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9 February 2016
Bakersfield Man Agrees to Forfeit 3,804 Lower Receiver FirearmsRead the Press Release
SACRAMENTO, Calif. — Christopher Cook, of Bakersfield, agreed to forfeit to the United States approximately 3,804 polymer AR-15 lower receivers manufactured in violation of federal firearms laws, United States Attorney Benjamin B. Wagner announced. AR-15 lower receivers are classified as firearms under federal law.
The AR-15 style rifle is composed of both an upper and lower receiver. The lower receiver contains the trigger control group, hammer and firing mechanism, and contains mounting points for the upper receiver. Federal law classifies AR-15 lower receivers as firearms and, thus, requires that they must be manufactured with serial numbers by a licensed manufacturer, and that they can only be sold by a licensed firearms dealer. In addition, dealers must perform background check on prospective buyers before they can be sold. The unregulated sale of unserialized AR-15 style firearms assembled using similar lower receivers has been a focus of several recent criminal prosecutions in the Eastern District of California.
According to documents filed by the Government in the civil forfeiture case, Christopher Cook manufactured and sold unserialized polymer AR-15 lower receivers online and from his retail store in Bakersfield. Cook also distributed his product to other dealers who sold them at gun shows. Cook’s lower receivers were made of polymer and contained cavities with different color polymer, making it easier for purchasers to mill out the cavities and convert the lower receiver to an operational firearm. Cook holds a dealer’s license and was trained on the laws governing the manufacture and sale of firearms. Cook does not, however, have a manufacturer’s license.
Starting in January 2014, undercover federal agents purchased approximately 33 lower receivers directly from Cook’s retail store, through his company’s online store, or from one of his distributors. Not one of the lower receivers purchased by undercover agents were serialized for later identification, nor did Cook or his distributors initiate background checks. In April 2014, federal agents executed warrants at Cook’s business and personal residence, seizing the 3,804 lower receivers. According to the Government’s complaint, Cook contracted with a Southern California plastics company to manufacture approximately 40,000 of the multi-colored polymer lower receivers. In the stipulation in which he agreed to the forfeiture of the lower receivers, Cook did not admit to the allegations in the Government’s complaint.
“The construction of high-powered firearms with no serial numbers, and the sale of such firearms with no background checks or other regulatory oversight, has become a serious threat to public safety in this area,” said U.S. Attorney Wagner. “As a result of this agreement, over 3,800 unserialized lower receivers will never hit the streets as components in illegally sold firearms.”
“Targeting the illegal manufacturing and distribution of unfinished lower receivers continues to be a priority for ATF. Keeping these untraceable firearms out of the hands of criminals is paramount to protecting the public,” said ATF Special Agent in Charge Jill A. Snyder.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Kevin C. Khasigian prosecuted the case.
Attorney Charged with Forgery of Federal Bankruptcy Court Orders, Wire Fraud and Obstruction of JusticeRead the Press Release
SAN JUAN, P.R. – A federal grand jury in the District of Puerto Rico returned a ten- count indictment against attorney Luis R. Santos-Baez, charging him with Forgery of a Federal Bankruptcy Court Judge’s signature, obstruction of justice and wire fraud, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Santos-Baez was arrested earlier today by agents from Homeland Security Investigations.
The indictment alleges that Luis R. Santos-Baez forged and concurred in the use of a purported legal documents bearing the false signatures of Hon. Mildred Caban-Flores and Hon. Edward A. Godoy, both Judges of the United States Bankruptcy Court for the District of Puerto Rico, for the purpose of authenticating said documents for the bankruptcy proceedings, to wit: documents that appeared to be court orders signed by the Honorable Judges, had in fact never been entered by the bankruptcy court nor signed by any judge.
The indictment also alleges that the defendant unlawfully enriched himself by obtaining money and property from individuals under the false and fraudulent pretenses and representations that defendant had filed on their behalf, bankruptcy petitions under the United States Bankruptcy Code. During the course of the scheme, Santos-Baez filed on behalf of Debtor #1, Debtor #2 and Debtor #3, various bankruptcy petitions in the United States Bankruptcy Court for the District of Puerto Rico. Santos Baez received payments from the debtors for filing and attorney’s fees. However, the bankruptcy petitions filed by Santos-Baez were later dismissed by the Court for failure to pay the corresponding filing fees and/or failure to provide required information to the Court. Furthermore, Santos-Baez made a series of false and fraudulent statements and representations to convince the debtors that he was working on their cases, and that they were under bankruptcy protection, when in fact their cases had been dismissed. Defendant Santos-Baez also sent e-mail communications attaching fraudulent court documents purportedly filed in the debtors’ bankruptcy cases and signed by United States Bankruptcy Court Judges, when in fact these documents were not signed by, or consented to by the Judges.
In order to carry out the objects of the scheme and artifice to defraud, Santos-Baez sent e-mail communications in furtherance of the scheme to defraud. In these communications Santos-Baez made a series of false statements and provided false documents in order to induce his clients into believing that they were under bankruptcy protection, when in fact their cases had been dismissed. The defendant knew the signatures and the orders provided in these wire communications were fraudulent and false.
“Today’s arrest demonstrates our commitment to prosecute those who maliciously seek to enrich themselves at the expense of vulnerable victims who have sought the protection and relief under our bankruptcy laws.” said U.S. Attorney Rosa Emilia Rodríguez-Vélez.
“This man took advantage of people who deposited their trust in his profession and alleged expertise with the sole intent to line his own pockets,” said Ricardo Mayoral, acting special agent in charge of HSI San Juan. “HSI's special agents are constantly vigilant against those who attempt to feed off the vulnerable and will continue to pursue those who think they can game the system.”
“I am grateful to U.S. Attorney Rosa Emilia Rodriguez and to Immigration and Customs Enforcement-Homeland Security Investigations for joining the U.S. Trustee Program’s efforts to combat bankruptcy fraud and abuse,” stated Guy G. Gebhardt, Acting U.S. Trustee for Puerto Rico, Florida, Georgia, and the U.S. Virgin Islands (Region 21). The U.S. Trustee Program is the component of the U.S. Department of Justice that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.
Assistant U.S. Attorney Olga Castellón is in charge of the prosecution of the case. If convicted, the defendant faces a sentence of up to twenty-nine years of imprisonment. Criminal indictments are only charges and are not evidence of guilt. A defendant is presumed innocent unless and until proven guilty.
Alaskan Physician Sentenced to 20 Years for Distributing and Receiving Child PornographyRead the Press Release
Juneau, Alaska – An Alaskan physician was sentenced today to 20 years in prison for receiving and distributing child pornography, a lifetime term of supervised release, and a $25,000 fine, announced U.S. Attorney Karen. L. Loeffler.
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.
According to evidence presented at trial, between June and October 2014, during an FBI investigation concerning the trading of child pornography using peer-to-peer (P2P) software, investigators discovered that an Internet Protocol (IP) address linked to Salard was used on multiple occasions to share files of known child pornography. The evidence also showed that a laptop computer subsequently seized from Salard’s home contained the same P2P software used to share one of the images identified during the investigation.
Testimony regarding a forensic examination of the laptop demonstrated that the computer contained the child pornography video identified by investigators, as well as evidence of hundreds of other files of child pornography; the jury reviewed the contents of eleven of those files. The testimony also showed that multiple searches had been run on the laptop for a term associated with child pornography, and videos of child pornography had been viewed on the computer. Finally, the evidence introduced at trial 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.
At sentencing, Judge Burgess focused on the defendant’s “extremely serious conduct,” and the “thoughtful, deliberate, and sophisticated way in which he obtained the material.” Judge Burgess noted that Salard “was sophisticated enough to put [his child pornography] into files no one searching for it would know were child pornography…he was sophisticated enough to alter the default features of [the file-sharing program. That was not an unintentional step…and only adds to the seriousness.”
Judge Burgess noted that the defendant had not appeared to come to terms with the fact that he had committed a crime and that there was no acknowledgement of guilt. There is no first step toward rehabilitation. Judge Burgess expressed concern with the fact that there was “nothing” to assure him that the defendant will not engage in child exploitation crimes in the future.
Finally, Judge Burgess also stated that the many letters of support submitted on behalf of the defendant did not capture his true nature. “I think Dr. Salard is a sophisticated and manipulative person who was able to compartmentalize his life and deceive others,” said Judge Burgess. “There is a dark and sinister side to his personality that let him get involved in this type of behavior and hide it from others.”
The FBI investigated the case, with assistance from the U.S. Forest Service; the Petersburg, Alaska, Police Department; the Wrangell, Alaska, Police Department; and the Juneau, Alaska, Police Department. The case was prosecuted by 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.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Advance Fee Fraud Scheme Operator Sentenced to More Than 17 Years in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that DAVID C. JACKSON, also known as “C. David Manns,” “Charles Jackson” and “Andrew D. Smithson,” 54, was sentenced yesterday by U.S. District Judge Janet Bond Arterton in New Haven to 205 months of imprisonment, followed by three years of supervised release, for operating an advance fee fraud scheme that victimized more than 40 individuals who lost a total of more than $4.5 million.
“This sentence is entirely appropriate for this defendant who has a prior federal felony conviction and preyed upon over 40 business owners ultimately defrauding them of more than 4.5 million dollars,” said U.S. Attorney Daly. “Many of these victims were small business owners and family farmers struggling in the extremely limited financing environment that existed in the wake of the 2008 recession. “As part of his scheme, Mr. Jackson used multiple identities to conceal his criminal past and thwart background checks. His outright theft had devastating consequences to many of his victims. We urge those seeking business loans to be wary of any one who offers funding that requires significant advance fees. The public should be especially cautious of purported lenders who operate on the internet preying upon trusting individuals unable to verify the accuracy of the representations made by these lenders.”
“Driven by greed, and through lies, deceit, and deception, Mr. Jackson took advantage of unsuspecting individuals and stole millions of dollars so he could line their own pockets,” said FBI Special Agent in Charge Ferrick. “The FBI will continue to vigorously pursue and bring to justice those who would operate advance fee fraud schemes.”
On December 22, 2014, a grand jury returned an 11-count indictment charging JACKSON, formerly of Maryland, Ohio and Pennsylvania, and Alexander D. Hurt, also known as “Alex Hurt” and “Alex Dante,” of Scottsdale, Ariz., and formerly of Massachusetts, with one count of conspiracy to commit wire fraud and multiple counts of wire fraud. The indictment also charged Hurt with one count of making a false statement to federal law enforcement. On September 29, 2015, a jury returned a verdict of guilty on all counts.
According to the evidence presented during the trial, in approximately September 2009, JACKSON, using the alias “C. David Manns,” established Jalin Realty Capital Advisors, LLC, using a business address in Dayton, Ohio. In 2011, JACKSON changed the name of his business to American Capital Holdings, LLC, using business addresses in Pittsburgh, Pennsylvania. Soon after changing the business name, JACKSON began introducing himself to victim clients as “Charles Jackson” and then also used the name “Andrew Smithson” to prevent victims from learning his true identity and the true nature of his background and his scheme.
Hurt held himself out as Vice President of Brightway Financial Group, LLC, a company that used a business addresses in Grapevine, Texas. As established during the trial, Hurt used his background as a pastor with a Brockton, Massachusetts church to gain the confidence of at least one victim who lost money in the scheme.
JACKSON, Hurt and others defrauded individuals, including Connecticut residents, who wired funds to them in anticipation of receiving large business loans. The upfront fees were alternately described as “application fees,” “collateral fees” or “commitment fees.” The victims were promised a refund of the upfront fees if their loan transactions were not completed. In order to convince victim-borrowers that the loans were legitimate and Jalin and ACH had successfully secured loans in the past, JACKSON provided victims and potential victims the name and phone number of a co-conspirator and told them that they could contact her for a reference. After she was contacted, the co-conspirator falsely represented to victims and potential victims that she had, in fact, received funding from JACKSON for a construction loan, and that she had successfully done a project financed with her co-conspirator and Jalin. The reference she gave was false and was just another part of the scam.
Through this scheme, more than 40 individuals provided JACKSON and Hurt with more than $4.5 million in advance fees and funds that were to be held in escrow for business loans that were never provided. Some of the individuals received partial refunds of the advance fees they had provided, but the refunds were made using fees that had been paid by other victims in a Ponzi-like scheme. JACKSON was ordered to make full restitution.
JACKSON has been detained since his arrest on August 26, 2014.
JACKSON was previously convicted in the Western District of Pennsylvania of federal bank fraud and money laundering offenses in October 2006 and was sentenced to 41 months in prison, followed by five years of supervised release. He was released from federal prison in September 2009 and operated this advance fee fraud scheme while on supervised release.
Hurt, who is released on bond, awaits sentencing.
This matter has been investigated by the Federal Bureau of Investigation and the Ansonia Police Department, and is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and Michael S. McGarry.
8 February 2016
Wife of Dead ISIL Leader Charged in Death of Kayla Jean MuellerRead the Press Release
Defendant Charged with Conspiracy to Provide Material Support to ISIL
Nisreen Assad Ibrahim Bahar, aka Umm Sayyaf, 25, an Iraqi citizen and wife of Abu Sayyaf, a senior leader within the Islamic State of Iraq and the Levant (ISIL) until his death last year, was charged by criminal complaint today for her role in a conspiracy that resulted in the death of American citizen Kayla Jean Mueller in February 2015.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement.
“The charges filed today allege that Umm Sayyaf and others conspired to provide material support to ISIL and that this conspiracy resulted in the death of Kayla Jean Mueller,” said Assistant Attorney General Carlin. “Sayyaf is currently in Iraqi custody for her terrorism-related activities. We fully support the Iraqi prosecution of Sayyaf and will continue to work with the authorities there to pursue our shared goal of holding Sayyaf accountable for her crimes. At the same time, these charges reflect that the U.S. justice system remains a powerful tool to bring to bear against those who harm our citizens abroad. We will continue to pursue justice for Kayla and for all American victims of terrorism.”
“Kayla Mueller’s kidnapping and death is a tragic reminder of the dangers that ISIL poses to Americans,” said U.S. Attorney Boente. “We will continue to work alongside the FBI to investigate this case and remain steadfast in our pursuit of justice for the Mueller family.”
“The FBI continues to work tirelessly alongside our partners to hold accountable those who are responsible for the kidnapping and death of Kayla Mueller,” said Assistant Director in Charge Abbate. “This criminal complaint is another step toward achieving justice in the case. We will always be relentless in our efforts to identify, locate and arrest those who are responsible for the kidnappings and murders of American citizens.”
According to the affidavit in support of the criminal complaint, in August 2013, on their second full day in northern Syria, Mueller and Individual 1 were kidnapped at gunpoint by masked ISIL soldiers. Mueller remained an ISIL hostage until her death on or about Feb. 7, 2015.
According to the affidavit, in August 2014, Individual 2 and Individual 3, two young Kurdish women of Yazidi heritage, were forcibly kidnapped by ISIL from their village in northern Iraq. After their capture, Individual 2 and Individual 3 were taken to a prison in Syria maintained by ISIL where they were held with Mueller.
According to the affidavit, on or about Sept. 24, 2014, Mueller, Individual 2 and Individual 3 were transferred from the ISIL prison to the custody of Abu and Umm Sayyaf. Abu Sayyaf, who reported directly to ISIL leader Abu Bakr al-Baghdadi, was ISIL’s minister of oil and gas, and was previously responsible for ISIL’s media program. The Sayyafs maintained several residences where they forcibly held Mueller, Individual 2 and Individual 3, along with other female captives. The captives were at various times handcuffed, held in locked rooms, and Mueller was sexually abused by Baghdadi, who forced her to have sex with him. Umm Sayyaf knew how Mueller was treated by Baghdadi when Mueller was held against her will in Sayyaf’s home.
The Sayyaf residences featured ISIL flags and other ISIL-branded items, and often had numerous firearms open and visible to captives. For a period of time, a large supply of weapons was maintained in a room of one of the residences for use by ISIL fighters.
According to the affidavit, the Sayyafs held young women who were sold or traded to ISIL men, and the women were characterized as being “owned” by the ISIL men who acquired them. While Mueller, Individual 2 and Individual 3 were held captive by the Sayyafs, Umm Sayyaf threatened the women, telling them she would kill them if they did not listen to her.
According to the affidavit, on or about May 15, 2015, the U.S. military conducted an operation targeting one of the Sayyaf residences. During the operation, Abu Sayyaf was killed when he engaged with U.S. military forces and Umm Sayyaf was captured. Firearms stored at the residence at the time of the operation were seized and are currently in the custody of the FBI.
According to the affidavit, beginning on or about June 17, 2015, Umm Sayyaf was interviewed by FBI agents and admitted that her family belonged to the al-Qaeda in Iraq (AQI) terrorist organization, the predecessor group to ISIL, and remained members of the terrorist organization when its name changed to ISIL. The defendant admitted to holding Mueller, Individual 2, Individual 3 and others hostage on behalf of ISIL. Umm Sayyaf also admitted she had sole responsibility for Mueller, Individual 2, Individual 3 and others in captivity while her husband travelled on ISIL business. In addition, she admitted to hosting ISIL members, including al-Baghdadi, at her residence.
According to the affidavit, Sayyaf admitted that al-Baghdadi “owned” Mueller during her captivity at the Sayyaf residence and admitted that “owning” is equivalent to slavery.
If convicted, Sayyaf faces a maximum penalty of life in prison. 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.
The charge in the complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.
The case was investigated by the FBI’s Washington Field Office. The case is being prosecuted by Assistant U.S. Attorney Dennis Fitzpatrick of the Eastern District of Virginia and Trial Attorneys Bridget Behling and John Gibbs of the National Security Division’s Counterterrorism Section.
Sayyaf Complaint
Wife of Dead ISIL Leader Charged in Death of Kayla Jean MuellerRead the Press Release
ALEXANDRIA, Va. – Nisreen Assad Ibrahim Bahar, aka Umm Sayyaf, 25, an Iraqi citizen and wife of Abu Sayyaf, a senior leader within the Islamic State of Iraq and the Levant (ISIL) until his death last year, was charged by criminal complaint today for her role in a conspiracy that resulted in the death of American citizen Kayla Jean Mueller in February 2015.
“Kayla Mueller’s kidnapping and death is a tragic reminder of the dangers that ISIL poses to Americans,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “We will continue to work alongside the FBI to investigate this case and remain steadfast in our pursuit of justice for the Mueller family.”
“The charges filed today allege that Umm Sayyaf and others conspired to provide material support to ISIL and that this conspiracy resulted in the death of Kayla Jean Mueller,” said Assistant Attorney General Carlin. “Sayyaf is currently in Iraqi custody for her terrorism-related activities. We fully support the Iraqi prosecution of Sayyaf and will continue to work with the authorities there to pursue our shared goal of holding Sayyaf accountable for her crimes. At the same time, these charges reflect that the U.S. justice system remains a powerful tool to bring to bear against those who harm our citizens abroad. We will continue to pursue justice for Kayla and for all American victims of terrorism.”
“The FBI continues to work tirelessly alongside our partners to hold accountable those who are responsible for the kidnapping and death of Kayla Mueller,” said Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office. “This criminal complaint is another step toward achieving justice in the case. We will always be relentless in our efforts to identify, locate, and arrest those who are responsible for the kidnappings and murders of American citizens.”
According to the affidavit in support of the criminal complaint, in August 2013, on their second full day in northern Syria, Mueller and Individual #1 were kidnapped at gunpoint by masked ISIL soldiers. Mueller remained a hostage of ISIL until her death on or about Feb. 7, 2015.
According to the affidavit, in August 2014, Individual #2 and Individual #3, two young Kurdish women of Yazidi heritage, were forcibly kidnapped by ISIL from their village in northern Iraq. After their capture, Individual #2 and Individual #3 were taken to a prison in Syria maintained by ISIL where they were held with Mueller.
According to the affidavit, on or about Sept. 24, 2014, Mueller, Individual #2 and Individual #3 were transferred from the ISIL prison to the custody of Abu and Umm Sayyaf. Abu Sayyaf, who held a senior leadership position within ISIL and reported directly to ISIL leader Abu Bakr al-Baghdadi, was ISIL’s minister of oil and gas, and was previously responsible for ISIL’s media program. The Sayyaf’s maintained several residences where they forcibly held Mueller, Individual #2, and Individual #3, along with other female captives. The captives were at various times handcuffed, held in locked rooms, and Mueller was sexually abused by Baghdadi, who forced her to have sex with him. Umm Sayyaf knew how Mueller was treated by Baghdadi when Mueller was held against her will in Sayyaf’s home.
The Sayyaf residences featured ISIL flags and other ISIL-branded items, and often had numerous firearms open and visible to captives. For a period of time, a large supply of weapons was maintained in a room of one of the residences for use by ISIL fighters.
According to the affidavit, the Sayyaf’s held young women who were sold or traded to ISIL men, and the women were characterized as being “owned” by the ISIL men who acquired them. While Mueller, Individual #2, and Individual #3 were held captive by the Sayyaf’s, Umm Sayyaf threatened the women, telling them she would kill them if they did not listen to her.
According to the affidavit, on or about May 15, 2015, the U.S. military conducted an operation targeting one of the Sayyaf residences. During the operation, Abu Sayyaf was killed when he engaged with U.S. military forces, and Umm Sayyaf was captured. Firearms stored at the residence at the time of the operation were seized and are currently in the custody of the FBI.
According to the affidavit, beginning on or about June 17, 2015, Umm Sayyaf was interviewed by FBI agents and admitted that her family belonged to the al-Qaeda in Iraq (AQI) terrorist organization, the predecessor group to ISIL, and remained members of the terrorist organization when its name changed to ISIL. The defendant admitted to holding Mueller, Individual #2, Individual #3, and others hostage on behalf of ISIL. Umm Sayyaf also admitted she had sole responsibility for Mueller, Individual #2, Individual #3, and others in captivity while her husband travelled on ISIL business. In addition, she admitted to hosting ISIL members, including al-Baghdadi, at her residence.
According to the affidavit, Umm Sayyaf admitted that al-Baghdadi “owned” Mueller during her captivity at the Sayyaf residence, and admitted that “owning” is equivalent to slavery.
Umm Sayyaf has been charged with conspiracy to provide material support to a designated foreign terrorist organization, and faces a maximum penalty of life in prison if convicted. 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; John P. Carlin, Assistant Attorney General for National Security; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement. Assistant U.S. Attorney Dennis Fitzpatrick and Trial Attorneys Bridget Behling and John Gibbs are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-mj-63.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Wheeling woman sentenced for cocaine traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Jennifer Vensel, 38, of Wheeling, was sentenced today to 18 months in prison for cocaine trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Vensel was discovered in possession of cocaine base in late 2014 in Ohio County, West Virginia. Following an investigation by the Ohio Valley Drug and Violent Crime Task force, a HIDTA-funded initiative, she pled guilty in May 2015 to one count of “Aiding and Abetting Possession with Intent to Distribute Cocaine Base.”
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Virginia Man Pleads Guilty to Voluntary Manslaughter for Killing a Climber in National Park in MarylandRead the Press Release
Greenbelt, Maryland - David DiPaolo, age 33, of Bristow, Virginia, pleaded guilty today to voluntary manslaughter in connection with the death of a person in Carderock, a popular rock climbing area within the Chesapeake and Ohio Canal National Historical Park.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Chief of Police Robert MacLean of the U.S. Park Police.
According to DiPaolo’s plea agreement, on December 28, 2013, DiPaolo had an argument with the victim in the parking area at Carderock Recreation Area (Carderock), located in Bethesda, Maryland, within the Chesapeake and Ohio Canal National Historical Park. Immediately following this altercation, the victim went to the base of the rock climbing area and DiPaolo returned to his parked vehicle. Shortly thereafter, DiPaolo found the victim and used a claw hammer to hit the victim multiple times on his head. DiPaolo then fled first from Carderock and subsequently drove to New York State, where he remained until his arrest on January 8, 2014.
Following DiPaolo’s attack, other rock climbers in the area discovered the victim at the base of the rock face. The victim was suffering from massive head trauma, but was still alive. Emergency personnel were called, and the victim was airlifted to a hospital in Bethesda, Maryland, where he later died of his injuries.
DiPaolo and the government have agreed that if the Court accepts the plea agreement DiPaolo will be sentenced to between 10 and 15 years in prison. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for May 9, 2016 at 10:00 a.m.
United States Attorney Rod J. Rosenstein praised the U.S. Park Police for its work in the investigation and thanked the New York State Police, U.S. Attorney’s Office for the Northern District of New York, and the U.S. Marshals Service for their assistance. Mr. Rosenstein thanked Assistant United States Attorney Thomas M. Sullivan, who is prosecuting the case.
United States Attorney’s Office Releases Tips to Keep Kids Safe OnlineRead the Press Release
ROANOKE, VIRGINIA – United States Attorney John P. Fishwick Jr. released today a list of tips that parents, teachers, caregivers, and others, can use to help keep children safe online. Today’s tips, in conjunction with the offer of free community training sessions, continues the United States Attorney’s Office mission of not only prosecuting those who exploit children but also being a community leader in education and prevention.
“The amount of technology our children have access to expands almost daily. It is nearly impossible for parents to keep up with every website or social media portal their children visit, which is why we, as parents, must be vigilant in protecting our children from online exploitation,” United States Attorney John P. Fishwick said today. “In our office we have experts who not only prosecute these cases but also train parents, and other community members, to help keep our kids safe online.”
U.S. Attorney Fishwick, along with Project Safe Childhood Coordinator and Assistant United States Attorney Nancy S. Healey, offered the attached “Tips for Keeping Kids Safe Online” as a basic resource for parents, and others, who are looking for some first steps to take in keeping children safe online.
The U.S. Attorney also announced today that in the coming weeks and months he, along with AUSA Healey and others, will be offering free training for parents, teachers, school groups, and other interested community groups, looking to learn more about the online dangers children encounter on a daily basis and how to keep kids safe online. These presentations can be tailored for length and audience and offer a plethora of information dealing with the subject of online safety.
“This is a topic every parent needs to be up-to-date on,” AUSA Healey said today. “Unfortunately, there are many places our kids are going online that parents simply aren’t informed enough about. Our kids are also posting questionable pictures online and communicating with people they don’t always know. I hope through these tips and our trainings that we can help parents better understand the online world our children are encountering.”
For more information or to schedule a free training session, please contact Brian McGinn, 434-293-4283, [email protected]. Groups of all sizes are encouraged to reach out.
Two Men Plead to Possessing Large Quantities of Controlled SubstancesRead the Press Release
Memphis, TN – Two Memphis men have pled guilty to conspiring to distribute large quantities of heroin, cocaine, marijuana and oxycodone. One of the defendants has also pled to possessing multiple firearms. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the pleas today.
According to information presented in court, 45-year-old Freeman Monger and 40-year-old Jeffrey Ingram, both of Memphis, possessed with intent to distribute large quantities of heroin, cocaine, marijuana and oxycodone. Ingram also possessed multiple handguns and rifles.
In April 2013, Shelby County Sheriff’s Office deputies conducted a traffic stop on Ingram. A large quantity of cocaine was found in Ingram’s vehicle. Deputies later executed a search warrant at Ingram’s residence, as well as storage units he maintained. Eleven handguns and two rifles were recovered from the storage units.
Over two years later, in August 2015, deputies executed a search warrant on a residence owned by Monger. Upon entering the residence, law enforcement located Monger and Ingram in separate parts of the house. A search of the residence yielded hundreds of grams of heroin, cocaine, and marijuana, as well as 50 oxycodone pills. The residence was reportedly used to stash and distribute narcotics.
A search warrant was also conducted on Ingram’s residence in August 2015. Deputies recovered a Beretta 9mm pistol during the search.
On Friday, February 5, 2016, both Ingram and Monger pled guilty to multiple offenses.
Ingram pled guilty to two counts of possessing with the intent to distribute cocaine; individual counts of aiding and abetting a co-conspirator in possession with the intent to distribute multiple grams of heroin, cocaine, marijuana and oxycodone; felony possession of 13 firearms; felony possession of 12 firearms in furtherance of a drug trafficking crime; and felony possession of a Beretta 9mm pistol.
Monger pled guilty to aiding and abetting a co-conspirator in unlawful possession with the intent to distribute heroin, cocaine, marijuana and oxycodone.
Both defendants are scheduled to be sentenced by U.S. District Judge John T. Fowlkes Jr. on Thursday, May 6, 2016.
Ingram faces a maximum sentence of life.
Monger faces a maximum sentence of 40 years.
This case was investigated by the Shelby County Sheriff’s Office.
Assistant U.S. Attorney Lorraine Craig is prosecuting this case on the government’s behalf.
Sprinfield Man Sentenced for Illegal Firearm PossessionRead the Press Release
DAYTON, Ohio – Terrence Victoria, 30, of Springfield, Ohio was sentenced in U.S. District Court to 96 months in prison for illegal possession of a firearm by a convicted felon.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Donald J. Soranno, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Ohio Attorney General Mike DeWine and Clark County Sheriff Gene A. Kelly, announced the sentence handed down today by U.S. District Judge Walter H. Rice.
According to court documents, Victoria was armed with a semi-automatic pistol while at the parking lot of Horseshoe Sports Bar in Springfield, Ohio. The recovery of his firearm occurred following an interaction with the Clark County Sheriff’s Office during which the defendant was incapacitated by a gunshot wound.
Victoria pleaded guilty on July 29, 2015 to one count of felon in possession of a firearm.
“The defendant displayed the firearm and threatened a patron in the bathroom of the bar,” Special Assistant U.S. Attorney Amy Smith told the court. “As law enforcement responded, Mr. Victoria left the bar and went to a vehicle in the parking lot, where he pointed the firearm at responding deputies.”
U.S. Attorney Stewart commended the cooperative investigation by ATF and BCI, as well as Special Assistant United States Attorney Amy Smith, who is representing the United States in this case.
Shawnee Mission Man Sentenced in $6 Million EmbezzlementRead the Press Release
KANSAS CITY, KAN. – A Shawnee Mission man was sentenced Monday to 63 months in federal prison for embezzling more than $6 million from an Overland Park company, U.S. Attorney Barry Grissom said.
Kenneth Voboril, 46, Shawnee Mission, Kan., pleaded guilty to one count of wire fraud and one count of filing a false tax return. In his plea, he admitted he was hired in 2005 by Commodity Specialists Company to run its subsidiary, TransMaxx. TransMaxx brokered trucking deliveries for customers and occasionally provided services to CSC.
Voboril devised a scheme to defraud CSC by creating fake companies and billing CSC for deliveries that never occurred. He caused false truck load information to be entered into TransMaxx’s computer system, resulting in invoices being created by TransMaxx’s account software program.
Over the course of time, he embezzled more than $6 million from CSC. In addition, he failed to report the income on his federal tax returns.
Grissom commended the Internal Revenue Service, U.S. Secret Service and Assistant U.S. Attorney Chris Oakley for their work on the case.
Shasta County Man Pleads Guilty to Defrauding the VA by Falsely Claiming He Was a Decorated VeteranRead the Press Release
SACRAMENTO, Calif. — John Cal Howe II, 42, of Lakehead, pleaded guilty today to 23 misdemeanor counts in a scheme to obtain thousands of dollars in veterans’ benefits to which he was not entitled, United States Attorney Benjamin B. Wagner announced.
According to court documents, Howe pleaded guilty to one count of theft in connection with a healthcare program, 20 counts of theft of government property, one count of making a fraudulent demand against the United States, and one count of making a fraudulent representation about the receipt of military decorations or medals.
According to the superseding information filed on January 14, 2016, between February 2012 and April 2015, Howe obtained health care benefits from the Veterans Affairs Health Benefits Program. He also obtained fraudulent travel reimbursements from the VA, and applied for a VA pension. He falsely claimed he was a decorated United States Marine Corps veteran and the recipient of three Purple Heart medals, although he had never enlisted or served in the armed forces of the United States.
This case is the product of an investigation by the Department of Veterans Affairs Office of Inspector General. Special Assistant United States Attorney Elliot Wong is prosecuting the case.
Howe is scheduled to be sentenced on April 25, 2016, by United States Magistrate Judge Edmund F. Brennan. Howe faces a maximum statutory penalty of one year in prison, a $100,000 fine, and a one-year term of supervised release on each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
School Bus Driver Gets 500 Months for Producing and Distributing Child PornographyRead the Press Release
GALVESTON, Texas – A 46-year-old Galveston man has been ordered to federal prison for nearly 42 years for sexual exploitation of a child as well as possession and distribution of child pornography, announced U.S. Attorney Kenneth Magidson. Michael Lee Martinez pleaded guilty Sept. 11, 2015.
Today, U.S. District Judge George C. Hanks Jr. handed Martinez a sentence of 360 months for three counts of production of child pornography, each to be served concurrently. He also received a sentence of 140 months for the distribution which be served consecutively to production sentence and 120 months for possession which is to be served concurrently to the other sentences imposed. The total 500-month sentence will be followed by life on supervised release during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet and will be required to register as a sex offender.
At the hearing, information was presented including evidence that he produced numerous images to a website used by pedophiles to exchange child pornography. He possessed 140 videos and 394 images of child pornography on his cell phone as well as 44 images and 1,261 videos in his emails. The images Martinez produced were of two minor female relatives and a close friend of one of the relatives. All of the victims were under 16 years of age with one only five.
In handing down the sentence, Judge Hanks called his actions horrible and selfish. “You destroyed the lives of three innocent children,” the court noted, “and society has to protect itself from people like you.”
Martinez came to the attention of law enforcement during a Homeland Security Investigations (HSI) investigation of a particular website hosted outside the United States. The website was used by those sexually exploiting children and looking to connect with others who shared their interest in the sexual exploitation of children by trading images of child pornography.
Martinez created an account on this website in May 2014, using the screen name “Mr. Happy” and indicated he loved girls eight to 16 years of age. His profile contained 37 albums with hundreds of images of child pornography. A review of his albums led law enforcement to believe Martinez was producing some of the images he had posted to the website. Law enforcement was able to identify the victims and learned Martinez was a school bus driver. There is no indication that any of this criminal behavior was connected to his employment nor any of his victims a part of his route.
Martinez admitted to his criminal behavior, including stealing images of from two of his victims’ cell phones. He turned his phone over to law enforcement and indicated they would find images of him sexually gratifying himself next to the head of one of the victims as well as an image of his face near her breasts while she slept.
Martinez was originally arrested by local authorities and later transferred to federal custody where he has been and will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The charges were the result of an investigation conducted by Homeland Security Investigations with the assistance of the Galveston Police Department – Internet Crimes Against Children Task Force. He still faces state charges in Galveston.
This case, prosecuted by Assistant U.S. Attorney Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Randolph County Resident Sentenced for Methamphetamine OffenseRead the Press Release
On February 3, 2016, Randall A. Miller, 25, of Percy, was sentenced on a methamphetamine offense, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Miller, who had previously pled guilty to one count of conspiracy to distribute methamphetamine, was sentenced to 235 months in federal prison, 3 years’ supervised release, and fined $200.00. Evidence at the plea and sentencing hearings established that Miller was involved with others in distribution of ice/methamphetamine. Ice is a form of methamphetamine with a purity of at least 80%. Miller was getting dealer amounts of ice/methamphetamine from a Missouri source for redistribution in southern Illinois. At sentencing, the judge found that Miller was responsible for the distribution of more than 1.9 kilograms of ice/methamphetamine. Miller also received a sentencing enhancement based on his possession of a firearm. The offense occurred between 2013 and June 2015, in Perry, Jackson, and Randolph Counties. Six co-defendants have pled guilty and are awaiting sentencing. Five co-defendants have pled not guilty and are awaiting a February 29, 2016, jury trial. As to those awaiting trial, remember that they are presumed innocent unless/until proven guilty beyond a reasonable doubt.
The ongoing investigation is being conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Percy Police Department, Steeleville Police Department, Mascoutah Police Department, Illinois State Police Methamphetamine Response Team, DuQuoin Police Department, Pinckneyville Police Department, and Drug Enforcement Administration. The Randolph and Perry County State’s Attorney’s Offices also assisted in the investigation.
The case is assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Pittsburgh Man Participated in California to Pennsylvania Cocaine Trafficking SchemeRead the Press Release
PITTSBURGH - A Pittsburgh resident pleaded guilty in federal court to a charge of conspiracy to possess with intent to distribute and distribute a quantity of cocaine, United States Attorney David J. Hickton announced today.
Keith Beck, 23, pleaded guilty to one count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. During that timeframe, Keith Beck was intercepted over the wire conspiring with others to possess with intent to distribute and distribute cocaine, which was shipped from California to the Western District of Pennsylvania through the United States Postal Service or commercial carrier.
Judge Hornak scheduled sentencing for June 10, 2016. The law provides for a maximum sentence of 20 years in prison, a fine of not more than $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant’s detention.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Police conducted the investigation that led to the prosecution of Keith Beck.
Phoenix Man Sentenced to 14 Years in Prison for Sex Trafficking of ChildrenRead the Press Release
PHOENIX - Today, Abram Kyle O’Bannon, 31, of Phoenix, Ariz., was sentenced by U.S. District Judge John J. Tuchi to 14 years’ incarceration, to be followed by a 20 year term of supervised release. O’Bannon previously pleaded guilty to attempted sex trafficking of children.
“My office places a high priority on investigating and prosecuting human traffickers, who prey on the weak and vulnerable for financial advantage,” said U.S. Attorney John S. Leonardo. “I am hopeful that today’s fourteen-year sentence will send a strong message that such conduct will be punished severely.”
O’Bannon was responsible for the sex trafficking of a juvenile in Phoenix, Ariz., during a four-day period in October 2014. On October 15, 2015, the Phoenix Police Department Vice Enforcement Unit recovered the juvenile victim during an undercover operation.
The investigation in this case was conducted by the Federal Bureau of Investigation, the Phoenix Police Department, and the Maricopa County Attorney’s Office. The prosecution was handled by Robert Brooks and Christine Keller, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-CR14-1530-PHX-JJT
RELEASE NUMBER: 2016-007_O’Bannon
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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.
Pennsylvania Man Sentenced to More Than 14 Years in Federal Prison for Kidnapping, Jewelry Store RobberyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that KASAM HENNIX, 42, of Easton, Pa., was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 171 months of imprisonment, followed by five years of supervised release, for his role in a violent kidnapping and jewelry store robbery in April 2013.
According to court documents and statements made in court, at approximately 9:00 p.m. on April 11, 2013, HENNIX, William Davis, Christopher Gay and Jeffrey Houston, all of whom were wearing masks and gloves and two of whom were armed with handguns, broke into an apartment on Gravel Street in Meriden, Conn., bound four victims with duct tape and covered their heads with pillowcases, towels and jackets. HENNIX, Davis, and Houston then forced two of the victims into a victim’s vehicle and drove to Lenox Jewelers in Fairfield, Conn., where the two victims worked. A fifth defendant traveled to Fairfield in a separate vehicle, and Gay remained in the Meriden apartment to guard the two other victims.
After the perpetrators arrived at the Fairfield store, they stole jewelry, watches and loose diamonds with a total replacement value of more than $3 million. They then fled in the victim’s car, leaving the two victims bound inside the store. One of the defendants called Gay to advise him that they had successfully carried out the robbery and that he should leave the apartment. The defendants abandoned the victim’s vehicle before they fled the state.
HENNIX has been detained since his arrest on May 22, 2013. On May 18, 2015, he pleaded guilty to one count of interference with commerce by robbery and one count of use of a firearm during and in relation to a crime of violence.
HENNIX’s criminal history includes a conviction for third degree murder for which he served approximately 20 years in prison. In October 1992, HENNIX shot a victim multiple times with a sawed-off shotgun, and his co-defendant then shot the victim in the head, killing him. He was discharged from custody in October 2012.
William Davis of Allentown, Pa., Jeffrey Houston of Allentown, and Christopher Gay of the Bronx, N.Y., also pleaded guilty to charges stemming from their involvement in this kidnapping and robbery. The fifth defendant is awaiting trial. On April 17, 2015, Davis was sentenced to 176 months in prison and, on January 27, 2016, Gay was sentenced to 102 months in prison. Houston has not been sentenced.
HENNIX, Davis and Gay have been ordered to pay restitution of more than $3.1 million.
The defendants also have forfeited gemstones, jewelry, watches, a vehicle, and more than $127,000 in cash seized from them at the time of their arrests.
This matter has been investigated by the U.S. Marshals Service, Federal Bureau of Investigation, Fairfield Police Department and Meriden Police Department. U.S. Attorney Daly also acknowledged the assistance provided by the U.S. Marshals Service and FBI in New York and Pennsylvania; the York, Allentown and Bethlehem Police Departments in Pennsylvania, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
This case is being prosecuted by Assistant U.S. Attorney Tracy Lee Dayton.
Ohio Convicted Murderer Pleads Guilty to 2005 Murder of Woman at Fort Knox Military BaseRead the Press Release
Ohio Woman had been missing since 2005
PADUCAH, Ky. – A Toledo, Ohio, convicted murderer pleaded guilty before Senior Judge Thomas B. Russell, in United States District Court, on Friday, February 5, 2016, to a Federal Information charging him with the 2005 murder of a woman at Fort Knox Military Base, announced United States Attorney John E. Kuhn, Jr.
In court, defendant Ernest Otto Smith, 49, admitted that on or about January 7, 2005, he murdered Cathy M. Barnett willfully, deliberately, maliciously, and with premeditation, on the grounds of Fort Knox, within the special territorial jurisdiction of the United States.
According to the plea agreement, on January 3, 2005, Smith robbed and shot and killed James Dillingham in Toledo, Ohio. It is believed Barnett was present during the murder. Shortly after the murder, Smith and Barnett fled Toledo and ultimately headed south to Kentucky in Smith’s van. Smith had formerly lived and worked near Fort Knox.
During the trip to Kentucky Smith decided to murder Barnett because she witnessed the Dillingham murder and could tell the police about the murder. On January 7, 2005, Smith’s van broke down in Kentucky and Smith and Barnett hitchhiked and they were dropped off near Fort Knox. Smith and Barnett walked approximately one quarter of a mile down a service road off the main highway, into a wooded area located on the grounds of Fort Knox, in Meade County, Kentucky. In the wooded area, Smith first attempted to break Barnett’s neck, and then beat her on the head with a tree branch until Smith knew Barnett was dead. Smith left Barnett’s body in the woods and eventually traveled to Tennessee where he was arrested in Nashville on January 21, 2005. In March 2006, Smith was convicted in Ohio of the Dillingham murder and was sentenced to 32 years of imprisonment.
In late 2010, Smith spoke with his former parole officer, Dan Van Vorhis, who asked Smith what happened to Barnett. Over the course of several recorded conversations, Smith explained to Van Vorhis the details of her murder. Smith also identified where Barnett’s remains would be found. The Federal Bureau of Investigation (FBI) searched and found Barnett’s remains on the grounds of Fort Knox, in the wooded area identified by Smith.
As a result of his guilty plea, Smith faces a mandatory sentence of life in prison, and a potential $250,000 fine.Smith was in the custody of the Ohio Department of Prisons. His sentencing before Senior Judge Russell is scheduled for March 22, 2016, at 3:00pm in Louisville.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the Federal Bureau of Investigation.
North Carolina Man Charged in Fraudulent U.S. Treasury Check SchemeRead the Press Release
A Clayton, North Carolina, resident was arrested yesterday after being indicted on Dec. 2 by a federal grand jury sitting in Raleigh, North Carolina, on one count of conspiracy to commit theft of public money, 25 counts of theft of public money and two counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina.
Felipe Hurtado aka “Juan de Dios” is alleged to have conspired with check cashers during the years 2011 and 2012 to cash U.S. Treasury checks issued as a result of fraudulent tax returns filed in the names of third parties. According to the allegations in the indictment, Hurtado provided the check cashers with U.S. Treasury checks in the names of payees purportedly living in New York. These checks ranged in value from approximately $5,000 to $10,000. The indictment alleges that the check cashers deposited the U.S. Treasury checks into their business bank accounts and then provided Hurtado with cash equal to the value of the check minus a check cashing fee. The third party payees were not present when the checks were cashed. The indictment further alleges that Hurtado cashed U.S. Treasury checks in the names of individuals whose identities had been stolen.
If convicted, Hurtado faces a statutory maximum sentence of five years in prison for the conspiracy charge, 10 years in prison for each count of theft of public funds and a two year mandatory sentence for the counts of aggravated identity theft. He also faces substantial monetary penalties, supervised release and restitution.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Bruce commended special agents of Internal Revenue Service-Criminal Investigation, who investigated the case and Trial Attorneys Nathan Brooks and Lauren Castaldi of the Tax Division, who are prosecuting this case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office of the Eastern District of North Carolina for their assistance.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Norfolk College Student Pleads Guilty to Coercing and Enticing a MinorRead the Press Release
NEWPORT NEWS, Va. – Dylan Allen Jeffries, 26, of Clifton Forge, pleaded guilty today to charges of coercion or enticement of a minor.
In a statement of facts filed with the plea agreement, Jeffries, who previosuly attended college in Norfolk, acknowledged using two social networking accounts to communicate with at least two underage girls, then ages 12 and 13. The communication revealed that Jeffries was aware of their age at the time he communicated with them. Jeffries also acknowledged possessing a hard drive on which he illegally stored photos and videos of underage girls. Jeffries admitted to receiving many of the images from the girls depicted in them through social media and email communications.
Jeffries was indicted by a federal grand jury on Nov. 16, 2015. He faces a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison when sentenced on May 10, 2016. The maximum and mandatory minimum statutory sentences are prescribed by Congress and are provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after the plea was accepted by U.S. Magistrate Judge Robert J. Krask. Assistant U.S. Attorneys Kaitlin C. Gratton and Lisa R. McKeel are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:15cr83
Montesano Man Charged with Illegal Firearms PossessionRead the Press Release
SEATTLE – A Montesano man arrested early Saturday morning is charged by criminal complaint with illegal firearms possession, announced U.S. Attorney Annette L. Hayes. The complaint alleges that DANIEL SETH FRANEY, 33, a/k/a Abu Dawuud, possessed firearms in violation of a permanent protection order prohibiting him from possessing firearms. On multiple occasions between September and November 2015, FRANEY handled several firearms, to include firing fully automatic machineguns on one occasion. FRANEY will appear in U.S. District Court in Tacoma today, February 8, 2016, at 2:30 PM.
“This defendant possessed firearms, including machine guns, even though he knew he was prohibited from doing so. He also discussed attacking members of the military and law enforcement,” said U.S. Attorney Annette L. Hayes. “I commend the FBI and the Joint Terrorism Task Force for their diligent efforts to pursue all available leads to ensure the public was protected from any possible harm.”
As set forth in the complaint, beginning in April 2015, multiple Washington state residents began reporting to law enforcement that they had heard FRANEY espouse violent rhetoric, particularly in support of the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. They also reported hearing FRANEY advocate for the killing of non-Muslim Americans, particularly members of the U.S. military and law enforcement. One citizen reported that FRANEY repeatedly asked to purchase a firearm from the citizen, despite FRANEY’s admissions that he is not legally allowed to possess firearms.
FRANEY was captured on audio attempting to acquire firearms, particularly AK-47s. FRANEY also discussed what he deemed were good targets for an attack. In discussing his attack aspirations, FRANEY repeatedly referred to his support for ISIL.
“The FBI works diligently to have a positive relationship with the Muslim community,” said Frank Montoya, Jr., Special Agent in Charge of the FBI’s Seattle Division. “From our conversations with Muslim community leaders, we know they reject this type of violent ideology and actively contribute to the security of our community, Washington State, and our country.”
FRANEY is charged by complaint with three counts of unlawful possession of firearms and two counts of unlawful possession of machineguns. Each count is punishable by up to ten years in prison and a $250,000 fine.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Assistant United States Attorney Todd Greenberg for the Western District of Washington, with assistance from the Counterterrorism Section of the Justice Department’s National Security Division. The investigation was conducted by the FBI’s Joint Terrorism Task Force, which combines investigators from federal, state, and local law enforcement. Task force members include the Seattle Police Department, the Pierce County Sheriff’s Department, the Federal Protective Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), and elements of the U.S. Army’s 902nd Military Intelligence Group. In addition, the Grays Harbor County Sheriff’s Department contributed significantly to this investigation.
Mineral County, WV man convicted of unlawful possession of nine firearmsRead the Press Release
MARTINSBURG, WEST VIRGINIA – Eric Donald Wilson, 45, of Ridgeley, West Virginia, pled guilty to unlawful possession of firearms today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Wilson, who has a previous felony conviction in state court in Maryland, was discovered in September 2015 in unlawful possession of nine firearms in Mineral County, West Virginia. He was previously convicted of the felony offense of “Second Degree Assault” in the District Court for Baltimore City, Maryland.
Wilson pled guilty today to one count of “Felon in Possession of a Firearm.” He faces up to 10 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn Adkins prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Maryland Man Pleads Guilty to Federal Charges in Contract Kickbacks and Phony Billing SchemesRead the Press Release
WASHINGTON – Bryan D. Wright, 53, of Laytonsville, Md., pled guilty today to taking part in a scheme in which he paid kickbacks to an executive with an investment banking firm in return for construction management contracts, announced U.S. Attorney Channing D. Phillips and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office.
In addition, Wright admitted taking part in a related scheme in which he submitted invoices for work that was not performed.
Wright pled guilty to one count of conspiracy to engage in wire fraud and one count of conspiracy to engage in money laundering. Conspiracy to engage in wire fraud carries a statutory maximum of five years in prison and conspiracy to engage in money laundering carries up to 10 years. Both charges also carry potential financial penalties. Under federal sentencing guidelines, Wright faces a likely range of 27 to 33 months in prison and a fine of up to $100,000. The Honorable Amy Berman Jackson is to sentence Wright at a date to be determined later.
The plea agreement calls for Wright to pay restitution to the investment banking firm. He also must pay a forfeiture money judgment of $623,347, representing his share of the illegal proceeds generated by the schemes. The plea agreement further calls for Wright to forfeit his interest in assets seized as part of the investigation, including $320,227.13 from bank accounts and six rare coins.
According to a statement of offense, signed by the defendant as well as the government, Wright is the president of P&E Services, a company used in furtherance of the scheme.
The statement of offense describes these activities from 2011 through 2013:
In mid-2011, Wright was contacted by a person described in court documents as “Co-Conspirator 1.” This person was a vice president in the Washington, D.C. office of an investment banking firm and oversaw the firm’s real estate development investments in the regional area. In that role, “Co-Conspirator 1” was authorized to approve construction-related invoices.
Over the months that followed, “Co-Conspirator 1” steered construction management contracts to Wright, tied to a commercial development project in Hanover, Md. Between October 2011 and May 2013, “Co-Conspirator 1” authorized $760,609 in payments from the investment banking firm to Wright’s company, P&E Services. Additionally, “Co-Conspirator 1” directed a general contracting company hired for the project to make payments to P&E Services; the contractor paid P&E Services $417,708 between January 2012 and January 2013. The investment banking firm reimbursed the contractor for the money that was paid to P&E Services.
In total, Wright and P&E Services received approximately $1,178,317 in payments from the investment banking firm and general contracting company. In turn, Wright paid “Co-Conspirator 1” approximately $588,622 of the funds, retaining the other $589,695.
In a related scheme, Wright conspired with “Co-Conspirator 1” to submit three phony invoices to the investment banking firm. Wright received $114,003 from this scheme. He paid “Co-Conspirator 1” $80,351 of these proceeds, retaining the other $33,652.
Wright retained a total of $623,347 from his participation in the two schemes.
No other charges have been filed in the investigation, which is ongoing.
In announcing the plea, U.S. Attorney Phillips and Assistant Director in Charge Abbate commended the work of those who investigated the case from the FBI’s Washington Field Office. They also expressed appreciation for the work of those who handled the case for the U.S. Attorney’s Office, including Paralegal Specialists Tasha Harris and C. Rosalind Pressley and Legal Assistants Angela Lawrence and John Lowell. Finally, they acknowledged the work of Assistant U.S. Attorneys David A. Last and Zia Faruqui, who are investigating and prosecuting the matter.
Manager of Predatory Loan Modification “Law Firm” Sentenced to PrisonRead the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738 and Valerie Chu (619) 546-6750
NEWS RELEASE SUMMARY – February 8, 2016
SAN DIEGO – San Diego businessman Michael Nazarinia was sentenced today to 9 months in custody for his role in a fraudulent mortgage loan modification business that duped hundreds of struggling homeowners.
The business, known as “Haffar & Associates,” owned by figurehead attorney Mohamed Haffar, recruited new customers using telemarketers who lied to clients in order to induce more than 1,000 people to sign up to pay more than $3.5 million in total.
Haffar & Associates Scheme
Nazarinia’s co-conspirator Charles Rose managed a call center staffed with as many as 30 telemarketers, whose job was to recruit new clients. Rose trained the telemarketers, wrote telemarketing scripts for use on calls with potential clients, wrote form letters for the salespeople to send to potential clients, and recorded his own sales calls for telemarketers to emulate. Rose pleaded guilty in July, admitting that he and his business partners, including Nazarinia, trained telemarketers to make statements to potential clients that were false, such as the following:
- “Haffar & Associates has a 98% success rate.”
- “Haffar & Associates has never lost a home to foreclosure.”
- “We have had no complaints with the California state bar.”
- “When you sign up with Haffar & Associates you will be represented by a law firm, and an attorney will negotiate on your behalf.”
- “Once you sign up, you will be protected by the power of the law firm and the bank cannot foreclose on your home.”
- “You definitely qualify for a loan modification.”
- “Our team has settled countless loans with just about every lender, and we have built up connections with the banks and deal directly with many bank’s legal departments.”
- “We have direct phone numbers at banks to help you get your loan modification. We can go through the ‘back door’ at the bank to get your loan modified.”
- “We have had great success with your mortgage lender.”
- “Your lender will not deal with you because you don’t know how to deal with them.”
- “We conduct a forensic audit of the original loan documents in order to discover whether the lender . . . violated one of many predatory lending laws . . . . [Then] our lawyers can use these violations to either sue or threaten to sue the banks, therefore leveraging the lender into providing our client with a work out solution.”
- “We have a 100% money back guarantee.”
- “You will be paid a refund of your fee if Haffar & Associates is unsuccessful at obtaining a loan modification on your behalf, but no one has ever asked for a refund.”
In reality, Haffar & Associates did not have anything close to a 98% success rate in obtaining loan modifications for their clients. Similarly, Haffar & Associates did not have any special connections with banks or the legal departments of banks. The business also did not have sufficient numbers of staff or staff experienced enough to successfully complete loan modifications. And many dissatisfied customers never received refunds they requested. Although existing clients were not getting loan modifications, the telemarketers were encouraged to keep selling.
For his part, Nazarinia generated a fraudulent lease agreement, which was used to fraudulently delay eviction after Haffar & Associates failed to negotiate a modification for a client. Nazarinia also admitted to filing a false 2010 income tax return, omitting almost $100,000 in illegal income from Haffar & Associates. Among other things, Nazarinia supervised Haffar & Associates “case managers,” who submitted loan modification applications and negotiated with the banks on behalf of clients. Despite the representations made to clients, attorney Haffar did not directly supervise Nazarinia’s case managers, and instead, Nazarinia and the case managers provided legal services to clients without Haffar’s input or direction. Haffar rarely reviewed the clients’ files and almost never provided direction to the case managers. According to Rose’s plea agreement, Haffar, Nazarinia, and Rose all understood that Haffar’s fees were his compensation for the risk he took in allowing Nazarinia and Rose to use his name, bar license, and law firm, and not for any actual work Haffar did on loan modification cases.
After Haffar & Associates stopped doing new business, Rose and Nazarinia started a new company, called “REST Report Matters,” selling a product they claimed would facilitate mortgage lenders’ review of homeowners applications for loan modifications. Rose admitted as part of his guilty plea that he made false representations to potential clients in order to induce them to sign up and pay their fees. They told homeowners that the product was the only available tool that could definitely tell homeowners the modification terms their lenders would provide.
Federal Law Enforcement Condemns Loan Modification Schemers
United States Attorney Laura E. Duffy reiterated her belief that, “The real tragedy of this case is that the defendants chose to profit from the suffering of others. In difficult economic times, they exploited a particularly vulnerable segment of our population, homeowners who were desperately trying to make ends meet and stay in their homes.”
“Fraudulent mortgage fraud schemes affect consumers at the most basic level, jeopardizing their ability to retain ownership of their homes,” said Robert Wemyss, Inspector in Charge of the U.S. Postal Inspection Service – Los Angeles Division. "The U.S. Postal Inspection Service will continue to investigate these crimes to protect consumers and our nation's mail system from being used for illegal or dangerous purposes.”
“Using the guise of a law office and a legal team, the defendants preyed upon financially desperate homeowners struggling to keep a roof over their head,” stated Erick Martinez, Special Agent in Charge of IRS Criminal. “As today’s sentencing shows, those who find ways to profit by taking advantage of distressed homeowners and fail to report the income will be brought to justice.”
“Michael Nazarinia preyed on others’ misfortune to line his own pockets,” said Federal Housing Finance Agency – Office of Inspector General Special Agent in Charge Leslie DeMarco. “The sentence he received today provides justice and will hopefully act as a deterrent to anyone else who might be tempted to engage in similar conduct.”
Rose is scheduled to be sentenced on April 11, 2016, also by Judge Houston. Attorney Haffar has also pleaded guilty to tax charges relating to the venture, and admitted that he had no existing knowledge or experience in loan modifications when he started the business in 2008. Haffar stipulated to his disbarment in November 2011 for his conduct. He was formally disbarred in June 2012, and obligated to pay over $192,000 to reimburse former Haffar & Associates clients. Haffar pleaded guilty to the federal criminal charge in August 2014, and was sentenced to three months in prison in January 2015.
Another participant who worked for Rose’s telemarketing company, Stacy Tuers, pled guilty on tax charges in May 2015. As part of Tuers’s guilty plea, he admitted that he knew the telemarketers were making false statements to potential clients, but continued to sell Haffar & Associates loan modification services. Tuers is scheduled to be sentenced on the tax offense on March 10, 2016.
DEFENDANT
Michael Nazarinia, 15CR2718-JAH Age: 41 San Diego, CA
CHARGES
Mail fraud, in violation of 18 U.S.C. § 1341
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary loss or gain, $100 special assessment, restitution.
Subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1)
Maximum Penalties: 3 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
DEFENDANTS PREVIOUSLY CHARGED:
Charles Rose, 15CR1786-JAH Age: 32 San Diego, CA
Mohamed Haffar, 14CR2251-JAH Age: 36 San Diego, CA
Stacy Tuers, 15CR1342-JAH Age: 54 San Diego, CA
AGENCIES
United States Postal Inspection Service
Internal Revenue Service – Criminal Investigation
Federal Housing Finance Agency – Office of Inspector General
Man Sentenced in Pill Mill CaseRead the Press Release
DALLAS — Muhammad Taylor, 32, was sentenced on Friday by U.S. District Judge Sidney A. Fitzwater to 30 months in federal prison on a felony conviction stemming from his involvement in a pill mill operation during parts of 2013-2014, announced U.S. Attorney John Parker of the Northern District of Texas.
Taylor, most recently a resident of Houston, Texas, pleaded guilty in October 2015 to one count of unlawful use of a communication facility.
Last month, co-defendants Shane Barron, 27, of Austin, Texas, and Tonya Sue Griggs, 34, of Dallas, who pleaded guilty to the same offense, were each sentenced to 37 months in federal prison.
In March 2015, a federal grand jury in Dallas indicted 23 individuals, including Taylor, Barron and Griggs, on offenses related to their participation in a prescription drug distribution conspiracy. That indictment alleged that from at least May 2013 through July 2014, the defendants participated in a scheme to illicitly obtain prescriptions for pain medications, such as oxycodone and hydrocodone, and then distribute those controlled substances for profit. As part of the conspiracy, individuals, often homeless or of limited means, were recruited and paid to pose as patients at medical clinics, including the McAllen Medical Clinic in Dallas, to obtain prescriptions to fill those prescriptions at designated pharmacies. Many of those defendants have pleaded guilty and are awaiting sentencing.
According to documents filed for Taylor, in February 2014, he and another co-conspirator met in the parking lot outside a pharmacy located on FM 1960 in Houston. The two entered the pharmacy together and exited a short while later. Taylor got into his own car and drove away, but was stopped a short time later by law enforcement officers, who seized approximately 154 10mg hydrocodone in an un-labeled prescription bottle from Taylor.
Taylor called the co-conspirator to tell him about the stop and that law enforcement had seized the pills he had just obtained even though he had the paperwork. The co-conspirator told Taylor not to worry, and that he would take care of it.
Taylor admitted he obtained these hydrocodone with the intent to distribute them at a later time, and he further admitted that he used his cell phone to coordinate obtaining and selling the hydrocodone.
Last month, a physician, Dr. Richard Andrews, 63, of Dallas, and pharmacists, Ndufola Kigham, 44, of Arlington, Texas, and Kumi Frimpong, 55, of Grand Prairie, Texas, were arrested on charges outlined in a superseding indictment that charged them with offenses related to their roles in the conspiracy. They are on bond; trial is set for June 2016. All three were ordered to surrender their DEA registration numbers, preventing Dr. Andrews from issuing prescriptions for controlled substances and pharmacists Kigham and Frimpong from dispensing controlled substances. Also, Kigham surrendered her stock of controlled substances that she had at her pharmacy to DEA.
This Organized Crime Drug Enforcement Task Force (OCDETF) investigation is being conducted by the Drug Enforcement Administration, with assistance from the Texas Department of Public Safety, the Louisiana State Police, the Grand Prairie Police Department, the Dallas Police Department, the Houston Police Department, the Arlington Police Department, the Greenville Police Department, the Parker County Sheriff’s Office, the U.S. Marshal’s Service, the U.S. Postal Inspection Service, and the Diplomatic Security Service. Assistant U.S. Attorney Mary Walters is prosecuting.
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Lexington Man Sentenced for Mortgage FraudRead the Press Release
Contact Person: Winston Holliday (803) 929-3000
Columbia, South Carolina---- United States Attorney Bill Nettles stated that Michael Yant, age 40, of Lexington, South Carolina, was sentenced today in federal court in Columbia, South Carolina, for Wire Fraud, a violation of 18 U.S.C. § 1343, in connection with a mortgage fraud scheme. United States District Judge Joseph F. Anderson, Jr., of Columbia sentenced Yant to five months of incarceration, to be followed by five months home confinement. Yant also was ordered to pay almost $270,000 in restitution to the U.S. Department of Housing and Urban Development.
Evidence presented at the change of plea hearing established that between November 2011 and December 2013, Yant and others committed mortgage fraud on approximately fifteen Federal Housing Administration (FHA) loans. Specifically, Yant engaged in a prohibited rent-to-own scheme. Yant collected rent from future buyers and used those funds for the buyer’s down payment at closing. Further, Yant added buyers to other people’s credit accounts as authorized users to enhance the buyer’s credit scores
Yant admitted to falsifying and submitting bank statements of buyers, paying off buyers’ debt and collection accounts, as well as falsifying buyers’ vehicle bills of sale in an effort to forge the origination of the buyer’s down payments. Also, Yant provided forged W-2’s and paystubs for buyers, as well as prepared false employment verifications to conceal the buyer not being an employee of certain businesses. Further, Yant secured FHA loans for buyers who would not otherwise qualify by paying off the buyers’ debt and collection accounts to increase the buyers’ credit scores.
The case was investigated by the United States Department of Housing and Urban Development, Office of the Inspector General, and the United States Postal Inspection Service. Assistant United States Attorney Winston Holliday of the Columbia office prosecuted the case.
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Katy Couple Charged with Enslaving ServantRead the Press Release
HOUSTON – A couple residing in Katy has been taken into custody following the filing of a criminal complaint alleging forced labor, withholding documents, conspiracy to harbor an illegal alien and visa fraud, announced U.S. Attorney Kenneth Magidson.
Chudy and Sandra Nsobundu, 56 and 50, respectively, were arrested today and expected to make their initial appearance before U.S. Magistrate Judge Nancy Johnson at 10:00 a.m. tomorrow. The criminal complaint was filed under seal Feb. 5, 2016, and automatically unsealed upon their arrests today.
The victim is a 38-year-old Nigerian national. According to the affidavit in support of the complaint, she was subjected to physical and verbal abuse while employed by the Katy couple and regularly referred to as “the idiot.” The victim allegedly worked every day from 5:30 a.m. until 1:00 a.m. and was responsible for cleaning the house, making meals and taking care of five children. The criminal complaint alleges she was told she could not watch television or even sit down during her work hours. She was also allegedly told to sleep on the floor and could not use warm water to bathe or wash her hair. The affidavit also claims that she was not allowed to eat fresh food and was only permitted the leftovers from the previous prepared meals. Further, if the victim even wanted some milk for her tea, she would have to actually strain the milk out of the children’s cereal bowls, according to the allegations. In one instance of alleged abuse, the criminal complaint charges that Sandra Nsobundu drug the victim by her hair and hit her across her face because she did not like the socks the victim put on one of the children.
The victim did not have access to a phone and could not communicate with her family, according the charges. Her movements were mostly limited to the residence and allegedly only allowed out for short walks with the youngest children around her block. The charges outlined in the complaint indicate the victim also did not have access to her passport and other travel documents.
The defendants had previously agreed to pay the woman 20,000 Nigerian nairas - $100 U.S. dollars per month, according to the charges. The Nsobundus allegedly never paid the victim for any of her work here in the U.S.
The victim was rescued Oct. 10, 2015, after more than two years with the Nsobundus in the U.S., following a tip to the National Human Trafficking Resource Center.
If convicted of forced labor, the defendants face up to 20 years in federal prison. For visa fraud, the maximum penalty is a 25-year-federal prison term, while the withholding documents and harboring conspiracy carry as possible punishment a maximum five and 10 years, respectively, upon conviction. All of the charges could also result in a $250,000 maximum fine.
The investigation leading to the filing of criminal charges was the result of an investigation conducted by members of the Human Trafficking Rescue Alliance in Houston, which includes Homeland Security Investigations, Fort Bend Sheriff’s Office and the Department of State - Diplomatic Security Service. Assistant U.S. Attorneys Julie N. Searle and Ruben R. Perez are prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Justice Department Sues to Permanently Shut Down Liberty Tax Service Franchise OwnerRead the Press Release
South Carolina Man Allegedly Owns Three Liberty Tax Service Stores Accused of Preparing Fraudulent Tax Returns
Three Columbia-area, South Carolina Liberty Tax Service franchises deliberately prepare false federal income tax returns in order to increase their customers’ refunds, according to a civil lawsuit filed today by the Justice Department. The United States’ complaint asks the U.S. District Court for the District of South Carolina to permanently bar the alleged franchisee for all three locations, Christopher Paul Haynes of Irmo, South Carolina, from preparing federal tax returns for others.
According to the suit, Haynes and his employees prepare tax returns that include misstatements such as false or inflated Schedule C (Profit or Loss From Business) income and expenses, bogus dependents, false filing statuses and improper unreimbursed employee business expenses. For example, the complaint alleges that Haynes’s employees included a bogus “arts and crafts” business on one customer’s tax return and a bogus “hair care” businesses on another’s. In each case, according to the complaint, the false statements purported to allow the customer to qualify for a larger Earned Income Tax Credit and receive inflated tax refunds from the Internal Revenue Service (IRS).
The lawsuit states that Haynes’s Liberty Tax Service offices have prepared more than 9,700 federal income tax returns since 2010. Based on adjustments the IRS has made to tax returns prepared and filed by Haynes’s Liberty Tax Service offices for 2010 to 2013, the average tax deficiency for tax returns audited in connection with the IRS’s investigation of Haynes is $3,834 per tax return, according to the suit.
The complaint also alleges that Haynes does not report to the IRS the wages he pays some of his employees, even though the report is required by law. According to the complaint, Haynes also fails to withhold and pay over to the IRS federal employment taxes for those same employees.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Houston Man Charged in Garden Oaks Post Office RobberyRead the Press Release
HOUSTON - A 40-year-old man has been arrested following the filing of a criminal complaint alleging he robbed a post office and brandished a firearm during a crime of violence, announced U.S. Attorney Kenneth Magidson.
Joe Robert Martinez, of Houston, was taken into custody Friday and is expected to make his initial appearance before U.S. Magistrate Judge Nancy Johnson at 10:00 a.m. today.
Martinez is charged with robbing the post office in Garden Oaks, located at 3816 North Shepherd in Houston on Jan. 28, 2016. The criminal complaint alleges he entered the post office and inquired about tracking a package. He then exited the building, but soon returned with a gun and allegedly demanded the clerk open the cash drawer and give him money. He ordered her to her knees, then he left with the currency, according to the allegations.
If convicted, he faces up to 25 years in prison for the robbery in addition to mandatory minimum of seven years for the firearms charge.
The charges are the result of an investigation conducted by the U.S. Postal Inspection Service in cooperation with the Houston Police Department. Assistant U.S. Attorneys Joe Porto and Heather Winter are prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Guilty Plea in Electric Meter Tampering ScamRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that James E. Nordhausen, age 51, of Ellicott, Maryland,
According to statements made at the plea hearing today and documents filed in court, the defendant worked with others to alter the electric meters affixed to residential and commercial buildings in Delaware and elsewhere. The defendant solicited residents and business owners, telling them that he would install an energy efficient “device” on their electric meters. The defendant gave the victims a flier, stating that he worked for a company called “eShield Technologies”. The flier stated that the installation fees were $500 for a residence, and one month’s average electricity bill for commercial locations. After collecting a fee, the defendant and others altered the electric meters at the victims’ locations. The alterations impacted the power companies’ ability to detect the power used by the victims. As a result, the victims’ electricity bills decreased significantly. Eventually, power company technicians noticed that the meters were the subject of tampering, and the victims became liable for the previously unbilled energy usage. The defendant, together with others, tampered with at least 37 meters, in at least 24 different locations in Delaware and elsewhere, obtaining at least $12,000 in fees.
This case is being investigated by the Federal Bureau of Investigation, with the cooperation and assistance of Delmarva Power, a PHI company.
Greyhound Lines to Resolve Americans with Disabilities ViolationsRead the Press Release
Under the terms of a consent decree filed by the Justice Department today, Greyhound Lines Inc., the nation’s largest provider of intercity bus transportation, will implement a series of systemic reforms to resolve allegations that it repeatedly violated the Americans with Disabilities Act (ADA). Greyhound will pay $300,000 in compensation to certain passengers with disabilities identified by the department and will retain a claims administrator to compensate an uncapped number of additional passengers who have experienced disability discrimination.
The consent decree, pending approval by the U.S. District Court for the District of Delaware, resolves the department’s complaint that Greyhound engaged in a nationwide pattern or practice of violating the ADA by failing to provide full and equal transportation services to passengers with disabilities. The alleged violations include failing to maintain accessibility features on its bus fleet such as lifts and securement devices, failing to provide passengers with disabilities assistance boarding and exiting buses at rest stops; and failing to allow customers traveling in wheelchairs to complete their reservations online.
“The ADA guarantees people with disabilities equal access to transportation services so that they can travel freely and enjoy autonomy,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Today’s agreement marks a major step toward fulfilling the promise of the ADA, and we applaud Greyhound for entering the consent decree.”
“We are fully committed to ensuring equal access to all opportunities society has to offer, including transportation services,” said U.S. Attorney Charles M. Oberly III of the District of Delaware.
Under the terms of the agreement, Greyhound – which serves more than 3,800 destinations and more than 18 million passengers each year across North America – will compensate several classes of passengers who faced barriers because of their disabilities. Through a claims administrator, Greyhound will compensate individuals who experienced barriers based on disability during the three years prior to today’s filing. There is no cap on the number of individuals who may submit claims or on the total amount to be disbursed by Greyhound through this process. In addition, Greyhound will be required to pay a total of $300,000 among specific individuals identified by the department who experienced ADA violations. Greyhound will also pay a civil penalty to the United States in the amount of $75,000.
In addition, the agreement mandates that Greyhound implement a series of systemic reforms, including the following:
- hire an ADA Compliance Manager;
- require all employees and contractors who may interact with the public to attend annual in-person training on the ADA;
- provide technical training to all employees and contractors on the proper operation of accessibility features of Greyhound’s fleet;
- report every three months to the department on its compliance efforts; and
- ensure that persons with disabilities can make reservations for travel, and lodge disability-related requests, through its online booking system.
Individuals who experienced disability-related discrimination while traveling or attempting to travel on Greyhound buses during the previous three years may be eligible to receive a monetary award. The claims administrator for the fund will be posted on Greyhound’s website, and on the department’s Disability Rights Section’s website at www.ada.gov following entry of the consent decree by the court. Questions about making claims should be directed to the claims administrator.
To read the consent decree and complaint, please visit www.ada.gov. For more information about the ADA, call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
Greyhound Consent Decree
Greyhound Lines to Resolve Americans with Disabilities ViolationsRead the Press Release
WILMINGTON, Del. – Under the terms of a consent decree filed by the Justice Department today, Greyhound Lines Inc., the nation’s largest provider of intercity bus transportation, will implement a series of systemic reforms to resolve allegations that it repeatedly violated the Americans with Disabilities Act (ADA). Greyhound will pay $300,000 in compensation to certain passengers with disabilities identified by the department and will retain a claims administrator to compensate an uncapped number of additional passengers who have experienced disability discrimination.
The consent decree, pending approval by the U.S. District Court for the District of Delaware, resolves the department’s complaint that Greyhound engaged in a nationwide pattern or practice of violating the ADA by failing to provide full and equal transportation services to passengers with disabilities. The alleged violations include failing to maintain accessibility features on its bus fleet such as lifts and securement devices, failing to provide passengers with disabilities assistance boarding and exiting buses at rest stops; and failing to allow customers traveling in wheelchairs to complete their reservations online.
“The ADA guarantees people with disabilities equal access to transportation services so that they can travel freely and enjoy autonomy,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Today’s agreement marks a major step toward fulfilling the promise of the ADA, and we applaud Greyhound for entering the consent decree.”
“We are fully committed to ensuring equal access to all opportunities society has to offer, including transportation services,” said U.S. Attorney Charles M. Oberly III of the District of Delaware.
Under the terms of the agreement, Greyhound – which serves more than 3,800 destinations and more than 18 million passengers each year across North America – will compensate several classes of passengers who faced barriers because of their disabilities. Through a claims administrator, Greyhound will compensate individuals who experienced barriers based on disability during the three years prior to today’s filing. There is no cap on the number of individuals who may submit claims or on the total amount to be disbursed by Greyhound through this process. In addition, Greyhound will be required to pay a total of $300,000 among specific individuals identified by the department who experienced ADA violations. Greyhound will also pay a civil penalty to the United States in the amount of $75,000.
In addition, the agreement mandates that Greyhound implement a series of systemic reforms, including the following:
-
hire an ADA Compliance Manager;
-
require all employees and contractors who may interact with the public to attend annual in-person training on the ADA;
-
provide technical training to all employees and contractors on the proper operation of accessibility features of Greyhound’s fleet;
-
report every three months to the department on its compliance efforts; and
-
ensure that persons with disabilities can make reservations for travel, and lodge disability-related requests, through its online booking system.
Individuals who experienced disability-related discrimination while traveling or attempting to travel on Greyhound buses during the previous three years may be eligible to receive a monetary award. The claims administrator for the fund will be posted on Greyhound’s website, and on the department’s Disability Rights Section’s website at www.ada.gov following entry of the consent decree by the court. Questions about making claims should be directed to the claims administrator.
To read the consent decree and complaint, please visit http://www.ada.gov/greyhound/greyhound_cd.html. For more information about the ADA, call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
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Former South Bend, Indiana, Police Officer Pleads Guilty to Violating Civil Rights of ArresteeRead the Press Release
The Justice Department announced today that Theodore Robert, 41, a former police officer with the South Bend, Indiana, Police Department (SBPD), pleaded guilty today in federal court to violating the civil rights of an arrestee.
During his guilty plea before U.S. Magistrate Judge Christopher A. Nuechterlein of the Northern District of Indiana, Robert admitted that, acting under his authority as an SBPD officer, he punched a handcuffed victim in the face, as multiple officers attempted to intervene. He also admitted that, prior to punching the victim in the face, he forcefully pushed the victim into a wall and pressed his arm against the victim’s head and throat. Robert’s actions caused the victim to suffer a laceration above the eye. According to information presented in court, the incident occurred at the St. Joseph County Jail in South Bend and was recorded by the jail’s surveillance cameras.
“When police officers violate the laws they swear to uphold, it threatens the credibility of our criminal justice system,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department will continue to vigorously prosecute and hold accountable those officers who violate the constitutional rights of people in their custody.”
A sentencing hearing has been scheduled for May 19, 2016. Robert faces a maximum sentence of 10 years in prison.
This case was investigated by the FBI Indianapolis Division’s South Bend Resident Agency. The case is being prosecuted by Trial Attorneys Stephen Curran and Sanjay Patel of the Civil Rights Division, with the assistance of the U.S. Attorney’s Office of the Northern District of Indiana.
Robert Plea Agreement
Former South Bend, Indiana, Police Officer Pleads Guilty to Violating Civil Rights of ArresteeRead the Press Release
WASHINGTON – The Justice Department announced today that Theodore Robert, 41, a former police officer with the South Bend, Indiana, Police Department (SBPD), pleaded guilty today in federal court to violating the civil rights of an arrestee.
During his guilty plea before U.S. Magistrate Judge Christopher A. Nuechterlein of the Northern District of Indiana, Robert admitted that, acting under his authority as an SBPD officer, he punched a handcuffed victim in the face, as multiple officers attempted to intervene. He also admitted that, prior to punching the victim in the face, he forcefully pushed the victim into a wall and pressed his arm against the victim’s head and throat. Robert’s actions caused the victim to suffer a laceration above the eye. According to information presented in court, the incident occurred at the St. Joseph County Jail in South Bend and was recorded by the jail’s surveillance cameras.
“When police officers violate the laws they swear to uphold, it threatens the credibility of our criminal justice system,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department will continue to vigorously prosecute and hold accountable those officers who violate the constitutional rights of people in their custody.”
A sentencing hearing has been scheduled for May 19, 2016. Robert faces a maximum sentence of 10 years in prison.
This case was investigated by the FBI Indianapolis Division’s South Bend Resident Agency. The case is being prosecuted by Trial Attorneys Stephen Curran and Sanjay Patel of the Civil Rights Division, with the assistance of the U.S. Attorney’s Office of the Northern District of Indiana.
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Former Rockford Physician Pleads Guilty to Bankruptcy FraudRead the Press Release
ROCKFORD — A former Rockford physician pleaded guilty today before U.S. District Judge Frederick J. Kapala to making false statements in a bankruptcy case. LYNN Y. ZOIOPOULOS (also known as Lynn Shelton-Zoiopoulos), 60, now of Chicago, Ill., filed a Chapter 7 Bankruptcy Petition on Aug. 11, 2009. According to the written plea agreement, Zoiopoulos signed a declaration under penalty of perjury that the schedules she filed in the bankruptcy case were true and correct to the best of her knowledge, information, and belief. However, as Zoiopoulos admitted in the plea agreement, she had an interest in the estate of her deceased grandmother that she had intentionally concealed in order to deceive the bankruptcy trustee.
In the plea agreement, Zoiopoulos also admitted to defrauding her grandmother’s estate. According to the plea agreement, Zoiopoulos was appointed Executor of her deceased grandmother’s estate in 2001. As Executor, Zoiopoulos opened a bank account with the balance reaching up to $855,178 in May 2006. In October 2008, Zoiopoulos used $550,000 of the money from that account to purchase an annuity contract, which after its purchase became an asset of the estate. Between June 2008 and November 2012, with the intent to deceive and defraud the estate, Zoiopoulos embezzled assets of the estate by converting them to her own use, knowing she had a fiduciary duty not to use the assets of the estate for her personal benefit. Zoiopoulos further admitted she tried to conceal her embezzlements by not filing the required inventory, accounting, tax returns, and status reports for the estate.
Zoiopoulos also admitted she intended to conceal her embezzlements by sending $35,000 to her sister for the purpose of lulling her sister into believing the estate was being properly administered. Along with the payment, Zoiopoulos sent her sister a letter indicating she had invested the rest of the estate money. Zoiopoulos admitted in the plea agreement that she had not reinvested the money, but had embezzled it, and had sent the letter to her sister for the purpose of preventing her sister from making further inquiries into the status of the estate.
In October of 2012, Zoiopoulos took the remaining balance of the annuity, $227,170.18, and used the money for her personal benefit although she knew the money was an asset of the estate.
Providing material false statements or documents under penalty of perjury in a bankruptcy case carries a maximum penalty of 5 years in prison, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater. The judge may also impose a sentence of probation of one to five years, and a term of supervised release of up to three years, and restitution. The actual sentence will be determined by the United States District Court, guided by the Sentencing Guidelines. Sentencing for Zoiopoulos is set for May 12, 2016, at 2:30 p.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Michael Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorneys Michael D. Love and Margaret J. Schneider.
Plea Agreement
Former Maintenance Manager at Foster Farms Pleads Guilty to Conspiring to Commit Mail FraudRead the Press Release
FRESNO, Calif. — Surjit Toor, 61, of Hilmar, pleaded guilty today to conspiring to commit mail fraud in a scheme that defrauded Foster Farms of nearly $47,000, United States Attorney Benjamin B. Wagner announced.
According to court documents, Surjit Toor was a maintenance manager at the Foster Farms processing plant in Livingston and was responsible for selecting third-party vendors to perform work at the plant. From February 2012 to April 2012, he conspired with his son, Raju Toor, 34, who ran a construction company, to bill Foster Farms for work that the construction company never performed. The falsely billed projects included the construction of an inspection catwalk and the modification of a large metal tank designed to hold ammonia. After fraudulently receiving payment from Foster Farms, Raju Toor transferred the majority of the funds back to his father.
As part of his plea agreement, Surjit Toor agreed to pay $46,979 in restitution to Foster Farms, which he provided to the court today. Raju Toor entered into a deferred prosecution agreement with the United States, which was approved by the court on January 29, 2016. According to the agreement, if Raju Toor does not engage in any fraudulent conduct, does not commit any crime, and the restitution amount is paid by the time of the sentencing of Surjit Toor, then after a 12 month period, the United States will seek dismissal of the charges against Raju Toor in the indictment.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Grant B. Rabenn is prosecuting the case.
Surjit Toor is scheduled to be sentenced by United States District Judge Dale A. Drozd on May 16, 2016, at 10:00 a.m. Surjit Toor faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Former Las Cruces Elementary School Janitor Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
ALBUQUERQUE – David Anaya Garcia, 32, of Las Cruces, N.M., pleaded guilty today in federal court to a federal child pornography charge. At the time he committed the crime, Garcia was employed as a janitor in a Las Cruces elementary school.
Garcia was arrested in July 2015, on a criminal complaint charging him with distribution of child pornography and possession of child pornography. According to the complaint, Homeland Security Investigations (HSI) initiated the federal investigation leading to Garcia’s arrest in June 2015, after the New Mexico Office of the Attorney General reported that an investigation by the New Mexico Internet Crimes Against Children (ICAC) Task Force revealed that an IP Address subscribed to Garcia’s residential address was being used to download child pornography. The Las Cruces Police Department and HSI arrested Garcia and executed a federal search warrant at his residence on July 1, 2015.
Garcia was subsequently indicted on Sept. 16, 2015, and charged with distributing child pornography on March 26, 2015, receiving child pornography from March 2015 through April 2015, and possessing child pornography on July 1, 2015. All offenses charged in the indictment occurred in Doña Ana County, N.M.
During today’s proceedings, Garcia pled guilty to receipt and distribution of child pornography and admitted that between March 12, 2015 and April 30, 2015, he distributed child pornography through file-sharing software that allowed others to download the images and videos he saved to a shared folder. Garcia further admitted that on July 2, 2015, agents from HSI executed a search warrant on his home where they seized an HP Pavilion laptop containing five images and 88 videos depicting child pornography and a thumb-drive containing 56 images and 55 videos depicting child pornography.
At sentencing, Garcia faces a statutory mandatory minimum penalty of five years and a maximum of 20 years in federal prison followed by not less than five years of supervised release. Garcia will also be required to register as a sex offender.
This case was investigated by the Las Cruces office of HSI, the Las Cruces Police Department, the New Mexico Office of the Attorney General, the New Mexico ICAC Task Force and the New Mexico Regional Computer Forensic Laboratory. The case is being prosecuted by Assistant U.S. Attorney Alexander Shapiro of the U.S. Attorney’s Las Cruces Branch Office as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 82 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the NMAGO. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Former Hell’s Angels Associate Sentenced for Destroying EvidenceRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Timothy M. Stone, 36, of East Rochester, NY, who was convicted of being an accessory after the fact to an assault with a dangerous weapon in aid of racketeering activity, was sentenced to 12 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Brett A. Harvey, who is handling the case, stated that in the late night hours on May 31, 2006, a male patron at Spenders Bar in Rochester was assaulted with a baseball bat. At the time, Spenders Bar was equipped with interior surveillance cameras that recorded the area in the bar where the assault occurred. The recordings were stored on a computer hard drive. In the early morning hours on June 1, 2006, Stone – knowing that others had committed the assault with the baseball bat in aid of racketeering – went to Spenders Bar, forcibly removed the hard drive, and took the hard drive from the bar. The defendant later destroyed the hard drive and the baseball bat used to commit the assault to assist the perpetrators of the assault in order to prevent their apprehension by the police.
This case was part of a larger investigation that resulted in the indictment and arrest of members and associates of the Rochester and Monterey (California) Hell's Angels for drug trafficking and racketeering-related offenses in February 2012. Monterey (California) Hell's Angels President Richard W. Mar, Rochester Hell's Angels members James H. McAuley, Jr., of Oakfield, NY, and Jeffrey A. Tyler, of Rochester, and Donna Boon, of Oakfield, NY, were charged with conspiracy to possess with intent to distribute, and to distribute, 500 grams or more of methamphetamine. Three other defendants – Paul Griffin, of Blasdell, NY, Richard E. Riedman, of Webster, NY, and Gordon L. Montgomery, of Batavia, NY – were convicted for their roles in the methamphetamine conspiracy. Griffin was sentenced to probation and Riedman to 37 months in prison. Montgomery will be sentenced on May 3, 2016.
Rochester Hell's Angels member Robert W. Moran, Jr., of Rochester, along with Gina Tata, also of Rochester, are charged in the same indictment with assault with a dangerous weapon in aid of racketeering activity, and McAuley, Moran and Tata are charged with conspiracy to commit assault with a dangerous weapon in aid of racketeering activity. In addition, Tata is charged with being an accessory after the fact to the assault and conspiracy.A jury trial for the remaining six defendants – Mar, McAuley, Moran, Boon, Tyler and Tata – is scheduled to begin on March 7, 2016, before U.S District Judge Lawrence J. Vilardo. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the culmination of an investigation on the part of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam Cohen, the Genesee County Sheriff's Office, under the direction of Sheriff Gary T. Maha, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the New York State Police, under the direction of Major Craig Hanesworth, the City of Batavia Police Department, under the direction of Chief Sean Shawn Heubusch, and the Village of LeRoy Police Department.
Former Freedom Industries owner latest sentenced for role in chemical spillRead the Press Release
CHARLESTON, W.Va. – A former owner of Freedom Industries was sentenced today to three years of probation and a $20,000 fine for an environmental crime connected to the 2014 Elk River chemical spill, announced Acting United States Attorney Carol Casto. William E. Tis, of Verona, Pennsylvania, previously pleaded guilty to unlawfully discharging refuse matter in March 2015. Tis is one of six former officials of Freedom Industries, in addition to Freedom Industries itself as a corporation, to be prosecuted for federal crimes associated with the chemical spill.
On January 9, 2014, a major chemical leak was discovered in Charleston at the above-ground storage tank area owned and operated by Freedom Industries (Freedom) on the Elk River. Freedom used these storage tanks to keep and process chemicals, and the leak consisted primarily of 4-methylcyclohexane methanol (MCHM), a chemical used in the coal mining industry as a cleansing agent. A significant amount of MCHM leaked into the Elk River, flowed into a water treatment plant, and contaminated the water supply of Charleston and the surrounding areas for several days. Freedom did not have a permit required by law that would have allowed the company to discharge MCHM into the Elk River.
Tis, along with co-defendants Dennis P. Farrell and Charles E. Herzing, owned Freedom until December 2013, when they sold their shares to a Pennsylvania corporation. From 2004 until the 2013 sale, Tis served as the secretary of Freedom. In this role, Tis had the responsibility and the authority to ensure that Freedom and its facility on the Elk River complied with the law.
Freedom had a permit issued by West Virginia’s Department of Environmental Protection that allowed for the discharge of storm water and groundwater subject to monitoring and reporting requirements. However, this permit did not allow for the discharge of MCHM, and required the development and maintenance of a storm water plan and a groundwater plan. Generally, storm water and groundwater plans identify potential sources of pollution and outline steps to prevent, contain, and reduce pollutants.
Tis admitted that he was aware of the permit and was put on notice that Freedom was required to have a storm water plan. He further admitted that he had the responsibility to ensure that Freedom complied with the permit by having a storm water and groundwater plan in place. During Tis’ tenure as a corporate officer, Freedom never developed a storm water or groundwater plan, which was a contributing cause to the chemical spill.
Tis is one of five defendants that have been sentenced as part of the investigation into the chemical spill. Robert J. Reynolds, of Apex, North Carolina, who worked as an environmental consultant with Freedom, was sentenced on February 1, 2016, for negligently discharging a pollutant. Charles E. Herzing, of McMurray, Pennsylvania, a former owner and vice president of Freedom, was sentenced on February 2, 2016, for unlawfully discharging refuse matter. Freedom, as a corporation, was sentenced on February 4, 2016, for negligently discharging a pollutant, unlawfully discharging refuse matter, and knowingly violating an environmental permit. Michael E. Burdette, of Dunbar, a former plant manager for Freedom’s facility on the Elk River, was sentenced on February 4, 2016, for negligently discharging a pollutant.
Dennis P. Farrell, of Charleston, a former Freedom president and owner, pleaded guilty in August 2015 to violating the Refuse Act and violating a permit by failing to have a pollution prevention plan. Farrell is scheduled to be sentenced on February 11, 2016.
Gary Southern, of Marco Island, Florida, the president of Freedom at the time of the spill, pleaded guilty in August 2015 to negligently discharging a pollutant, unlawfully discharging refuse matter in violation of the Refuse Act, and violating a permit by failing to have a pollution prevention plan. Southern is scheduled to be sentenced on February 17, 2016.
The investigation of the chemical spill was conducted by the Federal Bureau of Investigation and the Environmental Protection Agency’s Criminal Investigation Division. Assistant United States Attorneys Philip H. Wright, Larry R. Ellis, and Eric P. Bacaj, as well as the Environmental Protection Agency’s Regional Criminal Enforcement Counsel Perry D. McDaniel, are handling the prosecutions. United States District Judge Thomas E. Johnston imposed the sentence, and will preside over the remaining sentencing hearings associated with the chemical spill.
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Former Controller of Company in Lenexa to $135,000 EmbezzlementRead the Press Release
KANSAS CITY, KAN. – The former controller of a company in Lenexa pleaded guilty Monday to embezzling more than $135,000, U.S. Attorney Barry Grissom said.
Alan Wenk, 43, pleaded guilty to two counts of bank fraud. In his plea, he admitted the crimes occurred while he worked as the regional controller and corporate accounts payable manager for Performance Contracting Group, Inc. (PCG), headquartered in Lenexa. The company, with 50 offices throughout the United States, is made up of several companies that provide a wide range of services and products including demolition; lead and asbestos abatement; thermal, fire and acoustical insulation; and recycling processes.
Wenk caused PCG to issue fraudulent checks for payment to him and to business entities he controlled. In all, he fraudulently received 20 checks totaling approximately $135,560.
Sentencing is set for May 16. He faces a maximum penalty of 30 years and a fine up to $1 million on each count. Grissom commended the U.S. Postal Inspection Service and Assistant U.S. Attorney Jabari Wamble for their work on the case.
Florida Man Pleads Guilty in Manhattan Federal Court in Connection with Two Multimillion-Dollar Fraud SchemesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that JOSEPH DEL VALLE, an owner and partner of various investment companies, pled guilty today in Manhattan federal court to wire fraud and aggravated identity theft charges for operating two fraudulent schemes that resulted in more than $5 million in investor losses. DEL VALLE pled guilty to a four-count Indictment before United States District Judge Richard M. Berman.
Manhattan U.S. Attorney Preet Bharara stated: “Joseph Del Valle convinced his clients to invest millions of dollars in his real estate and restaurant projects. But in reality, his clients were only investing in Del Valle’s personal slush fund that he used to supplement his self-indulgent lifestyle. Del Valle’s plea today will ensure that he can no longer victimize any other investors.”
According to the Indictment, and other statements made in open court:
The Project Miami Scheme
Beginning in 2005, JOSEPH DEL VALLE, a co-conspirator (“CC-1”), and an employee of Vanquish Acquisition Partners LLC began soliciting investors for a real estate development project in the Little Havana neighborhood of Miami (referred to herein as “Project Miami”). Project Miami involved two high-rise buildings in which the bottom floors would house retail shops and the top floors would be residential condominiums. Project Miami was designed to provide affordable housing to middle-income individuals and included an arrangement for financing so that purchasers of the condominiums would receive government-subsidized mortgages. From 2005 through 2007, DEL VALLE, CC-1, and the employee obtained approximately $6.4 million from investors for Project Miami.
Prior to making any investments, investors were told that the investment was solely for Project Miami. Investors were provided with various materials that specified the investments were for Project Miami, and that DEL VALLE and his company would only take a 5 percent management fee. However, almost immediately after investors transferred funds for Project Miami, almost all of which were sent to banks in Manhattan, New York, DEL VALLE and CC-1 transferred amounts far greater than 5 percent to other bank accounts and began using the funds for other purposes, including investments in a wine magazine and for DEL VALLE’s personal use. For example, in October 2007, DEL VALLE used $30,000 of investor money in Europe for, among other things, hotels, restaurants, a cruise, and cash withdrawals. In total, DEL VALLE and CC-1 used more than $3 million for other investments or personal expenses.
When investors became suspicious and requested financial statements for their investments and a return of their money, DEL VALLE represented to investors in phone calls and e-mail communications that the investment funds were secure when, in fact, a large portion of the investors’ money had already been misappropriated and/or diverted to other uses. DEL VALLE also falsely told investors that financial statements were in the process of being prepared and would be mailed to them shortly, but in fact, DEL VALLE and CC-1 had not provided any financial information to the accountant responsible for the preparation of financial statements of the relevant entities.
The Project WT/Bistro, Project Chateau & Project Rioja Scheme
From 2009 through 2014, DEL VALLE conducted a second scheme in which he solicited investors to wire investments to various bank accounts for the purpose of investing in three purported investment projects, Project WT (later named Project Bistro), Project Rioja, and Project Chateau, all of which DEL VALLE controlled. According to DEL VALLE, Project WT/Bistro was created for the purpose of raising money to expand two restaurants, Project Chateau was created for the purpose of raising money to invest in the high-end segment of the hospitality industry, and Project Rioja was created for the purpose of raising money to invest in the high-end segment of the wine industry. DEL VALLE raised more than $2 million from investors for these projects.
Among other things, DEL VALLE falsely represented to investors that their money would be used solely to fund the specific projects in which the investors had decided to invest. However, almost immediately after investors transferred funds to bank accounts controlled by DEL VALLE, DEL VALLE withdrew money from the bank accounts (often through debit card purchases, ATM withdrawals, and wire transfers) and spent approximately all of the funds on restaurants, hotels, clothing, mortgage payments, and payments to DEL VALLE’s family members and his fiancée, among other things. In addition, to induce investors to invest money in the specific projects, DEL VALLE frequently sent investors multiple fabricated emails that purported to come from well-known chefs and businesspeople.
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DEL VALLE, 61, of Aventura, Florida, pled guilty to one count of conspiracy to commit wire fraud and two counts of wire fraud, both of which carry a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. DEL VALLE will be sentenced May 10, 2016.
Mr. Bharara praised the work of the FBI.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’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.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Aimee Hector and Damian Williams are in charge of the prosecution.
Five Men Charged with Conspiracy to Distribute 55 Kilograms of NarcoticsRead the Press Release
NEWARK, N.J. – Five men who were arrested in Passaic County, New Jersey, with a combined 55 kilograms of heroin and cocaine in their possession appeared in Newark federal court today, U.S. Attorney Paul J. Fishman announced.
Edwin Alamo Jr., 21, of Bronx, New York, Sauro D. Estevez Figueredo, 48, of Miami, Florida, Emmanuel Gonzalez, 31, of Bronx, New York, Alberto Mora, 52, of Morriston, Florida, and Porfirio Peralta-Nunez, 37, of Jersey City, New Jersey, are each charged by criminal complaint with one count of conspiracy to distribute and possess with intent to distribute a kilogram or more of heroin. Figueredo and Mora are also charged with one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine.
All five defendants appeared this afternoon before U.S. Magistrate Judge James B. Clark III and were remanded into custody.
According to the complaint filed today:
On Feb. 5, 2016, law enforcement observed a tractor trailer, driven by Figueredo and Mora, parked at an intersection near a store in Clifton, New Jersey. That afternoon, Gonzalez and Alamo drove to the tractor trailer and left with a suitcase given to them by Mora. Later, Peralta-Nunez arrived at the tractor trailer with two empty bags and left shortly afterwards with the bags filled.
Subsequent traffic stops later revealed 22 kilograms of heroin in Gonzalez and Alamo’s possession and 13 kilograms of heroin in Peralta-Nunez’s possession. Law enforcement also found 20 kilograms of cocaine still remaining at the tractor trailer, resulting in a total of 55 kilograms of seized narcotics. All five defendants were arrested that day.
The drug distribution conspiracy charges each carry a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison and a $10 million fine.
The government is represented by Assistant U.S. Attorney Meredith Williams and Mary Toscano, Deputy Chief of the General Crimes Unit of the U.S. Attorney’s Office in Newark.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski in Newark, with the investigation leading to today’s charges.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defense Counsel:
Alamo: Chester Keller Esq., First Assistant Public Defender, Newark
Figueredo: Michael D’Alessi Esq.
Gonzalez: James Murphy Esq., Princeton, New Jersey
Mora: David Schafer Esq., Assistant Federal Public Defender, Trenton
Peralta-Nunez: Brian Neary., Esq., Hackensack, New Jersey
Ex-CEO of McAllen-Based Trucking Company Sentenced in $11 Million Fraud SchemeRead the Press Release
HOUSTON – The former CEO of USA Dry Van Logistics (USADV), a cross-border trucking company that services the maquiladora industry, has been ordered to federal prison, announced U.S. Attorney Kenneth Magidson. Sergio Lagos, 46, pleaded guilty Jan. 20, 2015, to conspiracy to commit wire fraud and six counts of wire fraud. Also sentenced today were Aurelio “Jim” Aleman, 62, and Oscar Barbosa, 53, former chief operations officer and former controller for the company, respectively, who pleaded guilty to conspiracy to commit wire fraud on Sept. 16, 2013.
Today, U.S. District Judge Kenneth M. Hoyt ordered Lagos to serve a total of 97 months in federal prison to be immediately followed by three years of supervised release. Aleman and Barbosa were handed respective sentences of 47 and 24 months, also followed by three-year-terms of supervised release. The court further ordered restitution in the amount of $15,970,517.37 which includes payment for attorney fees and investigative fees incurred by GE Capital in investigating the magnitude and extent of the defendants’ fraud.
According to records, Aleman and Lagos entered into a financing agreement with GE Capital Corporation (GECC) under which GECC would issue a revolving line of credit which was secured by USADV’s accounts receivables. By January 2010, the maximum borrowing limit under the agreement was increased to $38 million. Pursuant to the agreement, USADV justified advances on the line of credit by submitting “borrowing base certificates” to GECC.
Lagos admitted that from March 2008 through the end of January 2010, he joined in a scheme to defraud and swindle GECC, a lending company that provided capital to USADV, fraudulently obtaining funds through a revolving line of credit. At the plea hearing, Lagos admitted he schemed to conceal from GECC the truth about USADV’s declining operating performance and financial results. Rather than reveal USADV’s true condition, Lagos and his co-defendants misrepresented USADV’s true operating performance and financial results to include the nature of the USADV’s accounts receivable, against which GECC was permitting USADV to borrow hundreds of thousands of dollars on a weekly basis. This caused USADV to appear to be operating more profitably that it actually was.
Lagos signed, prepared and/or directed others to prepare certificates that falsely inflated the amount of the company’s accounts receivables and caused them to be submitted to GECC to enable USADV to obtain more funds than would otherwise have been permitted. Lagos perpetuated and concealed the scheme to defraud GECC by directing other employees to manually invoice millions of dollars of fraudulent receivables to inflate the borrowing base and to create false and forged invoices and support documentation for accounts receivables that did not exist. Lagos also admitted to submitting false financial statements to auditors and GECC.
When the truth about USADV’s operations and finances were revealed, USADV went into bankruptcy and is no longer operational.
The three defendants were permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by Homeland Security Investigations and the FBI. Assistant U.S. Attorney (AUSA) Casey N. MacDonald and former AUSA Grady J. Leupold prosecuted the case.
Erie Woman Had Role in Mexico to Texas to Erie Cocaine Distribution RingRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, pleaded guilty in federal court to a charge of violating federal drug laws, United States Attorney David J. Hickton announced today.
Sammar Aimee Melchor, 34, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that from June 2013 through February 2015, Melchor engaged in a conspiracy to distribute and possess with intent to distribute between five and fifteen kilograms of cocaine which she obtained from other co-conspirators. The court was also advised that on or about October 28, 2014, Melchor distributed and possessed with intent to distribute 6 ounces of cocaine. The court was advised that the cocaine was distributed in Erie as part of a large network transporting cocaine from Mexico into Texas, and from Texas to Erie, Pennsylvania concealed in hidden compartments in vehicles.
Judge Cercone scheduled sentencing for June 13, 2016. The law provides for a total sentence of years 40 years in prison, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Homeland Security Investigations, the Drug Enforcement Administration, the Pennsylvania State Police, U.S. Border Patrol, the Internal Revenue Service, Criminal Investigation; the Pennsylvania Office of Attorney General Organized Crime Section, the U.S. Postal Inspection Service, the U.S. Marshals Service, and the Bureau of Alcohol Tobacco Firearms and Explosives conducted the investigation that led to the prosecution of Melchor.
Erie Felon Sentenced to Prison for Illegally Possessing PistolRead the Press Release
ERIE, Pa. - A former resident of Erie, Pennsylvania, has been sentenced in federal court to 24 months in jail on his conviction of violating federal firearms laws, United States Attorney David J. Hickton announced today.
United States District Judge David S. Cercone imposed the sentence on Vincent Andrew Feliciano, 25.
According to information presented to the court, Feliciano was found in possession of a Springfield Armory .40 caliber pistol in his residence in Erie, at the time a federal search warrant was being executed. Feliciano is prohibited from possessing firearms because he is a convicted felon.
Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.
Prior to imposing sentence, Judge Cercone discussed the seriousness of the defendant’s unlawful possession of a firearm and the fact that Feliciano was on parole from an earlier firearm possession conviction in state court.
U.S. Attorney Hickton commended the Organized Crime Drug Enforcement Task Force (OCDETF) for the investigation leading to the successful prosecution of Feliciano. The OCDETF task force includes The Department of Homeland Security, Immigration and Customs Enforcement, the Drug Enforcement Administration, the Internal Revenue Service, Criminal Investigation and the Pennsylvania State Police. The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Defendant Sentenced to 5 Years in Prison for Marijuana Cultivation Operation in the Sierra National ForestRead the Press Release
FRESNO, Calif. — Juan Pedro Jimenez, 40, of Mexico, was sentenced today to five years in prison for conspiring to manufacture, distribute and possess with intent to distribute, manufacturing, and possess with intent to distribute marijuana in connection with a large-scale cultivation operation on Chowchilla Mountain in Mariposa County in the Sierra National Forest in Mariposa County, United States Attorney Benjamin B. Wagner announced.
According to court documents, Jimenez was found at the cultivation site on public land in July. Agents removed 6,919 marijuana plants from the site and found fertilizer, trash, water lines, and propane tanks. The cultivation activities caused extensive damage to the land and natural resources. Native trees and plants were cut down and steep hillsides were terraced to plant the marijuana. Water was diverted from a nearby creek to irrigate the plants. Jimenez pleaded guilty on November 18, 2015.
This case was the product of an investigation by the U.S. Forest Service and the Mariposa County Sheriff’s Office. Assistant United States Attorney Karen Escobar prosecuted the case.
Dearborn Heights Resident Charged with Illegal Possession of FirearmRead the Press Release
A 21-year-old Dearborn Heights man was charged in a criminal complaint with possession of a firearm by an unlawful user of a controlled substance, United States Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division. According to the complaint, on October 5, 2015, Khalil Abu-Rayyan purchased a .22 caliber revolver from a sporting goods store in Dearborn Heights. At the time of purchase, Abu-Rayyan made a false statement on ATF Form 4473, stating “no” in response to a question that asks whether the purchaser is an unlawful user of a controlled substance. On November 15, 2015, Abu-Rayyan attempted to purchase another pistol from a different sporting goods store, however, due to pending state charges, was unable to purchase the pistol. On that occasion, Abu-Rayyan again falsely stated on ATF Form 4473 that he was not an unlawful user of a controlled substance. Abu-Rayyan subsequently admitted to law enforcement that he was an habitual user of marijuana during the time period in which he purchased the .22 caliber revolver. Abu-Rayyan has also since pleaded guilty to possession of marijuana in a state case, and is currently awaiting trial in state court on the charge of carrying a concealed weapon in an automobile. According to the complaint, photographs and postings on Abu-Rayyan's social media sites, as well as conversations with an undercover FBI employee, indicated his support for the Islamic State of Iraq and Levant, a designated foreign terrorist organization, and his desire to conduct a martyrdom operation, including with the use of firearms. On February 4, 2016, FBI agents arrested Abu-Rayyan on charges of being an unlawful user of a controlled substance (marijuana) in possession of a firearm which travelled in interstate commerce. Abu-Rayyan appeared in federal court in Detroit before United States Magistrate Elizabeth Stafford, and was assigned appointed counsel and ordered temporarily detained pending a hearing. That hearing was scheduled for today, but it was adjourned at the request of Abu-Rayyan because he has recently retained an attorney. The hearing is now scheduled for February 10. "Threats of this nature, regardless of where they originate, or who they target, are always taken seriously," said David P. Gelios, Special Agent in Charge, FBI - Detroit Division. "The FBI acted quickly and comprehensively to investigate and arrest Mr. Rayyan upon the receipt of information that he posed a potential public safety threat. The investigative actions prior to his arrest included 24/7 surveillance to ensure there was a prompt response to any attempted violent act." If convicted of the charged offense, Abu-Rayyan faces a term of up 10 years in federal prison. A complaint is only a charge and is not evidence of guilt. Trial cannot be held on felony charges in a complaint. When the investigation is completed a determination will be made whether to seek a felony indictment.Clarksburg man sentenced for heroin traffickingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Brian K. Dixon, 47, of Clarksburg, was sentenced today to 15 months in prison for heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Dixon sold heroin in Harrison County. He pled guilty in October 2015 to one count of “Distribution of Heroin.”
Assistant U.S. Attorney Sarah Montoro 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.
Chiropractor Sentenced for Insurance FraudRead the Press Release
COLUMBUS, Ohio – Jeffrey R. Shope, 45, of Blacklick, Ohio, was sentenced in U.S. District Court to one year and one day in prison for one count of insurance fraud.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Lieutenant Governor Mary Taylor, Director of Ohio Department of Insurance and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down today by U.S. District Judge Gregory L. Frost.
According to court documents, Shope was a licensed chiropractor and owner of True Health Chiropractic in Westerville, Ohio. From January 2009 to December 2012, Shope made false statements to defraud federal health care benefit programs and obtained nearly $700,000 in fraudulent payments. Shope would bill for equipment and services not rendered to maximize insurance payments and would bill two separate programs for identical services provided to the same patients on the same day.
U.S. Attorney Stewart commended the cooperative investigation by the FBI and Ohio Department of Insurance, as well as Assistant United States Attorney Ken Affeldt, who represented the United States in this case.