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10 February 2016
Private Contractor Pleads Guilty to Bribing Former U.S. Postal Service Contracting OfficialRead the Press Release
A private contractor pleaded guilty today to paying bribes to a U.S. Postal Service (USPS) contracting official in order to receive contracts to deliver the mail.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and USPS Inspector General David C. Williams made the announcement.
Barbara Murphy, 52, of Rocky Mount, North Carolina, pleaded guilty before U.S. District Judge George Jarrod Hazel of the District of Maryland, who set sentencing for June 13, 2016.
According to a factual stipulation filed with the court, Murphy was the sole owner of ER&R Transportation and MC&G Trucking LLC, which she used to bid for and perform on transportation contracts with USPS. Murphy admitted that from January 2011 to July 2012, she bribed Gregory Cooper, a former USPS contracting officer representative. These bribes included cash paid directly into Cooper’s bank accounts, automobile loan payments, college tuition for Cooper’s daughter, five cell phone bill payments, an airline ticket and fitness equipment, Murphy admitted.
According to the plea agreement, Murphy gave all of these benefits in exchange for Cooper’s favorable treatment of her companies when contracting opportunities with the USPS arose, in violation of Cooper’s lawful duty to the USPS. Specifically, Cooper recommended to his superiors that 10 USPS contracts on which Murphy bid during the relevant time period be awarded to Murphy’s companies, she admitted. Additionally, Murphy admitted that Cooper provided her with advice on how to address specific issues that arose from her contract performance and drafted documents that Murphy provided to the USPS.
On Nov. 15, 2015, Judge Hazel sentenced Cooper to 15 months in prison for bribery.
The USPS Office of the Inspector General investigated the case. Trial Attorneys Mark Cipolletti and Monique Abrishami of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney David Salem of the District of Maryland are prosecuting the case.
Private Contractor Pleads Guilty to Bribing Former U.S. Postal Service Contracting OfficialRead the Press Release
Greenbelt, Maryland – Barbara Murphy, 52, of Rocky Mount, North Carolina, pleaded guilty today to bribing a former contracting officer with the U.S. Postal Service in exchange for favorable treatment in connection with the awarding of contracts to deliver the mail.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; and Special Agent in Charge Paul Bowman of the U.S. Postal Service, Office of Inspector General.
According to a factual stipulation filed with the court, Murphy was the sole owner of ER&R Transportation and MC&G Trucking LLC, which she used to bid for and perform on transportation contracts with USPS. Murphy admitted that from January 2011 to July 2012, she bribed Gregory Cooper, a former USPS contracting officer representative. These bribes included cash paid directly into Cooper’s bank accounts, automobile loan payments, college tuition for Cooper’s daughter, five cell phone bill payments, an airline ticket and fitness equipment, Murphy admitted.
Murphy admitted that she gave all of these benefits in exchange for Cooper’s favorable treatment of her companies when contracting opportunities with the USPS arose, in violation of Cooper’s lawful duty to the USPS. Specifically, Cooper recommended to his superiors that 10 USPS contracts on which Murphy bid during the relevant time period be awarded to Murphy’s companies, she admitted. Additionally, Murphy admitted that Cooper provided her with advice on how to address specific issues that arose from her contract performance and drafted documents that Murphy provided to the USPS.
Murphy faces a maximum sentence of 15 years in prison for bribing a public official in order to influence the official’s performance of his lawful duties. U.S. District Judge George J. Hazel has scheduled sentencing for June 13, 2016.
On November 15, 2015, Gregory Cooper, 60, of Glenn Dale, Maryland, was sentenced to 15 months in prison for receiving bribes in connection with the awarding of mail delivery contracts. Judge Hazel also entered an order that Cooper forfeit $25,931.76.
U.S. Attorney Rosenstein and Assistant Attorney General Caldwell commended the U.S. Postal Service Office of the Inspector General for its work in the investigation. The case is being prosecuted by Assistant U.S. Attorney David I. Salem and Trial Attorneys Mark Cipolletti and Monique Abrishami of the Criminal Division’s Public Integrity Section.
Philadelphia, PA man sentenced for heroin traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – John Charles Wade, III, 28, of Philadelphia, Pennsylvania was sentenced today to twenty months and nine days in prison for heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Wade sold heroin near a Harrison County, West Virginia middle school. He pled guilty in October 2015 to one count of “Distribution of Heroin within 1,000 feet of a Protected Location.
Assistant U.S. Attorneys Zelda Wesley and Stephen Warner along with former Assistant U.S. Attorney Shawn Morgan prosecuted the case on behalf of the government. The Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Irene M. Keeley presided.
Philadelphia Woman Charged with Stealing Dead Father's BenefitsRead the Press Release
PHILADELPHIA - Michelle Ford, 61, of Philadelphia, Pennsylvania, was charged today by Information with one count of theft of government funds and one count of theft from an employee pension plan, announced United States Attorney Zane David Memeger. According to the Information, the defendant received Social Security and pension benefits intended for her father, after her father’s death in February 2011 until her fraud was discovered in September 2013. The defendant’s alleged actions resulted in a loss to the government of approximately $44,186.
If convicted, the defendant faces a maximum sentence of 15 years in prison, up to three years of supervised release, restitution to the government of $44,186, a possible fine, and a $200 special assessment.
The case was investigated by the Social Security Administration Office of Inspector General, and the Department of Labor Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Amanda R. Reinitz.
An Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Papillion Woman Sentenced for EmbezzlementRead the Press Release
United States Attorney Deborah R. Gilg announced that Chief United States District Judge Laurie Smith Camp sentenced Amy Fisher, 43, of Papillion, Nebraska, to 18 months imprisonment to be followed by three years of supervised release. In April 2014, a federal grand jury returned a criminal indictment charging Fisher with embezzlement. On June 22, 2015, Fisher pleaded guilty to the charge.
The investigation demonstrated that Fisher was a Financial Services Officer with the Bellevue branch of the Bank of the West. Fisher performed her embezzlement by making unauthorized withdrawals from various accounts of customers. Fisher typically made the unauthorized withdrawals by closing out customer certificates of deposits, and then reopening new certificates of deposits for what appeared to be the same amount. However, Fisher made false entries within the bank’s computer systems and generated false documents to be provided to the customers to mask the fact that she had withdrawn and pocketed a portion of the customer’s certificate of deposit. Fisher engaged in similar conduct relative to customers’ home equity line of credit accounts as well as checking and savings accounts.
Judge Smith Camp found that Fisher engaged in 55 such fraudulent transactions affecting 17 different customers all of whom were between the ages of 82 and 97 years old. Judge Smith Camp ordered Fisher to pay restitution to the Bank of the West in the amount of $158,941.56. The Bank of the West had previously reimbursed all of its customer accounts for Fisher’s conduct.
This case was investigated by the Federal Bureau of Investigation.
Owner of Cancer Treatment Clinic Convicted of Providing Fraudulent Medical Treatments to PatientsRead the Press Release
A jury sitting in the Northern District of Oklahoma convicted a former owner of Lase Med Inc., a purported cancer treatment clinic, today of committing a fraudulent scheme claiming to cure patients’ cancer, announced U.S. Attorney Danny C. Williams Sr. for the Northern District of Oklahoma.
Following a 15-day trial before U.S. District Judge James H. Payne, a jury found Antonella Carpenter, 71, of Tulsa, Oklahoma, guilty on 29 of the 41 counts alleged in a superseding indictment and were unable to come to a unanimous decision on three counts of the superseding indictment.
Carpenter was charged with five counts of inducing persons to travel in interstate commerce in an effort to defraud them of at least $5,000; 34 counts of using interstate wire communications to defraud patients; and two counts of using the United States mails in furtherance of a fraudulent scheme. Carpenter was indicted by a grand jury in August 2014 and a superseding indictment was filed on Oct. 15, 2014.
“The defendant preyed upon and lured her patients to her purported clinic in order to defraud them of money,” said U.S. Attorney Williams. “Today’s conviction demonstrates the U.S. Attorney’s Office’s commitment to ensuring justice is served for victims and their family members. Together with the FDA we are protecting individuals who were victimized by this fraudulent medical scheme. This should be a deterrent and warning to those who intend to defraud and take advantage of peoples’ situations.”
According to documents filed in this case and evidence presented at trial:
From November 2006 to December 2012, Carpenter, a physicist and not a medical doctor, orchestrated a scheme to obtain money from cancer patients by means of false and fraudulent representations. Carpenter made materially false claims to patients about her treatment method called “Light Induced Enhanced Selective Hyperthemia” (LIESH), including that the treatments were 100 percent effective and there would be no negative side effects.
In addition, Carpenter claimed to cure various kinds of cancers, when in fact, she would inject a patient’s tumor with a mixture consisting of saline solution and food coloring or walnut hull extract. She would then heat the injected area with a laser. Carpenter operated a clinic in Broken Arrow and Owasso, Oklahoma.
At the time of sentencing, Carpenter faces up to 10 years in prison for inducing persons to travel in interstate commerce in an effort to defraud them of at least $5,000; and up to 20 years in prison on the remaining charges. Also as part of her sentence, a criminal forfeiture money judgment will be entered against the defendant in an amount of approximately $1,102,160 representing proceeds obtained as a result of her fraudulent scheme.
U.S. Attorney Williams credited special agents of the U.S. Food and Drug Administration-Office of Criminal Investigations and Assistant U.S. Attorneys Kevin C. Leitch, Clemon Ashley and Catherine Depew with the prosecution.
Owner of Cancer Treatment Clinic Convicted of Providing Fraudulent Medical Treatments to PatientsRead the Press Release
TULSA, Okla.–A jury sitting in the Northern District of Oklahoma convicted Antonella Carpenter, former owner of Lase Med Inc., a purported cancer treatment clinic, today of committing a fraudulent scheme claiming to cure patients’ cancer, announced United States Attorney Danny C. Williams Sr. for the Northern District of Oklahoma.
Following a 15-day trial before U.S. District Judge James H. Payne, a jury found Carpenter, 71, of Tulsa, guilty on 29 of the 41 counts alleged in a Superseding Indictment, and were unable to come to a unanimous decision on 3 counts of the Superseding Indictment. Carpenter was charged with five counts of inducing persons to travel in interstate commerce in an effort to defraud them of at least $5,000; 34 counts of using interstate wire communications to defraud patients; and two counts of using the United States mails in furtherance of a fraudulent scheme. Carpenter was indicted by a grand jury in August 2014, and a Superseding Indictment was filed on October 15, 2014.
“The defendant preyed upon and lured her patients to her purported clinic in order to defraud them of money. Today’s conviction demonstrates the U.S. Attorney’s Office’s commitment to ensuring justice is served for victims and their family members,” said U.S. Attorney Williams. “Together with the FDA we are protecting individuals who were victimized by this fraudulent medical scheme. This should be a deterrent and warning to those who intend to defraud and take advantage of peoples’ situations.”
According to documents filed in this case and evidence presented at trial:
From November 2006 to December 2012, Carpenter, a physicist and not a medical doctor, orchestrated a scheme to obtain money from cancer patients by means of false and fraudulent representations. Carpenter made materially false claims to patients about her treatment method called “Light Induced Enhanced Selective Hyperthemia or “LIESH’, including that the treatments were 100% effective and there would be no negative side effects.
In addition, Carpenter claimed to cure various kinds of cancers, when in fact, she would inject a patient’s tumor with a mixture consisting of saline solution and food coloring or walnut hull extract. She would then heat the injected area with a laser. Carpenter operated a clinic in Broken Arrow and Owasso, Oklahoma.
At the time of sentencing, Carpenter faces up to 10 years in prison for inducing persons to travel in interstate commerce in an effort to defraud them of at least $5,000; and up to 20 years in prison on the remaining charges. Also as part of her sentence, a criminal forfeiture money judgment will be entered against the defendant in an amount of approximately $1,102,160 representing proceeds obtained as a result of her fraudulent scheme.
United States Attorney Williams credited special agents of the U.S. Food and Drug Administration-Office of Criminal Investigations and Assistant U.S. Attorneys Kevin C. Leitch, Clemon Ashley, and Catherine Depew with the prosecution.
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New York Man Sentenced to over Five Years in Prison for Taking Part in Drug ConspiracyRead the Press Release
WASHINGTON – Edwin A. Henriquez, 36, formerly of Hempstead, N.Y., has been sentenced to a prison term of five years and eight months on a federal charge stemming from his participation in a drug trafficking ring, U.S. Attorney Channing D. Phillips announced today.
Henriquez pled guilty on Feb. 19, 2008, in the U.S. District Court for the District of Columbia, to a charge of conspiracy to possess with intent to distribute 500 grams or more of cocaine. Following his plea, he was released on personal recognizance with a number of conditions, including that he maintain contact with authorities. However, in June 2008, law enforcement was no longer aware of his whereabouts. In July 2008, a warrant was issued for Henriquez’s arrest. He was apprehended on July 1, 2015 in the Dominican Republic and extradited to the United States.
Henriquez was sentenced on Feb. 9, 2016 by the Honorable John D. Bates. Upon completion of his prison term, he will be placed on three years of supervised release.
According to the government’s evidence, in January 2008, Henriquez traveled from New York to Atlanta, Ga., to purchase two kilograms of cocaine. He paid a total of $40,000 for the cocaine, including $30,000 from a co-conspirator and $10,000 of his own money. He then packaged the drugs in a hidden compartment inside of a VCR and purchased a train ticket to return to and deliver the cocaine to New York. On Jan. 17, 2008, a detective with the Amtrak Police Department was on duty and noticed that Henriquez made the train ticket reservation from Atlanta to New York in a suspicious manner. He provided the defendant’s name and train car number to the Metropolitan Police Department (MPD).
On Jan. 18, 2008, while the train was at Union Station in Washington, D.C., MPD officers went to Henriquez’s sleeper car. After a brief conversation, Henriquez gave the officers permission to search the sleeper car and his bag. The officers searched the bag and discovered the cocaine, leading to Henriquez’s arrest.
Following his disappearance from the United States, Henriquez was tracked by the U.S. Drug Enforcement Administration to the Dominican Republic. The Department of Justice’s Office of International Affairs assisted in securing his extradition to the United States, and he was returned to Washington, D.C., by the U.S. Marshals Service.
In announcing the sentence, U.S. Attorney Phillips commended those who investigated the case from the Metropolitan Police Department, the Amtrak Police Department, the New York and Washington, D.C. offices of the Drug Enforcement Administration, and the U.S. Marshals Service. He expressed appreciation for the assistance provided by the Justice Department’s Office of International Affairs as well as the government of the Dominican Republic. Finally, he praised the work of Assistant U.S. Attorney Angela S. George, of the office’s Violent Crime and Narcotics Trafficking Section, who investigated and prosecuted the case.
Muldrow Man Sentenced to 13 Months for Use of Telephone to Make Bomb ThreatRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma, announced that ERIC WAYNE LOCKHART, age 30, of Muldrow, Oklahoma, was sentenced to 13 months imprisonment, followed by 3 years of supervised release for USE OF TELEPHONE TO MAKE BOMB THREAT, in violation of Title 18, United States Code, Section 844(e).
The Indictment alleged that on or about June 15, 2015, in the Eastern District of Oklahoma, the Defendant, ERIC WAYNE LOCKHART, did, through use of a telephone, make a threat to kill, injure and intimidate an individual by means of an explosive, in and affecting interstate commerce.
The charges are a result from an investigation by the Sequoyah County Sheriff’s Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives. The defendant pled guilty in October, 2015.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshals Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Christopher Wilson represented the United States.
McAlester Man Sentenced to 60 Months for Manufacturing MethamphetamineRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that JEREMY DAVID STARR, age 39, of McAlester, Oklahoma, was sentenced to 60 months imprisonment, followed by 4 years of supervised release for MANUFACTURE OF METHAMPHETAMINE, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B).
The Indictment alleged that on or about June 21, 2015, in the Eastern District of Oklahoma, the defendant, JEREMY DAVID STARR, did knowingly and intentionally manufacture 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The charges arose from an investigation by the McAlester Police Department and the Pittsburg County Sheriff’s Department. The defendant pled guilty in October, 2015.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody of the United States Marshals Service pending transportation to the designated federal prison at which he will serve his nonparolable sentence.
Assistant United States Attorney Christopher Wilson represented the United States.
Manhattan U.S. Attorney Announces Criminal Charges Against Owner of $161 Million Fraudulent Internet Payday Lending EnterpriseRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Mark Bialek, Inspector General for the Board of Governors of the Federal Reserve System (“Federal Reserve”), announced today the unsealing of an indictment charging RICHARD MOSELEY, SR. with wire fraud and violating the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and the Truth in Lending Act (“TILA”) for operating a payday lending enterprise that systematically evaded state usury laws in order to charge illegally high interest rates, and for issuing payday loans to consumers who never even sought them. MOSELEY was arrested this morning and will be presented later today in federal court in Kansas City, Missouri. The case has been assigned to U.S. District Judge Edgardo Ramos.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, Richard Moseley, Sr., extended predatory loans to over six hundred thousand of the most financially vulnerable Americans, charging illegally high interest rates to people struggling just to meet their basic living expenses. Worse, Moseley allegedly also extended loans to many who never even sought them, withdrawing exorbitant ‘financing fees’ from their bank accounts for loans the borrowers never asked for or authorized. For years, Moseley allegedly hid behind sham offshore corporations and operated through the Internet to try to avoid criminal liability.”
FBI Assistant Director-in-Charge Rodriguez stated: “This case is an example of predatory lending at its finest. Claiming more than half a million victims, Moseley, through his enterprise, deceived not only those who unwittingly bought into this sham agreement, but others who never even authorized the origination of the loans they received. Despite their best efforts, innocent people throughout the country were deprived of the opportunity to regain their financial well -being as a result of this conspiracy. Today, we issue a stop payment on Moseley’s fraudulent scheme.”
Federal Reserve Inspector General Bialek stated: “Today’s indictment sends a clear message that those who engage in fraud to obstruct regulators from carrying out their supervisory responsibilities and deceive unsuspecting consumers will be held accountable for their actions.”
According to the allegations contained in the Indictment[1] unsealed today in Manhattan federal court:
Between approximately 2004 and September 2014, MOSELEY owned and operated a group of payday lending businesses (the “Hydra Lenders”) that issued and serviced small, short-term, unsecured loans, known as “payday loans,” through the Internet to customers across the United States.
For nearly a decade, MOSELEY systematically exploited more than 620,000 financially struggling working people throughout the United States, many of whom were having trouble paying for basic living expenses. MOSELEY, through the Hydra Lenders, targeted and extended loans to these individuals at illegally high interest rates of more than 700%, using deceptive and misleading communications and contracts and in violation of the usury laws of numerous states that were designed to protect residents from such loan sharking and abusive conduct.
In furtherance of the scheme, the Hydra Lenders’ loan agreements materially understated the amount the payday loan would cost, the annual percentage rate of the loan, and the total of payments that would be taken from the borrower’s bank account. The loan agreements suggested, for example, that the borrower would pay $30 in interest for $100 borrowed. In truth and in fact, however, MOSELEY structured the repayment schedule of the loans such that, on the borrower’s payday, the Hydra Lenders automatically withdrew the entire interest payment due on the loan, but left the principal balance untouched so that, on the borrower’s next payday, the Hydra Lenders could again automatically withdraw an amount equaling the entire interest payment due (and already paid) on the loan. Under MOSELEY’s control and oversight, the Hydra Lenders proceeded automatically to withdraw such “finance charges” payday after payday, applying none of the money toward repayment of principal. Indeed, under the terms of the loan agreement, the Hydra Lenders withdrew finance charges from their customers’ accounts unless and until consumers took affirmative action to stop the automatic renewal of the loan.
Through the Hydra Lenders, MOSELEY also extended numerous payday “loans” to victims across the country who did not even want the loans or authorize the issuance of the loans, but instead had merely submitted their personal and bank account information in order to inquire about the possibility of obtaining a payday loan. MOSELEY then automatically withdrew the Hydra Lenders’ usurious “financing fees” directly from the financially struggling victims’ bank accounts on a bi-weekly basis. Although hundreds of victims, over a period of years, lodged complaints that they had never approved or even been aware of the issuance of the loans, the Hydra Lenders, at MOSELEY’s direction, continued to issue loans to consumers without confirming that the consumers in fact wanted the loans that they received or had reviewed and approved the loan terms.
Throughout their existence, the Hydra Lenders were the subject of complaints from customers across the country, numerous state regulators, and consumer protection groups, about the Hydra Lenders’ deceptive and misleading practices in issuing usurious and fraudulent loans. Beginning in approximately 2006, in an attempt to avoid civil and criminal liability for his conduct, and to enable the Hydra Lenders to extend usurious loans contrary to state laws, MOSELEY created the sham appearance that the Hydra Lenders were located overseas. MOSELEY nominally incorporated the Hydra Lenders first in Nevis, and later in New Zealand, and claimed that the Hydra Lenders could not be sued or subject to state enforcement actions because they were beyond the jurisdiction of every state in the United States. In truth and in fact, the entirety of MOSELEY’s lending business, including all bank accounts from which loans were originated, all communications with consumers, and all employees, were located at MOSELEY’s corporate office in Kansas City, Missouri. The Hydra Lenders’ purported “offshore” operation consisted of little more than a service that forwarded mail from addresses in Nevis or New Zealand to the Kansas City, Missouri, office.
In furtherance of the scheme, MOSELEY falsely told his attorneys that the Hydra Lenders maintained physical offices and employees in Nevis and New Zealand and that the decision whether to extend loans to particular consumers was made by employees of the Hydra Lenders in Nevis and New Zealand. As MOSELEY knew, at no time did the Hydra Lenders have any employees involved in the lending business in Nevis or New Zealand, and at all times the decision whether to underwrite loans was made by employees under MOSELEY’s direction in Kansas City, Missouri. To defeat state complaints and inquiries, MOSELEY directed his attorneys at an outside law firm to submit correspondence to state Attorneys General which (unbeknownst to MOSELEY’s attorneys) falsely stated that the Hydra Lenders originated loans “exclusively” from their offices overseas and had no physical presence anywhere in the United States. In reliance on this materially false and misleading correspondence, many state Attorneys General and regulators closed their investigations on the apparent basis that they lacked jurisdiction over the Hydra Lenders and that the Hydra Lenders had no presence or operations in the United States.
From approximately November 2006 through approximately August 2014, the Hydra Lenders generated approximately $161 million in revenues. MOSELEY spent millions of dollars he obtained from victims on, among other things, vacation homes in Colorado and Mexico, luxury automobiles, and country club membership dues.
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MOSELEY, 68, of Kansas City, Missouri, is charged with one count of conspiracy to collect unlawful debts in violation of RICO, one count of collecting unlawful debts in violation of RICO, one count of conspiracy to commit wire fraud, and one count of wire fraud, each of which carries a maximum term of 20 years in prison; and one count of violating TILA, which carries a maximum term of one year in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and the Federal Reserve Office of the Inspector General. Mr. Bharara also thanked the Consumer Financial Protection Bureau (the “CFPB”), which referred the case, for its assistance in the investigation. In a civil enforcement action filed by the CFPB against MOSELEY in the United States District Court for the Western District of Missouri, proceeds that MOSELEY obtained as a result of his fraudulent conduct have been restrained.
Mr. Bharara noted that the investigation remains ongoing.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to:
http://www.usdoj.gov/usao/nys/victimwitness.html
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Edward A. Imperatore is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Manhattan U.S. Attorney Announces Charges Against Owner of, and Attorney for, $2 Billion Unlawful Internet Payday Lending EnterpriseRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Karl Stiften, Special Agent-in-Charge of the St. Louis Field Office of the Internal Revenue Service (“IRS”), and Diego Rodriguez, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a criminal indictment charging SCOTT TUCKER and TIMOTHY MUIR with violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) and the Truth in Lending Act (“TILA”) for operating a nationwide internet payday lending enterprise that systematically evaded state laws in order to charge illegal interest rates as high as 700% on loans. Both defendants were arrested in Kansas City, Kansas, earlier today and will be presented in the United States District Court for the District of Kansas. The case has been assigned to U.S. District Judge Katherine B. Forrest.
Mr. Bharara also announced a non-prosecution agreement (the “Agreement”) with two tribal corporations controlled by the Miami Tribe of Oklahoma, a Native American tribe. As part of the Agreement, the tribal corporations agree to forfeit $48 million in criminal proceeds from TUCKER’s payday lending enterprise that are currently held in tribal bank accounts. The Agreement also acknowledges, among other things, that a tribal representative filed false factual declarations in multiple state court actions. TUCKER and MUIR used these false declarations to defeat numerous state enforcement actions seeking to enjoin the operation of their unlawful business.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, Scott Tucker and Timothy Muir targeted and exploited millions of struggling, everyday people by charging illegally high interest rates – as much as 700 percent. Tucker and Muir allegedly sought to evade liability by claiming that this $2 billion business was actually owned and operated by Native American tribes. But thanks to the investigative work of the FBI and IRS, this deceptive and predatory scheme to take advantage of the most financially vulnerable in our communities has been exposed for what it is – a criminal scheme.”
IRS Special Agent-in-Charge Karl Stiften stated: “These defendants allegedly used deceptive and misleading lending practices to prey on millions of hard working individuals seeking payday loans. In reality, these loan customers were taken advantage of and charged illegally high interest rates.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “As alleged, Tucker and Muir deceptively preyed on more than 4.5 million working people, including those in New York, to enter into payday loans with interest rates ranging from 400 to 700 percent. Not only did their business model violate the Truth-in Lending Act, established to protect consumers from such loans, but they also tried to hide from prosecution by creating a fraudulent association with Native American Tribes to receive sovereign immunity. This scheme, like so many others who swindle innocent victims, only ends with an arrest by the FBI.”
As alleged in the Indictment[1] and described in the Agreement:
From at least 1997 until 2013, TUCKER engaged in the business of making small, short-term, high-interest, unsecured loans, commonly referred to as “payday loans,” through the Internet. TUCKER’s lending enterprise, which had approximately 600 employees based in Overland Park, Kansas, did business as Ameriloan, f/k/a Cash Advance; One Click Cash, f/k/a Preferred Cash Loans; United Cash Loans; US FastCash; 500 FastCash; Advantage Cash Services; and Star Cash Processing (the “Tucker Payday Lenders”). TUCKER, working with MUIR, an attorney for TUCKER’s payday lending businesses since 2006, routinely charged interest rates of 400% or 500%, and sometimes higher than 700%, using deceptive and misleading “disclosures” about the true cost of the loans. These loans were issued to more than 4.5 million working people throughout the United States, including hundreds of thousands of people in New York, many of whom were struggling to pay basic living expenses. Many of these loans were issued in states, including New York, with laws that expressly forbid lending at the exorbitant interest rates TUCKER charged.
The False Truth-in-Lending Act (“TILA”) Disclosures
TILA is a federal statute intended to ensure that credit terms are disclosed to consumers in a clear and meaningful way, both to protect customers against inaccurate and unfair credit practices, and to enable them to compare credit terms readily and knowledgeably. Among other things, TILA and its implementing regulations require lenders, including payday lenders like the Tucker Payday Lenders, to accurately, clearly, and conspicuously disclose, before any credit is extended, the finance charge, the annual percentage rate, and the total of payments that reflect the legal obligation between the parties to the loan.
The Tucker Payday Lenders purported to inform prospective borrowers, in clear and simple terms, as required by TILA, of the cost of the loan (the “TILA Box”). For example, for a loan of $500, the TILA Box provided that the “finance charge – meaning the “dollar amount the credit will cost you” – would be $150, and that the “total of payments” would be $650. Thus, in substance, the TILA Box stated that a $500 loan to the customer would cost $650 to repay. While the amounts set forth in the Tucker Payday Lenders’ TILA Box varied according to the terms of particular customers’ loans, they reflected, in substance, that the borrower would pay $30 in interest for every $100 borrowed.
In truth and in fact, through at least 2012, TUCKER and MUIR structured the repayment schedule of the loans such that, on the borrower’s payday, the Tucker Payday Lenders automatically withdrew the entire interest payment due on the loan, but left the principal balance untouched so that, on the borrower’s next payday, the Tucker Payday Lenders could again automatically withdraw an amount equaling the entire interest payment due (and already paid) on the loan. With TUCKER’s approval, the Tucker Payday Lenders proceeded automatically to withdraw such “finance charges” payday after payday (typically every two weeks), applying none of the money toward repayment of principal, until at least the fifth payday, when they began to withdraw an additional $50 per payday to apply to the principal balance of the loan. Even then, the Tucker Payday Lenders continued to assess and automatically withdraw the entire interest payment calculated on the remaining principal balance until the entire principal amount was repaid. Accordingly, as TUCKER and MUIR well knew, the Tucker Payday Lenders’ TILA box materially understated the amount the loan would cost, including the total of payments that would be taken from the borrower’s bank account. Specifically, for a customer who borrowed $500, contrary to the TILA Box disclosure stating that the finance charge would be $150, for a total payment of $650 by the borrower, in truth and in fact, and as TUCKER and MUIR well knew, the finance charge was $1,425, for a total payment of $1,925 by the borrower.
The Sham Tribal Ownership of the Business
In response to complaints that the Tucker Payday Lenders were extending abusive loans in violation of their usury laws, several states filed actions to enjoin the Tucker Payday Lenders from operating in their states. To thwart these state actions, TUCKER devised a scheme to claim that his lending businesses were protected by sovereign immunity, a legal doctrine that, among other things, generally prevents states from enforcing their laws against Native American tribes. Beginning in 2003, TUCKER entered into agreements with several Native American tribes (the “Tribes”), including the Miami Tribe of Oklahoma. The purpose of these agreements was to cause the Tribes to claim they owned and operated parts of TUCKER’s payday lending enterprise, so that when states sought to enforce laws prohibiting TUCKER’s loans, TUCKER’s lending businesses would claim to be protected by sovereign immunity. In return, the Tribes received payments from TUCKER, typically one percent of the revenues from the portion of TUCKER’s payday lending business that the Tribes purported to own.
In order to create the illusion that the Tribes owned and controlled TUCKER’s payday lending business, TUCKER and MUIR engaged in a series of deceptions. Among other things:
- MUIR and other counsel for TUCKER prepared false factual declarations from tribal representatives that were submitted to state courts, falsely claiming, among other things, that tribal corporations substantively owned, controlled, and managed the portions of TUCKER’s business targeted by state enforcement actions.
- TUCKER opened bank accounts to operate and receive the profits of the payday lending enterprise, which were nominally held by tribally owned corporations, but which were, in fact, owned and controlled by TUCKER. TUCKER spent over $100 million from these accounts on lavish personal expenses, including race cars, the expenses of a professional auto racing team, a luxury home in Aspen, Colorado, and jewelry.
- Employees of TUCKER making payday loans over the phone told borrowers that they were operating in Oklahoma and Nebraska, where the Tribes were located, when in fact they were operating at TUCKER’s corporate headquarters in Kansas.These employees were even provided daily weather reports for the Tribes’ reservations, so that the employees could convince customers that the employees actually were calling from those locations (when they were in fact in Kansas).
These deceptions succeeded for a time, and several state courts dismissed enforcement actions against TUCKER’s payday lending businesses based on claims that they were protected by sovereign immunity. In reality, the Tribes neither owned nor operated any part of TUCKER’s payday lending business. The Tribes made no payment to TUCKER to acquire the portions of the business they purported to own. TUCKER continued to operate his lending business from a corporate headquarters in Kansas, and TUCKER continued to reap the profits of the payday lending businesses, which generated over $2 billion in revenue from 2003 to 2012 – in substantial part by charging desperate borrowers high interest rates expressly forbidden by state laws.
* * *
TUCKER, 53, of Leawood, Kansas, and MUIR, 44, of Overland Park, Kansas, are each charged with conspiring to collect unlawful debts in violation of RICO, which carries a maximum term of 20 years in prison, three counts of violating RICO’s prohibition on collecting unlawful debts, each of which carries a maximum term of 20 years in prison, and five counts of violating the Truth in Lending Act, each of which carries a maximum term of one year in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentences the defendants receive will be determined by the Court. The indictment also seeks to forfeit from TUCKER and MUIR the proceeds and property derived from their alleged crimes, including, among other things, numerous bank accounts, a vacation home in Aspen, Colorado, six Ferrari race cars, four Porsche automobiles, and a Learjet airplane.
Mr. Bharara praised the outstanding investigative work of the IRS and the FBI. Mr. Bharara also thanked the Criminal Investigators at the United States Attorney’s Office, and the Federal Trade Commission, for their assistance with the case.
Mr. Bharara further noted that the investigation remains ongoing.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to:
http://www.usdoj.gov/usao/nys/victimwitness.html.
The prosecution is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Niketh Velamoor and Hagan Scotten are in charge of the prosecution.
The charges contained in the Indictment 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 Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Manchester Man Sentenced on Firearm ChargeRead the Press Release
CONCORD, NEW HAMPSHIRE - Nathan Tremblay, 23, of Manchester, New Hampshire, was sentenced today in the United States District Court for the District of New Hampshire for possession of a firearm by a prohibited person in violation of federal law, announced United States Attorney Emily Gray Rice. The Court imposed a term of five months’ imprisonment, followed by five months of community confinement and two years of supervised release.
On August 10, 2014, Tremblay was a passenger in a vehicle that was subject to a traffic stop by the Concord Police Department. The defendant was carrying a Taurus handgun and 34 rounds of Hornady 9 mm ammunition. Concord Police also seized a backpack belonging to the defendant. After searching it with the defendant’s consent, the police found three small plastic baggies containing the controlled substance marijuana. The defendant was a regular user of the controlled substance marijuana at the time he possessed the firearm, and had purchased and re-sold a quarter of a pound of marijuana earlier that day.
“The combination of firearms and illegal drug use presents a particularly dangerous potential harm to the public,” stated United States Attorney Emily Gray Rice. “Our office will continue to combat the threat posed when unlawful users of controlled substances possess firearms.”
This case was investigated by the Concord Police Department and the Bureau of Alcohol Tobacco, Firearms and Explosives.
Man Sentenced to 6 1/2 Years for Distribution of Child PornographyRead the Press Release
RICHMOND, Va. – Patrick Lawrence Raines, 41, of Sandston, was sentenced today to 78 months in prison and five years of supervised release for distribution of child pornography. Raines was also ordered to register as a sex offender upon his release from prison.
Raines pleaded guilty on Nov. 10, 2015. According to court documents, Raines was identified after the FBI learned that a computer user was using a cellular device to make child pornography files available to other users for download. Based on this information, the FBI went to the Raines’s residence in Milford to speak with him. Raines agreed to be interviewed, during which he admitted searching for and downloading child pornography from the Internet. He also admitted allowing other users to download files from his computer. At the conclusion of the interview, Raines gave the FBI consent to search his computer and cell phone. A forensic examination of these items revealed the presence of 466 images and 38 videos of child pornography.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Virginia Attorney General; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after sentencing by U.S. District Judge M. Hannah Lauck. Virginia Assistant Attorney General and Special Assistant U.S. Attorney Thomas K. Johnstone IV prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-84.
Man Sentenced for Unlawfully Possessing Destructive DeviceRead the Press Release
Jackson, TN – A West Tennessee man has been sentenced to federal prison for unlawfully possessing an improvised destructive device. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentence today.
According to information presented in court, in May 2015, the Carroll County Sheriff’s Office received a complaint of a domestic disturbance at a residence in Trezevant, Tennessee. Deputies met with the complainant and homeowner, who advised that Milton Edward Strain III, 30, of Trezevant, Tennessee, was in possession of a grenade.
Deputies apprehended the defendant and recovered an improvised destructive device from the back of Strain’s vehicle, along with firearms and ammunition. Bomb technicians with the Jackson Police Department determined that the improvised destructive device contained high explosives. Further analysis by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) determined that the device was an explosive bomb.
On Monday, February 8, 2016, Chief U.S. District Judge J. Daniel Breen sentenced Strain to 18 months in prison.
The investigation was conducted by the ATF; Tennessee Bomb and Arson Unit; Jackson Police Department’s Bomb Squad; and the Carroll County Sheriff’s Office.
The case was prosecuted by the U.S. Attorney’s Office for West Tennessee’s Eastern Division in Jackson.
Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that on February 10, 2016, United States District Judge John M. Gerrard sentenced Juan Miguel Gallegos Loaiza, to 210 months in federal prison, followed by 5 years of supervised release.
Mr. Loaiza pled guilty to conspiracy to distribute methamphetamine on March 19, 2015. Loaiza had been involved in the distribution of methamphetamine in the Lincoln and eastern Nebraska area in at least 2012 and 2013. He received large quantities of methamphetamine from Phoenix, Arizona, which he distributed to other dealers in the Lincoln and eastern Nebraska areas. The Court found that Loaiza maintained an apartment for the purpose of distributing drugs at 32nd and Starr streets in Lincoln.
On October 22, 2013, the FBI and the Lincoln/Lancaster County Narcotics Task Force stopped two vehicles, one loaded with methamphetamine from Phoenix, and one loaded with cash intended to be taken from Lincoln to Phoenix. They uncovered about 4 pounds of methamphetamine and $10,000 in cash in these two vehicles. The following day investigators served several search warrants and arrest warrants. The searches uncovered about 9.6 pounds of methamphetamine and over $90,000 in cash. They had an arrest warrant for Loaiza, however he eluded them and fled to Mexico. On October 17, 2014, Loaiza was arrested in Arizona.
Loaiza is expected to be deported to his native Mexico after serving his prison sentence.
This case was investigated by the FBI and the Lincoln/Lancaster County Narcotics Task Force.
Lutherville Man Faces Federal Charges for Bank Fraud and Identity Theft and State Charges for Elder AbuseRead the Press Release
Baltimore, Maryland – Salah Sood, age 34, of Lutherville, Maryland, faces federal charges of aggravated identity theft and bank fraud. Sood has also been indicted in Baltimore County with four counts of abuse of vulnerable adults and one count of operating an unlicensed assisted living home. The state and federal charges arise from an investigation of Holland Manor Eldercare where, on December 3, 2015, two elderly residents were found alone when Baltimore County police and the fire department personnel responded to a fire alarm at that location.
The charges were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Baltimore County State’s Attorney Scott Shellenberger, Chief James W. Johnson of the Baltimore County Police Department; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to the criminal complaint affidavit, on December 3, 2015, at 9:10 p.m. (BCoFD) and Baltimore County Police Department (BCoPD) personnel responded to a fire alarm at Holland Manor Eldercare, a formerly licensed Assisted Living Program located at 1812 Landrake Road in Towson, Maryland. Maryland health officials had revoked the Assisted Living Program License of Holland Manor Eldercare on September 25, 2015, after an investigation revealed deficiencies in care and staffing. The responding officers located two residents inside the facility without any staff present. An 80 year old male resident spoke with the officers and told them that no caretaker was present at the facility overnight. The man told the officers that if there was an emergency, he would call facility manager Salah Sood. BCoPD officers attempted to call Sood, but the call immediately went to voicemail. The second resident, a woman who was 82 years old, was located in a bed in a second floor bedroom. The resident was comatose and unable to communicate. BCoFD personnel who attempted to render aid to her discovered that she was restrained by a blanket that was tied to the bedrails across her body. In addition to the unattended residents, the conditions inside the facility were found to be unsanitary and unsafe. The locks on doors inside the facility had also been reversed so that residents could be locked into rooms from the outside. Both residents were transported to medical facilities to be evaluated. Salah Sood later called police and stated that he was the manager of Holland Manor Eldercare and had left the facility to go home and take a shower and get something to eat. Sood refused to provide police with his location while speaking with them on the phone
In December 2015, a criminal investigation was initiated by BCoPD detectives regarding the possible abuse and/or neglect of residents at Holland Manor Eldercare. During that investigation, it was discovered that the personal information of at least three Holland Manor Eldercare residents had been used to open multiple credit card accounts in their names without their knowledge or permission. In each instance, Salah Sood had been added as an authorized user of the credit card account.
For example, according to the affidavit, on November 10, 2015, November 30, 2015, and January 8, 2016, three credit card accounts were opened using the name, date of birth, and Social Security Number of the 80 year old resident of Holland Manor Eldercare who was removed by BCoFD personnel responding to the December 3, 2015 fire alarm. Each of the applications was submitted electronically and used the address of Holland Manor Eldercare, as the man’s home address. On the same day that each account was opened, an authorized user name of Salah Sood was added to the account. Between December 21, 2015 and January 27, 2016, a total of $59,094.39 in purchases were made using the accounts.
Sood faces a maximum sentence of 30 years in prison for bank fraud; and a mandatory minimum of two years in prison consecutive to any other sentence imposed for aggravated identity theft. Sood was arrested today and is scheduled to have initial appearance in Baltimore County Circuit Court on the state charges at 9:00 a.m. on Thursday, February 11, 2016. No court appearance has been scheduled yet in U.S. District Court in Baltimore on the federal charges.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein and Baltimore County State’s Attorney Scott Shellenberger commended the Baltimore County Police Department and HHS-Office of Inspector General for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Sandra Wilkinson and Roann Nichols and Special Assistant U.S. Attorney Lauren E. Perry, who are prosecuting the federal case.
Lexington Couple Pleads Guilty to Grant FraudRead the Press Release
LEXINGTON — A Lexington couple has admitted in federal court that they submitted false claims related to federal grants from the National Institutes of Health (“NIH”) and defrauded the government out of hundreds of thousands of dollars.
Today, Jerome Hahn, 69, pleaded guilty, to conspiracy to defraud the United States with respect to claims, before U.S. District Judge Danny C. Reeves. On December 16, 2015, Vesta Brue, 70, pleaded guilty to making a false claim against the United States.
According to court documents, Vesta Brue certified on behalf of Telehealth Holdings, LLC, a company owned by Jerome Hahn, that the company had incurred expenses totaling $222,037, relating to two federal grants Telehealth received from NIH, for the development of medical devices. Brue falsely certified that the funds had been spent in accordance with grant rules and regulations.
Brue and Hahn waived their right to be indicted by a grand jury, were formally charged in court, and admitted to the charges.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky; Howard S. Marshall, Special Agent in Charge, Federal Bureau of Investigation; Derrick Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Atlanta Region; and Christopher A. Henry, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, jointly announced the guilty pleas.
The investigation was conducted by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of Inspector General, and the Internal Revenue Service, Criminal Investigation Division. Assistant U.S. Attorney Kate K. Smith represents the federal government in this case.
Vesta Brue is scheduled to be sentenced on March 30, 2016. She faces a maximum prison sentence of 5 years and a maximum fine of $250,000. Jerome Hahn is scheduled to be sentenced on May 18, 2016. He faces a maximum prison sentence of 10 years and a maximum fine of $250,000. Any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Las Vegas Resident Indicted for Running Counterfeit and Misbranded Contact Lens OperationRead the Press Release
A federal grand jury in the District of Nevada has charged a Las Vegas resident with running a large operation selling counterfeit and misbranded contact lenses online to customers throughout the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Director George M. Karavetsos of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA OCI) made the announcement today after the indictment was unsealed and the defendant made his initial appearance before U.S. Magistrate Judge Peggy A. Leen of the District of Nevada.
Dmitriy V. Melnik, 29, was charged with one count of conspiracy to traffic in counterfeit goods and to introduce into interstate commerce misbranded devices; four counts of trafficking in counterfeit goods; and five counts of introducing misbranded devices into interstate commerce.
According to the indictment, Melnik allegedly imported thousands of colored contact lenses from the People’s Republic of China and South Korea that he knew were counterfeit, unauthorized by the FDA for import to and sale in the United States, or both. Many of these contact lenses bore counterfeit trademarks for Ciba Vision FreshLook COLORBLENDS, which are manufactured by Novartis International AG, and others had labels of brands of contact lenses produced and sold in Asia.
As noted in the indictment, contact lenses—even decorative ones—are medical devices that must receive FDA authorization to enter the United States and be further distributed. Melnik allegedly sold “authentic” contact lenses to customers without a prescription and without adequate directions for use or adequate warnings. After purchasing the contact lenses, many customers complained directly to Melnik about the quality of the contact lenses and questioned Melnik about whether the contact lenses were genuine and FDA approved. Some of the contact lenses that Melnik sold were tested and allegedly found to be contaminated with possibly hazardous bacteria.
The charges and allegations contained in the indictment are merely accusations. The defendant is presumed innocent until and unless proven guilty.
Anyone with information about individuals committing intellectual property offenses can report those crimes to the National Intellectual Property Rights Coordination Center by going to http://www.iprcenter.gov/referral or calling (866) IPR-2060.
The prosecution is the result of an ongoing multiagency effort to combat counterfeit, illegally imported and unapproved contact lenses called Operation Double Vision. The FDA OCI led the investigation, with significant support from the U.S. Postal Inspection Service and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Crane M. Pomerantz of the District of Nevada are prosecuting the case.
The indictment is related to the many efforts being undertaken by the department’s Task Force on Intellectual Property, which supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state and local law enforcement partners and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.
Las Vegas Resident Indicted for Running Counterfeit and Misbranded Contact Lens OperationRead the Press Release
Las Vegas Resident Indicted For Running Counterfeit And Misbranded Contact Lens Operation
WASHINGTON – A federal grand jury in the District of Nevada has charged a Las Vegas resident with running a large operation selling counterfeit and misbranded contact lenses online to customers throughout the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Director George M. Karavetsos of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA OCI) made the announcement today after the indictment was unsealed and the defendant made his initial appearance before U.S. Magistrate Judge Peggy A. Leen of the District of Nevada.
Dmitriy V. Melnik, 29, was charged with one count of conspiracy to traffic in counterfeit goods and to introduce into interstate commerce misbranded devices; four counts of trafficking in counterfeit goods; and five counts of introducing misbranded devices into interstate commerce.
According to the indictment, Melnik allegedly imported thousands of colored contact lenses from the People’s Republic of China and South Korea that he knew were counterfeit, unauthorized by the FDA for import to and sale in the United States, or both. Many of these contact lenses bore counterfeit trademarks for Ciba Vision FreshLook COLORBLENDS, which are manufactured by Novartis International AG, and others had labels of brands of contact lenses produced and sold in Asia.
As noted in the indictment, contact lenses—even decorative ones—are medical devices that must receive FDA authorization to enter the United States and be further distributed. Melnik allegedly sold “authentic” contact lenses to customers without a prescription and without adequate directions for use or adequate warnings. After purchasing the contact lenses, many customers complained directly to Melnik about the quality of the contact lenses and questioned Melnik about whether the contact lenses were genuine and FDA approved. Some of the contact lenses that Melnik sold were tested and allegedly found to be contaminated with possibly hazardous bacteria.
The charges and allegations contained in the indictment are merely accusations. The defendant is presumed innocent until and unless proven guilty.
Anyone with information about individuals committing intellectual property offenses can report those crimes to the National Intellectual Property Rights Coordination Center by going to http://www.iprcenter.gov/referral or calling (866) IPR-2060.
The prosecution is the result of an ongoing multiagency effort to combat counterfeit, illegally imported and unapproved contact lenses called Operation Double Vision. The FDA OCI led the investigation, with significant support from the U.S. Postal Inspection Service and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Crane M. Pomerantz of the District of Nevada are prosecuting the case.
The indictment is related to the many efforts being undertaken by the department’s Task Force on Intellectual Property, which supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state and local law enforcement partners and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.
Justice Department Settles Lawsuit Against the City of Somerville, Massachusetts, to Enforce the Employment Rights of a Marine Corps ReservistRead the Press Release
The Department of Justice today announced a settlement which is subject to District Court approval with the Commonwealth of Massachusetts and the City of Somerville, Massachusetts, resolving claims that the city violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) when it failed to re-employ U.S. Marine Corps Reservist Sean Keane at the level he should have been in following his multiple military deployments, including tours of duty to Afghanistan.
Keane, a firefighter for the city of Somerville since 1989, was called to active duty military service from April 2, 2004, to Sept. 25, 2013. Following his return from service, Keane took a lieutenant’s make-up promotional exam to replace the regular administration of the examination that he missed because of his military service. Keane received the highest score on the test, which placed him at the top of the promotional list, ahead of two firefighters who had already been promoted in July 2013. When Keane was eventually promoted in October 2014, he requested that his promotion be effective as of July 2013, the date he would have been promoted had he not been away on military service. He was denied the July 2013 promotion date and, as a result, was deemed ineligible to take a make-up exam for a captain’s position. Subject to certain limitations, USERRA requires that service members who leave their civilian jobs to serve in the military be reemployed by their civilian employers in the positions that they would have held if their employment had not been interrupted by military service. Under circumstances like those here, federal law also requires that a servicemember be reemployed in a position of comparable seniority, pay and status so that no opportunities for advancement or promotion are adversely affected by military service.
“The great sacrifice of Americans who serve in our Marine Corps should never be a detriment to their civilian careers,” said Acting Associate Attorney General Stuart Delery. “The Department of Justice is committed to protecting the rights of the men and women who serve in our Armed Forces and we will continue to hold employers who violate their rights accountable.”
“As a service member in Afghanistan, Sean Keane has served his country with admirable distinction, honor and integrity,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Courageous men and women like Lieutenant Keane, who answer America’s call to defend our freedom, deserve to reclaim their civilian jobs without undue impediment when they return home. We commend the state and local officials who worked cooperatively to resolve this claim under USERRA.”
“Reservists who are called into active duty to serve their country make many sacrifices including time away from their jobs,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts. “In applying USERRA’s protections, we seek to restore servicemembers to the promotions and pay they have rightfully earned. We are committed to ensuring that those who serve our country are not disadvantaged because of their military service, and are encouraged by the City’s prompt action in fulfilling its legal obligations with respect to Mr. Keane.”
Under the terms of the settlement agreement, the city agreed to pay more than $15,000 as back pay. The agreement also provides that Keane will be permitted to make-up a missed examination for promotion to captain. Based on his score, Keane will be as eligible for a promotion as others who took the examination on its regular schedule.
This case stems from a referral by the U.S. Department of Labor (DOL), following an investigation by the DOL’s Veterans’ Employment and Training Service. The case is being handled by the Employment Litigation Section of the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office of the District of Massachusetts, who work collaboratively with the DOL to protect the jobs and benefits of Reserve and National Guard servicemembers upon their return to civilian life.
The case was handled by Assistant U.S. Attorneys Jessica Driscoll and Jennifer Serafyn of the District of Massachusetts, along with Special Litigation Counsel Andrew Braniff and Trial Attorneys Jeremy Monteiro and Taryn Null of the Civil Rights Division’s Employment Litigation Section.
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Somerville Complaint
Somerville Stipulation and Settlement
Justice Department Files Lawsuit to Bring Constitutional Policing to Ferguson, MissouriRead the Press Release
Attorney General Loretta E. Lynch announced today that the Department of Justice filed a lawsuit in U.S. District Court against the city of Ferguson, Missouri, alleging a pattern or practice of law enforcement conduct that violates the First, Fourth and 14th Amendments of the Constitution and federal civil rights laws.
“Today, the Department of Justice is filing a lawsuit against the city of Ferguson, Missouri, alleging a pattern or practice of law enforcement conduct that violates the Constitution and federal civil rights laws,” said Attorney General Lynch. “The residents of Ferguson have waited nearly a year for their city to adopt an agreement that would protect their rights and keep them safe. They have waited nearly a year for their police department to accept rules that would ensure their constitutional rights and that thousands of other police departments follow every day. They have waited nearly a year for their municipal courts to commit to basic, reasonable rules and standards. But residents of Ferguson have suffered the deprivation of their constitutional rights – the rights guaranteed to all Americans – for decades. They have waited decades for justice. They should not be forced to wait any longer.”
“Our investigation found that Ferguson’s policing and municipal court practices violate the Constitution, erode trust and undermine public safety,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “As shown by our lawsuit today, the Justice Department will continue to vigorously enforce the law to ensure that Ferguson implements long-overdue reforms necessary to create constitutional, effective and accountable policing. Ferguson residents and police officers deserve a law enforcement system that productively and fairly serves the entire community.”
The lawsuit, filed pursuant to Section 14141 of the Violent Crime Control and Law Enforcement Act of 1994 and Title VI of the Civil Rights Act of 1964 (Title VI), alleges that the city of Ferguson, through its police department and municipal court:
- conducts stops, searches and arrests without legal justification, and uses excessive force, in violation of the Fourth Amendment;
- interferes with the right to free expression in violation of the First Amendment;
- prosecutes and resolves municipal charges in a manner that violates due process and equal protection guaranteed by the 14th Amendment; and
- engages in discriminatory law enforcement conduct against African Americans in violation of the 14th Amendment and federal statutory law.
The lawsuit follows a comprehensive investigation of Ferguson’s police department and municipal court conducted by the Civil Rights Division. In March 2015, the department detailed its investigative findings in a 104-page report. The department found that Ferguson’s focus on generating revenue over public safety, together with racial bias, has a profound effect on Ferguson’s police and court practices, resulting in conduct that routinely violates the Constitution and federal civil rights laws.
The complaint alleges that from October 2012 to October 2014, African Americans were more than twice as likely to be searched, to receive a citation or to be arrested, than other stopped individuals. Of all incidents from 2010 to August 2014, African Americans account for 88 percent of all incidents in which a Ferguson police officer reported using force. For municipal offenses where Ferguson police officers have a high degree of discretion in charging, African Americans were again disproportionately represented as compared to their relative representation in Ferguson. While African Americans make up 67 percent of the Ferguson’s population, they make up 95 percent of manner of walking in roadway charges; 94 percent of failure to comply charges; 92 percent of resisting arrest charges; 92 percent of disturbing the peace charges; and 89 percent of failure to obey charges. The department also found that Ferguson’s law enforcement conduct has created a lack of trust between the police department and the community members it serves, especially African Americans.
On Feb. 9, the Ferguson City Council voted to reject the consent decree that the city’s negotiating team had negotiated. Unable to reach a mutually agreed upon court-enforceable settlement to remedy the department's findings, the lawsuit was filed today in order to seek declaratory and injunctive relief to remedy the unlawful conduct identified by the department’s investigation.
This matter was investigated by attorneys from the Civil Rights Division.
Indictment: Former Fort Riley Nurse Stole Fentanyl from HospitalRead the Press Release
TOPEKA, KAN. - A former Fort Riley nurse was indicted Wednesday on charges of stealing fentanyl, a powerful painkiller, U.S. Attorney Barry Grissom said today.
Lana J. Pendergast, 56, Clay Center, Kan., is charged with one count of unlawfully obtaining a controlled substance. The indictment alleges that while she worked as a nurse at Irwin Army Hospital she began taking fentanyl for her own use, replacing the stolen fentanyl with saline to cover up the crime. The fentanyl vials containing saline were disposed of as waste.
If convicted, she faces a maximum penalty of four years in federal prison and a fine up to $250,000. U.S. Army Criminal Investigation Division investigated. Special Assistant U.S. Attorney Robin Graham is prosecuting.
OTHER GRAND JURY INDICTMENTS
Don Alvin Womack, Jr., 41, Topeka, Kan., is charged with one count of carjacking. The indictment alleges that on Jan. 14, 2016, Womack threatened the driver of a 2001 Buick Regal and stole the vehicle. The crime occurred in Shawnee County, Kan.
If convicted, he faces a maximum penalty of 15 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.
Vincent Dang, 40, Garden City, Kan., is charged with two counts of distributing child pornography. The crimes are alleged to have occurred in November 2015 and January 2016 in Garden City, Kan.
If convicted, he faces a penalty of not less than five years and not more than 20 years and a fine up to $250,000 on each count. The Dodge City Police Department, the Internet Crimes Against Children Task Force, the Wichita Police Department, and Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Haynes Timberland Fined $100,000 in Township 37 Marijuana Grow CaseRead the Press Release
Contact: Joel Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Haynes Timberland, Inc., a Maine corporation, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. and ordered to pay a $100,000 fine for managing and controlling property used to manufacture marijuana.
The charge arose out of the September 22, 2009 seizure of 2,943 marijuana plants in Township 37, Washington County. Haynes Timberland, Inc. and co-defendant, Malcolm French, were also ordered to forfeit $1,550,000, a warehouse compound in Township 31, and a hunting camp in LaGrange that facilitated drug trafficking.Judge Woodcock continued the sentencings of co-defendants French, Rodney Russell and Kendall Chase that had been scheduled to take place today.
The case was investigated by the Maine Drug Enforcement Agency the Internal Revenue Service-Criminal Investigation and the U.S. Department of Homeland Security, Office of Homeland Security Investigations, with assistance from the U.S. Drug Enforcement Administration, Maine State Police, Washington and Penobscot County Sheriff’s Offices, Maine Warden Service, Maine Forest Service and U.S. Customs and Border Protection.
Fourteen Individuals Convicted for Their Participation in Large-Scale Drug Distribution ConspiracyRead the Press Release
WASHINGTON – Eight current and former law enforcement officers, four correctional officers and two other individuals have been convicted for their participation in trafficking narcotics and narcotics proceeds for a large-scale drug trafficking organization, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina.
In April 2013, the FBI initiated an undercover investigation regarding allegations of systemic corruption within the Northampton County, North Carolina, Sheriff’s Office (NCSO). Undercover agents posed as members of a large-scale drug trafficking organization that was responsible for introducing kilogram quantities of narcotics to be transported up the I-95 corridor. In connection with their guilty pleas, the defendants admitted that they understood that they were recruited to work for the drug trafficking organization because of their status as law enforcement officers or ties to law enforcement. The investigation grew as the original targets recruited others to participate. The defendants transported purported narcotics and narcotics proceeds for the drug trafficking organization in exchange for bribe payments, and some defendants carried firearms during this time.
The following individuals pleaded guilty in the Eastern District of North Carolina:
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Lann Tjuan Clanton, a former correctional officer with the Virginia Department of Corrections, pleaded guilty to drug conspiracy and firearm charges today;
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Ikeisha Jacobs, a former sergeant with the NCSO, pleaded guilty to drug conspiracy, firearm and bribery charges today;
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Jason Boone, a former captain with the NCSO, pleaded guilty to drug conspiracy and bribery charges today;
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Adrienne Moody, a former correctional officer with the North Carolina Department of Public Safety, pleaded guilty to a drug conspiracy charge today;
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Cory Jackson, a former deputy sheriff of the NCSO, pleaded guilty to a drug conspiracy charge today;
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Jimmy Pair Jr., a former lieutenant with the NCSO, pleaded guilty to drug conspiracy and bribery charges today;
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Curtis Boone, a former deputy sheriff with the NCSO, pleaded guilty to drug conspiracy and bribery charges today;
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Alphonso Ponton, a former sergeant with the Virginia Department of Corrections, pleaded guilty to a drug conspiracy charge today;
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Thomas Jefferson Allen II, a former sergeant with the NCSO, pleaded guilty to drug conspiracy and bribery charges today;
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Wardie Vincent Jr., a former detective sergeant with the NCSO, previously pleaded guilty to drug conspiracy and firearms charges;
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Alaina Sue-Kam-Ling, a former correctional officer with the North Carolina Department of Public Safety, previously pleaded guilty to a drug conspiracy charge;
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Kavon Phillips, a former correctional officer with the North Carolina Department of Public Safety, previously pleaded guilty to a drug conspiracy charge;
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Crystal Pierce, of Raleigh, North Carolina, previously pleaded guilty to a drug conspiracy charge; and
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Tosha Dailey, a former 911 dispatch operator for Northampton County, previously pleaded guilty to a drug conspiracy charge.
The FBI Charlotte Division’s Raleigh Resident Agency investigated the case. Trial Attorneys Lauren Bell and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Toby W. Lathan of the Eastern District of North Carolina are prosecuting the case.
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Former Tribal Casino Employee Charged in Federal Court with EmbezzlementRead the Press Release
WICHITA, KAN. – A former tribal casino employee has been charged in federal court with embezzlement, U.S. Attorney Barry Grissom said today.
Donald M. Collins, 32, Wetmore, Kan., is charged with one count of embezzling tribal funds.
A criminal information filed in U.S. District Court in Wichita Tuesday alleges the crime occurred while Collins worked as players club manager for the Sac and Fox Casino, which is owned by the Sac and Fox Nation of Kansas and Nebraska. He is accused of making $13,326 in counterfeit players cards. The cards allowed the bearers to play various casino games at the casino. Approximately $17,400 was fraudulently won by the users of the counterfeit cards.
If convicted, he faces a maximum penalty of five years in federal prison and a fine up to $250,000. The Kansas State Gaming Agency investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Former Sacramento Man Indicted for Selling Firearms and NarcoticsRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a 38-count indictment today against David Guevara-Pimentel, 22, of Fort Drum, New York, formerly of Sacramento, charging him with dealing and manufacturing firearms without a license, illegal possession of a machine gun, possession of an unregistered short-barreled shotgun, possession of a firearm with an obliterated serial number, and distribution of methamphetamine, cocaine, and heroin, United States Attorney Benjamin B. Wagner announced. Guevara-Pimentel was arrested on January 22, 2016, in New York, where he was stationed as a U.S. Army Private. U.S. Army Criminal Investigation Command made the arrest.
According to court documents, on 19 separate occasions between August 11, 2014, and April 29, 2015, Guevara-Pimentel met with an undercover agent and sold him a variety of firearms, including a short-barreled shotgun, unserialized AR-15-style rifles, and handguns. On many of these occasions, Guevara-Pimentel sold the agent methamphetamine, cocaine, or heroin. Altogether, Guevara-Pimentel sold the undercover agent 49 firearms, many of which lacked a serial number or other identifying markings. On January 22, 2016, Guevara-Pimentel was found to possess a fully automatic machine gun.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the West Sacramento Police Department, and the Woodland Police Department. Assistant United States Attorney Ross K. Naughton is prosecuting the case.
If convicted, Guevara-Pimentel faces the following possible penalties: a maximum statutory penalty of five years in prison and a $250,000 fine for the charges of dealing firearms without a license and possession of a firearm with an obliterated serial number, 10 years in prison and a $250,000 fine for illegal possession a machine gun, 10 years in prison and a $10,000 fine for possession of an unregistered short-barreled shotgun, 20 years in prison and a $1 million fine for any of the narcotics-distribution charges. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Plan Trustee Sentenced for Embezzling over $1 Million, Income Tax EvasionRead the Press Release
DAYTON – Timothy Hock, 51, currently of Chicago, was sentenced to 42 months in prison and ordered to pay more than $1.3 million in restitution for his role in the embezzlement from a bankruptcy estate and income tax evasion.
Hock was ordered to pay approximately $1 million in restitution to Domin-8 Enterprises Solutions, Inc. (Domin-8) and approximately $326,000 in restitution to the Internal Revenue Service (IRS).
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Guy A. Ficco, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Division, announced the sentence handed down today by U.S. District Judge Thomas M. Rose.
According to court documents, Hock, who was a Certified Public Accountant, was the controller for Domin-8 when the company (and five other related entities) filed for Chapter 11 bankruptcy in September 2009. Domin-8 was a Mason, Ohio-based company that provided software to companies that managed rental properties.
During the bankruptcy proceedings, Hock was responsible for handling the company’s liquidation and transfer of assets, completing claims reviews and making appropriate distributions to various creditors of the company.
He embezzled approximately $1,080,289.73 which belonged to the bankruptcy estate of Domin-8 through a variety of means, including writing checks to himself from the trust’s bank accounts.
These checks were deposited into Hock’s personal bank account and then used for his personal expenditures. In addition, Hock wrote cashier’s checks from the trust’s bank accounts in order to purchase several personal vehicles, including two luxury vehicles, a 2006 Land Rover, a 2009 Jaguar XF and a 2010 Honda Civic for his daughter. Hock attempted to conceal his activities by submitting four false post confirmation reports in which he did not include all the payments he made to himself and all expenses paid on his behalf.
Hock committed tax evasion on his 2010, 2011 and 2012 tax returns by claiming that his taxable income was much less than it actually was. In total, he attempted to evade paying approximately $326,000 in federal income taxes for those years.
Hock pleaded guilty to the embezzlement and tax evasion charges on August 19, 2015.
“Tax evasion and bankruptcy fraud of this magnitude and with this degree of trickery, dishonesty and deceit, deserves to be punished,” said Guy A. Ficco, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “The IRS, FBI, and U.S. Attorney’s Office remain determined and vigilant in ferreting out such schemes to cheat the honest taxpayers."
U.S. Attorney Stewart commended the cooperative law enforcement investigation, as well as Assistant United States Attorney Alex R. Sistla, who is prosecuting the case.
Former L.A. County Sheriff Lee Baca Agrees to Plead Guilty to Lying to Federal Authorities during Investigation into His DepartmentRead the Press Release
LOS ANGELES – Former Los Angeles County Sheriff Lee Baca has agreed to plead guilty to a felony charge of making a false statement to federal authorities who were conducting a wide-ranging corruption and civil rights investigation into the Sheriff’s Department.
In a plea agreement filed this morning in United States District Court, Baca admitted that he lied to the FBI and the United States Attorney’s Office when he falsely stated that he did not know that LASD officials were going to approach the FBI’s lead agent on the investigation in 2011. In fact, Baca was aware that his deputies were going to contact the agent, and he directed that they “should do everything but put handcuffs” on her, according to his plea agreement.
During an April 12, 2013 meeting with FBI agents and Assistant United States Attorneys, Baca falsely stated that he was not made aware of his deputies contacting the FBI case agent until he received a phone call from the FBI’s then-Assistant Director in Charge of the Los Angeles Field Office, who told Baca that deputies had threatened to arrest the agent. In the plea agreement, Baca admitted that he knew his statement was untrue and that it was illegal to lie to federal investigators.
“Today’s charge and plea agreement demonstrate that illegal behavior within the Sheriff’s Department went to the very top of the organization,” said United States Attorney Eileen M. Decker. “More importantly, this case illustrates that leaders who foster and then try to hide a corrupt culture will be held accountable.”
The threat to arrest the FBI case agent was part of an extensive scheme to obstruct justice which previously has resulted in eight LASD deputies with ranks as high as captain being convicted of federal charges. The ninth person to be charged in relation to conspiracy to obstruct justice – former Undersheriff Paul Tanaka – is currently scheduled to go on trial on March 22.
During the course of the investigation that was being conducted by the FBI, the U.S. Attorney’s Office and a federal grand jury, a sheriff’s deputy assigned to the Men’s Central Jail accepted a bribe to smuggle a cell phone into the facility. The phone was delivered to an inmate who was working as an FBI informant. Jail officials later discovered the phone, linked it to the FBI and determined that the inmate was an informant. This led to a month-long scheme to obstruct the investigation, which included members of the conspiracy concealing the informant from the FBI, the United States Marshals Service and the grand jury. Members of the conspiracy also engaged in witness tampering and harassing the FBI agent.
Baca participated in a September 25, 2011 meeting in which senior members of the department discussed approaching the FBI case agent. The next day, two LASD sergeants approached the agent and threatened her with arrest.
During the 2013 meeting with the FBI and Assistant United States Attorneys, Baca denied knowing about the plan to approach the case agent, and he also denied participating in conversations about “keeping the FBI and Inmate AB away from each other,” according to the statement of facts in the plea agreement.
“One of the measures of an organizational culture is how it handles its allegations of misconduct,” said David Bowdich, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Mr. Baca set the wrong command climate and allowed that culture to fester, instead of fostering an environment of accountability. In short, he did not lead when he had the opportunity to do so.”
In the plea agreement, the parties agree that the federal sentencing guidelines call for a sentence of up to six months in federal prison, and they have agreed that Baca should not receive a sentence above the guideline range. Once he pleads guilty, the actual sentence will be determined by the federal judge presiding over the case. But if the court decides to impose a sentence greater than six months, Baca would be allowed to withdraw from the plea agreement and face a possible indictment.
Baca made his initial appearance this morning in federal court, and he is expected to formally enter his guilty plea this afternoon at 2:30.
The case against Baca is the result of an investigation by the FBI, and is one in a series of cases resulting from an investigation into corruption and civil rights abuses at county jail facilities in downtown Los Angeles. As a result of the investigation, 17 current or former members of the Los Angeles Sheriff’s Department have now been convicted of federal charges. If a federal judge accepts the plea agreement this afternoon, Baca would become the 18th person to be convicted.
Former Financial Officer at Local Oil and Gas Company Pleads Guilty to Forgery and Signing a False Tax ReturnRead the Press Release
Oklahoma City, Oklahoma – LARRY SANFORD WATERS, of Edmond, Oklahoma, pled guilty yesterday to check forgery and signing a false federal income tax return, in connection with a $1.5 million embezzlement from a local oil and gas company, announced Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma.
On January 27, 2016, Waters was charged by information with one count of a forged security and one count of filing a false federal income tax return. From 1986 until early 2014, Waters handled accounting work and served as the financial officer at an Oklahoma City oil and gas company. As part of his job, Waters prepared checks for the company to pay operating expenses and to pay oil well owners for their profits. Yesterday, Waters pled guilty to preparing an unauthorized company check, in the amount of $65,541.32, to a separate business under his control. He admitted that he did not have his employer’s permission in August 2011 to issue the check with the oil and gas company owner’s digital signature. As part of his plea, Waters further admitted that he embezzled funds from his former employer from around 2004 through February of 2014 and stipulated that the total loss to the oil and gas company from his embezzlement scheme was $1,573,339.31. Waters has already made payment to the victim in full for the stipulated amount of restitution.
In addition to pleading guilty to forgery, Waters pled guilty to signing a false tax return. He admitted that on January 25, 2013, he signed a personal federal tax return for the 2011 calendar year that he knew was false because it reported only $379,373 in total income. At yesterday’s plea hearing, Waters admitted that he omitted on the 2011 return more than $420,000 of embezzled income for that year from his former employer.
At sentencing, Waters faces up to 10 years in prison on the forgery count, plus three years of supervised release, and a $250,000 fine. Waters also faces up to three years in prison on the tax count, in addition to one year of supervised release, a $250,000 fine, and restitution to the Internal Revenue Service for the tax loss. Waters will be sentenced on May 11, 2016. Reference is made to the information and other public filings for further information.
This case is the result of an investigation by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigations, and it is being prosecuted by Assistant U.S. Attorney Chris M. Stephens.
Five Defendants Sentenced in Extensive Stolen Identity Tax Refund Fraud SchemeRead the Press Release
Five defendants were sentenced for their participation in an extensive stolen identity tax refund fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Ronald Jerome Scriven was sentenced to 108 months in prison, to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $7,521,485. Danesa Latoya Webb was sentenced to 54 months in prison, to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $3,271,603. The defendants each previously pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, one count of misusing Social Security numbers, in violation of Title 42, United States Code, Section 408(a)(8), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
On January 28, 2016, co-defendant Walter Waitus Pressley was sentenced to 31 months in prison, to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $1,361,326. Michael Dwight Brown, a/k/a “Big Mike,” was sentenced to 24 months in prison, to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $340,976. On February 2, 2016, Fritznel Jacques, a/k/a “Glacier,” was sentenced to 18 months in prison, to be followed by three years of supervised release, and was ordered to pay restitution in the amount of $493,733. Each of the defendants previously pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286.
According to court documents, Scriven created nine business entities, seven of which were tax preparation businesses using his name, the names of co-conspirators, or the names of individuals whose identities were stolen. Scriven, Webb and others obtained electronic filing identification numbers (EFINs) from the IRS for the seven tax preparation businesses for the purpose of electronically submitting false tax returns. Scriven, Webb and Pressley recruited taxpayers and obtained their personal identifying information (PII), such as their names and Social Security numbers, for the purpose of submitting false tax returns to the IRS. Scriven and Webb also used the PII of living and deceased individuals for the same fraudulent purpose. Tax preparers’ fees and other fees totaling $700,000 were deducted from the tax refunds and were deposited into bank accounts controlled by the co-conspirators.
Scriven and Webb printed refund checks in the names of taxpayers whose names and Social Security numbers were used to file the false tax returns. Some of the co-conspirators accompanied taxpayers, whose identities they had used to file false tax returns, to cash the refund checks and would then demand a substantial portion of the proceeds obtained from those cashed checks.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Lois Foster-Steers.
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
El Paso Federal Grand Jury Charges Two in Connection with Ammunition Smuggling SchemeRead the Press Release
This afternoon, a federal grand jury returned an indictment charging two El Paso residents for scheming to smuggle thousands of rounds of ammunition into the Republic of Mexico announced United States Attorney Richard L. Durbin, Jr., Homeland Security Investigations (HSI) Special Agent in Charge Waldemar Rodriguez and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge William A. Temple, Dallas Field Division.
The three-count federal indictment charges Sofia Acosta de Caballero, age 34, and Edward Navarro, age 29, with one count of conspiracy to smuggle goods from the United States. Acosta is also charged with two substantive counts of smuggling goods from the United States. Navarro is also charged with one substantive count of smuggling goods from the United States.
The indictment alleges that from January 2015 until January 2016, the defendants conspired to purchase approximately 80,000 rounds of assorted caliber ammunition on the Internet with the understanding and purpose that this ammunition was to be exported to Mexico. The conspiracy charge also alleges that the defendants purchased several firearms with the understanding and purpose that these firearms were to be exported to Mexico.
On January 13, 2016, federal authorities at the Bridge of Americas Port of Entry in El Paso seized approximately 4,550 rounds of .38 caliber ammunition discovered inside a car being driven by Acosta. At the time, Acosta was also in possession of a Ruger Model Mini 14 magazine.
Acosta has remained in federal custody since January 13, 2016. Navarro is considered a fugitive.
Waldemar Rodriguez, special agent in charge of HSI El Paso, said HSI will continue to pursue those who present a threat to our national security. “HSI works aggressively to identify and investigate individuals tied to transnational criminal organizations who attempt to export weapons and ammunition,” said Rodriguez. “HSI and our law enforcement partners are committed to uphold the exportation laws of the United States to ensure that U.S. weapons don't end up in the wrong hands.”
William A. Temple, special agent in charge of the ATF Dallas Field Division, said, “The indictments rendered today are yet another successful example of law enforcement agencies collaborating to combat violent crime. ATF actively works alongside our law enforcement partners to provide investigative expertise and guidance in all firearms and ammunition related investigations.”
Upon conviction of the conspiracy charge, the defendants face up to five years in federal prison. Each substantive firearms charge calls for up to ten years in federal prison upon conviction.
This indictment resulted from an investigation conducted by the Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms and Explosives with assistance from the United States Customs and Border Protection. Assistant United States Attorneys Michael C. Williams and Steven Spitzer are prosecuting this case on behalf of the Government.
HSI encourages the public to report any suspicious activity through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form. Both are staffed around the clock by investigators. From outside the U.S. and Canada, callers should dial 802-872-6199. Hearing impaired users can call TTY 802-872-6196.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Eagle Butte Man Sentenced for Child AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Child Abuse was sentenced on February 8, 2016, by U.S. District Judge Roberto A. Lange.
Eric Brown, age 42, was sentenced to 24 months in custody, 2 years of supervised release, and $100 special assessment to the Federal Crime Victims Fund.
Brown was indicted for Aggravated Sexual Abuse of a Child and Child Abuse by a federal grand jury on July 14, 2015. He pled guilty to Child Abuse on November 16, 2015.
On January 17, 2015, Cheyenne River Sioux Tribe Law Enforcement was contacted by an employee at the Ampride gas station in Eagle Butte, regarding an intoxicated person driving a gold Buick Regal with a small child in the car. An officer observed the vehicle swerve towards the center line and then correct its course, so he initiated a traffic stop on the vehicle. The driver was Brown, and the passenger was a 5-year old child.
The child was not wearing a seatbelt and was not otherwise secured in the vehicle. The officer conducted an investigation and arrested Brown for driving under the influence (DUI).
There were previous times when Brown drove while intoxicated with that same child in the car. On July 25, 2014, Brown was arrested for DUI, and the same 5-year-old child was in the vehicle with Brown at that time.
This case was investigated by the Federal Bureau of Investigation and the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
Brown was immediately turned over to the custody of the U.S. Marshals Service.
Downsville man pleads guilty to possessing firearms and ammunition after being convicted of a felonyRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Downsville man pleaded guilty Tuesday to possessing firearms, ammunition and an unregistered silencer after he was previously convicted of a felony.
William David Futch, 44, of Downsville, La., pleaded guilty before U.S. Magistrate Judge Karen L. Hayes to one count of possession of firearms and ammunition by a convicted felon and one count of possession of an unregistered firearm silencer. The pleas will become final when accepted by U.S. District Judge Robert G. James. According to the guilty plea, Ouachita Parish Sheriff’s deputies responded to a complaint on April 11, 2014 that Futch was at his home firing shots. During this investigation, Futch was found in possession of a .45/.410 revolver, a 12 gauge shotgun, .a 22 caliber rifle with scope, a .22 caliber stainless rifle, a .22 caliber rifle with scope and bipod, a third .22 caliber rifle, a .223 caliber rifle, a 9 mm handgun, a .40 caliber handgun, ammunition, and a firearm silencer. He was previously convicted of a felony on three separate occasions.
Futch faces 10 years in prison, three years supervised release, forfeiture of the seized weapons and ammunition, and a $250,000 fine for each count. A sentencing date of June 20, 2016 was set.
This investigation and prosecution is part of Project Safe Neighborhoods, which is a Department of Justice initiative to reduce firearm crimes by preventing the possession and use of firearms by dangerous and persistent felons and others not authorized to possess a firearm and to promote firearm safety.
The ATF and the Ouachita Parish Sheriff’s Department conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie is prosecuting the case.
Dilkon-Area Man Sentenced to 51 Months in Prison for Attack on Elderly WomanRead the Press Release
PHOENIX – Earlier this week, Mark Benally, Jr., 29, of Indian Wells, Ariz., a member of the Navajo Nation, was sentenced by U.S. District Judge David G. Campbell to 51 months in prison. Benally previously pleaded guilty to assault with a dangerous weapon.
The investigation revealed that on May 17, 2015, Benally entered the home of his elderly female victim, also a member of the Navajo Nation, near Dilkon, Ariz. There, he struck her on the face, neck, and throat, causing visible injuries. The assault occurred on the Navajo Nation Reservation. Benally’s sentence was increased because his elderly victim was particularly vulnerable.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Navajo Nation Police Department. The prosecution was handled by Alexander W. Samuels and Sharon K. Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-15-8168-PCT-DGC
RELEASE NUMBER: 2016-009_Benally
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Detroit One Collaboration Leads to Indictment of 12 Members of Local Chapter of National Violent GangRead the Press Release
The collaboration of local, state and federal law enforcement under the Detroit One program has led to the indictment and arrests of 12 members of the Crips street gang in northwest Detroit, United States Attorney Barbara L. McQuade announced today. Joining McQuade in the announcement was Special Agent in Charge Robin Shoemaker, Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division and Chief James Craig, Detroit Police Department. According to the indictment, the Detroit chapter of the “Rollin 60s Crips” is a branch of the national street gang founded in Los Angeles in the mid-1970s. Starting around 2006, a Detroit set of the Rollin 60s was created, and now has approximately 150 members. The indictment alleges that the Rollin 60s Detroit chapter is a violent organization responsible for assaults, robberies, carjackings and the unlawful possession and trafficking of firearms and narcotics in the Detroit metropolitan area during the last nine years. The gang uses violence to avenge acts of rival gang members, to intimidate witnesses and to advance members’ positions within the gang. Under the Detroit One initiative, and through the lead efforts of ATF’s Comprehensive Violence Reduction Partnership (“CVRP”) and the FBI’s Violent Crime Task Force, law enforcement has identified the leaders and key members of this organization, and charged 12 individuals by indictment in federal court. The CVRP includes representatives of the Detroit Police Department, Michigan State Police and Michigan Department of Corrections. Among those charged today are: • Jerome Hamilton 23, of Detroit, charged with Racketeer Influenced and Corrupt Organizations Act (“RICO”) conspiracy, assault with a dangerous weapon in aid of racketeering and using a firearm during a crime of violence; • Darriyon Mills, 24, of Detroit, charged with RICO conspiracy, assault with a dangerous weapon in aid of racketeering, carjacking and using a firearm during a crime of violence; • Jonathan Barber, 24, of Detroit, charged with RICO conspiracy, assault with a dangerous weapon in aid of racketeering, and carrying and using an explosive device to commit a felony; • Deaires Foster, 22, of Irondale, Alabama, charged with RICO conspiracy; • Martel Strong, 26, of Detroit, charged with RICO conspiracy; • Timothy Price, 26, of Detroit, charged with RICO conspiracy; • Sadeisha Johns, 30, of West Bloomfield, charged with RICO conspiracy; • Soumo Kennedy, 22, of Detroit, charged with RICO conspiracy, carjacking and using a firearm during a crime of violence; • Brandon Kennedy, 22, of Detroit, charged with RICO conspiracy; • Charles Anthony Smith, 31, of Windsor, Ontario, Canada, charged with RICO conspiracy; • Jermell Julius Coleman, 35, of Detroit, charged with RICO conspiracy; assault with a dangerous weapon in aid of racketeering, and using a firearm during a crime of violence; • William Steele, 34, of Charlotte, North Carolina, charged with RICO conspiracy. “The Detroit One partners are systematically dismantling the most violent street gangs in Detroit,” McQuade said. “Our effort is relentless. We believe that by removing the gang members who are committing violent crime, we can provide our neighborhoods with the public safety we should all expect and deserve.” “These individuals had no regard for the welfare of others,” said ATF Detroit Special Agent in Charge S. Robin Shoemaker. Their brazen display of violence carried out with assaults, robberies, carjacking, the unlawful possession and trafficking of firearms and narcotics in and around the Detroit metropolitan area is over. ATF, working closely with DPD, MSP, MDOC in our CVRP initiative, will see to it that these dangerous individuals and those who will take their place are removed from our streets. No longer will they threaten the safety of our citizens.” "As promised the Detroit One partners continue to disrupt and bring to an end the atrocities committed against our citizens by such a violent gang," said Chief James Craig. "The efficacy of this program is rooted in the belief that our citizens and neighborhoods deserve to be free of such heinous acts." "Today's announcement of the indictments and arrests of these twelve individuals demonstrates the continuing commitment of Detroit area Law Enforcement, as a united front, to substantially chip away at the ability of violent gangs to operate in our community," said David P. Gelios, Special Agent in Charge, FBI - Detroit Division. "The collective strength of the agencies involved in the Detroit One Program represents a formidable deterrent to violent gangs and criminal enterprises, and continues to result in the improvement in the quality of life in Detroit." By working collaboratively, local, state and federal law enforcement is striving to maximize its ability to identify and arrest the persons and groups initiating the violence in Detroit. This indictment is the latest in a string of charges from the United States Attorney’s Office and Wayne County Prosecutor’s Office during the last two years involving violent street gangs in the city of Detroit, including: • Nine members of the Bounty Hunter Bloods street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering; • Thirteen members of the Latin Counts street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering; • Fourteen members of the Phantom Outlaw Motorcycle Club / Vice Lords street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering; • Four members of the Vice Lords in state court for armed robbery and a Vice Lord leader charged under the federal street gang statute for his role in that armed robbery; • Three members of the Band Crew street gang charged under the Michigan gang felony statute for violent acts in furtherance of their gang activities and eight members of the Band crew for federal racketeering conspiracy and other violent acts in furtherance of racketeering; • Ten members of the Related Through Money street gang for federal racketeering conspiracy and other violent acts in furtherance of racketeering; and • Eight members of the Traveling Vice Lords for federal racketeering conspiracy and other violent acts in furtherance of racketeering. These charges are just some of the tangible and significant results of this joint effort. Most significantly, Detroit has seen a reduction in homicides every year since the Detroit One collaboration began in 2013, and a 24 percent total reduction since 2012. Seven of the twelve defendants were arrested today and will be making their initial appearance in federal court in Detroit this afternoon. An indictment is only a charge and is not evidence of guilt. A defendant is presumed not guilty unless convicted at trial by a jury.Colombian National Pleads Guilty to Immigration OffenseRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MARCELINO OLAVE-GRANJA, age 46, a native of Colombia, pled guilty today to a one-count indictment for illegal reentry of a removed alien, in violation of Title 18, United States Code, Section 1326(a).
According to court documents, OLAVE-GRANJA was previously removed from the United States on June 9, 1998. OLAVE-GRANJA was later found in the Eastern District of Louisiana on June 11, 2015 and had not received permission from the Attorney General of the United States or the Secretary of the Department of Homeland Security to reenter.
OLAVE-GRANJA faces a maximum term of imprisonment of two (2) years, as well as a fine of $250,000. United States District Court Judge Susie Morgan set sentencing for April 13, 2016.
U.S. Attorney Polite praised the work of United States Customs and Border Protection agents in investigating this matter. Assistant United States Attorney Jon Maestri is in charge of the prosecution.
Burley Man Pleads Guilty to Possessing and Distributing Child PornographyRead the Press Release
POCATELLO – Danny Henderson, 42, of Burley, Idaho, pleaded guilty today in United States District Court to possessing and distributing child pornography, U.S. Attorney Wendy J. Olson announced. Henderson was indicted on October 27, 2015.
According to the plea agreement, on May 26, 2015, Henderson sent twenty-one sexually exploitative images of minors to another person via email. A subsequent search of his residence revealed several computers with numerous sexually exploitive images of minors. Henderson admitted that he possessed the images, knowing the images contained visual depictions of minors engaged in sexually explicit conduct, and also knowing that production of such visual depictions involved the use of minors in sexually explicit conduct.
The charge of possession of child pornography is punishable by up to twenty years in prison, up to five years of supervised release, and a fine of up to $250,000. The charge of distribution of child pornography is punishable by at least five and up to twenty years in prison, at least three and up to five years of supervised release, and a fine of up to $250,000.
Henderson is scheduled to be sentenced on May 20, 2016, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by Homeland Security Investigations.
Alaskan Physician Sentenced to 20 Years for Receiving and Distributing Child PornographyRead the Press Release
An Alaskan physician was sentenced to 20 years in prison and a lifetime term of supervised release for receiving and distributing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Karen. L. Loeffler of the District of Alaska.
Dr. Greg Alan Salard, 54, of Wrangell, Alaska, was found guilty on July 28, 2015, after a six-day trial before Chief U.S. District Judge Timothy M. Burgess of the District of Alaska, who also sentenced Salard late yesterday and ordered him to pay a $25,000 fine.
According to evidence presented at trial, between June and October 2014, an Internet Protocol address linked to Salard was used to share known child sexual exploitation files and a laptop computer seized from Salard’s home contained peer to peer software that was used to share one of the images identified during the investigation. A forensic examination of the laptop uncovered evidence of hundreds of child sexual exploitation files, that multiple searches had been run on the laptop for a term associated with child sexual exploitation and that child sexual exploitation videos had been viewed on the computer. The evidence also revealed that a program designed to erase or “wipe” computer files had been used multiple times, including on the morning the search warrant was executed.
The FBI investigated the case, with assistance from the U.S. Forest Service; the Petersburg, Alaska, Police Department; the Wrangell Police Department; and the Juneau, Alaska, Police Department. Assistant U.S. Attorney Kyle Reardon of the District of Alaska and Trial Attorney Leslie Williams Fisher of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
9 February 2016
Virginia Man Pleads Guilty to Traveling into the District of Columbia to Engage in Illicit Sexual Conduct with a MinorRead the Press Release
WASHINGTON – Wesley Breeden, 30, of Springfield, Va., pled guilty today to traveling interstate to engage in illicit sexual conduct with a minor, announced U.S. Attorney Channing D. Phillips, Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Breeden entered the guilty plea in the U.S. District Court for the District of Columbia. The Honorable Tanya S. Chutkan is to sentence him on April 25, 2016. Breeden faces a maximum sentence of 30 years in prison as well as a fine of $250,000.
According to the government's evidence, on July 30, 2015, Breeden contacted an undercover officer with the FBI's Child Exploitation Task Force, through a social network site. Over the course of the next several days, Breeden engaged in e-mail and text-messaging conversations with the undercover officer, whom the defendant believed was the father of an under-aged girl. During the course of these conversations, Breeden arranged with the undercover officer to meet for the purpose of engaging in sexual acts with the child.
On Aug. 4, 2015, Breeden traveled from Virginia to a pre-arranged meeting place in Washington, D.C. When he arrived, he was arrested. He has been in custody ever since.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
In announcing the guilty plea, U.S. Attorney Phillips, Assistant Director in Charge Abbate, and Chief Lanier commended the work of the MPD Detectives and Special Agents of the FBI’s Child Exploitation Task Force. They also expressed appreciation for the efforts of Assistant U.S. Attorney Andrea L. Hertzfeld, who is prosecuting the case.
Virginia Beach Man Pleads Guilty to Distribution of Heroin Resulting in DeathRead the Press Release
NORFOLK, Va. – Gregory Hatt, 28, of Virginia Beach, pleaded guilty today to charges of conspiracy to distribute heroin, distribution of heroin resulting in death, distribution of heroin, possession with intent to distribute heroin and cocaine, and the possession of a firearm in furtherance of a drug trafficking crime.
“Hundreds of people die each year in the Commonwealth from heroin and opioid overdoses, and the Tidewater area leads the state in heroin overdose deaths, with 87 fatalities in the first nine months of 2015,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Make no mistake, arrests and criminal prosecutions will not alone solve this problem, but they are an important part of the solution. We are committed to working with the Virginia Office of the Attorney General and our partners across federal, state, and local law enforcement to combat the abuse of heroin and prescription opiates, which can have devastating effects on victims, their families, and our communities.”
“The Naval Criminal Investigative Service is committed to working with our law enforcement partners to bring to justice those who are driving this deadly heroin wave, taking lives and destroying families in the Tidewater area,” said Timothy Quick, Special Agent in Charge of the NCIS Norfolk Field Office. “NCIS will use our unique authorities, resources and capabilities in combatting this growing problem, to help protect Sailors, Marines, Department of the Navy civilians, DON families, and the communities in which we work and live.”
“This case is indicative of the popularity and prevalence of heroin in the Tidewater Area of Virginia, and the longstanding, effective partnerships between the Local, State, and Federal agencies in the region, tasked with these investigations,” said William Dean, Deputy Chief of Virginia Beach Police.
In a statement of facts filed with the plea agreement, Hatt allegedly sold heroin, cocaine, and other narcotics to local residents out of a house he rented in Virginia Beach from December 2014 through July 2015. On Dec. 26, 2014, Hatt distributed heroin at his house to Monica Beaudry, a 23-year-old Virginia Beach woman, who later overdosed. Hatt’s roommate implored him to call 911, but Hatt refused. After some delay, Hatt drove her to Chesapeake Regional Medical Center where she was pronounced dead. Hatt was aware of Beaudry’s death, but continued to distribute heroin from his residence and from other Virginia Beach locations through July 2015. On July 24, 2015, law enforcement agents with NCIS and Virginia Beach Police Department executed a search warrant on Hatt’s residence. The agents found over 36 grams of heroin, 17 grams of cocaine, various drug paraphernalia, and multiple firearms including a fully loaded sawed-off shotgun.
Hatt was charged via superseding indictment on Dec. 18, 2015, and faces a maximum penalty of life in prison when sentenced on May 19, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Timothy Quick, Special Agent in Charge of NCIS Norfolk; and William Dean, Deputy Chief of Virginia Beach Police, made the announcement after the plea was accepted by U.S. District Judge Raymond A. Jackson. Special Assistant U.S. Attorneys Alyssa Nichol and John Butler are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-140.
Two Men Receive Multi-Year Sentences for Brutal Beatings on Navajo ReservationRead the Press Release
PHOENIX – Yesterday, Ray Manygoats, 26, of Tuba City, Ariz., was sentenced by U.S. District Judge G. Murray Snow to 70 months’ imprisonment after Manygoats previously pleaded guilty to two counts of assault resulting in serious bodily injury. Judge Snow previously sentenced co-defendant, Lee Bighorse Reed, 23, also of Tuba City, Ariz., to 84 months’ imprisonment on the same charges. Both defendants and victims are members of the Navajo Nation.
The defendants admitted searching for and then beating the two unarmed and unsuspecting victims with a wooden dowel and a metal bar on the Navajo Nation Reservation. The assault resulted in permanent injury to the victims.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Christine Ducat Keller, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-15-08126-PCT-GMS
RELEASE NUMBER: 2016-008_Reed_Manygoats
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Two Drug Dealers Associated with 7th Street Murda Squad Plead to ConspiracyRead the Press Release
Memphis, TN – Two drug dealers associated with the 7th Street Murda Squad have pled guilty to conspiring to distribute several kilos of cocaine. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the pleas today.
According to the indictment and information presented in court, Joe Jones aka “Joe Cobbs” and “Joe Blow,” 37, and Tavious Swift aka “Tabo,” 36, both of Memphis, supplied and distributed cocaine in neighborhoods associated with the 7th Street Murda Squad.
The 7th Street Murda Squad is comprised of Gangster Disciples, Vice Lords, and other neighborhood gangs. The gang is known to have a reputation of violence, boasting members who have been convicted of violent offenses including aggravated assault, robbery, and murder. The criminal organization is primarily based in residential neighborhoods in the northern area of Memphis.
From at least 2012 to April 2015, both defendants conspired with each other, along with additional co-conspirators, to possess with the intent to distribute and did distribute more than five kilograms of cocaine in West Tennessee.Over the aforementioned period, Jones reportedly purchased several quarter-kilograms of cocaine from a co-conspirator on a weekly basis. Jones would distribute the cocaine to multiple people, and maintained stash houses where large quantities of cocaine were stored and packaged for distribution.
Swift purchased multiple ounces of cocaine at a time from Jones. He also purchased several ounces from other co-conspirators. In addition to distributing cocaine, Swift maintained stash houses where large quantities of cocaine were stored and packaged for distribution.
From 2012 to April 2015, the Drug Enforcement Administration (DEA), with support from state, local and federal law enforcement partners, conducted a long-term investigation into the 7th Street Murda Squad.
In April 2015, 16 alleged members and associates of the gang were indicted on federal drug charges. Jones and Swift were among the individuals indicted.
On Monday, February 8, 2016, both Jones and Swift pled guilty to one count of conspiracy to possess with the intent to distribute and to distribute more than 5 kilograms of cocaine.
The defendants are scheduled to be sentenced by U.S. District Judge Sheryl H. Lipman on Thursday, May 19, 2016.
Both defendants face a minimum sentence of 10 years and a maximum sentence of life in federal prison. They also face individual fines of up to $10,000,000.
The cases were investigated by the Memphis DEA Task Force.
Assistant U.S. Attorney John Fabian is prosecuting these cases on the government’s behalf.
Timeshare Telemarketing Fraudsters Plead Guilty to Federal ChargesRead the Press Release
DALLAS — Three defendants charged with offenses stemming from their operation of a telemarketing fraud scheme that targeted persons over age 55, have pleaded guilty to their respective roles in the scheme, announced John Parker, U.S. Attorney for the Northern District of Texas.
Today, one of the lead defendants, Max Chilson, 37, pleaded guilty before U.S. Magistrate Judge Paul D. Stickney to one count of conspiracy to commit mail fraud, wire fraud and telemarketing fraud. The maximum statutory penalty for that offense is 30 years in federal prison, since the conduct affected a financial institution, a $1 million fine and restitution. While not binding on the Court, the government recommends a sentence not to exceed 120 months in custody.
Last week, co-defendants Gunner Dell Jenkins, 36, and Victor Sanchez, 46, pleaded guilty to the same offense. According to their plea agreements, the government recommended a custody sentence not to exceed 60 months for Jenkins and 78 months for Sanchez. Those recommendations also are not binding upon the Court.
Chilson is a resident of Lake Mary, Florida; Jenkins is a resident of Orlando, Florida; and Sanchez is a resident of Hollywood, Florida. Chilson remains on bond; Jenkins and Sanchez are in custody. All three defendants currently are set to be sentenced on July 20, 2016. The remaining five defendants charged in the case are set for trial on August 8, 2016.
According to documents filed in the case, between Spring 2009 through at least October 2010, Chilson agreed with his coconspirators Jenkins, Sanchez, others charged in the indictment and other coconspirators not charged, to commit mail fraud, wire fraud and telemarketing fraud in connection with a telemarketing scheme that targeted and victimized persons over the age of 55 in the U.S. and in Canada. The government contends it could prove the defendants could reasonably foresee the following losses, incurred by 10 or more victims: Chilson - $7,060,092.00; Jenkins - $5,025,610.00; and Sanchez - $12,755,324.37.
As part of the elaborate telemarketing scheme, the conspirators made unsolicited phone calls to owners of resort timeshare properties to induce them into paying fees associated with the bogus sale of their property. They misrepresented the existence of a buyer for their timeshare and solicited money from them to facilitate the sale. They solicited the timeshare owners to enter into agreements to sell their timeshares and pay for alleged “closing costs” with their credit cards, personal checks, bank checks, or through electronic check conversion.
As part of the conspiracy, the defendants also instituted a bogus telephone verification process to make follow-up phone calls to the targeted timeshare owners to give them the false impression they were dealing with entities that would protect their money and property, and to trick them into making recorded statements that no sale had been promised by the telemarketers.
Further, the defendants falsely represented their companies were global leaders in connecting timeshares to buyers, sellers, and renters; their companies were full-service timeshare resale companies and vacation rental agencies with more than 30 years of experience in timeshares; bona fide buyers were interested in purchasing the owner’s properties and offers exceeded the original amount paid for the properties; buyers had already paid money into an escrow account, been approved by a lender, and were ready to close; the timeshare owner would receive all the funds from the purchase within 45 to 90 days; and that the timeshare owners must pay a one-time fee to cover the title search and other closing costs before the sale could close.
After obtaining money from the timeshare owners and diverting it for their own purposes, the defendants, in order to lull the timeshare owners and cause them to not question, investigate or report the status of the transaction, made additional false and fraudulent statements to the timeshare owners, including advising them they were protected under established telemarketing laws and could cancel their contract and request a refund by mailing written notification within seven days of receiving the contract and advising them they could phone or send correspondence to Resorts Condos Management in Irving, Texas, — which, unbeknownst to the owners was in fact, a boiler room.
Information for Timeshare Owners Affected by the Scheme:
1. If you believe you were the victim of criminal fraud committed by any of the defendants, possibly using the below company names, please go to www.postalinspectorsurvey.com/haffar and complete the questionnaire:
Resorts Condos Management;
Timeshare Goldline;
JAMS Management;
Vision Ventures Inc.;
Timeshare Services Today;
Vacation Equity Marketing, Inc.;
Maximum Properties;
Universal Processing Services of Wisconsin, LLC, also known as Newtek Merchant Solutions;
HES Merchant Services, Inc.;
Interval Equity Marketing, Inc.;
Vacations And Resorts; and
Visionary Investments, LLC.
The information you provide through the questionnaire regarding your experience may be helpful in the criminal investigation and prosecution of this case. A law enforcement agent may contact you with additional questions or to request documents you may have received or submitted during your dealings with these businesses. To access the questionnaire, please go to www.postalinspectorsurvey.com/haffar and input the user name timeshare and the password uspis.
Please note that submitting the questionnaire is NOT a substitute for consulting with your own attorney to determine what actions and remedies are available to you through civil litigation or other federal or state agencies.
2. You may access the websites for the U.S. Attorney’s Office for the Northern District of Texas http://www.justice.gov/usao/txn/ to obtain more information on the case or the court proceedings.
3. If you have any questions related to this matter that are not addressed at the above website, you may contact the government at the e-mail address [email protected].
The U.S. Postal Inspection Service is investigating this fraud. The Orlando Police Department provided substantial assistance in the investigation and apprehension of the defendants. Assistant U.S. Attorney C.S. Heath is prosecuting.
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Springfield Man Sentenced to Ten Years in Prison for Child Exploitation ChargeRead the Press Release
BOSTON – Daniel Lorenz, 45, was sentenced today in U.S. District Court in Springfield to 10 years in prison. In November 2015, Lorenz pleaded guilty before U.S. District Court Judge William G. Young to one count of possession of material involving the sexual exploitation of minors.
On March 13, 2014, federal agents executed a search warrant at Lorenz’s Springfield residence. Pursuant to the search warrant, agents seized Lorenz’s personal computer and found 800 videos of child pornography, including many depicting the rape, bondage, and sexual torture of girls as young as three years old.
At the time of the search, Lorenz d told agents that he had a large quantity of child pornography, including image and video files, on his computer and that most of the files depicted girls between the ages of eight and fourteen. Lorenz admitted that he had collected child pornography for at least three or four years and distributed or received child pornography three times per week using e-mail accounts. Lorenz also admitted that he created and utilized multiple social media accounts, including various Facebook and Google+ profiles in the name and image of a minor female, in order to make contact with girls to obtain child pornography and to engage in sexually explicit conversations, which he found “sexually and emotionally exciting.”
At sentencing, Judge Young told the defendant, “you were active in trying to turn this fantasy into reality,” and stated that the defendant’s misconduct “reveals to the Court a most dangerous situation.”
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistance was also provided by the Springfield Police Department. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Southern Texas Man Pleads Guilty to Drug Conspiracy ChargeRead the Press Release
Sigifredo Bazan, a resident of the McAllen, Texas area, pled guilty in federal district court this afternoon to conspiracy to distribute and possess with intent to distribute 5 kilograms or more of a mixture or substance containing a detectable amount of cocaine, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Bazan was detained pending sentencing, which is scheduled for June 7, 2016, at 10:30 A.M. before the Honorable Nancy J. Rosenstengel, United States District Judge. Bazan faces a mandatory minimum sentence of ten years, up to a term of life in federal prison, followed by a minimum of five years on supervised release. Bazan also faces a fine of up to $10,000,000 and a special assessment fee of $100.
Evidence in support of this prosecution was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Agencies participating in this case include the Drug Enforcement Administration and the Internal Revenue Service, Criminal Investigations. This case is being prosecuted by Assistant United States Attorney Monica A. Stump.
Southbridge Man Sentenced for being a Felon in Possession of Firearms and AmmunitionRead the Press Release
BOSTON – A Southbridge man was sentenced today in U.S. District court in Worcester for being a felon in possession of firearms and ammunition.
Mark McForbes, aka “S-Dot,” 33, was sentenced to 15 years in prison and three years of supervised release. In July 2015, McForbes was convicted of being a felon in possession of firearms and ammunition following an eight-day jury trial.
On Aug. 29, 2014, McForbes negotiated the sale of firearms and ammunition in Southbridge to a cooperating witness. McForbes told the cooperating witness that the firearms and ammunition were located in Worcester, where they arranged to meet for the sale. Later that day, McForbes sold two loaded 9mm firearms to the cooperating witness in the basement of a Worcester residence. One of the firearms had been stolen, and the other had an obliterated serial number. McForbes qualifies under federal law as an armed career criminal based upon his prior criminal convictions.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and Southbridge Police Chief Shane Woodson, made the announcement today. The Federal Bureau of Investigation, the U.S. Marshals Service and the Worcester Police Department also assisted with the investigation. The case was prosecuted by Assistant U.S. Attorneys Greg A. Friedholm and Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.
Seventeen Charged in Manhattan Federal Court with Narcotics-Related Offenses, Including the Distribution of Cocaine, Marijuana, and OxycodoneRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge of the U.S. Drug Enforcement Administration New York Division (“DEA”), and Delano A. Reid, Special Agent in Charge of the New York Division of the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), announced today the unsealing of an Indictment in Manhattan federal court charging 17 individuals with narcotics-related offenses. Fifteen of those charged were arrested this morning in the Southern District of New York and will be presented before United States Magistrate Judge Frank Maas later today. One defendant was arrested in the District of Maine this morning and will be presented there later today.
According to the allegations in the Indictment:[1]
Between late 2012 and December 2015, MARIO HERRERA, a/k/a “Mo,” JOHN MIRANDA, JOEL CASADO, a/k/a “Cojo,” CESAR DOMINGUEZ, JOEL QUEZADA, a/k/a “J-Buff,” JONATHAN MORALES, a/k/a “Blood,” and OLIVEROS VILLAREAL conspired to distribute and possess with the intent to distribute five kilograms and more of cocaine and a quantity of marijuana. This charge carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison. The Indictment also charges that between late 2012 and December 2015, HERRERA, MIRANDA, CASADO, DOMINGUEZ, QUEZADA, THOMAS ABREU, a/k/a “TJ,” JONATHAN GOLDEN, a/k/a “Johnny,” CYNTHIA URRA, DEBRA MONCHE, EZEQUIL NIN, a/k/a “Seki,” ANDREW SEIBERT, a/k/a “Blue,” CARLOS ALVAREZ-GONZALEZ, a/k/a “Pops,” KEITH WOODARDS, ALEXANDER CARNO, and KEVIN SKEETE conspired to distribute and possess with the intent to distribute oxycodone, a Schedule II controlled substance. This charge carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Bharara praised the outstanding investigative work of the DEA and the ATF. He also thanked the New York City Police Department, the U.S. Marshals Service, the Putnam County Sheriff’s Department, and the United States Secret Service for their assistance throughout the investigation.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Gina Castellano, Jordan Estes, and Jason A. Richman are in charge of the prosecution.
The charges contained in the Indictment 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 Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Rochester Man Pleads Guilty ToFirearms and Heroin Possession ChargesRead 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 Timothy C. Fitzpatrick, 39, of Rochester, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to possession of heroin with intent to distribute and possession of a firearm and ammunition while being a previously convicted felon. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine.Assistant U.S. Attorney Charles E. Moynihan, who is handling the case, stated that on April 23, 2015, law enforcement officers from the Greater Rochester Area Narcotics Enforcement Team executed a search warrant at 127 Evergreen Street, Apartment #2, in the Rochester. Upon entry, officers detained Fitzpatrick inside of the location and searched it. They seized a loaded Raven Arms .25 caliber semi-automatic pistol, along with heroin and cocaine packaged for sale. Officers also seized drug paraphernalia. Fitzpatrick also had United States currency in his front pants pocket.
The investigation revealed that Fitzpatrick had previously been convicted of Criminal Possession of a Controlled Substance in the Third Degree in 2005, Criminal Sale of a Controlled Substance in the Fifth Degree, in 200, and Attempted Criminal Sale of a Controlled Substance in the Third Degree in 1999. As a result, the defendant is unable to lawfully possess a firearm.
The plea is the culmination of an investigation on the part the Greater Rochester Area Narcotics Enforcement Team composed of law enforcement personnel from the Bureau of Alcohol, Tobacco, Firearms and Explosives under the direction of Special Agent in Charge Delano A. Reid, New York Field Office and the Monroe County Sheriff’s Office, under the direction of Monroe County Sheriff Patrick O’Flynn.
Sentencing is scheduled for May 10, 2016, at 3:30 p.m. before Judge Wolford.
Registered Sex Offender Charged with Online Enticement of A Minor Is Sentenced to More Than 19 YearsRead the Press Release
STATESVILLE, N.C. – A registered sex offender was sentenced today by U.S. District Judge Richard Voorhees to serve 235 months in a federal prison on charges of online enticement of a minor, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Judge Voorhees also ordered Samuel Henry Vinci, Jr., 55, of Granite Falls, N.C. to continue to register as a sex offender and to serve the rest of his life under court supervision after he is released from prison.
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 and Sheriff Alan C. Jones, of the Caldwell County Sheriff’s Office.
According to court records, Vinci was convicted in 1998 of two counts of second degree rape and served 11 years in prison. After serving his prison term, Vinci was required to register as a sex offender and to inform law enforcement about any online identifiers he used, including e-mail addresses.
Court records show that in September 2014, the Caldwell County Sheriff’s Office became aware that Vinci was operating a social media webpage under a fictitious name. According to court records, using his fake social media identity, Vinci befriended an individual he believed to be a 15 year old female, but unknowingly made contact with law enforcement instead. Court records show that over the course of multiple online exchanges, Vinci asked the individual he thought was a minor to engage in sexual acts. During those exchanges, Vinci also repeatedly tried to verify the minor’s identity, sent her photos of himself, and gave her instructions on how to delete evidence of their conversations to avoid detection. According to court records, eventually Vinci asked the individual he believed to be a minor female to meet with him alone. Law enforcement arrested Vinci in when he drove to the agreed location to meet the 15 year old girl.
Vinci pleaded guilty in October 2015 to one count of online enticement of a minor and is currently in federal custody. He will be transferred to custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was handled by the FBI and the Caldwell County Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Cortney Randall of the U.S. Attorney’s Office in Charlotte.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.