez. “This guilty plea comes at a time when the abuse of opioid painkillers, such as Oxycodone, has become a national epidemic that is having a devastating impact on New Mexicans, and the efforts of the DEA and FBI in investigating this case must be commended. This case demonstrates that law enforcement can and will act forcefully with respect to those who supply drugs – including doctors.”
“Dr. Jain was entrusted with the care and well-being of patients in our community. Tragically, he took advantage of that trust and endangered the lives of his own patients,” said DEA Special Agent in Charge Will Glaspy. “Prescription drug abuse is a leading cause of heroin addiction and overdose deaths in the United States which has taken over 44,000 lives in the past year. Physicians are generally part of the solution to our medical concerns. Sadly, Dr. Jain was part of the problem.”
“Doctors who over-prescribe opioid pain medication contribute to a national epidemic of drug overdoses that annually kills thousands of people from every background and income level.
While this plea won't repair the damage done to the victims or their families, it will hopefully head off future tragedies by making some doctors think twice before recklessly prescribing pain-killers. If that happens, then all the hard work that went into this case will have been worth it,” said FBI Special Agent in Charge Terry Wade. “I thank the FBI Special Agents and support staff who worked closely with the DEA, New Mexico Medical Board and New Mexico Board of Pharmacy on this case, and I congratulate the U.S. Attorney’s Office for a successful prosecution.”
This case was investigated by the DEA’s Tactical Diversion Team in El Paso, Texas and the FBI’s Healthcare Fraud Unit with assistance from the New Mexico Medical Board and the New Mexico Board of Pharmacy. The case is being prosecuted by Assistant U.S. Attorneys Sarah M. Davenport and Richard C. Williams of the U.S. Attorney’s Las Cruces Branch Office.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting individuals who participate in drug diversion schemes, pill mills, rogue clinics and pharmacies, and prescription drug rings for investigation and prosecution is a priority of the HOPE Initiative.
Pakistani Citizen Admits Laundering Millions from Massive Computer Hacking and Telecommunications Fraud SchemeRead the Press Release
NEWARK, N.J. – A Pakistani citizen today admitted laundering over $19.6 million on behalf of the perpetrators of a massive international computer hacking and telecommunications fraud scheme, U.S. Attorney Paul J. Fishman announced.
Muhammad Sohail Qasmani, 47, formerly of Bangkok, Thailand, pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of conspiracy to commit wire fraud. He remains detained without bail.
“Thanks to the hard work of the prosecutors and agents on this case, Qasmani acknowledged his role in an international scheme that hijacked the telephone networks of U.S. companies and ran up millions in bogus charges,” U.S. Attorney Fishman said. “Today, he admitted moving over $19 million in illicit proceeds across 10 countries and ensuring the dialers and hackers who perpetuated the scheme received their cut.”
“The successful investigation of Qasmani is a testament to the dedication, hard work, and commitment of the men and women of the FBI, the Enforcement and Removal Operations of the U.S. Customs and Border Protection, and the State Department," said FBI-Newark Acting Special Agent in Charge Andrew Campi.
According to documents filed in this and related cases and statements made in court:
This massive international telecommunications fraud scheme, allegedly led by Noor Aziz, 53, of Karachi, Pakistan, involved unauthorized access to the computer systems – commonly known as PBX systems – that ran the internal telephone networks of numerous businesses and organizations in the United States. Foreign-based hackers targeted the telephone systems of the victim corporations and placed calls to those systems in an attempt to identify unused telephone extensions. Once the hackers identified unused extensions, they illegally reprogrammed the telephone systems so that they could be used to make unlimited long distance calls, all of which were ultimately charged back to the victim corporations.
The hacked telephone systems were then used to make calls to premium telephone numbers – such as purported chat lines, adult entertainment, and psychic hotlines – that generated revenue based on the calls’ duration and were set up and controlled by Aziz. In actuality, the numbers provided no actual services. Telephone company representatives who suspected fraudulent activity and called the numbers heard recordings of fake rings, fake password prompts, fake voicemail messages, music, or dead air on continuous loops.
In 2008, Qasmani, who operated a money laundering and smuggling business in Thailand, agreed to launder proceeds of the scheme for Aziz. In furtherance of the conspiracy, Qasmani established multiple bank accounts to receive the money generated by the illicit telephone traffic. Qasmani also paid the hackers and dialers who worked for Aziz to keep the scheme going.
Specifically, over nearly four years, Qasmani initiated money transfers to approximately 650 unique transferees, located in at least 10 countries, including the Philippines, India, Pakistan, Malaysia, China, the United Arab Emirates, Saudi Arabia, Indonesia, Thailand, and Italy. Qasmani moved a total of approximately $19.6 million in fraud proceeds from November 2008 through Dec. 31, 2012. Qasmani kept laundering the money even after Aziz was arrested in connection with this scheme and later released by foreign authorities.
On Dec. 22, 2014, Special Agents of the FBI arrested Qasmani at Los Angeles International Airport after he arrived on a flight from Bangkok.
The count of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for May 17, 2016.
Aziz was charged by indictment on June 20, 2012 and remains a fugitive. For more information, visit the FBI Cyber’s Most Wanted list. The charges and allegations against him are merely accusations, and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Campi, with the investigation leading to today’s guilty plea. He also thanked special agents with U.S. Immigration and Customs Enforcement's (ICE) Enforcement and Removal Operations (ERO) and U.S. Customs and Border Protection for their assistance in this case.
The government is represented by Assistant U.S. Attorney L. Judson Welle of the U.S. Attorney’s Office National Security Unit in Newark.
16-041 ###
Defense Counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark
Owner of Several ‘Clean and Sober’ Residential Facilities in Snohomish County Arrested for Drug TraffickingRead the Press Release
Investigators with the Drug Enforcement Administration (DEA) and the Seattle Police Department (SPD) arrested the operator of a number of ‘clean and sober’ residential facilities on February 9, 2016, following an investigation that revealed the man was dealing illegal drugs, announced U.S. Attorney Annette L. Hayes. TIMOTHY REHBERG, 50, of Everett was arrested Tuesday following a three-month investigation. In a search of the office at the primary I.C. Clean People Recovery Housing, Incorporated facility in the 2900 block of Everett Avenue in Everett, authorities located approximately one pound of crystal methamphetamine, a quarter pound of heroin, small quantities of marijuana, oxycodone and methadone, and a .38 caliber revolver. REHBERG will make his initial appearance on the criminal complaint in Seattle at 2:00 PM this afternoon. He remains in custody pending a detention hearing.
According to charging documents in Snohomish County, REHBERG came to the attention of law enforcement in December 2015, when a witness identified him as someone selling methamphetamine, heroin, and marijuana. Further investigation confirmed REHBERG’s identity and his occupation as the owner and operator of a chain of clean and sober housing facilities under the name ‘I.C. Clean People Recovery Housing.’ The person working with law enforcement made four purchases of illegal drugs, including methamphetamine, heroin, and marijuana, from REHBERG. REHBERG is prohibited from possessing firearms due to prior felony convictions as well as an active protection order from a domestic partner.
The federal charges will be filed at the initial appearance this afternoon. The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The investigation was led by the DEA and SPD with assistance from Health and Human Services, Office of the Inspector General (HHS-OIG), the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), and the Washington State Attorney General’s Office.
O'Fallon Woman Sentenced for Healthcare FraudRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today, that Ann Marie Sheppard, 55, of O’Fallon, Illinois, was sentenced on February 10, 2016, in the U.S. District Court in East Saint Louis, Illinois, on the charges that she engaged in a scheme to steal from a health care program and that she committed two related mail frauds. The district court sentenced Sheppard to five years of probation with the first six months to be served in home detention. She is also ordered to pay $34,168.33 in restitution to the Home Services Program and a $300.00 special assessment.
Court records indicate that Sheppard submitted false and fraudulent bills in relation to her alleged performance of personal assistant services in the Home Services Program, a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. Sheppard falsely billed the program between June 30, 2013 and April 30, 2015, when she purportedly rendered personal assistant services to a customer when, in fact, she had not. For example, she billed for home services when she was actually in Costa Rica and then again when she was on a cruise in the Caribbean Sea. As a result, Sheppard improperly billed hours of services and obtained $34,168.33 in payments for services not performed.
The investigation was conducted by the U.S. Department of Health and Human Services - Office of Inspector General, the Illinois State Police - Medicaid Fraud Control Bureau, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney William E. Coonan.
If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services, Office of Inspector General, or you may call 1.800.447.8477.New York Man Sentenced for Passport FraudRead the Press Release
CONCORD, NEW HAMPSHIRE – United States Attorney Emily Gray Rice announced today that Jeffrey Slamow, of Lynbrook, NY, was sentenced to three years’ probation after pleading guilty to a one-count Indictment alleging that he filed a false affidavit in connection with the fraudulent passport application of another individual.
On June 22, 2011 Slamow intentionally filed a false Sworn Affidavit of Identifying Witness (U.S. State Department form DS-71) supporting the fraudulent passport application of a friend. Slamow’s friend was not a citizen or national of the United States and could not obtain a passport in his own identity. The friend submitted a passport application using the identity information of another person known to Slamow. The Sworn Affidavit of Identifying Witness that was executed by Slamow was false because Slamow knew the applicant was not a citizen of the United States and knew the applicant’s true name was not that listed on the application.
Slamow pled guilty to the charge on November 4, 2015.
The case was investigated by the U.S. State Department Diplomatic Security Service. This case was prosecuted by Assistant U.S. Attorney Alfred Rubega.
New Orleans Woman Pleads Guilty to Defrauding Gulf Coast Claims FacilityRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CHANDORELL MILES, age 33, of New Orleans, pled guilty today to conspiracy to commit wire fraud relating to fraudulent applications she made to the Gulf Coast Claims Facility (GCCF) for financial assistance in the aftermath of the Deepwater Horizon oil spill in the Gulf of Mexico.
According to court documents, the GCCF made disaster assistance money available to individuals and businesses affected by the oil spill resulting from the Deepwater Horizon explosion. The GCCF required individuals to verify loss of income. Beginning in or about September 2010, MILES, assisted by her co-conspirators who posed as claimants, completed claim forms with false representations, created false and fraudulent documentation to support the claim forms, and wired all of the aforementioned documents to the GCCF’s office in Dublin, Ohio. The representations in the claim forms included false representations that the claimants were employed at different businesses in the New Orleans metropolitan area at the time of the oil spill. The false documentation included earnings statements falsely purporting to be from the employers. Based on these false representations, the GCCF paid MILES and her co-conspirators emergency benefits totaling approximately $406,400.00.
MILES faces a maximum term of imprisonment of five years, a fine of $250,000 and three years of supervised release following any term of imprisonment. U.S. District Judge Nannette Jolivette Brown set sentencing for April 21, 2016.
This case was brought as part of this District’s partnership with the National Center for Disaster Fraud (NCDF), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected] or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
U.S. Attorney Polite praised the work of the United States Secret Service, New Orleans Field Office in investigating this matter. Assistant United States Attorney Loan AMimi@ Nguyen is in charge of the prosecution.
New Jersey Man Sentenced to Federal Prison for Fraud Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Michael Silva, 25, of West Orange, N.J., was sentenced today in federal court in Albuquerque, N.M., to 18 months in prison followed by three years of supervised release for his conviction on fraudulent use of counterfeit access devices charges.
Silva was arrested on Sept. 11, 2015, on a 15-count indictment charging him with one count of conspiracy to commit aggravated identity theft, 11 counts of access devise fraud, and two counts of aggravated identity theft. The indictment alleged that from March 7, 2015 through April 21, 2015, Silva conspired with others to commit access device fraud and aggravated identity theft in Bernalillo, Sandoval and Santa Fe Counties, N.M.
According to the indictment, Silva participated in a conspiracy to use electronic devices known as “skimmers” on Automatic Teller Machines (ATM) to record information encoded on bank cards inserted into ATMs by legitimate bank customers. The “skimmers” permitted Silva and his coconspirators to record Personal Identification Number (PIN) codes and magnetic data recorded from bank cards to create fraudulent bank cards. They then used the fraudulent bank cards to access the bank accounts of legitimate bank customers.
On Nov. 12, 2015, Silva entered a guilty plea to two counts of access device fraud. In entering the guilty plea, Silva admitted that in April 2015, he possessed electronic devices that could be used to unlawfully obtain bank account information and PIN codes from innocent users at ATMs. Silva admitted using the electronic devices known as “skimmers” to obtain PIN codes and to create fraudulent bank cards. Silva further admitted that on April 19, 2015, he used two counterfeit bank cards at the ATM at First Financial Credit Union on San Mateo Blvd. in Albuquerque to withdraw a total of $600.00 in cash from bank accounts without permission from the account holders.
This case was investigated by the Albuquerque office of Homeland Security Investigations and the Albuquerque Police Department. Assistant U.S. Attorney Jonathon M. Gerson prosecuted the case.
New Haven Man Indicted for Attempting to Entice a Minor for Illicit SexRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a New Haven, Mo., man has been indicted by a federal grand jury for attempting to entice a minor under the age of 17 (actually an undercover law enforcement officer) to engage in illicit sex.
Jason M. Strubberg, 26, of New Haven, was charged in an indictment returned by a federal grand jury in Jefferson City, Mo., on Wednesday, Feb. 10, 2016. The federal indictment replaces a criminal complaint that was filed against Stubberg on Jan. 19, 2016, which charged him with the same offense.
According to an affidavit filed in support of the original criminal complaint, a detective with the Boone County, Mo., Sheriff’s Department posted an undercover online advertisement on Jan. 6, 2016, as part of an investigation to seek out potential sexual predators. Strubberg allegedly responded with several e-mails the same day. The decoy provided Strubberg with a phone number and told him she was looking for someone to help with her 14-year-old daughter’s respect issues.
Strubberg allegedly told the decoy he was a dominant person and agreed to help the decoy with her 14-year-old daughter as long as the decoy would sign a contract giving him permission to do so. Strubberg was sent two images of the decoy’s daughter, who he believed to be 14 years of age. Over the course of the next two days, the affidavit says, Strubberg described his plans for sexual conduct, including deviate sexual intercourse with the decoy’s daughter. Strubberg allegedly advised he would use ropes and other restraints if need be in order to prevent the decoy’s daughter from moving while he engaged in sexual conduct with her. Furthermore, the affidavit says, Strubberg sent a contract to the decoy by text message and asked her to print and sign the contract granting him permission to engage in sexual conduct with the decoy’s daughter.
After further e-mail correspondence, the affidavit says, Strubberg asked the decoy and her daughter to meet in person so that he could spend the day with them engaging in sexual conduct. On Jan. 8, 2016, Strubberg arrived at the meeting place and was arrested.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Anthony P. Gonzalez. It was investigated by the Boone County, Mo., Sheriff’s Department and the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Nevada Rancher Cliven Bundy Arrested and Charged with Felony Crimes Related to 2014 Attempted Cattle ImpoundmentRead the Press Release
LAS VEGAS, Nev. – Nevada rancher Cliven Bundy was arrested yesterday evening in Portland, Ore., and faces multiple felony charges filed in the District of Nevada related to the attempted cattle impoundment operation conducted by federal law enforcement officers near Bunkerville, Nev. in April 2014, according to U.S. Attorney Daniel G. Bogden for the District of Nevada.
Bundy, 69, of Bunkerville, Nev., is charged in a criminal complaint with conspiracy to commit an offense against the United States, assault on a federal law enforcement officer, using and carrying a firearm in relation to a crime of violence, obstruction of the administration of justice, and interference with commerce by extortion. Bundy is scheduled for an initial court appearance at 1:30 p.m. today in Portland.
The 32-page complaint alleges that on or about April 12, 2014, Bundy and his co-conspirators organized and led a massive armed assault against federal law enforcement officers who were attempting to execute federal court orders to remove cattle from the federal public lands in Bunkerville, Nev.
If convicted, Bundy faces up to five years in prison on the conspiracy charge, up to 20 years in prison on the assault on a federal law enforcement officer and interference with commerce by extortion charges, up to 10 years in prison on the obstruction of justice charge, and a mandatory minimum consecutive of seven years in prison on the use and carry of a firearm in relation to a crime of violence charge, as well as fines of up to $250,000 per count.
The case is being investigated by the FBI and the Bureau of Land Management.
The public is reminded that a criminal complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Morgan Stanley Agrees to Pay $2.6 Billion Penalty in Connection with Its Sale of Residential Mortgage Backed SecuritiesRead the Press Release
The Justice Department today announced that Morgan Stanley will pay a $2.6 billion penalty to resolve claims related to Morgan Stanley’s marketing, sale and issuance of residential mortgage-backed securities (RMBS). This settlement constitutes the largest component of the set of resolutions with Morgan Stanley entered by members of the RMBS Working Group, which have totaled approximately $5 billion. As part of the agreement, Morgan Stanley acknowledged in writing that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its RMBS and about its due diligence practices. Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in RMBS issued by Morgan Stanley in 2006 and 2007.
“Today’s settlement holds Morgan Stanley appropriately accountable for misleading investors about the subprime mortgage loans underlying the securities it sold,” said Acting Associate Attorney General Stuart F. Delery. “The Department of Justice will not tolerate those who seek financial gain through deceptive or unfair means, and we will take appropriately aggressive action against financial institutions that knowingly engage in improper investment practices.”
“Those who contributed to the financial crisis of 2008 cannot evade responsibility for their misconduct,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This resolution demonstrates once again that the Financial Institutions Reform, Recovery and Enforcement Act is a powerful weapon for combatting financial fraud and that the department will not hesitate to use it to hold accountable those who violate the law.”
An RMBS is a type of security comprised of a pool of mortgage loans created by banks and other financial institutions. The expected performance and price of an RMBS is determined by a number of factors, including the characteristics of the borrowers and the value of the properties underlying the RMBS. Morgan Stanley was one of the institutions that issued RMBS during the period leading up to the economic crisis in 2007 and 2008.
As acknowledged by Morgan Stanley in a detailed statement of facts that is a part of this agreement (and is quoted below), the company made representations to prospective investors about the characteristics of the subprime mortgage loans underlying its RMBS – representations with which it did not comply:
- In particular, Morgan Stanley told investors that it did not securitize underwater loans (loans that exceeded the value of the property). However, Morgan Stanley did not disclose to investors that in April 2006 it had expanded its “risk tolerance” in evaluating loans in order to purchase and securitize “everything possible.” As Morgan Stanley’s manager of valuation due diligence told an employee in 2006, “please do not mention the ‘slightly higher risk tolerance’ in these communications. We are running under the radar and do not want to document these types of things.” As a result, Morgan Stanley ignored information – including broker’s price opinions (BPOs), which are estimates of a property’s value from an independent real estate broker – indicating that thousands of securitized loans were underwater, with combined-loan-to-value ratios over 100 percent. From January 2006 through mid-2007, Morgan Stanley acknowledged that “Morgan Stanley securitized nearly 9,000 loans with BPO values resulting in [combined loan to value] ratios over 100 percent.”
- Morgan Stanley also told investors that it did not securitize loans that failed to meet originators’ guidelines unless those loans had compensating factors. Morgan Stanley’s offering documents “represented that ‘[the mortgage loans originated or acquired by [the originator] were done so in accordance with the underwriting guidelines established by [the originator]’ but that ‘on a case-by-case-basis, exceptions to the [underwriting guidelines] are made where compensating factors exist.’” Morgan Stanley has now acknowledged, however, that “Morgan Stanley did not disclose to securitization investors that employees of Morgan Stanley received information that, in certain instances, loans that did not comply with underwriting guidelines and lacked adequate compensating factors . . . were included in the RMBS sold and marketed to investors.” So, in fact, “Morgan Stanley . . . securitized certain loans that neither comported with the originators’ underwriting guidelines nor had adequate compensating factors.”
- Likewise, “Morgan Stanley also prepared presentation materials . . . that it used in discussions with potential investors that described the due diligence process for reviewing pools of loans prior to securitization,” but “certain of Morgan Stanley’s actual due diligence practices did not conform to the description of the process set forth” in those materials.
- For example, Morgan Stanley obtained BPOs for a percentage of loans in a pool. Morgan Stanley stated in these presentation materials that it excluded any loan with a BPO value exhibiting an “unacceptable negative variance from the original appraisal,” when in fact “Morgan Stanley never rejected a loan based solely on the BPO results.”
- Through these undisclosed practices, Morgan Stanley increased the percentage of mortgage loans it purchased for its RMBS, notwithstanding its awareness about “deteriorating appraisal quality” and “sloppy underwriting” by the sellers of these loans. The bank has now acknowledged that “Morgan Stanley was aware of problematic lending practices of the subprime originators from which it purchased mortgage loans.” However, it “did not increase its credit-and-compliance due diligence samples, in part, because it did not want to harm its relationship with its largest subprime originators.” Indeed, Morgan Stanley’s manager of credit-and-compliance due diligence was admonished to “stop fighting and begin recognizing the point that we need monthly volume from our biggest trading partners and that . . . the client [an originator] does not have to sell to Morgan Stanley.”
“In today’s agreement, Morgan Stanley acknowledges it sold billions of dollars in subprime RMBS certificates in 2006 and 2007 while making false promises about the mortgage loans backing those certificates,” said Acting U.S. Attorney Brian J. Stretch of the Northern District of California. “Morgan Stanley touted the quality of the lenders with which it did business and the due diligence process it used to screen out bad loans. All the while, Morgan Stanley knew that in reality, many of the loans backing its securities were toxic. Abuses in the mortgage-backed securities industry such as these helped bring about the most devastating financial crisis in our lifetime. Our office is committed to dedicating the resources necessary to hold those who engage in such reckless actions responsible for their conduct.”
The $2.6 billion civil monetary penalty resolves claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). FIRREA authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. The settlement expressly preserves the government’s ability to bring criminal charges against Morgan Stanley, and likewise does not release any individuals from potential criminal or civil liability. In addition, as part of the settlement, Morgan Stanley promised to cooperate fully with any ongoing investigations related to the conduct covered by the agreement.
In conjunction with today’s announcement of the federal government’s settlement with Morgan Stanley, the states of New York and Illinois – also members of the RMBS Working Group – have announced settlements with Morgan Stanley for $550 million and $22.5 million, respectively, arising from its sale of RMBS. Among other resolutions, Morgan Stanley previously paid $225 million to resolve claims brought by the National Credit Union Administration arising from losses related to corporate credit unions’ purchases of RMBS; $1.25 billion to resolve claims by Federal Housing Finance Agency (FHFA) for Morgan Stanley’s alleged violations of federal and state securities laws and common law fraud in connection with RMBS purchased by Fannie Mae and Freddie Mac; and $86.95 million to resolve federal and state securities laws claims brought by the Federal Deposit Insurance Corporation as receiver on behalf of failed financial institutions. Morgan Stanley also previously entered into a consent decree with the U.S. Securities and Exchange Commission (SEC) to pay $275 million to resolve certain RMBS claims. With today’s announcement, Morgan Stanley will have paid nearly $5 billion to members of the RMBS Working Group in connection with its sale of RMBS.
Today’s settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered billions of dollars arising from misconduct related to the financial crisis. The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together attorneys, investigators, analysts and staff from multiple state and federal agencies, including the Department of Justice, U.S. Attorneys’ Offices, the FBI, the SEC, the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA Office of Inspector General (OIG), the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s OIG, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and multiple state Attorneys General offices around the country. The RMBS Working Group is led by Director Joshua Wilkenfeld and five co-chairs: Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Director Andrew Ceresney of the SEC’s Division of Enforcement, U.S. Attorney John Walsh of the District of Colorado and New York Attorney General Eric Schneiderman.
“The securitization of defective mortgages and the billions of dollars that were lost as a result caused such a hardship to our economy, the housing industry and our nation as a whole that we are still feeling the effects years after,” said Deputy Inspector General for Investigations Rene Febles of FHFA-OIG. “Morgan Stanley is responsible for their role, which caused enormous losses to investors. This settlement is one step in recovering from those losses. We are proud to work with the RMBS Working Group and the U.S. Department of Justice on this and all RMBS matters.”
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Northern District of California, with investigative support from FHFA-OIG and the Special Inspector General for the Troubled Asset Relief Program.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov
Morgan Stanley Agrees to Pay $2.6 Billion Penalty in Connection with Its Sale of Residential Mortgage Backed SecuritiesRead the Press Release
WASHINGTON – The Justice Department today announced that Morgan Stanley will pay a $2.6 billion penalty to resolve claims related to Morgan Stanley’s marketing, sale and issuance of residential mortgage-backed securities (RMBS). This settlement constitutes the largest component of the set of resolutions with Morgan Stanley entered by members of the RMBS Working Group, which have totaled approximately $5 billion. As part of the agreement, Morgan Stanley acknowledged in writing that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its RMBS, and about its due diligence practices. Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in RMBS issued by Morgan Stanley in 2006 and 2007.
“Today’s settlement holds Morgan Stanley appropriately accountable for misleading investors about the subprime mortgage loans underlying the securities it sold,” said Acting Associate Attorney General Stuart F. Delery. “The Department of Justice will not tolerate those who seek financial gain through deceptive or unfair means, and we will take appropriately aggressive action against financial institutions that knowingly engage in improper investment practices.”
“Those who contributed to the financial crisis of 2008 cannot evade responsibility for their misconduct,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This resolution demonstrates once again that the Financial Institutions Reform, Recovery and Enforcement Act is a powerful weapon for combatting financial fraud and that the department will not hesitate to use it to hold accountable those who violate the law.”
An RMBS is a type of security comprised of a pool of mortgage loans created by banks and other financial institutions. The expected performance and price of an RMBS is determined by a number of factors, including the characteristics of the borrowers and the value of the properties underlying the RMBS. Morgan Stanley was one of the institutions that issued RMBS during the period leading up to the economic crisis in 2007 and 2008.
As acknowledged by Morgan Stanley in a detailed statement of facts that is a part of this agreement (and is quoted below), the company made representations to prospective investors about the characteristics of the subprime mortgage loans underlying its RMBS – representations with which it did not comply:
- In particular, Morgan Stanley told investors that it did not securitize underwater loans (loans that exceeded the value of the property). However, Morgan Stanley did not disclose to investors that in April 2006 it had expanded its “risk tolerance” in evaluating loans in order to purchase and securitize “everything possible.” As Morgan Stanley’s manager of valuation due diligence told an employee in 2006, “please do not mention the ‘slightly higher risk tolerance’ in these communications. We are running under the radar and do not want to document these types of things.” As a result, Morgan Stanley ignored information – including broker’s price opinions (BPOs), which are estimates of a property’s value from an independent real estate broker – indicating that thousands of securitized loans were underwater, with combined-loan-to-value ratios over 100 percent. From January 2006 through mid-2007, Morgan Stanley acknowledged that “Morgan Stanley securitized nearly 9,000 loans with BPO values resulting in [combined loan to value] ratios over 100 percent.”
- Morgan Stanley also told investors that it did not securitize loans that failed to meet originators’ guidelines unless those loans had compensating factors. Morgan Stanley’s offering documents “represented that ‘[the mortgage loans originated or acquired by [the originator] were done so in accordance with the underwriting guidelines established by [the originator]’ but that ‘on a case-by-case-basis, exceptions to the [underwriting guidelines] are made where compensating factors exist.’” Morgan Stanley has now acknowledged, however, that “Morgan Stanley did not disclose to securitization investors that employees of Morgan Stanley received information that, in certain instances, loans that did not comply with underwriting guidelines and lacked adequate compensating factors . . . were included in the RMBS sold and marketed to investors.” So, in fact, “Morgan Stanley . . . securitized certain loans that neither comported with the originators’ underwriting guidelines nor had adequate compensating factors.”
- Likewise, “Morgan Stanley also prepared presentation materials . . . that it used in discussions with potential investors that described the due diligence process for reviewing pools of loans prior to securitization,” but “certain of Morgan Stanley’s actual due diligence practices did not conform to the description of the process set forth” in those materials.
- For example, Morgan Stanley obtained BPOs for a percentage of loans in a pool. Morgan Stanley stated in these presentation materials that it excluded any loan with a BPO value exhibiting an “unacceptable negative variance from the original appraisal,” when in fact “Morgan Stanley never rejected a loan based solely on the BPO results.”
- Through these undisclosed practices, Morgan Stanley increased the percentage of mortgage loans it purchased for its RMBS, notwithstanding its awareness about “deteriorating appraisal quality” and “sloppy underwriting” by the sellers of these loans. The bank has now acknowledged that “Morgan Stanley was aware of problematic lending practices of the subprime originators from which it purchased mortgage loans.” However, it “did not increase its credit-and-compliance due diligence samples, in part, because it did not want to harm its relationship with its largest subprime originators.” Indeed, Morgan Stanley’s manager of credit-and-compliance due diligence was admonished to “stop fighting and begin recognizing the point that we need monthly volume from our biggest trading partners and that . . . the client [an originator] does not have to sell to Morgan Stanley.”
“In today’s agreement, Morgan Stanley acknowledges it sold billions of dollars in subprime RMBS certificates in 2006 and 2007 while making false promises about the mortgage loans backing those certificates,” said Acting U.S. Attorney Brian J. Stretch of the Northern District of California. “Morgan Stanley touted the quality of the lenders with which it did business and the due diligence process it used to screen out bad loans. All the while, Morgan Stanley knew that in reality, many of the loans backing its securities were toxic. Abuses in the mortgage-backed securities industry such as these helped bring about the most devastating financial crisis in our lifetime. Our office is committed to dedicating the resources necessary to hold those who engage in such reckless actions responsible for their conduct.”
The $2.6 billion civil monetary penalty resolves claims under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). FIRREA authorizes the federal government to impose civil penalties against financial institutions that violate various predicate offenses, including wire and mail fraud. The settlement expressly preserves the government’s ability to bring criminal charges against Morgan Stanley, and likewise does not release any individuals from potential criminal or civil liability. In addition, as part of the settlement, Morgan Stanley promised to cooperate fully with any ongoing investigations related to the conduct covered by the agreement.
In conjunction with today’s announcement of the federal government’s settlement with Morgan Stanley, the states of New York and Illinois – also members of the RMBS Working Group – have announced settlements with Morgan Stanley for $550 million and $22.5 million, respectively, arising from its sale of RMBS. Among other resolutions, Morgan Stanley previously paid $225 million to resolve claims brought by the National Credit Union Administration arising from losses related to corporate credit unions’ purchases of RMBS; $1.25 billion to resolve claims by Federal Housing Finance Agency (FHFA) for Morgan Stanley’s alleged violations of federal and state securities laws and common law fraud in connection with RMBS purchased by Fannie Mae and Freddie Mac; and $86.95 million to resolve federal and state securities laws claims brought by the Federal Deposit Insurance Corporation as receiver on behalf of failed financial institutions. Morgan Stanley also previously entered into a consent decree with the U.S. Securities and Exchange Commission (SEC) to pay $275 million to resolve certain RMBS claims. With today’s announcement, Morgan Stanley will have paid nearly $5 billion to members of the RMBS Working Group in connection with its sale of RMBS.
Today’s settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered billions of dollars arising from misconduct related to the financial crisis. The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together attorneys, investigators, analysts and staff from multiple state and federal agencies, including the Department of Justice, U.S. Attorneys’ Offices, the FBI, the SEC, the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA Office of Inspector General (OIG), the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s OIG, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network and multiple state Attorneys General offices around the country. The RMBS Working Group is led by Director Joshua Wilkenfeld and five co-chairs: Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Director Andrew Ceresney of the SEC’s Division of Enforcement, U.S. Attorney John Walsh of the District of Colorado and New York Attorney General Eric Schneiderman.
“The securitization of defective mortgages and the billions of dollars that were lost as a result caused such a hardship to our economy, the housing industry and our nation as a whole that we are still feeling the effects years after,” said Deputy Inspector General for Investigations Rene Febles of FHFA-OIG. “Morgan Stanley is responsible for their role, which caused enormous losses to investors. This settlement is one step in recovering from those losses. We are proud to work with the RMBS Working Group and the U.S. Department of Justice on this and all RMBS matters.”
The settlement was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Northern District of California, with investigative support from FHFA-OIG.
Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov
Mexican Nationals Arrested in New Mexico on Federal Methamphetamine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Four Mexican nationals made their initial appearances this morning in federal court in Las Cruces, N.M., on a criminal complaint charging them with methamphetamine trafficking offenses. All four remain in federal custody pending preliminary hearings and detention hearings which have yet to be scheduled.
Jobel Irai Fontes-Nieto, 29, Antonio Ignacio Villa-Garcia, 30, Jesus Manuel Rodela-Castillo, 22, and Manuel Carreon-Chavira, 25, all of Chihuahua, Mexico, were arrested on Feb. 5, 2016, in Sunland Park, N.M., after law enforcement agents recovered five sealed bundles containing approximately 5.46 pounds of methamphetamine from the four men during an undercover operation.
If convicted of the charges in the criminal complaint, all four defendants face a statutory mandatory minimum of ten years and maximum of life in federal prison and will be deported following their incarceration. Charges in criminal complaints are merely accusations, and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Las Cruces office of the FBI and the HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force. Assistant U.S. Attorneys John Balla and Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office are prosecuting the case.
The HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force is comprised of officers from the Las Cruces Police Department, the Doña Ana County Sheriff’s Office, the FBI, HSI and the New Mexico State Police. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Mexican National Sentenced for Violations of the Federal Gun Control ActRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JUAN ALBERTO SANCHEZ-ROMERO, age 25, a citizen of Mexico, was sentenced after previously pleading guilty to a one-count Bill of Information for violations of the Federal Gun Control Act.
U.S. District Judge Nannette Jolivette Brown sentenced SANCHEZ-ROMERO to time served followed by one year of supervised release, and a $100 special assessment. SANCHEZ-ROMERO will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to the court documents, on or about August 20, 2015, SANCHEZ-ROMERO, an alien present illegally in the United States, was found in possession of a firearm.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, Immigration Enforcement in investigating this matter. Assistant United States Attorney Irene González was in charge of the prosecution.
Meriden Man Pleads Guilty to Federal Hate Crime OffenseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, announced that TED HAKEY, JR., 48, of Meriden, pleaded guilty today before U.S. District Judge Michael P. Shea in Hartford to a federal hate crime offense stemming from his firing shots into the Baitul Aman Mosque in Meriden.
“A core mission of the Justice Department is to protect every person against racially, religiously and ethnically motivated violence and intimidation,” said U.S. Attorney Daly. “Individuals who commit hateful, divisive and violent acts against others in violation of federal law will be prosecuted. All of us have a right to worship freely and without fear of violence. I thank the FBI, ATF, Connecticut State Police and Meriden Police Department for their superb investigative efforts. We hope that the swift resolution of this case and the defendant’s acceptance of responsibility bring some solace to the Baitul Aman Mosque community.”
“Today’s guilty plea affirms that law enforcement and our criminal justice system are clear, that intolerance will not prevail,” said FBI Special Agent in Charge Ferrick.
According to court documents and statements made in court, in the early morning hours of November 14, 2015, officers from the Meriden Police Department responded to citizen complaints about shots being fired around the area of 410 Main Street in Meriden, the location of the Baitul Aman Mosque. On Sunday, November 15, 2015, a family who entered the Mosque to worship noticed damage to the interior walls and the drop ceiling of the Mosque and called the police. Investigators determined that approximately three rounds shot from a high-powered rifle had penetrated the building, and another had hit an exterior area. A preliminary analysis of the trajectory of the bullets indicated that they likely came from a high-powered rifle shot from the area of 380 Main Street, the house located closest to the Mosque, which is HAKEY’s residence.
In subsequent interviews with authorities, HAKEY admitted that he had shot a Springfield M1A rifle at the Mosque on November 14, 2015.
The investigation revealed that after HAKEY had learned about terrorist attacks that had occurred in Paris on November 13, 2015, he posted the following status to his Facebook account: “What is gonna be the breaking point to go “weapons free” against Islam?”
“Weapons free” is a military command to shoot at will.
HAKEY also sent a Facebook friend a private message saying: “I hate ISLAM!.”
HAKEY’s Facebook account also contained other evidence of animus toward Muslims and Islam. For example, earlier in 2015, HAKEY had told a Facebook friend that he has “a mosque right next door” and that he had “observe[d] them with [his] binos [binoculars].” In the same conversation, he said “All Muslims must die!!! I hate them all.” In July 2015, he posted to Facebook: “If we all kill just 1 Muslim each tonight it will make a dent!.”
HAKEY was arrested on December 17, 2015.
HAKEY pleaded guilty to one count of intentionally damaging religious property through use of a dangerous weapon, an offense that carries a maximum term of imprisonment of 20 years and a fine of up to $250,000. Judge Shea scheduled sentencing for May 10, 2016.
HAKEY is released on a $400,000 bond.
This matter is being investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Connecticut State Police and the Meriden Police Department.
Member of Robbery Crew Exiled to over 16 Years in Prison for Gun and Drug OffensesRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Donnell Williamson, a/k/a “Anthony Thomas,” age 25, of Landover, Maryland, today to 198 months in prison followed by five years of supervised release for conspiracy to possess with the intent to distribute five kilograms or more of cocaine, and for possession of a firearm in furtherance of a drug trafficking crime and during and in relation to a crime of violence.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division (ATF); and Interim Chief Henry P. Stawinski of the Prince George’s County Police Department.
According to his plea agreement, between September 2013 and October 29, 2013, Williamson conspired with Ted Duckett and others to rob certain drug dealers operating in Maryland, and conspired to possess with the intent to distribute five kilograms or more of cocaine.
On October 10, 2013, Duckett met an ATF undercover agent (UC) posing as a disgruntled drug courier to discuss robbing a drug stash house. During this meeting, the UC explained how he would be transporting 2 to 3 kilograms of cocaine from a narcotics “stash house,” which would contain approximately 12 to 15 kilograms of cocaine. The UC further explained that he planned to rob the cocaine stash house, which was protected by armed guards, and would split the stolen cocaine (12 to 15 kilograms) with whoever helped him commit the robbery. Duckett agreed to commit the robbery and discussed how he and his crew planned to execute the robbery and obtain the cocaine. Duckett assured the UC that he had the equipment necessary to rob a stash house protected by armed guards. Duckett also told the UC that he would bring his robbery crew to future meetings with the UC. While Duckett was meeting with the UC, Williamson was waiting for Duckett in a car parked nearby.
On October 23, 2013, Duckett and Williamson met the UC at a location in Maryland. During this meeting, Williamson advised the UC that the robbery crew would execute the robbery inside the stash house. Williamson then asked the UC “do you want it to be clean? Do you want them to stay alive?” When the UC indicated it doesn’t matter, Williamson replied “enough said, enough said.” During the conversation, Williamson confirmed the particulars of the robbery by repeating the quantity of cocaine that would be located in the stash house and that two guards would be protecting the drugs. Williamson assured the UC that the robbery crew would remove the firearm from the armed guard stationed at the entrance of the stash house. All of the meetings with the UC were audio and video recorded.
On October 29, 2013, the UC and Duckett spoke on the telephone and Duckett confirmed that they were ready to commit the robbery. Duckett and Williamson drove together and met the UC in Laurel, Maryland. The UC told Ducket that the rental car which they were going to use to commit the robbery was at a nearby location. The UC asked Williamson and Duckett if they wanted to put their “straps,” which is code for firearms, in the UC’s vehicle before driving to the rental car location. Williamson removed a duffel bag from his vehicle, and placed it in the trunk of the UC’s vehicle. Duckett and Williamson then followed the UC in their own vehicle to the location where the conspirators believed they would pick up the rental car and receive the location of the cocaine stash house. Shortly after they arrived at the location, the law enforcement arrest team placed Williamson and Duckett under arrest.
A search of the duffel bag that Williamson had placed in the UC’s vehicle revealed three firearms and ammunition and clear plastic gloves. From the conspirators and their vehicle, officers recovered black skull caps, a black balaclava, and a black ski mask.
Ted Duckett, age 31, of Landover, pleaded guilty to his role in the conspiracy and is scheduled to be sentenced on February 16, 2016, at 9:00 a.m.
Duckett and Williamson have been detained since their arrest.
United States Attorney Rod J. Rosenstein commended the ATF and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Thomas M. Sullivan and Leah J. Bressack, who prosecuted the case.
Louisville man faces child pornography chargeRead the Press Release
A one-count indictment was filed charging Christopher Allen Figueroa, 33, of Louisville, Ohio, with possessing child pornography, said Carole S. Rendon, Acting U.S. States Attorney for the Northern District of Ohio.
If convicted, the defendant’s sentence will be determined by the Court after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Brian M. McDonough following an investigation by the FBI Cleveland Field Office, Canton Resident Agency.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.
Lebanon Resident Sentenced for Role in Methamphetamine ConspiracyRead the Press Release
ABINGDON, VIRGINIA – United States Attorney John P. Fishwick Jr. announced today the sentencing of a local man who was previously convicted of conspiring to possess with the intent to distribute methamphetamine. The defendant was sentenced this afternoon in the United States District Court for the Western District of Virginia in Abingdon.
Timothy Joseph Fields, 60, of Lebanon, Virginia, pled guilty in November 2015 to one count of conspiracy to possess with the intent to distribute methamphetamine. Today in District Court, Fields was sentenced to 108 months of federal incarceration.
“We must be vigilant in the continued enforcement of our nation’s drug laws,” United States Attorney John P. Fishwick Jr. said today. “I am thankful to our partners in the law enforcement community who worked to bring about this conviction.”
The investigation of the case was conducted by the Bristol Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Bristol Office of the Drug Enforcement Administration, the Virginia State Police, the Sheriff's Offices of Washington County, Russell County, Tazewell County, and Smyth County, the Commonwealth's Attorney's Offices of Russell County and Tazewell County and the police departments of Abingdon and Lebanon. Special Assistant United States Attorney Kevin Jayne prosecuted the case for the United States.
Leader of Drug Ring Sentenced to More Than 8 Years in Prison for Trafficking CocaineRead the Press Release
CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. ordered Mateo Meraz, 42, of Rockford, Illinois and leader of a drug ring responsible for trafficking cocaine to the Charlotte area to serve 97 months in prison and three years of supervised release, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Meraz pleaded guilty in November 2015 to one count of conspiracy to distribute and to possess with intent to distribute cocaine.
Mateo Meraz’s conspirators, Sarah Christine Lapp, 38, of Jonesville, Wisconsin, and his son, Hector Meraz, 23, also of Rockford, have each pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute cocaine and are currently awaiting sentencing.
U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office, Steven M. Watkins, Director of the North Carolina Division of Motor Vehicles License and Theft Bureau (NC DMV L&T), and Chief Kerr Putney of the Charlotte Mecklenburg Police Department.
According to filed court documents and today’s sentencing hearing, Mateo Meraz was the leader of a Drug Trafficking Organization (DTO) responsible for trafficking cocaine from Chicago, Illinois to the Charlotte area. Court records show that in October 2015, Mateo Meraz, Hector Meraz and Sarah Lapp travelled to Charlotte to deliver approximately nine kilograms of cocaine with a street value of $476,145. According to court records, the cocaine had been packaged in eighteen (18) bundles and was prepared and ready for sale. To avoid detection, the conspirators transported the cocaine hidden in a secret compartment under the rear seat of the vehicle. Law enforcement arrested the three defendants shortly after the drug delivery had been made.
In announcing the sentence, Judge Conrad noted that “The defendant is an illegal alien that continues to return to the United States and traffic drugs. A 97-month prison sentence will adequately protect the community.”
Mateo Meraz has been in custody since October 2014 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole. Mateo Meraz is an undocumented alien and will be deported to Mexico upon completion of his sentence.
The case was investigated by DEA, NCDMV&T and CMPD. Assistant U.S. Attorney Sanjeev Bhasker of the U.S. Attorney’s office in Charlotte is in charge of the prosecution.
Las Vegas Man Sentenced for Wire FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that John Nielsen, 44, of Las Vegas, Nevada, who was convicted of wire fraud, was sentenced to 15 months in prison by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorneys Russell T. Ippolito, Jr. and Elizabeth R. Moellering, who handled the case, stated that the defendant was involved in an investment loan scheme which resulted in $175,000 dollars in financial losses to an investment company, Preston Waters Corp., located in the Western District of New York. Nielsen represented to the company that he could obtain a standby letter of credit from banks outside the United States. The defendant assured representatives that he could monetize the stand by letter of credit which would provide the investment company with $100 million dollars in loans. As part of the scheme, Nielsen required the investment company to provide him with $175,000 which would purportedly cover the costs associated with the financial transaction. The investment company provided the funds but instead of using the money to obtain financing, the defendant, and his co-conspirator, used the funds for their own purposes.
The plea was the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.
Lancaster Resident Charged with Illegal ReentryRead the Press Release
Rumualdo Diaz-Ramirez, a/k/a “Ricardo Ochoa Guzman,” 42, of Lancaster, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The Indictment alleges that on or about January 14, 2016, Diaz-Ramirez, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about April 30, 2003 and September 24, 2005.
If convicted the defendant faces a maximum possible sentence of two years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Albert S. Glenn.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
KC Crips Gang Member Who Murdered Five People Sentenced to 30 Years in PrisonRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for illegally possessing a controlled substance and firearms. Court documents and testimony from law enforcement officers during today’s sentencing hearing also connected him to the murders of five individuals, including a mother and her 3-year-old daughter.
Rashawn Long, 35, of Kansas City, was sentenced by U.S. District Judge Brian C. Wimes to 30 years in federal prison without parole, which was an upward departure from the federal sentencing guidelines.
Long was found guilty at trial on Aug. 21, 2014, of possessing Buphedrone (also known as bath salts, a controlled substance similar to methamphetamine) with the intent to distribute and of being a felon in possession of firearms. According to court documents and evidence presented at today’s sentencing hearing, Long carried out the murders of at least five individuals in a relatively short time frame – at least one in 2001 for which he was convicted in state court, and at least four during the summer of 2013, the year he was released from prison for his 2001 murder conviction.
Testimony at today’s hearing established Long’s longtime gang affiliation with the 51st Street Crips.
Long shot and killed Michael Birks on Feb. 1, 2001, in the middle of a public street in Kansas City, Mo. Related to that murder, Long attempted to kill Marlon Brown on March 5, 2001, in Overland Park, Kan. Though he survived, Brown was paralyzed from the incident.
According to court documents, Long was also responsible for the execution-style shooting murders of Myeisha J. Turner and her 3-year-old daughter on Aug. 23, 2013, in Kansas City, Mo., inside of the victims’ home.
Additionally, a federal agent testified today regarding Long’s shooting murder of Kevin “Flip” Jones on Sept. 20, 2013, in Kansas City, Mo., in the driveway of the victim’s home.
Long was also involved in the drive-by murder of Raymon K. Thomas with an automatic AK 47-style assault rifle on July 14, 2013, according to testimony from law enforcement at today’s hearing.
The investigation into this case began when Kansas City, Mo., police officers responded to a call about a suspicious person on Oct. 26, 2013. Officers contacted a homeowner, who stated that a man she didn’t know had been knocking on her door. She also told officers that he parked his 2013 Dodge Avenger in her back yard area and left. She had no idea who the vehicle belonged to or why it was parked in her back yard.
Officers noticed that the vehicle had a strong brake pad odor, which was consistent with it having been recently driven at a high rate of speed with the brakes repeatedly engaged. One of the officers requested a tow truck to come pick up the vehicle. When the resident went to move her own vehicle so that the tow truck could get into her back yard, she found a note from Long, but addressed to another person, thanking that person for letting him park the vehicle in her yard.
A few minutes later, Long came running up the hill, waving his arms and yelling at the officers. He told the officers that he knew the owner of the residence and that he parked vehicles there before. Long also told officers that he was trying to hide his car from his fiancé while he visited another woman who lived down the block, and did not want anyone to see him. Long, who had two active arrest warrants, was taken into custody.
When officers searched Long’s vehicle, they found a backpack that contained a stun gun, a can of pepper spray, a digital scale with residue, a digital video camera and a Coke can. Inside the Coke can was a false compartment that contained 5.67 grams of Buphedrone.
When officers reviewed the contents of the digital video camera, they found at least two images in which Long flashed a Glock semi-automatic handgun.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Long has prior felony convictions for second degree murder, armed criminal action, unlawful use of a weapon and trafficking drugs.
This case was prosecuted by Assistant U.S. Attorneys Joseph M. Marquez and Jeffrey Q. McCarther. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Irondequoit Woman Pleads Guilty to Production and Distribution of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. – U.S. Attorney William J. Hochul Jr. announced today that a Megan McDonald, 36, of Irondequoit, NY, pleaded guilty to production of child pornography, distribution of child pornography and possession of child pornography. The charges carry a mandatory minimum penalty of 15 years in prison, a maximum of 30 years, and a $250,000 fine. The charges carry a mandatory minimum penalty of 15 years in prison, a maximum of 30 years and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that in March 2015, law enforcement officers interviewed Jason Cortese who advised that he had received images of child pornography from McDonald. A forensic review of images from Cortese’s iPhone recovered sexually explicit images of two prepubescent minors.Cortese has been convicted of enticement of a minor and is awaiting sentencing. Cortese used the internet and a smart phone to persuade a 12 year old minor to engage in sexually explicit activity.
The plea is the result of an investigation by the Federal Bureau of Investigation’s Child Exploitation Task Force, under the direction of Special Agent in Adam S. Cohen. The task force includes the Monroe County Sheriff’s Office, the Rochester Police Department, and U.S. Immigration and Customs Enforcement-Homeland Security Investigations.
Hunting Show Host Imprisoned in Noatak National Preserve Poaching InvestigationRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a cable TV hunting show host was sentenced in Anchorage United States District Court to 16 months imprisonment for his role as a leader and guide in a multi-year poaching operation on the Noatak National Preserve.
On Feb. 11, 2016, Syndicate TV hunting show host Clark Dixon, 41, of Hazlehurst, Mississippi, was sentenced to 16 months in federal prison by U.S. District Judge Ralph R. Beistline, for two felony violations of the Lacey Act. As part of his plea agreement with the United States, Clark Dixon admitted to large scale violations of federal and state hunting laws including hunting and taking game same day airborne, hunting big game as a nonresident without a guide, hunting without the proper non-resident tags and permits, and the illegal transporting and outfitting of non-resident hunters in the illegal pursuit and take of game on the Noatak Preserve from 2008 through 2013.
As part of the plea agreement and sentence, Judge Beistline ordered that Clark Dixon pay a fine of $75,000, and forfeit 17 animals killed and turned into trophies while falsely claiming to be a resident of the state of Alaska. These included a grizzly bear, Dall sheep, moose and caribou, along with bows and several rifles used in the illegal take of game.
As part of his plea of guilty, Clark Dixon agreed that in 2010 he assisted Clarence Michael Osborne in the illegal take of a grizzly bear, by hunting same day airborne, without a guide or proper permits. The agreement also states that Clark Dixon falsified a hunt record claiming the bear was killed by his father, Charles Dixon. The plea agreement also covers the allegation that at the time the violations were committed, Clark Dixon illegally claimed Alaska residency status while being a resident of the state of Mississippi. The charges against Clark Dixon reflect that he lied about his residency status in order to take advantage of Alaska resident hunting privileges, thus nullifying all of his Alaska hunts which resulted in the forfeiture of the 17 trophies and firearms. Clark Dixon also agreed to the forfeiture of a STOL Quest SQ-4 aircraft used by his father, Charles Dixon, which was instrumental in assisting Clark Dixon in transporting and outfitting non-resident hunters in the illegal take of game. That aircraft has since been forfeited to the United States.
In November 2015, Charles Dixon, 70, also pleaded guilty to two violations of the Lacey Act for illegally flying a non-resident hunter, Clarence Michael Osborne, into their camp on the Noatak National Preserve to hunt grizzly bear, caribou and moose. During the hunt, Osborne killed a grizzly bear without a guide and without the appropriate non-resident permits. After the hunt, Charles Dixon claimed to have killed Osborne’s bear as his own on state hunt records. As part of his plea and sentence imposed by the court, Charles Dixon was sentenced to pay a fine of $15,000 and to pay $10,000 in restitution to the Noatak Preserve with those funds directed toward the removal of their illegal camp materials from the Preserve. In addition, Charles Dixon forfeited his STOL Quest SQ-4 aircraft, valued at $200,000, as the aircraft served as the primary means of unlawfully transporting hunters, and illegally taken game, in and out of the Preserve.
In other related cases, and on Nov. 13, 2015, Clarence Michael Osborne, 53, of Madison, Mississippi, pleaded guilty to a violation of the Lacey Act for killing a grizzly bear in the Preserve while hunting with Clark Dixon. Osborne killed the grizzly bear without a guide as required by Alaska law, and without the proper permits, or tags, and the same day he was airborne. Osborne also pleaded guilty to killing a bull moose without a permit from the Preserve. As part of his plea and sentence, Osborne was sentenced to five years of probation, with a condition that he not hunt anywhere in the world. Osborne was sentenced by Judge Beistline under a plea agreement and was sentenced to pay a fine of $65,000, and to pay restitution to the Noatak Preserve for the illegally taken game in the amount of $19,500. Osborne was also required to forfeit a grizzly bear mount, bull moose mount, three caribou mounts and a .375 H&H rifle and scope used to commit the crimes.
Fulton Wold, 41, of Nashville, Tennessee, pleaded guilty and was sentenced pursuant to a plea agreement on November 13, 2015. As part of this agreement and sentence, Wold agreed to plead guilty to the illegal take of a caribou on a hunt orchestrated by Clark Dixon in September 2009 in which Wold did not have the proper permits or non-resident tags. As part of his sentence, Wold was placed on two years of probation, paid a fine of $7,500, and was ordered to pay $1,000 in restitution to the Noatak Preserve. Wold was also required to forfeit a bull moose and caribou mount as both were killed illegally.
On Nov. 6, 2015, Terry Goza, 71, of Hazlehurst, Mississippi, pleaded guilty to taking a Dall sheep ram, same day airborne, in the Noatak preserve while hunting with Clark Dixon and others. Goza was sentenced to a term of probation and the payment of a $5,000 fine. Footage from Osborne, Wold’s and Goza’s hunts were shown on Clark Dixon’s cable TV hunting show “The Syndicate.”
Defendant Shannon Dale Hooks, 54, of Mendenhall, Mississippi, and Lance David Walker, 37, of Baton Rouge, Louisiana, plead guilty and were sentenced by Judge Beistline on Dec. 3, 2015. Hooks was sentenced to three years probation and Walker was sentenced to four years probation, both with a worldwide hunting prohibition. Hooks and Walker were also ordered to pay a fine of $5,000 and restitution in the amount of $10,000 for the unlawfully taken wildlife
Defendant Randolph Goza, 48, of Wasilla, Alaska, pleaded guilty to assisting in the same day airborne take of a Dall sheep. Goza was sentenced on Dec. 28, 2015, by Judge Beistline. As part of his plea agreement, Goza was sentenced to a term of five years probation that carried a worldwide hunting prohibition as a condition. Goza was ordered to pay a fine of $25,000 and restitution in the amount of $12,000 for the unlawfully taken Dall sheep.
Robert Viner, 49, of Ridgeland, Mississippi, was cited by investigators for the illegal transport of an unlawfully taken brown bear. Viner has admitted guilt in connection with the charges, and has paid a $3,250 fine.
The National Park Service cited The Outdoor Syndicate, LLC, in Reno, Nevada, its owner Michael P. Dianda, and a production company, Zap Lab, Ltd, in Reno, Nevada, for commercial filming on the Preserve without a permit. Clark Dixon and another professional videographer acquired footage of hunts which were aired on The Syndicate. These groups have all paid their fines in connection with this case.
In summary, the joint U.S. Fish and Wildlife Office of Law Enforcement and National Park Service’s Operation Syndicate resulted in nine federal convictions, with total fines imposed in the amount of $208,250.00. Restitution to the Noatak Preserve for the animals illegally killed by Clark Dixon and his associates was ordered by the court in the amount of $62,500.00. Charles Dixon’s STOL Quest SQ-4 aircraft, valued at $200,000, was forfeited to the United States under the Lacey Act, and 28 illegally killed wildlife trophies along with various firearms used in the offense were also forfeited to the government.
“You were leading some of these people you hunted with in the wrong direction,” said Judge Beistline. “You were a skilled hunter, who knew the rules and regulations and you violated the law on television; you’ve been hunting illegally for eight years and claimed to be an Alaska resident when you weren’t.”
Ms. Loeffler commends the work of the U.S. Fish and Wildlife Service, Office of Law Enforcement and the National Park Service who jointly investigated this case in Alaska and elsewhere.
Honduran National Sentenced for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DOMINGO HERRERA-VEGA, a/k/a Herrera Domingo, age 38, a citizen of Honduras, was sentenced after previously pleading guilty to a one-count Bill of Information for illegal reentry of removed alien.
U.S. District Nannette Jolivette Brown sentenced HERRERA-VEGA to time served to be followed by one year of supervised release, and a $100 special assessment. HERRERA-VEGA will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, on or about October 20, 2015, HERRERA-VEGA was found in the United States after having been officially deported and removed on or about May 1, 2014.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security, Immigration Enforcement in investigating this matter. Assistant United States Attorney Irene González was in charge of the prosecution.
Hazleton Resident Charged with Distributing HeroinRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that on February 9, 2016, a federal grand jury in Scranton indicted a 55-year-old Dominican national who resides in Hazleton for distributing heroin on two occasions between December 2015 and January 2016.
According to United States Attorney Peter Smith, the two-count indictment alleges that Juan Elvis Monsanto, who used the street name “Elvi,” distributed heroin on December 15, 2015, and January 28, 2016.
The indictment was unsealed yesterday following Monsanto’s arrest. He was arraigned late yesterday by U.S. Magistrate Judge Karoline Mehalchick in Scranton and was ordered to be detained in prison pending trial in the case.
The charges against Monsanto resulted from an investigation by the Drug Enforcement Administration (DEA) and Hazleton Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Monsanto faces up to 20 years in prison for each charge.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 40 years in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Gunsmoke Gun Shop Owner and Former Discovery Channel Star Indicted and Arrested for Conspiracy, Dealing in Firearms without a License and Tax Related ChargesRead the Press Release
Richard Wyatt, 52, of Evergreen, Colorado, surrendered to authorities today on charges of conspiracy, dealing in firearms without a license and tax related charges, U.S. Attorney John Walsh for the District of Colorado, Special Agent in Charge Stephen Boyd for the Internal Revenue Service (IRS) – Criminal Investigations (CI) Denver Division and Special Agent in Charge Ken Croke for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Field Division announced. Wyatt will make his initial appearance before U.S. Magistrate Judge Kristen L. Mix today, where he will be advised of his rights and the charges pending against him. Wyatt was the subject of a 13-count federal grand jury indictment in Denver, Colorado, returned on Feb. 9, 2016.
According to the indictment, Wyatt allegedly illegally sold firearms and he also failed to report over $1.1 million in income. Wyatt operated Gunsmoke, a store in Wheat Ridge, Colorado, that displayed firearm and firearm accessories for sale. Wyatt was the principal decision maker for the store and controlled the store’s bank account. In addition to holding itself out as a business that bought and sold firearms, Gunsmoke provided gunsmithing services. Wyatt aggressively publicized his business by posting videos on YouTube and by appearing in a reality television series that appeared on the Discovery Channel. The reality TV show aired from 2011 through 2012, showing a total of 26 episodes.
On Feb. 17, 2012, Wyatt conspired with others known to the grand jury but not named, to deal in firearms without a license. In April 2012, the defendant surrendered his Federal Firearms License (FFL) due to his violations of federal laws and regulations. After Gunsmoke surrendered its FFL, Gunsmoke changed the address of a store known as Triggers Firearms LLC (Triggers), a federal firearms license, to the Gunsmoke address, although they did not play any role in managing the store or receive any profits. Thereafter, Wyatt continued to operate Gunsmoke as a retail firearms store that also offered gunsmithing services, but never held an ownership interest in Triggers or assumed management of Triggers. Wyatt and other conspirators submitted false paperwork to the ATF to hide that Triggers was acting as a straw licensee for Gunsmoke.
After losing his FFL, the defendant did not apply for or obtain a license to sell firearms from the Gunsmoke premises. Wyatt held a meeting the day before losing his license with his employees to describe how he wanted the business to continue to run. During April 1, 2013 to March 31, 2015, no other person was licensed to engage in the business of dealing in firearms at Gunsmoke, Wyatt directed Gunsmoke employees to enter firearm sales in Gunsmoke’s computer point of sales software system as “miscellaneous” sales rather than firearm sales. Customers who shopped at Gunsmoke were able to look at numerous firearms that were displayed throughout the store. Customers were able to speak with Gunsmoke employees, including Wyatt, about the features of particular firearms. Finally, customers selected and purchased firearms from Gunsmoke and were able to have gunsmithing services performed on firearms at the Gunsmoke premises. After receiving payment for any firearms, Gunsmoke employees directed the customers to another firearm store which had a valid federal firearms license, where the customer filled out the background check paperwork and the customers took possession of the firearm(s) they had purchased at Gunsmoke. Customers who wanted gunsmithing services left their firearms with Gunsmoke. After the gunsmiths at Gunsmoke completed their work, they returned the firearms to the customers. The customers paid Gunsmoke directly for this service. Wyatt, without the FFL license, continued to order new guns for sale to keep the business going.
In addition to the alleged firearms violations, Wyatt failed to pay personal income tax in years 2009, when he made approximately $290,000, in 2010, when he made approximately $123,000, and in 2012, when he made approximately $689,000. Further, in 2010, 2011 and 2012, Wyatt failed to pay corporate taxes. In 2012, Wyatt willfully filed a tax return he knew to be false, stating that he lost money, when in fact he made at least $184,000 that he failed to disclose. The defendant also faces an asset forfeiture count, including but not limited to the forfeiture of firearms and ammunition involved in the commission of the alleged crimes.
Wyatt faces two counts of conspiracy, with each count carrying a penalty of not more than five years in federal prison and up to a $250,000 fine. He faces three counts of dealing in firearms without a license, with each count carrying a penalty of not more than five years in federal prison and up to a $250,000 fine. The defendant faces one count of filing a false tax return, which carries a penalty of not more than three years in federal prison and up to a $100,000 fine. Lastly, Wyatt faces seven counts of failure to file a tax return, each count of which carries a penalty of not more than one year in federal prison and up to a $25,000 fine.
This case was investigated by the IRS-CI and the ATF. The defendant is being prosecuted by Assistant U.S. Attorneys Suneeta Hazra and Anna Edgar, with Assistant U.S. Attorney Tonya Andrews assisting on the asset forfeiture.
The charges contained in this indictment are allegations and the defendant is presumed innocent unless and until proven guilty.
Gunsmoke Gun Shop Owner Richard Wyatt Indicted and Arrested for Conspiracy, Dealing in Firearms Without a License, and Tax Related ChargesRead the Press Release
DENVER – Richard Wyatt, age 52, of Evergreen, Colorado, surrendered to authorities this morning on charges of conspiracy, dealing in firearms without a license, and tax related charges, U.S. Attorney John Walsh, Internal Revenue Service (IRS) – Criminal Investigations (CI) Denver Division Special Agent in Charge Stephen Boyd and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Denver Field Division Special Agent in Charge Ken Croke announced. Wyatt will make his initial appearance before U.S. Magistrate Judge Kristen L. Mix at 2:00 p.m. today, where he will be advised of his rights and the charges pending against him. Wyatt was the subject of a 13-count federal grand jury indictment in Denver, returned on February 9, 2016.
According to the indictment, Wyatt allegedly illegally sold firearms, and he also failed to report over $1.1 million in income to the IRS. Wyatt operated Gunsmoke, a store in Wheat Ridge, Colorado that displayed firearm and firearm accessories for sale. Wyatt was the principal decision maker for the store and controlled the store’s bank account. In addition to holding itself out as a business that bought and sold firearms, Gunsmoke provided gunsmithing services. Wyatt aggressively publicized his business by posting videos on YouTube and by appearing in a reality television series that appeared on the Discovery Channel. The reality TV show aired from 2011 through 2012, showing a total of 26 episodes.
On February 17, 2012, Wyatt conspired with others known to the grand jury but not named, to deal in firearms without a license. In April 2012, the defendant surrendered his Federal Firearms License (FFL) due to his violations of federal laws and regulations. After Gunsmoke surrendered its FFL, Gunsmoke changed the address of a store known as Triggers Firearms, LLC (“Triggers”), a federal firearms license, to the Gunsmoke address, although they did not play any role in managing the store or receive any profits. Thereafter, Wyatt continued to operate Gunsmoke as a retail firearms store that also offered gunsmithing services, but never held an ownership interest in Triggers or assumed management of Triggers. Wyatt and other conspirators submitted false paperwork to the ATF to hide that Triggers was acting as a straw licensee for Gunsmoke.
After losing his FFL, the defendant did not apply for or obtain a license to sell firearms from the Gunsmoke premises. Wyatt held a meeting the day before losing his license with his employees to describe how he wanted the business to continue to run. During April 1, 2013 to March 31, 2015, no other person was licensed to engage in the business of dealing in firearms at Gunsmoke, Wyatt directed Gunsmoke employees to enter firearm sales in Gunsmoke’s computer point of sales software system as “miscellaneous” sales rather than firearm sales. Customers who shopped at Gunsmoke were able to look at numerous firearms that were displayed throughout the store. Customers were able to speak with Gunsmoke employees, including Wyatt, about the features of particular firearms. Finally, customers selected and purchased firearms from Gunsmoke, and were able to have gunsmithing services performed on firearms at the Gunsmoke premises. After receiving payment for any firearms, Gunsmoke employees directed the customers to another firearm store which had a valid federal firearms license, where the customer filled out the background check paperwork and the customers took possession of the firearm(s) they had purchased at Gunsmoke. Customers who wanted gunsmithing services left their firearms with Gunsmoke. After the gunsmiths at Gunsmoke completed their work, they returned the firearms to the customers. The customers paid Gunsmoke directly for this service. Wyatt, without the FFL license, continued to order new guns for sale to keep the business going.
In addition to the alleged firearms violations, Wyatt failed to pay personal income tax in years 2009, when he made approximately $290,000, in 2010 when he made approximately $123,000, and in 2012, when he made approximately $689,000. Further, in 2010, 2011, and 2012, Wyatt failed to pay corporate taxes. In 2012, Wyatt willfully filed a tax return he knew to be false, stating that he lost money, when in fact he made at least $184,000 that he failed to disclose. The defendant also faces an asset forfeiture count, including but not limited to the forfeiture of firearms and ammunition involved in the commission of the alleged crimes.
Wyatt faces two counts of conspiracy, with each count carrying a penalty of not more than 5 years in federal prison, and up to a $250,000 fine. He faces three counts of dealing in firearms without a license, with each count carrying a penalty of not more than 5 years in federal prison, and up to a $250,000 fine. The defendant faces one count of filing a false tax return, which carries a penalty of not more than 3 years in federal prison, and up to a $100,000 fine. Lastly, Wyatt faces seven counts of failure to file a tax return, each count of which carries a penalty of not more than 1 year in federal prison, and up to a $25,000 fine.
This case was investigated by the IRS-CI and the ATF. The defendant is being prosecuted by Assistant U.S. Attorneys Suneeta Hazra and Anna Edgar, with Assistant U.S. Attorney Tonya Andrews assisting on the asset forfeiture.
The charges contained in this indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Graham Co. Man Sentenced to More Than 6 Years in Prison for Possessing Child PornographyRead the Press Release
ASHEVILLE, N.C. – On Thursday, February 11, 2016 U.S. District Judge Martin Reidinger sentenced Mark Alan Tygart, of Robbinsville, N.C. to 76 months in prison on possession of child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Alan K. Flora Special Agent in Charge of the State Bureau of Investigation (SBI) Computer Crimes Unit, and Sheriff Danny Milsaps of the Graham County Sheriff’s Office.
In October 2015, Tygart pleaded guilty to one count of possession of child pornography. According to court documents and statements made in court, in November 2014, an undercover officer discovered Tygart posting links to child pornography in an online chat room where Tygart went by the name “twerk.” In December 2014, a search warrant was executed at Tygart’s residence in a joint operation with the FBI, SBI, and Graham County Sheriff’s Office detectives. Computer forensic analysis of seized devices revealed hundreds of images and videos of child pornography.
The defendant will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
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 the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Further Corruption Involving Georgia Department of Corrections Guards ExposedRead the Press Release
ATLANTA – More than 45 current and former Georgia Department of Corrections officers and contract correctional officers have been charged in seven separate federal indictments with smuggling contraband into prisons and with accepting bribe payments in exchange for providing protection for drug deals that were part of a federal undercover operation.
“It’s troubling that so many officers from state correctional institutions across Georgia were willing to sell their badges for personal payoffs from purported drug dealers,” said U. S. Attorney John Horn. “They not only betrayed the institutions they were sworn to protect, but they also betrayed the ideals that thousands of honest, hard-working correctional officers uphold every day.”
“While the vast majority of those working within Georgia’s correctional facilities are dedicated and loyal officers and employees, today’s FBI led an operation focused on the apprehension of those who strayed. These arrests represent an extensive FBI Atlanta and Georgia Department of Corrections’ investigation which initially focused on inmate criminal activities but also revealed a significant public corruption problem within eleven of the 35 Georgia Department of Corrections facilities,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
“We truly appreciate the swift response to our request for assistance from our partners at the FBI,” said GDOC Commissioner Homer Bryson. “We stand committed in our continuing efforts to bring to justice to those who pose a threat to the safety of the public and to the operations of our facilities. Shedding light on individuals involved in this type of corruption will remain our focus, and we will seek prosecution to the fullest extent of the law.”
According to U.S. Attorney Horn, the indictments, and other information presented in court: The Georgia Department of Corrections (“GA DOC”) is the agency responsible for overseeing the operations of the Georgia state prison system and its more than 50,000 inmates. During a federal investigation of GA DOC employees and inmates, the Federal Bureau of Investigation uncovered that correctional officers were smuggling contraband (liquor, tobacco, cell phones) into state prisons. Many of those contraband cell phones were then used by inmates to commit wire fraud, money laundering, identity theft and drug trafficking.
The operation also revealed that numerous GA DOC officers were willing to use their law enforcement credentials to protect what they believed were drug deals involving multiple kilograms of methamphetamine and cocaine. In a series of undercover operations, more than 45 correctional officers used their law enforcement status to protect drug deals in exchange for thousands of dollars in cash bribe payments. During the undercover deals, the correctional officers generally wore their GA DOC uniforms or had their GA DOC badges in an effort to avoid law enforcement scrutiny.
In connection with this most recent phase of the operation, a federal grand jury has returned multiple indictments charging the following individuals:
- Ashley Jenee Barnes, 21, of Sparta, Georgia, a Correctional Officer at Riverbend Correctional Facility, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Selena Black, 22, of Oglethorpe, Georgia, a Correctional Officer at Macon State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Michael Bostic, 32, of Lawrenceville, Georgia, formerly a Correctional Officer at Phillips State Prison, has been charged with accepting bribe payments to smuggle contraband into a prison, with accepting bribe payments to protect drug transactions, and with attempted drug trafficking.
- William Dale Bragg, 25, of Warner Robins, Georgia, a GA DOC inmate, has been charged with conspiring to commit money laundering.
- Crystal Sasha Brooks, 22, of Tennille, Georgia, formerly a Correctional Officer at Hancock State Prison, has been charged with accepting bribe payments to smuggle contraband into a prison, with accepting bribe payments to protect drug transactions, and with attempted drug trafficking.
- Jessica Brown, 30, of Milledgeville, Georgia, a Correctional Officer at Baldwin State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Christopher Clayton, 28, of Americus, Georgia, formerly a Correctional Officer at Macon State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Chasity Coleman, 22, of Cordele, Georgia, formerly a Correctional Officer at Dooly State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Patrick Coleman, 43, of Tucker, Georgia, formerly a Correctional Officer at Phillips State Prison, has been charged with accepting bribe payments to smuggle contraband into a prison, with accepting bribe payments to protect drug transactions, and with attempted drug trafficking.
- Angela Dinkins, 25, of Morrow, Georgia, formerly a Correctional Officer at Dooly State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Quardarrius Duhart, 29, of Tennille, Georgia, has been charged with attempted drug trafficking.
- Travonne Ferrell, 22, of Milledgeville, Georgia, a Correctional Officer on the GA DOC tactical unit or COBRA Squad, has been charged with accepting bribe payments to protect drug transactions and with drug trafficking.
- Benjamin Floyd, 23, of Hawkinsville, Georgia, formerly a Correctional Officer at Dooly State Prison and a jailor at Pulaski County Sheriff’s Office, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Dantavis Fluellen, 26, of Milledgeville, Georgia, a Correctional Officer on the COBRA Squad, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Jeremy Fluellen, 26, of Sparta, Georgia, formerly a Correctional Officer at Hancock State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Tacowan Fluellen, 24, of Milledgeville, Georgia, a Correctional Officer on the COBRA Squad, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Justin Gennings, 29, of Port Royal, South Carolina, formerly a Correctional Officer at Phillips State Prison, has been charged with accepting bribe payments to smuggle contraband into a prison.
- Charisma Glenn, 22, of Milledgeville, Georgia, a Correctional Officer at Riverbend Correctional Facility, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Jaleel Green, 23, of Oglethorpe, Georgia, a Correctional Officer at Dooly State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Kenny Grover, 28, of Fort Valley, Georgia, formerly a Correctional Officer at Macon State Prison prior to his arrest, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Kierria Harvey, 23, of Milledgeville, Georgia, a Correctional Officer at Riverbend Correctional Facility, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Cortavius Henderson, 23, of Cordele, Georgia, formerly a Correctional Officer at Dooly State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Pierre Hill, 33, of Warrenton, Georgia, formerly a Correctional Officer at Hancock State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Joshua Johnson, 20, of Kingsland, Georgia, formerly a Correctional Officer at Macon State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Marvin Johnson, 33, of Rochelle, Georgia, has been charged with attempted possession with intent to distribute a controlled substance.
- Tamika Johnson, 34, of Forsyth, Georgia, a Correctional Officer on the COBRA Squad, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Winfred Johnson, 25, of Sandersville, Georgia, formerly a Correctional Officer at Riverbend Correctional Facility, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Ethan Kilgore, 24, of Dublin, Georgia, a Correctional Officer at Dodge State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Kewanda Love, 26, of Cochran, Georgia, formerly a Correctional Officer at Pulaski State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Chelsey Mayweather, 24, of Milledgeville, Georgia, formerly a Correctional Officer at Baldwin State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Tiawanna McDonald, 24, of Centerville, Georgia, a Correctional Officer at Dooly State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Jarratt Ken Melvin, 23, of Thomaston, Georgia, formerly a Correctional Officer at Pulaski State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Phoenicia Minor, 30, of Bonaire, Georgia, a Correctional Officer at Pulaski State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Shameka Mobley, 27, of Warner Robins, Georgia, a Correctional Officer at Pulaski State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Brandon Mullino, 34, of Hawkinsville, Georgia, a Correctional Officer at Dooly State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Trevon Newsome, 22, of Warner Robins, Georgia, a Correctional Officer at Macon State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Angelique Pate, 25, of Montezuma, Georgia, formerly a Correctional Officer at Macon State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Ebony Scott, 26, of Tennille, Georgia, a Correctional Officer at Riverbend Correctional Facility, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Anthony Shoffner, 23, of Kathleen, Georgia, a Correctional Officer at Macon State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Sarne Sylvester, 28, of Albany, Georgia, formerly a Correctional Officer at Autry State Prison, has been charged with accepting bribe payments to smuggle contraband into a prison.
- Tavia Trammer, 34, of Lawrenceville, Georgia, formerly a Correctional Officer at Phillips State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Tramaine Tucker, 27, of Milledgeville, Georgia, formerly a Correctional Officer at Riverbend Correctional Facility, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Brandon Watkins, 24, of Warner Robins, Georgia, formerly a Correctional Officer at Dooly State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- James Julius Watkins, Jr., 26, of Sparta, Georgia, formerly a Correctional Officer at Hancock State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Alice Whitfield, 24, of Unadilla, Georgia, a Correctional Officer at Dooly State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Branden Wiley, 24, of Cordele, Georgia, a Correctional Officer at Dooly State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Christopher Tate Williams, 25, of Sparta, Georgia, formerly a Correctional Officer at Hancock State Prison, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Tonia Williams, 25, of Warner Robins, Georgia, a Correctional Officer on the COBRA Squad, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
- Keyerra Winkfield, 24, of Milledgeville, Georgia, formerly a Correctional Officer at Riverbend Correctional Facility, has been charged with accepting bribe payments to protect drug transactions and with attempted drug trafficking.
Previously, numerous others have been charged as part of the overall investigation of the GA DOC. In particular:
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On January 21, 2016, more than 50 Georgia Department of Corrections employees, inmates, and non-incarcerated co-conspirators were charged federally with conspiring to commit wire fraud, conspiring to commit money laundering, and accepting bribes to smuggle contraband into prisons. Many of the alleged criminal activities were committed inside Georgia state prisons.
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On January 13, 2016, three GA DOC inmates and 14 others were charged federally with participating in a wide-ranging drug trafficking conspiracy that operated within several state prisons.Using contraband cellular telephones inside of prison, and employing a network of brokers, distributers, and runners outside of prison, GDOC inmates controlled and managed the distribution of illegal narcotics throughout the Atlanta-metropolitan area and the southeast region of the United States.
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On September 24, 2015, 12 prison employees, inmates, and others were charged federally in a wide-ranging conspiracy that involved drug trafficking, identity theft, and credit card fraud. Many of the alleged criminal activities were committed inside Georgia state prisons.
In total, this extensive operation has resulted in charges against approximately 130 prison employees, inmates, and non-incarcerated co-conspirators.
Members of the public are reminded that the indictments only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
These cases are being investigated by the Federal Bureau of Investigation, the Georgia Bureau of Investigation, and the Georgia Department of Corrections Office of Professional Standards.
First Assistant United States Attorney Kurt R. Erskine and Assistant United States Attorneys Brent A. Gray, John S. Ghose, Trevor Wilmot, Brian Pearce, Jennifer Whitfield, and Jeffrey W. Davis are prosecuting the cases.
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.
Fourth Minnesota Man Pleads Guilty to Conspiracy to Provide Material Support to ISILRead the Press Release
Five Co-Defendants Expected to Go to Trial in May 2016
Abdirizak Mohamed Warsame, 20, of Egan, Minnesota, pleaded guilty today to an information charging him with conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. The defendant pleaded guilty before Senior U.S. District Judge Michael J. Davis of the District of Minnesota.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Andrew M. Luger of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division made the announcement.
“With his guilty plea, Abdirizak Mohamed Warsame has admitted to conspiring to provide material support to ISIL,” said Assistant Attorney General Carlin. “Warsame was part of a group of individuals who sought to travel to Syria to fight with the designated foreign terrorist organization. The National Security Division’s highest priority is counterterrorism, and we will continue to work to stem the flow of foreign fighters abroad and hold accountable those who conspire to provide material support to terrorists.”
“ISIL recruiting in Minnesota is an ongoing problem,” said U.S. Attorney Luger. “Federal law enforcement and our local partners remain dedicated to ending terror recruitment in our state. One of the important factors we believe will help stop the recruiting pipeline is for those who have been charged to take responsibility for their crimes. I am encouraged that today Mr. Warsame is doing just that. He has now taken the first step to help himself begin the process of rehabilitation and help our entire community begin to heal.”
“Preventing terrorism in the United States or against U.S. interests remain the FBI’s top priority,” said Special Agent in Charge Thornton. “This includes identifying individuals who aspire to travel overseas to fight on behalf of foreign terrorist organizations such as ISIL. Every person we stop from joining ISIL is one less person ISIL has to conduct acts of terror and the atrocities they are known for. This Joint Terrorism Task Force investigation which culminated in today’s guilty plea was the result of collaboration with our state, local, and federal partners.”
According to the defendant’s guilty plea, throughout early 2014, Warsame participated in several meetings with a group of individuals who wished to travel to Syria to join ISIL. Warsame and his co-conspirators discussed means of funding travel to Syria and potential routes from Minnesota to Syria that would best elude law enforcement. In April 2014, Warsame applied for an expedited passport with the intent of using the passport to travel overseas to join ISIL and in that same month, provided approximately $200 to co-conspirator Adnan Farah for fees associated with Farah’s expedited passport application. Warsame knew Farah planned to use the passport to travel to Syria to join ISIL.
According to the defendant’s guilty plea, during a May 2014 meeting between Warsame and his co-conspirators, Warsame accepted the position of “emir,” or leader, of the group. Guled Ali Omar had previously been “emir,” but was at that time planning to depart for Syria to join ISIL.
According to the plea, in June 2014, Warsame obtained a phone number for H.K., who at the time was an ISIL fighter, and Warsame passed the contact information along to Y.J., who was then attempting to travel from Turkey to Syria to join ISIL.
In April 2015, according to his guilty plea, Warsame participated in a series of meetings with co-conspirators Omar, Abdirahman Daud, Mohamed Farah and Adnan Farah. At one of the meetings, Warsame repeatedly encouraged Omar to travel to Syria to join ISIL.
This case is the result of an investigation conducted by members of the FBI-led Joint Terrorism Task Force (JTTF). The case is being prosecuted by Assistant U.S. Attorneys Andrew R. Winter and John Docherty of the District of Minnesota with assistance provided by the National Security Division’s Counterterrorism Section.
Four defendants sentenced for Federal drug crimes in BeckleyRead the Press Release
BECKLEY, W.Va. – Four defendants were sentenced today in federal court for drug charges, announced Acting United States Attorney Carol Casto.
Jason Treadway, 33, of Beckley, was sentenced to two years and six months in federal prison for using a telephone to facilitate a drug deal. Treadway previously pleaded guilty in October 2015 to the federal drug crime. Treadway admitted that on March 12, 2015, and on May 6, 2015, he used a telephone to arrange heroin deals with a confidential informant. In both instances after arranging the drug deals, Treadway met with the confidential informant and distributed heroin.
Shawn Haines, 43, of Beckley, was sentenced to two years in federal prison for distributing oxycodone. Haines previously pleaded guilty in October 2015 to the federal drug charge. Haines admitted that on October 28, 2014, he distributed oxycodone to a confidential informant cooperating with law enforcement. The drug deal took place on Christopher Drive in Beckley.
Jamal Johnson, 25, of Beckley, was sentenced to a year and two months in federal prison for distributing cocaine. Johnson previously pleaded guilty in October 2015 to the federal drug crime. Johnson admitted that on June 22, 2015, he sold cocaine to a confidential informant working with law enforcement. The drug deal took place on Industrial Drive in Beckley.
Ron Perdue, 54, of Mt. Hope, was sentenced to four years of probation for distributing oxycodone. Perdue previously pleaded guilty in October 2015 to the federal drug charge. Perdue admitted that on October 22, 2014, he distributed oxycodone to a confidential informant on Ewart Avenue in Beckley.
These cases were investigated by the Beckley/Raleigh County Drug and Violent Crime Unit. The sentences were imposed by United States District Judge Irene C. Berger.
These prosecutions were brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Fort Meade Man Convicted for Enticing a Minor to Engage in Sexual ActivityRead the Press Release
Baltimore, Maryland – A federal jury today convicted Pedro Antonio Del Granado, age 49, of Fort Meade, Maryland, for enticing a minor to engage in sexual activity. After the jury returned its verdict, U.S. District Judge George L. Russell ordered that the defendant be immediately taken into custody and detained pending sentencing.
The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief James W. Johnson of the Baltimore County Police Department.
According to the evidence presented at his four day trial, from October 23 through October 30, 2014,Del Granado used email messages to attempt to entice a person whom he believed to be a 13 year old girl to engage in sexual activity. In fact, Del Granado was communicating with an undercover Baltimore County Police detective posing as a 13 year old girl. Witnesses testified that Del Granado responded to an advertisement the undercover detective placed on an internet website. The undercover detective and Del Granado continued communicating over the next several days. During their conversations, the undercover detective posing as a 13 year old girl mentioned several times that she was 13 years old. Despite that, Del Granado asked about meeting the 13 year old girl and discussed what they would do at that time, including having oral sex.
On October 30, 2014, Del Granado and the undercover detective agreed to meet and the undercover detective provided a location. Del Granado advised the undercover detective that he would be driving a black SUV. Members of the Baltimore County Police Department set up surveillance at the address. When Del Granado arrived at the location he was arrested. A cellular phone containing most of the emails between the Del Granado and the undercover detective was found in his vehicle. Del Granado told law enforcement officers that he was there to meet a 20-year old woman even though the emails from the undercover detective said the girl was 13 years old.
Del Granado faces a minimum mandatory sentence of 10 years in prison and a maximum of life in prison for enticing a minor to engage in sexual activity. Judge Russell has scheduled sentencing for May 13, 2016 at 9:30 a.m.
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.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, HSI Baltimore, and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Ayn B. Ducao and Special Assistant U.S. Attorney Angela Tang, who prosecuted the case.
Former UTSA Projects Manager Sentenced to Federal Prison for his Role in Bribery SchemeRead the Press Release
In San Antonio today, 43-year-old former University of Texas at San Antonio (UTSA) project manager James Paul Council was sentenced to 38 months in federal prison followed by three years of supervised release for his role in a bribery scheme announced United States Attorney Richard L. Durbin, Jr., and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division.
On January 14, 2014, Council, a former project manager in the Facilities Department at UTSA, pleaded guilty to one count of bribery. By pleading guilty, Council admitted to accepting $1,000 in U.S. Currency from individuals seeking to secure UTSA construction contracts worth more than $200,000.
Council’s co-defendants—50-year-old Alfredo Romero Gonzalez, owner of Power Source Electric, an electrical construction and repair business in San Antonio; 63-year-old Power Source Electric chief estimator and project manager Magin Villalon (a.k.a. “Buddy”); and, Villalon’s wife, 59-year-old Sarah Anne Luna—have all pleaded guilty to paying a bribe to Council in order to secure UTSA contracts. In addition to sentencing Council this morning, United States District Judge Orlando Garcia sentenced: Gonzalez to 22 months in federal prison followed by three years of supervised release; Villalon, to 37 months in federal prison followed by three years of supervised release; and, Luna to two years probation. Judge Garcia also ordered that Council, Villalon and Gonzalez jointly and severally pay restitution to UTSA in the amount of $71,000. Luna was ordered to pay $9,838.21 restitution to UTSA.
This case was investigated by special agents with the Federal Bureau of Investigation together with the San Antonio Police Department, UTSA Police Department, and UTSA auditors. Assistant United States Attorney James Blankinship prosecuted this case on behalf of the Government.
Former Prison Guard Sentenced to Four Years for Smuggling ContrabandRead the Press Release
PHILADELPHIA – George Kindle, 29, of Philadelphia, PA, was sentenced today to 48 months in prison for delivering contraband to an inmate at The House of Corrections (HOC), in Philadelphia, where he worked at the time. On October 11, 2013, and then again on November 15, 2013, Kindle smuggled past prison security at the HOC a cellular telephone and 100 pills, represented to contain OxyContin, in exchange for $1,000. Kindle pleaded guilty to two counts of attempted extortion under color of official right and two counts of attempted distribution of controlled substances on November 20, 2015.
In addition to the prison term, U.S. District Court Judge John R. Padova ordered a $2,000 fine, three years of supervised release, 100 hours of community service, a $2,000 forfeiture money judgment, and a $400 special assessment.
The case was investigated by the FBI with assistance from the Philadelphia Department of Corrections. It is being prosecuted by Assistant United States Attorney Kevin R. Brenner.
Former Postal Carrier Pleads Guilty to Bribery, Drug Distribution, and Delay of MailRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Briana Fugate, 26, of Cheektowaga, NY, pleaded guilty to bribery, distribution of marijuana, and delay of mail before U.S. District Judge Lawrence J. Vilardo. The charges carry a maximum penalty of 25 years in prison and a $250,000 fine.“Our efforts to root out public corruption continue with this second conviction of a postal employee in as many weeks,” said U.S. Attorney Hochul. “We are not going to allow postal routes to become narcotics delivery services.”
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that Fugate accepted bribes to help deliver what she believed to be drug shipments from the West Coast. As the defendant learned to recognize packages containing narcotics, Fugate opened some of the packages and sold the drugs.
The defendant was a mail carrier for the United States Postal Service working out of the Central Park Station Post Office in an area covering the East Side of Buffalo for over a year. Fugate’s actions were uncovered during an undercover operation when she distributed a vacuum-sealed pound of marijuana out of her mail truck while working her postal route. After law enforcement agents arrested Fugate, they discovered over 1,500 pieces of mail in her car that had not been delivered. At the time, the defendant was on probation for a larceny conviction in Cheektowaga Town Court. Fugate admitted that some of the proceeds from marijuana sales went to pay her court-ordered restitution in that case.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the United States Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski, the United States Postal Service, Office of the Inspector General, under the direction of Special Agent in Charge Monica Weyler, Eastern Area Field Office, Philadelphia, PA, and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.Sentencing is scheduled for May 18, 2016 at 11:00 a.m. before Judge Vilardo.
Former Omaha Man Sentenced for Tax FraudRead the Press Release
United States Attorney Deborah R. Gilg announced that Adam Mwanza, age 44 of Miami, Florida, was sentenced today by the Honorable Joseph F. Bataillon. On May 8, 2015, a federal jury convicted Mwanza of 13 counts of tax fraud for his involvement in assisting in the preparation of false tax returns. Mwanza was sentenced to one year and a day in federal prison and ordered to pay a $1,300.00 special assessment. He was also ordered to serve a one year term of supervised release after his release from prison with one of the terms of his supervision being that he pay $297,556.00 in restitution.
Mr. Mwanza was a tax preparer. In tax years 2007 and 2008 Mwanza was servicing a primarily immigrant client base. He would electronically file fraudulent returns falsely claiming rental deductions for what people were paying for their monthly rent expense and would fabricate Adjusted Gross Income amounts. The effect of the fraud was to inflate the amount of the refunds the taxpayers received. “Today’s sentence demonstrates the importance of selecting a reputable tax preparer,” stated Karl Stiften, IRS-Criminal Investigation Special Agent in Charge of the St. Louis Field Office. “Ultimately, the taxpayer is responsible for the accuracy of their return, not the preparer. Don’t be tempted by a refund that is too good to be true.”
The case was investigated by the Internal Revenue Service Criminal Investigations unit.
Former Member of Croatian Defense Council in Bosnia and Herzegovina Sentenced for Fraudulently Obtaining Green Card and Consents to Removal from United StatesRead the Press Release
A Forrest Lake, Minnesota, man was sentenced today for failing to disclose, during his immigration to the United States, multiple crimes committed in Bosnia and Herzegovina before and during the Bosnian Conflict in the 1990s, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Andrew M. Luger of the District of Minnesota.
Zdenko Jakiša, 47, stipulated to an order of judicial removal from the United States, in which he agreed that he is not lawfully admissible in the United States and on Feb. 16, 2016, will self-surrender to U.S. Immigration and Customs Enforcement (ICE) for removal. Jakiša was sentenced to time served by U.S. District Judge Susan Richard Nelson of the District of Minnesota.
According to the plea agreement, Jakiša is a Bosnian citizen and between July 1990 and October 1997, he was convicted of various crimes and charged with others in Bosnia, including a conviction for shooting and killing his neighbor through her bedroom window in September 1993. While some of these charges remained pending in Bosnia, Jakiša fled to the United States where, he now admits, he lied about his criminal history on his legal permanent resident applications and was granted lawful permanent resident status in the United States.
The ICE Homeland Security Investigations St. Paul, Minnesota, Office investigated the case with support from the FBI’s Minneapolis Field Office. ICE’s Human Rights Violators and War Crimes Center provided the lead in this investigation. The Criminal Division’s Office of International Affairs and their counterparts at the Prosecutor’s Office of Bosnia and Herzegovina provided valuable assistance.
Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Nathan P. Petterson of the District of Minnesota prosecuted the case.
Former Lawrence Hall of Science Employee Pleads Guilty to Theft and FraudRead the Press Release
OAKLAND - DeSondra Michell Ward pleaded guilty in federal court to stealing from and defrauding the University of California, Berkeley, announced Acting United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge David J. Johnson. In the plea agreement filed late yesterday, Ward admitted she stole $389,948.57 while working at U.C. Berkeley from 2008 through 2014.
Ward, 44, formerly from Pinole, Calif., worked at U.C. Berkeley’s Lawrence Hall of Science, first as an administrative assistant with the Full Option Science System (“FOSS”) program and later as a financial analyst with budget and finance responsibilities over FOSS. Ward admitted she used the university’s travel systems to arrange personal air travel for herself, her family, and her friends. She also admitted she purchased tickets that she sold to individuals for her own benefit. In addition, she used her university-issued procurement card for personal transactions and processed vouchers to generate payments to herself, her family, and her friends. In an information filed November 16, 2015, Ward was charged with five counts of theft from programs receiving federal funds, in violation of 18 U.S.C. § 666(a)(1)(A). About one quarter of the Lawrence Hall of Science’s annual budget is comprised of federal funding. Under the plea agreement, Ward pleaded guilty to all five counts. Ward also agreed to pay restitution and forfeiture pursuant to the agreement.
Ward is currently on release on bond.
Ward’s sentencing hearing is scheduled for June 21, 2016, at 1:00 p.m. before the Honorable Jeffrey S. White, U.S. District Court Judge, in Oakland. The maximum statutory penalty for each count in violation of 18 U.S.C. § 666(a)(1)(A) is 10 years’ imprisonment and a fine of $250,000, or twice the gross gain or loss resulting from the offense. In addition, forfeiture, restitution and additional terms of supervised release may be imposed. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Andrew S. Huang is prosecuting the case with the assistance of Vanessa Quant and Stephanie Mitchell. The prosecution is the result of an investigation by the FBI, with significant assistance from the University of California Police Department and U.C. Berkeley’s Audit and Advisory Services.
Former Goodwill Employee Charged in Scheme to Steal VA Grant MoneyRead the Press Release
HOUSTON – A former employee of Goodwill Industries of Houston Inc. and another person have been taken into custody following the return of a 15-count indictment involving a wire fraud conspiracy, announced U.S. Attorney Kenneth Magidson.
Darrell Demond Arline, 36, of Pearland, and Aaron Matthew Pierce, 36, of Houston, were taken into custody today. They are expected to make their initial appearances before U.S. Magistrate Judge Nancy Johnson at 2:00 p.m.
Arline worked for Goodwill and served as program director for two Department of Veterans Affairs (VA) grants for Supportive Services for Veteran Families (SSVF), according to the indictment. The SSVF grants were intended to provide supportive services to very low-income military veteran families who were residing in permanent housing, were homeless and scheduled to become residents of permanent housing within 90 days and, after exiting permanent housing, were seeking other housing that was responsive to such very low-income military veteran family’s needs.
The indictment alleges that between Jan. 3, 2013, and Aug. 28, 2014, Arline submitted fraudulent purchase orders resulting in the theft of SSVF grant monies. Arline allegedly recruited Pierce to use his name and a sham real estate business to cash the fraudulently-acquired SSVF grant checks.
Both men are charged in the conspiracy. Arline faces 14 substantive counts of wire fraud, while Pierce is charged with three.
If convicted, the defendants face up to 20 years in federal prison and a possible $250,000 maximum fine on each count of conviction.
The indictment was the result of an investigation conducted by VA - Office of Inspector General, Criminal Investigations Division with the assistance of the U.S. Marshals Service. Assistant U.S. Attorney Daniel C. Rodriguez is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
The defendants are presumed innocent unless and until convicted through due process of law.
Former Freedom owner headed to prison for role in chemical spillRead the Press Release
CHARLESTON, W.Va. – A former owner of Freedom Industries was sentenced today to 30 days in federal prison, six months of supervised release, and a $20,000 fine for environmental crimes connected to the 2014 Elk River chemical spill, announced Acting United States Attorney Carol Casto. Dennis P. Farrell, of Charleston, previously pleaded guilty in August 2015 to unlawfully discharging refuse matter and violating an environmental permit by failing to have a pollution prevention plan. Farrell is one of six former officials of Freedom Industries, in addition to Freedom Industries itself as a corporation, to be prosecuted for federal crimes associated with the chemical spill.
On January 9, 2014, a major chemical leak was discovered in Charleston at the above-ground storage tank area owned and operated by Freedom Industries (Freedom) on the Elk River. Freedom used these storage tanks to keep and process chemicals, and the leak consisted primarily of 4-methylcyclohexane methanol (MCHM), a chemical used in the coal mining industry as a cleansing agent. A significant amount of MCHM leaked into the Elk River, flowed into a water treatment plant, and contaminated the water supply of Charleston and the surrounding areas for several days. Freedom did not have a permit required by law that would have allowed the company to discharge MCHM into the Elk River.
Farrell, along with co-defendants Charles E. Herzing and William E. Tis, owned Freedom until December 2013, when they sold their shares to a Pennsylvania corporation. From 2001 until the 2013 sale, Farrell served as the president of Freedom. After the sale, Farrell continued to work at Freedom’s facility on the Elk River and continued to describe himself as president of the company. In his role as a corporate officer, Farrell had the responsibility and the authority to ensure that Freedom and its facility on the Elk River complied with the law.
Freedom had a permit issued by West Virginia’s Department of Environmental Protection that allowed for the discharge of storm water and groundwater subject to monitoring and reporting requirements. However, this permit did not allow for the discharge of MCHM, and required the development and implementation of a storm water plan and a groundwater plan. Generally, storm water and groundwater plans identify potential sources of pollution and outline steps to prevent, contain, and reduce pollutants.
Farrell admitted that he was aware of the permit and knew that Freedom was required to have a storm water plan. He further admitted that he had the responsibility to ensure that Freedom complied with the permit by having a storm water and groundwater plan in place. During Farrell’s tenure as a corporate officer, Freedom never developed or implemented a storm water or groundwater plan, which was a proximate and contributing cause of the chemical spill.
Farrell is one of six defendants that have been sentenced as part of the investigation into the chemical spill. Robert J. Reynolds, of Apex, North Carolina, who worked as an environmental consultant with Freedom, was sentenced on February 1, 2016, for negligently discharging a pollutant. Charles E. Herzing, of McMurray, Pennsylvania, a former owner and vice president of Freedom, was sentenced on February 2, 2016, for unlawfully discharging refuse matter. Freedom, as a corporation, was sentenced on February 4, 2016, for negligently discharging a pollutant, unlawfully discharging refuse matter, and knowingly violating an environmental permit. Michael E. Burdette, of Dunbar, a former plant manager for Freedom’s facility on the Elk River, was sentenced on February 4, 2016, for negligently discharging a pollutant. William E. Tis, of Verona, Pennsylvania, a former owner and secretary of Freedom, was sentenced on Monday for unlawfully discharging refuse matter.
Gary Southern, of Marco Island, Florida, the president of Freedom at the time of the spill, pleaded guilty in August 2015 to negligently discharging a pollutant, unlawfully discharging refuse matter, and negligently violating a permit by failing to have a pollution prevention plan. Southern is scheduled to be sentenced on February 17, 2016.
The investigation of the chemical spill was conducted by the Federal Bureau of Investigation and the Environmental Protection Agency’s Criminal Investigation Division. Assistant United States Attorneys Philip H. Wright, Larry R. Ellis, and Eric P. Bacaj, as well as the Environmental Protection Agency’s Regional Criminal Enforcement Counsel Perry D. McDaniel, are handling the prosecutions. United States District Judge Thomas E. Johnston imposed the sentence, and will preside over the remaining sentencing hearing associated with the chemical spill.
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Five convicted in cigarette smuggling operationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Five individuals pled guilty in federal court to unlawful cigarette smuggling, United States Attorney William J. Ihlenfeld, II, announced.
Mohamed Abdo Elbarati, 30, of Winchester, Virginia, Farouk Mohamed Aldaylam, 29, of Queens Village, New York, Fahd Hamood Aljahaf, 38, of Bronx, New York, Galal Hameed Kassim, 30, and Muneer Kaid Khaled, 26, both of Brooklyn, New York, collaborated to facilitate a trafficking network designed profit from the unlawful sale of contraband cigarettes. The defendants transported large quantities of cigarettes across state lines for redistribution and sale. The cigarettes were acquired in Virginia, where the tax rate for cigarettes is one of the lowest in the nation, and sold in New York, which has one of the nation’s highest tax rates. The cigarettes were possessed and transported in West Virginia.
Each of the five defendants pled guilty to one count of “Conspiracy to Traffic in Contraband Cigarettes.” Each of the defendants faces up to five years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant U.S. Attorneys Michael Stein and Shawn Adkins prosecuted the case on behalf of the government. Homeland Security Investigations, the Frederick County, Virginia Sheriff’s Office, the Virginia Office of Attorney General, the Alcohol and Tobacco Tax and Trade Bureau, the West Virginia State Police, the New York Department of Taxation and Finance, the Federal Bureau of Investigation, and the Internal Revenue Service - Criminal Investigation led the inquiry.
U.S. Magistrate Judge Robert W. Trumble presided.
Final Two Defendants Sentenced to Federal Prison in Stockton Gun and Drug Trafficking CaseRead the Press Release
SACRAMENTO, Calif. — Melissa Torres, 29, and Sally Evans, 28, both of Stockton, were sentenced today by United States District Judge Morrison C. England Jr. for their involvement in the distribution of methamphetamine and firearms from a residence in Stockton, United States Attorney Benjamin B. Wagner announced.
Torres was sentenced to nine years in prison for distribution of methamphetamine and dealing firearms without a license. Evans was sentenced to seven years and three months in prison for distribution of methamphetamine.
“Criminals who traffic illegal drugs often possess firearms as a part of their unlawful enterprise. Targeting armed narcotic traffickers remains a top priority for ATF,” said Special Agent in Charge Jill A. Snyder.
According to court documents, in January, February, and March of 2014, Melissa Torres met with an undercover agent on eight separate occasions. During each of those meetings, Torres either sold or assisted in the sale of methamphetamine or firearms to the undercover agent. In total, Torres was involved in selling more than a half pound of methamphetamine and eight firearms to the undercover agent. The firearms included four pistols, a handgun, two rifles, and a shotgun. During that same time frame, Evans was involved in the sale of more than one pound of methamphetamine to the undercover agent. Co-defendant Jorge Magana supplied much of the methamphetamine sold by Torres and Evans. Co-defendants Donovan Torres and Johnny Torres supplied several of the firearms sold by Melissa Torres. Donovan Torres and Johnny Torres also sold the undercover ATF agent several firearms.
Melissa Torres and Sally Evans are the final defendants sentenced in this case. Three co-defendants have already been sentenced in this case – Jorge Magana, Johnny Torres, and Donovan Torres. On October 8, 2015, Jorge Magana was sentenced to eight years and one month in prison. On March 26, 2015, Johnny Torres was sentenced to two years in prison. On April 9, 2015, Donovan Torres was sentenced to 10 months in prison.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Stockton Police Department. Assistant United States Attorney Christiaan Highsmith prosecuted the case.
Fernandina Beach Man Indicted for Making Multiple Hoax Bomb ThreatsRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging David Anthony Moody (26, Fernandina Beach) with six counts of making hoax bomb threats. If convicted, he faces a maximum penalty of five years in federal prison on each count.
According to the indictment, Moody left notes at various public places in Fernandina Beach between January 30 and February 2, 2016. Each of the six notes stated, in substance, that a bomb was going to explode in the downtown Fernandina Beach area.
An indictment is merely a formal charge that a defendant has committed a violation of one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Fernandina Beach Police Department, the Nassau County Sheriff’s Office, the U.S. Coast Guard Investigative Service, the U.S. Coast Guard Explosives Detection Team, the Federal Bureau of Investigation Joint Terrorism Task Force, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations – Jacksonville Office. It will be prosecuted by Assistant United States Attorney Kevin C. Frein.