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28 January 2016
Six Vice Lords Plead Guilty to RICO Conspiracy and Gang-Related ShootingsRead the Press Release
DETROIT – Six members of the Vice Lords street gang pleaded guilty this week to racketeering and firearms offenses for their roles in the shootings of four members of a family. The guilty pleas are the result of the collaborative efforts of law enforcement and the community to reduce homicide and other violent crime under the Detroit One program. The announcement was made by U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Detroit Mayor Mike Duggan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Chief James Craig of the Detroit Police Department. In 2015, Antonio Clark, Aramis Wilson, Tyrone Price, Jonathan Kinchen, Kojuan Lee, Kirshean Nelson, Dion Robinson and Kenneth Smith, were indicted on charges of RICO conspiracy and other racketeering and firearms charges relating to the May 7, 2015, gang-related shooting of four members of a family. The indictment charges that, from 2011 through 2015, the defendants trafficked in controlled substances, including marijuana, Xanax, and ecstasy, at locations around the Detroit metropolitan area, including in Detroit and at Northland Mall in Southfield, Michigan. According to the indictment, the Vice Lords is a national gang engaged in a variety of crimes, including murder, robbery, narcotics trafficking and witness intimidation. The indictment alleges that the Vice Lords’ leaders are located in Chicago and Detroit, and that the gang is broken down into various “sets,” “decks,” or “branches,” including the Detroit-based Traveling Vice Lords, Insane Vice Lords, Imperial Insane Vice Lords, Conservative Vice Lords, and Mafia Insane Vice Lords. The indictment further alleges that members who seek to leave or withdraw from the gang often endure a physical beating, known as a “beat out,” by multiple Vice Lord members, or are targeted for killing, known as a “green light.” According to court documents, leading up to the May 7, 2015 shooting, members of the Vice Lords, acting at the direction of Kenneth Smith and others, searched for two brothers that had left, or had attempted to leave, the Vice Lords, as part of a plan to harm those individuals. On May 7, 2015, Vice Lords members Antonio Clark, Aramis Wilson, Tyrone Price, Jonathan Kinchen, Kojuan Lee, Kirshean Nelson, and Dion Robinson, traveled together to the intended victims’ house in multiple cars. These Vice Lord members first met at Kenneth Smith’s house to discuss their plans. They gathered firearms, including an AK-47 assault rifle, to assist in their plans. After a brief confrontation with family members, Clark opened fire with an AK-47 hitting four victims. The indictment charged these Vice Lords members with aiding and abetting one another in the shooting of the four family members after firing more than two dozen times at the family. All four victims suffered gunshot wounds, but are recovering. On January 25, 2016, Aramis Wilson, aka “Ace,” 25, of Detroit, pleaded guilty to two counts of Assault with a Dangerous Weapon in Aid of Racketeering, and one count of Use and Carry of a Firearm During, and in Relation to, a Crime of Violence. The firearm charge carries a mandatory minimum sentence of ten years in prison. On Tuesday, January 26, 2016, Kirshean Nelson, 19, of Detroit, pleaded guilty to one count of RICO conspiracy. On Wednesday, January 27, 2016, Antonio Clark, aka “Cheeto,” 26, of Detroit, pleaded guilty to two counts of Attempted Murder in Aid of Racketeering, and one count of Use and Carry of a Firearm During, and in Relation to, a Crime of Violence. The firearm charge carries a mandatory minimum sentence of ten years in prison. On Thursday, January 25, 2016, Kojuan Lee, aka “Juan,” 20, of Detroit, and Jonathan Kinchen, aka “Deago,” 22, of Detroit, each pleaded guilty to one count of RICO conspiracy. Also on Thursday, Tyrone Price, aka “Price,” 27, of Detroit, pleaded guilty to two counts of Assault with a Dangerous Weapon in Aid of Racketeering, and one count of Use and Carry of a Firearm During, and in Relation to, a Crime of Violence. The firearm charge carries a mandatory minimum sentence of ten years in prison. Dion Robinson is expected to plead guilty next week on certain charges. Kenneth Smith is currently a fugitive. Anyone with any information about Smith’s whereabouts is encouraged to call 313-234-5656. “The Detroit One partnership is focusing our efforts on combating gang violence,” McQuade said. “Gang members should take note that these recent cases demonstrate that the Detroit One strategy is permitting us to address gang violence with swift action and strong penalties. If any individual wants to leave gang life, we are here to help them do that safely.” "The significant arrests and prosecutions made by Detroit One make certain that the citizens of Detroit and the region can once again start to feel safe in their communities" said Chief James Craig. "We will maintain our focus and remain stead-fast in our pledge to bringing swift justice to all those who commit violent acts against our city." S. Robin Shoemaker, Special Agent in Charge of the Detroit Field Division of ATF said, “Countering firearms violence, particularly when it relates to violent street gangs remains one of ATF’s primary missions, when it comes to gun violence ATF will continue to work hand in hand with our Detroit One partners to ensure that those individuals’ who engage in violent criminal activity are removed from our neighborhoods. "These convictions represent the significant impact law enforcement can have on violent criminal enterprises when local, state, and Federal partners combine forces to address the violent gangs responsible for terrorizing our communities," said David P. Gelios, Special Agent in Charge, FBI - Detroit Division. "The quality of life in our community will remain closely aligned to our successful ongoing collective efforts to remove violent offenders from Detroit's streets." The charges relating to the May 7, 2015, shooting of the four family members are one component of the federal government’s prosecution of the Vice Lords street gang, which has led to the arrests and convictions of Vice Lords leaders and members over several years. In two trials in March and May 2015, juries convicted eight leaders and members of the PhantomOutlaw Motorcycle Club, many of whom also were leaders and members of the Vice Lords, for various crimes, including a September – October 2013 mass murder plot against a rival organization of the Phantoms, and the September 2013 shooting ofa member of another rival organization. Among those eight convicted defendants was Antonio Johnson, aka “MT” or “MisterTony,” the National President of the Phantoms and the “Three-Star General” over the Vice Lords in Michigan. On September 8, 2015, Johnson was sentenced to 35 years in prison. Also, on January 13, 2015, Christopher Tibbs, a.k.a. “Chief Fatah,” the leader of the Michigan branch of the Mafia Insane Vice Lords, was sentenced to almost 29 years in prison for his role in helping plan an armed robbery of a Little Caesars restaurant in Redford, Michigan, in September 2013. This case marked the first time that the federal criminal streetgang enhancement was charged in the Eastern District of Michigan. The case is being investigated by the ATF’s Comprehensive Violence Reduction Program, which includes representatives of the Detroit Police, Michigan State Police, and Michigan Department of Corrections, in coordination with the FBI and DEA. The case is being prosecuted by Assistant U.S. Attorneys Christopher Graveline and Mark Bilkovic of the Eastern Districtof Michigan, and Trial Attorney Joseph Wheatley of the Criminal Division’sSix Detroit Vice Lords Gang Members Plead Guilty to Racketeering Conspiracy and Gang-Related ShootingsRead the Press Release
Six members of the Vice Lords gang in Detroit pleaded guilty this week to various racketeering and firearms offenses based on their roles in the gang-related shooting of four individuals.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Detroit Mayor Mike Duggan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Chief James Craig of the Detroit Police Department made the announcement.
Antonio Clark, aka Cheeto, 26; Aramis Wilson, aka Ace, 25; Tyrone Price, aka Price, 27; Jonathan Kinchen, aka Deago, 22; Kojuan Lee, aka Juan, 20; Kirshean Nelson, 19; Dion Robinson, 37; and Kenneth Smith, 34, all of Detroit, were indicted for racketeering and firearms charges relating to the gang-related shooting of four members of a family on May 7, 2015.
On Jan. 25, 2016, Wilson pleaded guilty to two counts of assault with a dangerous weapon in aid of racketeering and one count of using and carrying of a firearm during and in relation to a crime of violence. On Jan. 26, 2016, Nelson pleaded guilty to one count of RICO conspiracy. On Jan. 27, 2016, Clark pleaded guilty to two counts of attempted murder in aid of racketeering and one count of using and carrying of a firearm during and in relation to a crime of violence. On Jan. 28, 2016, Lee and Kinchen each pleaded guilty to one count of RICO conspiracy; Price pleaded guilty to two counts of assault with a dangerous weapon in aid of racketeering and one count of using and carrying of a firearm during and in relation to a crime of violence.
According to the plea agreements, the Vice Lords is a national gang engaged in a variety of crimes, including murder, robbery, narcotics trafficking and witness intimidation. The defendants admitted that the Vice Lords’ leaders are located in Chicago and Detroit and that the gang is broken down into various “sets,” “decks” or “branches.” Members who seek to leave the gang oftentimes endure a physical beating by multiple Vice Lord members or are targeted for killing. The racketeering activity included, from 2011 through 2015, trafficking in controlled substances, including marijuana, Xanax and ecstasy, at locations in and around the Detroit metropolitan area, including at Northland Mall in Southfield, Michigan.
As admitted in the plea agreements, members of the Traveling Vice Lords set, acting at the direction of Smith and others, searched for two brothers who had left, or attempted to leave, the Vice Lords as part of a plan to harm those individuals. The defendants further admitted that on May 7, 2015, they and others met at Smith’s house to discuss their plan and collect firearms, including an AK-47 assault rifle, then traveled in multiple cars to the intended victims’ house. After a brief confrontation with the brothers’ family members, Clark opened fire with an AK-47, firing at the family more than two dozen times and hitting four victims.
The charges related to the shooting are a component of the federal government’s prosecution of the Vice Lords street gang, which has led to the arrests and convictions of Vice Lords leaders and members over several years. In two trials during March and May 2015, juries convicted eight leaders and members of the Phantom Outlaw Motorcycle Club, many of whom were also leaders and members of the Vice Lords, for various crimes, including a mass murder plot against a rival organization of the Phantoms and the shooting of a member of another rival organization. Among those eight convicted defendants was Antonio Johnson, aka MT and Mister Tony, the national president of the Phantoms and the “three-star general” of the Vice Lords in Michigan, who was sentenced to 35 years in prison on Sept. 8, 2015.
On Jan. 13, 2015, Christopher Tibbs, aka Chief Fatah, the leader of the Michigan branch of the Mafia Insane Vice Lords, was sentenced to 346 months in prison for his role in helping plan an armed robbery. This case marked the first time that the federal criminal street gang enhancement was charged in the Eastern District of Michigan.
Kenneth Smith is currently a fugitive and anyone with any information about his whereabouts is encouraged to call the U.S. Marshals tip line at (313) 234-5656 and the ATF’s tip line at (313) 202-3400. The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
The ATF’s Comprehensive Violence Reduction Program, which includes representatives of the Detroit Police, Michigan State Police and Michigan Department of Corrections, is investigating the case in coordination with the FBI and DEA. Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Mark Bilkovic of the Eastern District of Michigan are prosecuting the case.
Sentencings for January 22 - January 27, 2016Read the Press Release
Kimberly Erin Smith, 34, of Green River, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 27, 2016, for conspiracy to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Smith was arrested in Green River, Wyoming. She received 70 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $400.00 fine and a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Justin Dix, 35, of Cheyenne, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 25, 2016, for conspiracy to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine and for possession of a firearm in furtherance of a drug trafficking crime. Dix was arrested in Cheyenne, Wyoming. He received 160 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $300.00 fine and a $200.00 special assessment. This case was investigated by the Cheyenne Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Julia Flock, 54, of Torrington, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 25, 2016, for conspiracy to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Flock was arrested in Torrington, Wyoming. She received 37 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Cheyenne Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Nikki J. Juneman, 24, of Longview, Washington, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 25, 2016, for possession with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine and aiding and abetting. Juneman was arrested in Rawlins, Wyoming. She received 60 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $100.00 special assessment. This case was investigated by the Wyoming Division of Criminal Investigation.
Ramon Erek Slater, 26, of Laramie, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 25, 2016, for possession with intent to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Slater was arrested in Cheyenne, Wyoming. He received 41 months imprisonment, to be followed by four years of supervised release, and was ordered to pay a $300.00 fine and a $100.00 special assessment. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Brian William Price, 47, of Lovell, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 25, 2016, for being a felon in possession of a firearm. Price was arrested in Torrington, Wyoming. He received 30 months imprisonment, to be followed by two years of supervised release, and was ordered to pay a $200.00 fine and a $100.00 special assessment. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Sarah Ward, 27, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on January 22, 2016, for conspiracy to distribute 100 grams or more of heroin and for possession with intent to distribute heroin. Ward was arrested in Cheyenne, Wyoming. She received 37 months imprisonment, to be followed by three years of supervised release, and was ordered to pay a $300.00 fine and a $200.00 special assessment. This case was investigated by the Cheyenne Police Department.
Rhode Island Woman Pleads Guilty to $800,000 Immigration ScamRead the Press Release
BOSTON – A Woonsocket woman pleaded guilty today in U.S. District Court in Worcester to federal wire fraud charges in connection with a scheme to defraud immigrants that netted over $800,000.
Patria Zuniga, 53, of Woonsocket, R.I., pleaded guilty to eight counts of wire fraud. U.S. District Judge Timothy S. Hillman scheduled sentencing for May 24, 2016.
From 2009 through 2012, Zuniga targeted immigrant victims telling them that she worked for US immigration authorities and could assist them in lawfully obtaining permanent resident immigration status. The victims typically had no lawful status or temporary legal status in the United States. Zuniga’s services were initially offered for $8,000 to $14,000; however, after the victims made the payments, Zuniga extorted additional funds by, among other things, threatening to have them deported if they refused to pay.
Victim payments were initially made in cash, but later in the scheme Zuniga accepted money via cash deposits made directly into designated bank accounts (including accounts owned by her daughters), money orders, and bank and Western Union wire transfers. In total, victims paid more $800,000 over the course of the fraud.
In furtherance of her scheme, Zuniga employed a variety of tools to create the appearance of legitimacy in front of the victims. For example, in order to prove that she could in fact deliver the promised immigration benefits, Zuniga showed her victims photocopies of immigration documents with their names and photographs on them, which she had forged. Zuniga also routinely arranged for victims to travel to the United States Citizenship and Immigration Offices in Boston purportedly to take receipt of the of the immigration documents. Upon arrival, victims waited for hours only to have Zuniga contact and cancel the non-existent appointment.
Zuniga’s daughters, Alba Peña and Indranis Rocheford, have also been charged in connection with the fraud. They are scheduled for trial in April 2016.
Zuniga faces a maximum sentence of 20 years in prison to be followed by three years of supervised release and a fine of $250,000 per count of wire fraud. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service in Boston, made the announcement today. The case is being prosecuted by Jordi de Llano of Ortiz’s Major Crimes Unit.
Retired Air Force Master Sergeant Sentenced to Prison for Disclosing Confidential Bid Information for Government Contracts and Tax FraudRead the Press Release
A retired U.S. Air Force Master Sergeant was sentenced today in the U.S. District Court for the Southern District of Florida to 18 months in prison following his guilty plea to unlawfully disclosing confidential procurement information and filing a false tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to court documents, Trevor Smith retired from the U.S. Air Force in December 2012 at the rank of Master Sergeant. From February 2009 through February 2010, Smith was deployed to Afghanistan, where he served as Supply Non-Commissioned Officer-In-Charge for the Operation Enduring Freedom/Combined Security Transition Command-Afghanistan NATO Training Mission. In that capacity, Smith met a Fort Lauderdale-based government contractor. As part of his plea, Smith admitted that he agreed to disclose confidential bid information on government contracts to the contractor in exchange for bribe payments. Smith and the contractor agreed that Smith would receive two percent of all revenues on contracts that the contractor received as a result of Smith’s assistance.
In January 2010, the contractor wired $42,853.29 to Smith. The two agreed to wait until Smith returned to the United States for more payments. After returning to the United States, Smith set up a shell corporation called T Star Air Inc. to receive 23 additional payments totaling $220,600. Smith also created and submitted phony invoices to conceal the scheme. For tax years 2010 through 2012, Smith filed corporate tax returns for T Star Air that falsely claimed inflated expenses and deductions.
In addition to the prison term, U.S. District Judge Beth Bloom for the Southern District of Florida ordered Smith to pay restitution to the Internal Revenue Service (IRS) in the amount of $6,501.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, the U.S. Air Force’s Office of Special Investigations and the U.S. Department of Defense’s Office of the Inspector General, who investigated this case and Trial Attorneys Charles M. Edgar Jr. and Jason H. Poole of the Tax Division, who are prosecuting this case.
Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office of the Southern District of Florida for their substantial assistance.
Residents from Modesto and Southern California Indicted for Large Scale Statewide Drug Trafficking ConspiracyRead the Press Release
FRESNO, Calif. — A federal grand jury returned an 11-count indictment today against Antonio Castellanos, 32, of Whittier; Jose Reyes-Pineda, 43, of Anaheim; and Modesto residents Genaro Serrato-Calles, 45; Antonio Valencia-Hernandez, 60; Lorena Mariscal Velasquez, 46; Nora Lizbet Garcia, 29; and Melissa Velasquez, 25, charging them in a methamphetamine and heroin trafficking conspiracy, U.S. Attorney Benjamin B. Wagner announced.
According to court documents, between June 2014 and January 2016, the defendants conspired to distribute methamphetamine and heroin brought from Southern California to Stanislaus County. On April 8, 2015, agents seized six kilograms of methamphetamine obtained from Reyes-Pineda, transported by Valencia-Hernandez and Lorena Velasquez, and intended for Serrato-Calles. In addition, agents seized 16 kilograms of methamphetamine in June 15, 2015 that had been transported to Stanislaus County from Southern California as arranged by Castellanos and Serrato-Calles.
This case is the product of an investigation by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Stanislaus Drug Enforcement Agency, the Central Valley HIDTA, the San Joaquin METRO Task Force, and the Orange County Sheriff’s Special Investigations Bureau. Assistant U.S. Attorney Kathleen A. Servatius is prosecuting the case.
All defendants have been arrested. Castellanos, Reyes-Pineda, Lorena Velasquez, Melissa Velasquez, and Garcia have been ordered released pending trial. All defendants are scheduled to appear in court before U.S. Magistrate Judge Stanley A. Boone for arraignment on Friday, January 29, 2016.
If convicted, Castellanos, Serrato-Calles, and Valencia-Hernandez face a sentence of 10 years to life in prison and a $10 million fine. If convicted, the remaining defendants face a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Rand heroin dealer pleads guilty to Federal drug crimeRead the Press Release
CHARLESTON, W.Va. – A Rand drug dealer pleaded guilty today to a federal heroin crime, announced Acting United States Attorney Carol Casto. Marcus Manchion, 27, entered his guilty plea in federal court to distribution of heroin.
Manchion admitted that on March 3, 2015, he sold heroin to a confidential informant working with the Kanawha County Sheriff’s Department. The drug deal took place on the 5000 block of Church Drive in Rand. Manchion also admitted to selling heroin to a confidential informant on three other occasions in March of 2015. On April 16, 2015, officers executed a search warrant on Manchion’s house in Rand and recovered over 80 grams of heroin and a Glock Model 37 pistol.
Manchion faces up to 20 years in federal prison and a fine of $1 million when he is sentenced on April 28, 2016.
The case was investigated by the Kanawha County Sheriff’s Department. Assistant United States Attorney Monica D. Coleman is in charge of the prosecution. The hearing was held before United States District Judge John T. Copenhaver, Jr.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Prince George’s County Cocaine Dealer Sentenced to over 16 Years in PrisonRead the Press Release
Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang sentenced Charles Brian Curtin, age 46, of Mechanicsville, Maryland today to 200 months in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute cocaine, and for being a felon in possession of a firearm.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Interim Chief Henry P. Stawinski of the Prince George’s County Police Department; and St. Mary’s County Sheriff Tim Cameron.
According to his plea agreement, from at least February through September 4, 2014, Curtin conspired with others to distribute cocaine in and around Prince George’s County, Maryland. Curtin obtained cocaine from suppliers in Tennessee and Maryland. During the investigation, Curtin was overheard by law enforcement discussing the distribution of cocaine using coded language. Curtin stored cocaine, drug proceeds and firearms in multiple residences in Maryland.
On August 22, 2014, law enforcement executed a search warrant at a stash house in District Heights, Maryland used by Curtin and seized cocaine packaging material, a digital scale used to measure cocaine for distribution, and $178,020 in cash. Later that day, a second search warrant was executed at Curtin’s home in Mechanicsville. Law enforcement seized drug paraphernalia, a scale, a .45 caliber handgun and a PLR-16 handgun. Curtin had previously been convicted of a felony and was prohibited from possessing firearms or ammunition.
Curtin admitted that during the course of the conspiracy he was responsible for distributing between five and 15 kilograms of cocaine.
United States Attorney Rod J. Rosenstein praised the DEA, Prince George’s County Police Department, and St. Mary’s County Sheriff’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Leah J. Bressack and Joseph R. Baldwin, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Preston Hollow Woman Indicted for Social Security FraudRead the Press Release
ALBANY, NEW YORK – Karen L. Sowman, age 55, of Preston Hollow, New York, was arraigned today on an indictment accusing her of stealing $69,000 in benefits from the Social Security Administration (SSA).
The announcement was made by United States Attorney Richard S. Hartunian and Edward J. Ryan, Special Agent-In-Charge of the SSA Office of the Inspector General.
Sowman is charged with theft of government property. The indictment alleges that Sowman took and spent Social Security benefit payments deposited into her deceased mother’s bank account knowing that the money was not hers.
The charges in the indictment are merely accusations. The defendant is presumed innocent until proven guilty.
Sowman faces up to 10 years of imprisonment and a $250,000 fine if convicted. Actual sentences are typically less than the maximum penalties. Sentences are imposed by a judge based on U.S. Sentencing Guidelines and other statutory factors.
Sowman, who was indicted on January 20, 2016, was arraigned today before Magistrate Judge Daniel J. Stewart. She was released on her own recognizance pending a trial scheduled for March 28, 2016 before U.S. District Judge Mae A. D’Agostino.
This case is being investigated by the SSA Office of the Inspector General and is being prosecuted by Special Assistant U.S. Attorney Jason W. White.
Portland Man Sentenced to 1½ Years for Illegally Possessing FirearmRead the Press Release
Contact: Darcie N. McElwee
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Cory Girard, 27, of Portland, Maine, was sentenced today in U.S. District Court by Judge D. Brock Hornby to 1½ years in prison and three years of supervised release for possessing a firearm while being an unlawful user of marijuana. He pled guilty on October 1, 2015.
According to court records, on January 8, 2010, Girard was found by police at a Rackleff Street, Portland apartment in possession of a semi-automatic pistol that he purchased in October 2009 and used to protect his drug trafficking business. Over that period of time, Girard was an illegal daily user of marijuana and had smoked marijuana on January 8, 2010.
The investigation was conducted by the Portland Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
Pontoon Beach Man Sentenced for Distributing Methamphetamine in Granite CityRead the Press Release
The Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today that Michael J. Murphy, 35, of Pontoon Beach, Illinois, was sentenced on January 28, 2016 to 36 months in federal prison for Distribution of Methamphetamine in Granite City in December, 2013.
Murphy pled guilty to the federal charge on October 16, 2015. He has been in federal custody since then.
According to evidence presented at Murphy’s change of plea hearing, Murphy sold approximately two ounces of methamphetamine to a police informant for $3,800 on December 11, 2013, near a tavern in Granite City.
Charged along with Murphy was a co-defendant, Shawn A. Thompson, who supplied the methamphetamine to Murphy. Thompson has also pled guilty and is scheduled to be sentenced in U.S. District Court in East St. Louis, Illinois, on March 17, 2016.
The investigation which resulted in Murphy’s arrest and conviction was conducted by the Drug Enforcement Administration (DEA).
The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
Pocatello Man Pleads Guilty to Social Security FraudRead the Press Release
POCATELLO - Timmy Adam Allen, 51, of Pocatello, Idaho, pleaded guilty today to social security fraud, U.S. Attorney Wendy J. Olson announced. Allen was indicted by a federal grand jury in Pocatello on August 11, 2015.
According to the plea agreement, Allen admitted that in February 2012, he applied for social security benefits for his son and requested to be the representative payee. As part of the application, the defendant falsely represented that his son lived with him. In reliance on that application and the false statement it contained, the Social Security Administration determined the son was eligible for benefits and appointed Allen as the representative payee. From on or about February 9, 2012, through on or about July 3, 2014, the defendant received $21,681 in social security benefits for his son. The defendant did not spend any of the money on his son or conserve it for his future use. Instead, the defendant took the $21,681 and spent it on himself.
The charge of social security fraud is punishable by up to five years in prison, a maximum fine of $250,000.00, and up to three years of supervised release.
Sentencing is set for March 29, 2016, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the Social Security Administration Office of Inspector General with assistance from the Power County Sheriff’s Office. The case was prosecuted by a Special Assistant U.S. Attorney as part of a partnership venture between the Social Security Administration Office of General Counsel and the United States Attorney’s Office to prosecute social security fraud.
Norwalk Drug Trafficker Sentenced to 6 Years in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that KONSTANTINOS ZOGRAFIDIS, also known as “Gus,” 54, of Norwalk, was sentenced yesterday by U.S. District Judge Jeffrey Alker Meyer in New Haven to 72 months of imprisonment, followed by three years of supervised release, for trafficking oxycodone, cocaine and marijuana.
According to court documents and statements made in court, a year-long investigation headed by the DEA’s Bridgeport High Intensity Drug Trafficking Area Task Force and Norwalk Police Department identified ZOGRAFIDIS as a major distributor of oxycodone, cocaine and marijuana in Fairfield County.
Sixteen individuals were charged and convicted as a result of this investigation.
ZOGRAFIDIS has been detained since arrest in May 2012. On June 24, 2014, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute cocaine.
ZOGRAFIDIS, a citizen of Greece, faces immigration proceedings when he completes his prison term.
This matter was investigated by the DEA’s Bridgeport High Intensity Drug Trafficking Area Task Force and the Norwalk Police Department, with assistance provided by the Connecticut State Police and the Bridgeport, Stamford, Stratford and Westport Police Departments. The case is being prosecuted Assistant U.S. Attorneys Vanessa Richards and Michael Runowicz.
Norwalk Accountant Sentenced to More Than 8 Years in Federal Prison for Running Ponzi SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMES E. NEILSEN, 55, of Norwalk was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 97 months of imprisonment, followed by three years of supervised release, for operating a Ponzi scheme that defrauded investors of more than $1.6 million, and for stealing millions more from other investment accounts.
According to court documents and statements made in court, NEILSEN was a certified public accountant until he became inactive in approximately 2012. Since at least 2006, NEILSEN solicited and received more than $1 million dollars from numerous individuals to invest with Ulysses Partners, LLC, an entity in which NEILSEN was a partner and chief financial officer, or Neilsen Financial Services, an entity that NEILSEN owned and controlled. NEILSEN promised investors a guaranteed rate of return of 9 to 10.5 percent on their investment. NEILSEN told investors that Ulysses Partners or Neilsen Financial Services would invest their money in businesses or business ventures. Instead, NEILSEN used much of that money to pay back earlier victim investors and to make various personal expenditures.
As part of the scheme, NEILSEN submitted fabricated account statements to his victims, and also sent lulling emails to multiple victims.
Through this scheme, NEILSEN defrauded victim investors of $1,663,641.83.
In addition, NEILSEN stole funds from various trust and estates accounts to which he had access.
Judge Chatigny found that the total loss attributable to NEILSEN’s criminal conduct exceeds $6 million. A restitution hearing will be scheduled at a later time.
NEILSEN’s victims include his accounting clients, clients of his tax preparation business, friends and members of his family, including his 93-year-old great aunt. His victims also include minor children beneficiaries of a trust established after their father’s untimely death and whose trust monies NEILSEN had authorized access to. Approximately 10 of NEILSEN victims addressed the court during today’s sentencing proceeding.
NEILSEN was arrested on June 18, 2015. On September 24, 2015, he pleaded guilty to one count of wire fraud.
NEILSEN has been released on bond since his arrest. He will be confined to his home on electronic monitoring until he reports to prison on March 11, 2016.
This matter was investigated by the Federal Bureau of Investigation, the Greenwich Police Department and the Connecticut Department of Banking. The case was prosecuted by Assistant U.S. Attorney David T. Huang.
New York City Man Sentenced to 46 Months in Prison for Cocaine TraffickingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 28 year old New York City resident was sentenced today to 46 months in federal prison by U.S. District Court Judge Robert D. Mariani for selling cocaine and crack cocaine in the Lackawanna and Luzerne County areas.
According to United States Attorney Peter Smith, the conviction and sentence are the result of an investigation by the Federal Bureau of Investigation and the Pennsylvania State Police into the sale of drugs at various motels in Luzerne and Lackawanna Counties. On August 28, 2015, Cedrick Johnson pleaded guilty to distributing cocaine and crack on numerous occasions between 2012 and July 2013.
Judge Mariani also ordered Johnson to be placed on three years of supervised release following his prison sentence.
This case was prosecuted by Assistant U.S. Attorney John C. Gurganus, Jr.
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Nebraska Man Sentenced in Health Care Fraud CaseRead the Press Release
United States Attorney Deborah Gilg and Nebraska Attorney General Doug Peterson announced that Clements Akara, 61, of Omaha Nebraska, was sentenced today by United States District Judge John M. Gerrard for the crime of health care fraud. Akara was sentenced to three years of supervised release, five months incarceration, and five months of house arrest. He was also ordered to perform 100 hours of community service and pay restitution to the Nebraska Department of Health & Human Services, Medicaid Division totaling $65,911.
By his guilty plea, Akara admitted submitting false claims to Nebraska Medicaid for durable medical equipment, primarily nebulizers and nebulizer supplies, which he had not actually provided to anyone. Between November 2004 and August 2010 he submitted 76 false claims for payment through his business, Statewide Medical Equipment.
This case was investigated by the Medicaid Fraud and Patient Abuse Unit of the Nebraska Attorney General’s Office and prosecuted by the Nebraska Attorney General’s office and the United States Attorney’s office.
Navy Commander Pleads Guilty to Accepting Cash and Prostitutes in International Bribery SchemeRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – January 28, 2016
SAN DIEGO, CA – U.S. Navy Commander Michael Vannak Khem Misiewicz pleaded guilty to bribery charges in federal court today, admitting that he gave classified ship schedules - including those that contained information related to the U.S. Navy’s ballistic missile defense operations in the Pacific - to a foreign defense contractor in exchange for cash, gifts, travel expenses, entertainment and the services of prostitutes.
Misiewicz, 48, who was indicted last January by a federal grand jury in the Southern District of California, pleaded guilty before U.S. Magistrate Judge Jan Adler to one count of conspiracy and one count of bribery. A sentencing hearing is scheduled for April 29, 2016 at 9 a.m. before U.S. District Judge Janis L. Sammartino.
According to admissions in his plea agreement, from January 2011 until September 2013, Misiewicz provided classified U.S. Navy ship schedules and other sensitive U.S. Navy information to the defense contractor, Leonard Glenn Francis, CEO and owner of Singapore-based Glenn Defense Marine Asia. GDMA provided husbanding services such as tugboats, fuel, and trash removal services for U.S. Navy ships and submarines when they arrived at ports throughout the Pacific.
In his plea agreement, Misiewicz admitted that he used his position and influence within the U.S. Navy to advance the interests GDMA, including by providing Francis with classified ship schedules and other proprietary U.S. Navy information, and that in return, Francis gave him cash, paid for luxury travel on at least eight occasions for Misiewicz, his mother, brother and children to the Philippines, Japan, Kuala Lumpur, Cambodia, Singapore and the United States, provided his wife with a designer handbag, and plied Misiewicz with the services of prostitutes on multiple occasions. Throughout the conspiracy, Misiewicz admitted, he and his conspirators took steps to avoid detection by law enforcement by, among other means, using clandestine email accounts, which they periodically deleted.
“Commander Misiewicz provided information to a foreign contractor that, in the wrong hands, could’ve had a devastating impact on national security,” said U.S. Attorney Laura Duffy. “By giving in to greed, he put his Navy shipmates and fellow Americans in harm’s way. This guilty plea is an important step in ensuring that all those who violated their duty of trust to the United States in this affair are held accountable.”
“In exchange for luxury vacations, gifts and other expenses, Commander Misiewicz betrayed his oath, the men and women of the U.S. Navy, and American taxpayers by directing lucrative government contracts to his financial patron,” said Assistant Attorney General Leslie R. Caldwell. “Working with our law enforcement partners, the Department of Justice’s Criminal Division is committed to prosecuting corrupt officials who abuse positions of public trust.”
“Today's guilty plea of Commander Misiewicz is yet another example of a U.S. Navy officer who sought to enrich himself at the expense of U.S. taxpayers,” said DCIS Director James B. Burch, Director. “This type of reprehensible behavior will not be tolerated. Those who serve in the U.S. Navy have an obligation to uphold the public's trust or suffer the consequences. DCIS, the Naval Criminal Investigative Service, and the Department of Justice will vigorously pursue this investigation wherever it may lead us.”
“Commander Misiewicz chose personal gain and gratification over sacrifice and service to our country. His actions are antithetical to the Navy's core values of honor, courage and commitment," said NCIS Director Andrew Traver. “Along with DCIS, we will continue vigorously pursuing all aspects of the investigation.”
So far, nine people have been charged; of those, eight have pleaded guilty, including Misiewicz, Captain Daniel Dusek, Commander Jose Sanchez, NCIS Special Agent John Beliveau and U.S. Navy Petty Officer First Class Daniel Layug; as well as GDMA’s Francis and GDMA employee Alex Wisidigama. Former Department of Defense civilian employee Paul Simpkins awaits trial. Layug was sentenced last week to 27 months in prison and a $15,000 fine; the others await sentencing.
The ongoing investigation is being conducted by NCIS, DCIS and the Defense Contract Audit Agency. The case is being prosecuted by Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California and Trial Attorneys Brian R. Young and Lawrence Atkinson of the Criminal Division’s Fraud Section.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANT Case Number: 13-CR-4287
Michael Vannak Khem Misiewicz 48 San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine,
Bribery, in violation of 18 U.S.C. § 201
Maximum Penalty: 15 years in prison, a $250,000 fine
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Navajo Man from Sheep Springs, N.M., Pleads Guilty to Federal Voluntary Manslaughter ChargeRead the Press Release
ALBUQUERQUE – Bufred Denetclaw, 53, an enrolled member of the Navajo Nation who resides in Sheep Springs, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to a voluntary manslaughter charge. Under the terms of his plea agreement, Denetclaw will be sentenced to 100 months in federal prison.
Denetclaw was arrested on June 23, 2014, on a criminal complaint charging him with killing a Navajo man on the Navajo Indian Reservation in San Juan County, N.M., on June 21, 2014. The crime occurred during an alcohol-infused argument between Denetclaw and the victim. Denetclaw was subsequently indicted on June 24, 2015.
During today’s proceedings, Denetclaw pled guilty to a felony information charging him with voluntary manslaughter. In entering his guilty plea, Denetclaw admitted that on June 21, 2014, while acting in the heat of passion, he killed the victim by stabbing him in the back three times.
This case was investigated by the Farmington office of the FBI and the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorneys Elaine Y. Ramirez and Raquel Ruiz-Velez.
Navajo Man from Buffalo Springs Pleads Guilty to Federal Voluntary Manslaughter ChargeRead the Press Release
ALBUQUERQUE – Jay Barton, 48, an enrolled member of the Navajo Nation who resides in Buffalo Springs, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to a voluntary manslaughter charge. Under the terms of his plea agreement, Barton will be sentenced within the range of 78 to 97 months in federal prison followed by a term of supervised release to be determined by the court.
Barton was arrested on Aug. 26, 2015, on a criminal complaint charging with killing a Navajo man on the Navajo Indian Reservation in McKinley County, N.M., on Aug. 21, 2015. The crime occurred during an argument between Barton and the victim while Barton and the victim were drinking alcoholic beverages. Barton was subsequently indicted on a voluntary manslaughter charge on Sept. 22, 2015.
During today’s proceedings, Barton pled guilty to the indictment charging him with voluntary manslaughter. In entering the guilty plea, Barton admitted killing the victim by stabbing him in the chest, abdomen and back during an argument that became physical. According to the plea agreement, both Barton and the victim were intoxicated when Barton committed the crime.
Barton remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Gallup office of the FBI and the Navajo Nation Division of Public Safety and is being prosecuted by Assistant U.S. Attorney Elaine Y. Ramirez.
Naples Woman Sentenced to A Year and A Day for Evading Financial Reporting RequirementsRead the Press Release
Fort Myers, Florida – U.S. District Judge John E. Steele has sentenced Lorie Ann Williams to one year and a day in federal prison for structuring financial transactions. As part of her sentence, the Court also entered a money judgment in the amount of $332,500, the proceeds traceable to the offense. Williams will be jointly and severally liable for the amount of the money judgment, along with her husband and co-defendant, Sydney Jackson Williams, Jr., who has not yet been sentenced.
Lorie Ann Williams pleaded guilty on October 27, 2015.
According to court documents, subsequent to two civil lawsuits being brought against him, Sydney Jackson Williams, Jr., transferred more than $3 million in joint marital assets into an account in Lorie Ann Williams’s name. Soon thereafter, she began withdrawing funds her account in structured cash withdrawals. Between March 3, 2010, and April 22, 2010, Lori Ann Williams made 35 separate cash withdrawals, totaling $332,500, from her solely-owned checking account. She wrote checks from the account, made payable to cash, each in the amount of $9,500.
Ultimately, on September 30, 2010, Sydney Jackson Williams, Jr. filed a Chapter 11 bankruptcy petition with the United States Bankruptcy Court in the Middle District of Florida.
Pursuant to the Bank Secrecy Act, financial institutions are required to file a "Currency Transaction Report" with the United States Treasury Department for each financial transaction that involves United States currency in excess of $10,000. These transactions include deposits, withdrawals, check cashing, or other transactions involving the physical transfer of currency from one person to another.
This case was investigated by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Yolande G. Viacava and Charles D. Schmitz.
Mississippi Man Charged in Murder-for-Hire SchemeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JEFFERY HOWARD, age 35, of Nicholson, Mississippi, was charged today in a one-count Indictment with use of interstate commerce facilities in the commission of murder-for-hire in violation of Title 18, United States Code, Section 1958(a).
According to court documents, as a result of a Federal Bureau of Investigation (“FBI”) Domestic Terrorism investigation, the New Orleans Joint Terrorism Task Force (“JTTF”) became aware of HOWARD, a known member of the Aryan Brotherhood, a violent white supremacy prison gang. HOWARD, who was allegedly involved in the trafficking of methamphetamine, sold drugs to an undercover law enforcement officer on numerous occasions. During one of the sales of drugs, HOWARD volunteered that he would be willing to commit a murder in exchange for money. HOWARD later accepted payment to commit a murder.
If convicted, HOWARD faces up to ten years imprisonment, a $250,000 fine, and a three year term of supervised release.
U.S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the FBI New Orleans Division JTTF for investigating this matter. Assistant United States Attorney Gregory M. Kennedy is in charge of the prosecution.
Mikhail Zemlyansky Sentenced to 15 Years for Racketeering, Securities Fraud, Mail Fraud, Wire Fraud, and Money LaunderingRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MIKHAIL ZEMLYANSKY was sentenced today to 15 years in prison in connection with his operation, from 2007 through 2012, of a sprawling racketeering conspiracy that engaged in the largest single no fault automobile insurance fraud scheme ever charged, two investment fraud schemes that resulted in losses to nearly 300 victims of approximately $17 million, multiple complex money laundering operations, and illegal gambling. Zemlyansky was convicted on March 19, 2015, following a four-week jury trial, of racketeering conspiracy, securities fraud, wire fraud, and mail fraud. He was sentenced today by the United States District Judge J. Paul Oetken, who presided over the trial.
U.S. Attorney Preet Bharara said: “Driven by an insatiable greed, Mikhail Zemlyansky operated a sophisticated criminal enterprise that, during a five-year span, preyed on hundreds of innocent victims, reaping tens of millions of dollars in illicit proceeds. Zemlyansky’s criminal schemes were wide-ranging, from insurance and securities fraud to illegal gambling. Thanks to the tireless work of the prosecutors and our partners at the FBI and NYPD, justice has now been served for Zemlyansky.”
According to the Superseding Indictment, evidence admitted at trial, court filings, and statements made in open court:
From at least 2007 through 2012, ZEMLYANSKY was a leader, along with co-defendant Michael Danilovich, of a criminal enterprise engaged in a pattern of racketeering that included a massive scheme to defraud automobile insurance companies under New York’s no fault insurance law, multiple securities fraud schemes, money laundering, and the operation of illegal gambling businesses (the “Zemlyansky/Danilovich Organization”).
As part of the enterprise, ZEMLYANSKY was convicted for operating two investment fraud schemes that swindled nearly 300 innocent victims out of approximately $17 million. Both schemes – Lyons Ward & Associates and the Rockford Group – purported to be settlement claims funding companies that invested in lawsuits in return for a portion of future settlements. As part of these schemes, ZEMLYANSKY, Danilovich, and their co-conspirators created bogus documents and account statements used by cold-callers working in boiler rooms to solicit victims through lies. In reality, there was no investment fund at all; instead, ZEMLYANSKY and his co-conspirators simply stole the money invested by victims and laundered the proceeds by wiring them overseas to shell companies in Eastern Europe, which were then converted into cash in the United States.
In addition to the investment fraud schemes, ZEMLYANSKY and his co-conspirators perpetrated a sophisticated scheme to steal hundreds of millions of dollars from automobile insurance companies. Under New York State law, every vehicle registered in the State is required to have no fault automobile insurance, which enables the driver and passengers of a registered and insured vehicle to obtain benefits of up to $50,000 per person for injuries sustained in an automobile accident, regardless of fault (the “No Fault Law”). The No Fault Law requires prompt payment for medical treatment, thereby obviating the need for claimants to file personal injury lawsuits in order to be reimbursed. New York State Law also requires that all medical clinics in the State be incorporated, owned, operated, and controlled by a licensed medical practitioner in order to be eligible for reimbursement under the No Fault Law. Insurance companies will not honor claims for medical treatments from a medical clinic that is not actually owned, operated, and controlled by a licensed medical professional.
From at least 2007 through 2012, the Zemlyansky/Danilovich Organization defrauded automobile insurance companies of hundreds of millions of dollars by, among other things, creating and operating medical clinics that provided unnecessary or excessive medical treatments in order to take advantage of the No Fault Law. The Organization fraudulently owned and controlled more than a dozen medical professional corporations (“PCs”) – including no fault clinics, MRI offices, and acupuncture and chiropractic PCs – by recruiting and paying licensed medical professionals to use their licenses to incorporate the PCs. ZEMLYANSKY and his co-conspirators paid kickbacks of thousands of dollars to runners to recruit patients to receive the same battery of tests and treatments, and received kickbacks from other co-conspirators for referring patients for additional unnecessary treatments. All told, the Organization billed insurance companies for hundreds of millions of dollars in fraudulent medical treatments. ZEMLYANSKY and his co-conspirators laundered the proceeds of the fraud through check cashing entities and shell companies, and used the money to pay for luxury cars, watches, and vacations.
Finally, the Zemlyansky/Danilovich Organization operated high-stakes illegal poker games in Brooklyn and New York City that netted profits of tens of thousands of dollars per game.
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As part of the sentence imposed today by Judge Oetken, ZEMLYANSKY, 39, of Hewlett, New York, was further sentenced to three years of supervised release and was ordered to pay a fine of $50,000 and forfeiture and restitution to the victims of his crimes in the amount of $29,575,846.30.
At ZEMLYANSKY’s first trial in the fall of 2013, a mistrial was declared on Count One – which charged ZEMLYANSKY with a different racketeering conspiracy – after the jury failed to reach a unanimous verdict. At that trial, ZEMLYANSKY was acquitted of eight counts of charges related to the no fault insurance fraud scheme and money laundering.
On November 5, 2015, co-defendant Michael Danilovich was convicted following a five-week trial before United States District Judge Deborah A. Batts of 16 counts of racketeering conspiracy, securities fraud, health care fraud, mail fraud, wire fraud, and money laundering charges related to the crimes committed by the Zemlyansky/Danilovich Organization. Danilovich is scheduled to be sentenced by Judge Batts on March 8, 2016.
U.S. Attorney Preet Bharara thanked the Federal Bureau of Investigation and the New York City Police Department for their continued outstanding work in this investigation. Mr. Bharara also thanked the National Insurance Crime Bureau, the investigative units of the insurance companies, the Manhattan District Attorney’s Office, and the Alabama Securities Commission for their valuable assistance with the investigation.
The case is being prosecuted by the Office’s Violent & Organized Crime Unit. Assistant U.S. Attorneys Daniel S. Goldman, Daniel S. Noble, and Joshua A. Naftalis are in charge of the prosecution.
Miami Resident Admits Participating in Conspiracy to Burglarize A Kentucky Cigarette WarehouseRead the Press Release
Stole more than $1.5 million in cigarettes from Leitchfield, Kentucky warehouse
LOUISVILLE, KY – United States Attorney John E. Kuhn, Jr. today announced the guilty plea, from a Miami resident, before Chief Judge Joseph H. McKinley, Jr., to federal conspiracy and theft charges stemming from his participation in a warehouse burglary in Leitchfield, Kentucky, in March 2011.
In pleading guilty to the two count federal indictment, Ivan Romero, a/k/a El Negro, 42, admitted that he and others stole more than $1.5 million in cigarettes from the Coremark Cigarette Warehouse in Leitchfield, Kentucky, and that he and others received the stolen cigarettes (which constitute an interstate and foreign shipment of property valued at over $1,000) with the intent to convert the property to their own use.
During the theft, Romero and his co-conspirators gained entry into the warehouse through the roof, disabled the alarm system and loaded the stolen goods into a stolen tractor trailer. Specifically, between March 18, 2011, to March 20, 2011, defendant Camilo Rodriguez-Hernandez rented three hotel rooms in Elizabethtown, Kentucky, where the co-conspirators, who traveled to Kentucky from Miami, Florida, resided during the burglary and theft. Between March 19, 2011, and March 20, 2011, Amuary Villa, Ivan Romero, Amed Villa, and other co-conspirators unloaded a stolen tractor trailer and loaded it with cigarettes. Defendant Romero admitted to providing transportation for the stolen cigarettes and driving them to the New Jersey/New York area.
Romero, a legal permanent resident from Cuba who last resided in Miami, has been serving a state sentence from Florida before being transferred to federal custody. If convicted at trial, Romero could have been sentenced to no more than 15 years in prison for both charges, fined $500,000 and been required to serve three years of supervised release. Romero is scheduled for sentencing before Chief Judge McKinley, on April 19, 2016 in Owensboro, Kentucky.
This case is being prosecuted by Assistant United States Attorney Joshua Judd and the investigation of the Kentucky theft is being led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) with assistance from the U.S. Drug Enforcement Administration (DEA), Leitchfield and Elizabethtown Police Departments, and New Jersey and Kentucky State Police Departments.
Mexican National Indicted for Illegal Re-EnteryRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Harrisburg indicted Luciano Vasquez-Perez yesterday for illegally re-entering the United States after having been previously deported.
According to U.S. Attorney Peter Smith, Vasquez-Perez, a 32 year old Guatemalan national, has been deported on two previous occasions. In July of 2013, he was convicted of improperly entering the United States by the U.S. District Court for Arizona and subsequently deported. Later that month, he was again found near Nogales, Arizona and deported a second time.
The matter was investigated by the U.S. Immigration and Customs Enforcement and Removal Operations (ERO) and the case is being prosecuted by Assistant U.S. Attorney Scott R. Ford.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty for this offense under federal law is 2 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Maryland Woman Sentenced for Stealing $437,000 from EmployerRead the Press Release
ALEXANDRIA, Va. – Jennifer Xanten, 51, of Frederick, Maryland, was sentenced today to 18 months in prison for mail fraud relating to her stealing more than 550 checks totaling approximately $437,000 out of her employer’s incoming mail. Xanten was also ordered to pay $437,016.01 in restitution.
Xanten pleaded guilty on Oct. 14, 2015. According to court documents, Xanten, an employee of a rehabilitation center in Rockville, Maryland, admitted to stealing the checks out of the center’s incoming mail from February 2014 to July 2015. To effectuate her scheme, Xanten, who was responsible for mailing out the companies’ invoices, would send out invoices to collect payment for services the center performed. One such company who received invoices was located in Chantilly. She would then intercept the incoming check payments and deposit the checks into her personal account without authorization. Xanten, who was responsible for inputting entries into the bookkeeping records, falsified entries related to the stolen checks in order to conceal her scheme.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge James C. Cacheris. Assistant U.S. Attorney Jamar K. Walker prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15cr286.
Local Physician Convicted of Eight Counts of Tax Evasion After Earning over $1 MillionRead the Press Release
For Further Information, Contact: Assistant U.S. Attorneys Joseph J.M. Orabona (619)546-7951 and Melanie Pierson (619) 546-7976
NEWS RELEASE SUMMARY – January 28, 2016
SAN DIEGO – A federal jury today convicted Dr. William Bailey, a local physician of osteopathic medicine, on eight counts of tax evasion.
According to evidence presented at trial, between 2004 and 2011 Bailey earned over $1.1 million in compensation for his services as a physician at two different local clinics and paid no taxes. Bailey concealed his income by having his paychecks directed to an account in the name of a trust.
In his own testimony at trial, Bailey admitted that he cut and pasted other documents to create the trust himself and signed the name of another person as the creator of the trust. As the grantor, sole trustee and also the beneficiary of the so-called trust, the income was attributed to Bailey as an individual.
Bailey spent the $1.1 million he deposited in the trust account to pay his personal expenses, including the purchase of a home, two cars, a time share and approximately $400,000 in credit card bills. Despite earning a significant income, Bailey reported no taxable income on the tax returns he filed. Evidence presented at trial showed that Bailey owed a total of $315,000 in unpaid taxes for the period from 2004-2011.
“As today’s verdict shows, the law is clear on the issue of taxable income and who is required to file and pay taxes—there is no gray area on the subject,” said Special Agent in Charge Erick Martinez for IRS Criminal Investigation. “With filing season upon us, let this conviction serve as a warning to those who are considering similar conduct.”
Bailey is scheduled to be sentenced on April 20, 2016, at 9:00 a.m., before U.S. District Judge Cathy A. Bencivengo.
DEFENDANT Criminal Case No. 13CR3046-CAB
William Richard Bailey Age: 57 San Diego, California
SUMMARY OF CHARGES
Title 26, United States Code, Section 7201 B Tax Evasion
Maximum Penalties: 5 years of imprisonment and $250,000 fine per count
AGENCY
Internal Revenue Service-Criminal Investigations
Local Man Sentenced on Federal ChargesRead the Press Release
CHARLOTTESVILLE, VIRGINIA – A man who previously lived in Albemarle and Fluvanna counties and is a registered sex offender for previous convictions regarding child pornography, was sentenced today in the United States District Court for the Western District of Virginia in Charlottesville on a pair of federal charges to which he recently pled guilty.
Matthew Cody Williamson, 28, of Palmyra, Virginia, pled guilty in 2015 to one count of using a means of interstate commerce (including a cell phone) to persuade, induce, entice or coerce an individual under the age of 18 to engage in sexual activity and one count of committing one or more specified felony offenses involving a minor while being a registered sex offender.
Today in District Court, Williamson was sentenced to 15 years in federal prison and a lifetime of supervision thereafter.
“Protecting children from being sexually exploited, especially being exploited by repeat offenders like in this case, is of paramount importance to the United States Attorney’s Office,” United States Attorney John P. Fishwick Jr. said today. “We must continue to work with our federal, state and local partners to investigate and prosecute these cases while also educating the community on how to keep kids safe online.”
According to evidence presented at previous hearings by Assistant United States Attorney Nancy S. Healey, Williamson, who has previous child pornography convictions and is a registered sex offender, came to the attention of law enforcement in 2012 when the mother of a 14-year-old Canadian boy found sexually explicit pictures and communications with an adult male, later identified as Williamson, on her son’s phone.
An examination of the phone revealed that Williamson and the boy had been communicating via the internet and that during the course of those communications the defendant had sent the minor-boy pictures of himself with an erect penis, videos of him masturbating and other explicit images and videos. Further examination showed that Williamson encouraged the boy to send explicit images of himself to Williamson, who at the time was living in Fluvanna County. Details of the communications clearly showed that Williamson was aware the boy he was communicating with was a minor.
The investigation of the case was conducted by the Federal Bureau of Investigation and Canada’s Southern Alberta Internet Child Exploitation Unit. Assistant United States Attorney Nancy S. Healey prosecuted the case for the United States.
Lincoln Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Deborah R. Gilg announced that on January 28, 2016, Kenneth Ali Carman, 43, of Lincoln, was sentenced to 57 months in prison for conspiracy to distribute 500 grams or more of a mixture or substance containing methamphetamine between January of 2010 and April of 2015. Carman will serve five years on supervised release following the prison term.
Information provided to law enforcement indicated Carman was involved in the distribution of at least 500 grams, (approximately 18 ounces), of methamphetamine in the Lincoln area. In December of 2014 and January of 2015, Carman sold small amounts of methamphetamine to the confidential informant and/or the undercover officer working with the Lincoln/Lancaster County Drug Task Force. On April 3, 2015, a search warrant was executed at the Lincoln apartment which Carman shared with his co-defendant, Nicole Lynn Zabel. Over 95 grams of methamphetamine was found in the apartment. Carman was contacted by law enforcement the following day and admitted he had sold approximately one pound of methamphetamine over the prior six months to one year; that he had a number of regular customers; and that he sold methamphetamine for Zabel.
Zabel pled guilty to the conspiracy charge in December of 2015 and is scheduled for sentencing in March of 2016.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Lewisburg felon sentenced for illegally possessing pain pillsRead the Press Release
BECKLEY, W.Va. – Acting United States Attorney Carol Casto announced that a Lewisburg man was sentenced today to a year and nine months in federal prison for possession with intent to distribute oxycodone and hydrocodone. Miles Gregory, 42, previously pleaded guilty to the federal drug charge in November of 2015.
Gregory admitted that on July 2, 2015, he was carrying 279 hydrocodone pills and 25 oxycodone pills in his vehicle. Law enforcement discovered the drugs in Gregory’s car during a traffic stop near Lewisburg. Gregory was also sentenced today to two years in federal prison for possessing the drugs while he was on supervised release after he served a prison sentence for a 2010 felony conviction for possession with intent to distribute crack. The sentences were ordered to be served consecutively.
The case was investigated by the Greenbrier Valley Drug and Violent Crime Task Force, the West Virginia State Police, and the Greenbrier County Sheriff’s Department. Assistant United States Attorney John File handled the prosecution. United States District Judge Irene C. Berger imposed the sentences.
This prosecution was brought as part of the Greenbrier Valley Heroin and Pill Initiative, an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal drug trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers in communities across the Southern District.
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Largest Methamphetamine Seizure in Corpus Christi Division Results in Federal IndictmentRead the Press Release
CORPUS CHRISTI, Texas – A grand jury sitting in Corpus Christi has returned an indictment against a California man for conspiring to possess with intent to distribute 132 kilograms of methamphetamine, announced U.S. Attorney Kenneth Magidson. This is believed to be the largest seizure of methamphetamine ever in the Corpus Christi Division.
The indictment against Deandre Bennett, 57, of San Bernadino, California, was returned today. He is expected to make his initial appearance before U.S. Magistrate Judge Jason Libby next week, at which time the government expects to request his continued detention pending further criminal proceedings.
Bennett is charged with conspiring to possess with intent to distribute 132 kilograms of a mixture or substance containing a detectable amount of methamphetamine on Dec. 2, 2015. If convicted, he faces a minimum of 10 years and up to life in federal prison as well as a possible $10 million fine.
This charges are the result of an investigation through a joint effort by Homeland Security Investigations, Texas Department of Public Safety, Kingsville Specialized Crimes and Narcotics Task Force, Kleberg County District Attorney’s Office, U.S. Customs and Border Protection and the U.S. Marshals Service.
Special Assistant U.S. Brittany Jensen is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless and until convicted through due process of law.Landscaping Executive Admits to Scheming to Avoid Paying Union BenefitsRead the Press Release
PROVIDENCE, R.I. – Steven F. Pagliarini, 57, Executive Vice-President and Treasurer of Central Landscaping Construction Company, located in Johnston, R.I., and Executive Vice-President of Central Nurseries, Inc., located in Chepachet and Johnston, R.I., pleaded guilty in U.S. District Court in Providence today to charges that he orchestrated a scheme in which Central Landscaping avoided paying contractually obligated union benefits for employees of two unions who worked on federally-funded projects.
In addition, Pagliarini pleaded guilty to charges that he provided false information to the Rhode Island Department of Labor and Training (RIDLT) regarding the employment status of some of his Central Nursery employees. Based on the information provided to RIDLT, the employees were paid unemployment compensation they were not entitled to receive.
Pagliarini pleaded guilty to three counts of falsification of documents and one count of wire fraud. He is scheduled to be sentenced on April 15, 2016.
Pagliarini’s guilty plea is announced by United States Attorney Peter F. Neronha; Cheryl Garcia, Special Agent in Charge of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region; Susan A. Hensley, Regional Director, U.S. Department of Labor Employee Benefits Security Administration; Todd Damiani, Special Agent in Charge of Region One U.S. Department of Transportation Office of Inspector General; Christina D. Scaringi, Special Agent in Charge of the Northeast Region of the U.S. Department of Housing and Urban Development Office of Inspector General; and Scott Jensen, Director of RIDLT.
Appearing before U.S. District Court Chief Judge William E. Smith, Pagliarini admitted to the court that at various times, between January 2007 and December 2010, he submitted false documents to union welfare and pension plan administrators of two unions that represent construction equipment operators and other employees of Central Landscaping. The documents did not accurately reflect the actual number of hours worked by some employees and the actual amount of wages paid to those employees.
The employees worked on federally-funded projects at the Hartford Park Project in Providence and the I-195 Relocation Project.
Pagliarini also admitted to the court that in a separate scheme, in order to avoid paying wages to some employees between November 2009 through April 2010, he falsely reported to the RIDLT that the employees of Central Nurseries had been laid-off because of a lack of work. Pagliarini admitted to the court that he required the employees to work part-time and he did not pay them. Based on documents filed with RIDLT, employees were paid a total of $68,487 in unemployment compensation.
The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.
The matter was investigated by the United States Attorney’s Office; U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation; U.S. Department of Labor Employee Benefits Security Administration; U.S. Department of Transportation Office of Inspector General; U.S. Department of Housing and Urban Development Office of Inspector General; and the Rhode Island Department of Labor and Training.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Justice Department Settles with Alabama Moving Company over Hepatitis-C DiscriminationRead the Press Release
BIRMINGHAM – The Justice Department reached an agreement today with Kemper Moving Systems Inc., a Huntsville franchise of Two Men and a Truck, to resolve allegations that the moving company violated the Americans with Disabilities Act (ADA) when it refused service because of a customer’s Hepatitis-C, announced U.S. Attorney Joyce White Vance.
Under the terms of a two-year consent decree filed today in the U.S. District Court for the Northern District of Alabama, and still pending approval by the court, Two Men and a Truck will adopt a series of non-discrimination training and policy reforms. The company must also pay $10,000 in compensation to the victim and a $3,500 civil penalty to the United States.
“The Americans with Disabilities Act was passed just over 25 years ago with the promise of opening up all aspects of American life to individuals with disabilities,” Vance said. “Our office is committed to ensuring that this promise is kept and that those individuals with disabilities are given equal access to accommodations and services.”
“The ADA prevents public accommodations, including moving companies, from denying service to people because of their disability status,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Department of Justice stands firmly committed to protecting the rights of people who live with Hepatitis-C by combating unlawful discrimination, addressing unfounded stereotypes and eradicating the painful stigma that interferes with their daily lives.”
Title III of the ADA prohibits public accommodations, such as moving companies, from discriminating against people with disabilities, including Hepatitis-C. Through its investigation, the department found that Two Men and a Truck discriminated against a customer when its employees cancelled a move because of the customer’s Hepatitis-C. The company cancelled the move because its employees feared they would get Hepatitis-C, even though the customer explained to both the movers and their supervisors that individuals cannot contract Hepatitis-C by moving furniture or through casual contact. As a result of Two Men and a Truck’s cancellation on the scheduled move-out date, the customer had to pay rent for two apartments, locate last minute replacement movers and incur various other expenses.
Widely accepted professional medical guidelines and standards, including those published by the Centers for Disease Control and Prevention (CDC), clarify that Hepatitis-C is transmitted primarily through repeated exposures to infectious blood. According to the CDC, it is not spread through casual contact, including, sneezing, hugging, holding hands, coughing, sharing eating utensils or drinking glasses or through food or water. Two Men and a Truck’s refusal to move an individual with Hepatitis-C marked a clear violation of the ADA based on unfounded fears and stereotypes about a disability.
The agreement announced today requires Two Men and a Truck to implement a nondiscrimination policy along with additional procedures and employee training to prevent discrimination because of a customer’s disability, including Hepatitis-C. It also requires the company to hire or designate an ADA Compliance Official responsible for reviewing all disability-related decisions.
The consent decree, reached under Title III of the ADA – which prohibits discrimination against individuals with disabilities by public accommodations – requires Two Men and a Truck to report to the department on its compliance. The department will actively monitor compliance with the terms of the two-year consent decree.
For more information about the ADA or today’s agreement, individuals may access the ADA web page at http://www.ada.gov/ or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Justice Department Settles with Alabama Moving Company over Hepatitis-C DiscriminationRead the Press Release
The Justice Department reached an agreement today with Kemper Moving Systems Inc., a Huntsville, Alabama, franchise of Two Men and a Truck, to resolve allegations that the moving company violated the Americans with Disabilities Act (ADA) when it refused service because of a customer’s Hepatitis-C.
Under the terms of a two-year consent decree filed today in the U.S. District Court for the Northern District of Alabama, and still pending approval by the court, Two Men and a Truck will adopt a series of non-discrimination training and policy reforms. The company must also pay $10,000 in compensation to the victim and a $3,500 civil penalty to the United States.
“The ADA prevents public accommodations, including moving companies, from denying service to people because of their disability status,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Department of Justice stands firmly committed to protecting the rights of people who live with Hepatitis-C by combating unlawful discrimination, addressing unfounded stereotypes and eradicating the painful stigma that interferes with their daily lives.”
“The Americans with Disabilities Act was passed just over 25 years ago with the promise of opening up all aspects of American life to individuals with disabilities,” said U.S. Attorney Joyce White Vance of the Northern District of Alabama. “Our office is committed to ensuring that this promise is kept and that those individuals with disabilities are given equal access to accommodations and services.”
Title III of the ADA prohibits public accommodations, such as moving companies, from discriminating against people with disabilities, including Hepatitis-C. Through its investigation, the department found that Two Men and a Truck discriminated against a customer when its employees cancelled a move because of the customer’s Hepatitis-C. The company cancelled the move because its employees feared they would get Hepatitis-C, even though the customer explained to both the movers and their supervisors that individuals cannot contract Hepatitis-C by moving furniture or through casual contact. As a result of Two Men and a Truck’s cancellation on the scheduled move-out date, the customer had to pay rent for two apartments, locate last minute replacement movers and incur various other expenses.
Widely accepted professional medical guidelines and standards, including those published by the Centers for Disease Control and Prevention (CDC), clarify that Hepatitis-C is transmitted primarily through repeated exposures to infectious blood. According to the CDC, it is not spread through casual contact, including, sneezing, hugging, holding hands, coughing, sharing eating utensils or drinking glasses or through food or water. Two Men and a Truck’s refusal to move an individual with Hepatitis-C marked a clear violation of the ADA based on unfounded fears and stereotypes about a disability.
The agreement announced today requires Two Men and a Truck to implement a nondiscrimination policy along with additional procedures and employee training to prevent discrimination because of a customer’s disability, including Hepatitis-C. It also requires the company to hire or designate an ADA Compliance Official responsible for reviewing all disability-related decisions.
The consent decree, reached under Title III of the ADA – which prohibits discrimination against individuals with disabilities by public accommodations – requires Two Men and a Truck to report to the department on its compliance. The department will actively monitor compliance with the terms of the two-year consent decree.
For more information about the ADA or today’s agreement, individuals may access the ADA web page at http://www.ada.gov/ or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Two Men and a Truck Consent Decree
Justice Department Asks Federal Court to Shut Down Detroit-Area Liberty Tax Service FranchiseeRead the Press Release
The United States filed a complaint asking a federal court in Detroit to permanently bar a Liberty Tax Service franchise owner and his company from preparing federal tax returns for others, the Justice Department announced today. The civil complaint against Craig M. Comer of Royal Oak, Michigan, and his business, Comer Inc., alleges that Comer operates five Liberty Tax Service franchise locations in the Detroit area.
According to the complaint, the defendants prepare income tax returns for customers that fraudulently overstate refunds and claim refundable credits by, among other things, claiming false or inflated Schedule C income and expenses, bogus dependents, false filing statuses, improper education credits and false itemized deductions. Based on audit adjustments the IRS has made to tax returns prepared and filed by the defendants for 2008 to 2013, the defendants’ conduct has cost the U.S. Treasury approximately $4.5 million for those years alone, according to the suit.
The complaint also alleges that in order to increase their fees, the defendants have altered completed tax returns already signed by the customers and forged customers’ signatures on returns. Furthermore, the defendants have added false information to internal Liberty Tax Service documents to give the illusion that the franchises are properly verifying customer information when preparing customers’ tax returns, according to the complaint.
Return preparer fraud is one of the Internal Revenue Service’s (IRS)’s Dirty Dozen Tax Scams. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Jury Convicts Defendant in Los Zetas Money Laundering Case of Conspiracy and Bribery ChargesRead the Press Release
A federal jury today convicted 55-year-old Veracruz, Mexico businessman Francisco Antonio Colorado-Cessa (aka “Pancho”), of attempting to bribe a federal judge announced United States Attorney Richard L. Durbin, Jr., Federal Bureau of Investigation Special Agent in Charge Christopher Combs and Internal Revenue Service-Criminal Investigation Special Agent in Charge William Cotter.
The jury, seated in Shreveport, Louisiana, found Colorado-Cessa, the owner of ADT Petroservicios, an oil services company in Mexico doing business with the Mexican National Oil Company PEMEX, guilty of one count of conspiracy to bribe a public official and one substantive count of bribery, by offer or promise, of a public official. Evidence during trial revealed that Colorado-Cessa and others conspired in 2013 to pay a $1.2 million bribe to a federal judge in order to secure a reduced sentence for Colorado-Cessa in a related money laundering case. According to court records, at no time before or during this investigation was the federal judge involved in the alleged criminal activity.
On March 12, 2014, Colorado-Cessa, his son, Francisco Agustin Colorado Cebado (aka “Panchito”), and his business partner, Ramon Segura Flores, all pleaded guilty to one count of conspiracy to bribe a federal judge. On July 22, 2014, visiting United States District Judge Donald E. Walter of the Western District of Louisiana sentenced Colorado Cebado and Segura Flores in Austin to a year and a day in federal prison and ordered them to pay a $10,000 fine for their roles in the scheme. On February 2, 2015, Judge Walter sentenced Colorado-Cessa in Austin to five years in federal prison. However, in October 2015, the U.S. 5th Circuit Court of Appeals reversed Colorado-Cessa’s conviction and sentence and remanded the case back to the District Court. On December 23, 2015, Judge Walter granted a defense motion for change of venue from Austin and ordered that jury selection and trial occur in Shreveport, LA.
In the related case, on December 10, 2015, a federal jury in Austin convicted Colorado-Cessa of one count of conspiracy to commit money laundering in connection with a scheme to launder millions of dollars in Los Zetas drug distribution proceeds through purchasing, training, breeding and racing American quarter horses in the United States. Testimony during that trial revealed a shell game by Colorado Cessa, a close associate of the Zetas drug cartel’s top leaders including Miguel Angel Trevino Morales (aka “Z-40”), Oscar Omar Trevino Morales (aka “Z-42”), and others involving straw purchasers and transactions worth millions of dollars in New Mexico, Oklahoma, California and Texas to disguise the source of the drug money and make the proceeds from the sale of quarter horses or their race winnings appear legitimate.
Over 400 quarter horses seized by federal authorities in June 2012 as part of the above mentioned money laundering operation have been sold for approximately $12 million. One of the seized horses, Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, TX, in October 2009, sold at an auction for a record $1.7 million in November 2013.
As a result of both trial verdicts, Colorado-Cessa now faces up to 20 years in federal prison on the charge of conspiracy to commit money laundering; up to 15 years in federal prison for the charge of bribery by offer or promise; and, up to five years in federal prison for the charge of conspiracy to commit bribery. Colorado-Cessa remains in federal custody pending sentencing. No sentencing dates have been scheduled.
This investigation was conducted by agents with the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Drug Enforcement Administration with assistance from the United States Marshals Service, Immigration and Customs Enforcement Homeland Security Investigations (ICE-HSI) and U.S. Border Patrol. Other judicial districts involved in this matter include the Western District of Oklahoma, Central District of California, Southern District of Texas, District of New Mexico and the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC).
Houston Police Officer and Wife Plead Guilty to Transporting Undocumented AliensRead the Press Release
In Del Rio today, a Houston police officer and his wife pleaded guilty to transporting undocumented aliens announced United States Attorney Richard L. Durbin, Jr., Homeland Security Investigations Special Agent in Charge Shane Folden and U.S. Border Patrol Del Rio Sector Chief Patrol Agent Rodolfo Karisch.
Appearing before United States Magistrate Judge Collis White, 51-year-old Juan Carrillo and 42-year-old Rosa Lidia Carrillo of Cypress, TX, pleaded guilty to one count of transporting undocumented aliens. By pleading guilty, the Carrillos’ admitted that they were illegally transporting two undocumented aliens from Eagle Pass, TX, to Houston.
According to court documents, on November 8, 2015, U.S. Border Patrol agents from the Carrizo Springs station conducted an immigration inspection on a vehicle traveling on Highway 85 in Big Wells, TX. The defendants were in the front seat and there were four passengers in the back seat. Agents discovered that four of the occupants, including the defendants, were United States citizens. Two occupants were determined to be illegally present in the United States.
Court documents also reflect that Rosa Carrillo had previously wired $1,500 to an unknown individual in order to have a family member smuggled into the United States. The defendants, admittedly, had traveled that day to Eagle Pass to pick up the family member and his companion, another undocumented individual who was being harbored at the same location, and transport them to Houston.
Both defendants remain on bond pending sentencing. Each defendant faces up to five years in federal prison and a maximum $250,000 fine. Sentencing is scheduled for 9:00am on June 28, 2016 in Del Rio before Judge Moses.
The case resulted from a joint investigation by the Homeland Security Investigations (HSI) in Eagle Pass and the U.S. Border Patrol. This case is being prosecuted by Assistant United States Attorneys Matthew Watters and Todd Keagle.
Honduran Man Charged with Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that HECTOR ORLANDO RECATE REYES, age 30, a citizen of Honduras, was charged today in a one-count Indictment with illegal reentry of a removed alien.
According to the Indictment, RECATE-REYES reentered the United States after having been previously deported on August 8, 2012. If convicted, RECATE-REYES faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment.
U.S. Attorney Polite reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Former Tribal Corrections Officer Pleads Guilty to Sexual Abuse and Civil Rights Violations of InmateRead the Press Release
ALBUQUERQUE – Trevor Hunt, 22, of Paguate, N.M., a former detention officer with the Pueblo of Laguna’s Detention Facility (LPDF), pleaded guilty today in federal court in Albuquerque, N.M., on charges related to the sexual abuse of an inmate during the summer of 2015. Specifically, Hunt pled guilty to one count of sexual abuse of a ward and one count of violating the civil rights of the victim, who was an inmate under Hunt’s supervision at the time Hunt committed the crimes.
In announcing the guilty plea, U.S. Attorney Damon P. Martinez said, “Sexual assaults by corrections officers on those they are charged with keeping safe gravely undermine the very foundation of our judicial system. The Justice Department will vigorously prosecute these crimes and work to vindicate the rights of the courageous victims who report them.”
“Correction Officers fill important and challenging roles in the criminal justice system. While the majority perform their duties honorably, those who abuse their authority deserve to be prosecuted to the fullest extent of the law,” said Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division. “The FBI is proud to have worked with the U.S. Attorney’s Office and the Pueblo of Laguna Tribal Police Department on this case.”
“The Pueblo of Laguna and its Public Safety Department do not condone Hunt’s conduct as demonstrated by the immediate judicial and administrative action taken by the Pueblo upon learning about this unfortunate incident. Inmates of the Laguna Pueblo Detention Facility and other detention facilities deserve to feel safe and secure while incarcerated” said Director Jesse Orozco of the Pueblo of Laguna Public Safety Department. “I am proud of the fine work done by the Laguna Pueblo law enforcement officers on this case, and would like to express my gratitude for the assistance of the FBI and the U.S. Attorney's Office.”
According to the plea agreement, on May 23, 2015, Hunt was a corrections officer at the LPDF who supervised both male and female inmates. On that day, Hunt accompanied the victim to the LPDF’s laundry room where he sexually assaulted the victim. During today’s change of plea hearing, Hunt acknowledged that the victim was in official detention and under his custodial and supervisory control when he sexually assaulted her. Hunt also admitted that he was aware that he willfully violated the victim’s constitutional rights when he assaulted her.
Hunt was ordered to surrender to the U.S. Marshals Service on Feb. 1, 2016, and will be detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by Albuquerque office of the FBI and the Pueblo of Laguna Tribal Police Department, and is being prosecuted by Assistant U.S. Attorneys David Adams and Holland S. Kastrin.
This case was brought as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native American women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Former State Parole Officer Sentenced to Prison for BriberyRead the Press Release
Jackson, Miss - Andra Lowmon Smith, 44, of Anguilla, Mississippi, was sentenced today by Senior U.S. District Judge Tom Lee to 10 months in federal prison followed by two years of supervised release for bribery, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Donald Alway. Smith must also pay $800 in restitution, and a $100 special assessment.
Smith is a former Probation and Parole Officer with the Mississippi Department of Corrections who worked out of Madison County. He admitted that he solicited bribes from a parolee he was supervising from March, 2015 through June, 2015. He took the money in exchange for allowing the parolee to leave Mississippi to find employment.
This case was investigated by the Federal Bureau of Investigation and the Criminal Investigation Division of the Mississippi Department of Corrections. Assistant United States Attorneys Scott Gilbert and Mary Helen Wall prosecuted the case.
Former Real Estate Broker Pleads Guilty to Second Federal Fraud SchemeRead the Press Release
BOSTON – A former real estate broker pleaded guilty on Tuesday, Jan. 26, 2016, in U.S. District Court in Boston, in connection a scheme to defraud a couple of the deposit they paid to purchase three properties in Randolph, Roxbury and Jamaica Plain.
Michael David Scott, 51, of Mansfield, pleaded guilty to one count of wire fraud. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for March 25, 2016.
From February 2011 to October 2013, Scott fraudulently persuaded a couple to sign three Purchase & Sale Agreements to buy properties in Randolph, Roxbury and Jamaica Plain. The couple deposited $199,000 with Scott under the false promise that their funds would be held in escrow. However, Scott immediately spent the funds for his own use. Furthermore, Scott knew that the first property was taken off the market by the sellers, that the bank holding the mortgage had refused to approve the sale of the second property, and that he had sold the third property to someone else. Scott never informed the couple about the status of the properties, and when they tried to get a refund of their deposits, he falsely assured them their deals were still pending and refused to return their deposits.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
In a separate federal case, Scott was sentenced on November 12, 2015 to 135 months in prison in connection with a multi-year, multi-property mortgage fraud scheme in Boston. Scott was on pre-trial release in this earlier fraud case when he committed the aforementioned crimes.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Victor A. Wild and Ryan M. DiSantis of Ortiz’s Criminal Division.
Former Postal Carrier Pleads Guilty to BriberyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Dennis Bernhard, 56, of Derby, N.Y., pleaded guilty to bribery before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 15 years in prison and a $250,000 fine.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that Bernhard was a mail carrier for the United States Postal Service for 16 years, working out of the Eastside Station Post Office for the last 10 years. The Eastside Station covers the east side of the City of Buffalo. The investigation began when law enforcement officials learned that Bernhard had previously been paid by drug dealers to provide addresses of unsuspecting citizens in the City of Buffalo in order to mail boxes of narcotics. These addresses were within the defendant’s mail delivery route, so that when the boxes arrived in Buffalo, Bernhard did not deliver the boxes to the listed recipient address, but held on to the boxes and handed them directly to the drug dealers in exchange for cash payments.
When police approached Bernhard during an undercover operation in 2015, the defendant indicated he was willing to continue the scheme. During one transaction, Bernhard even said that one of the prior drug dealers “treated me pretty good. . . . at the end he was giving me like a hundred. . . .” (referring to $100 per box).
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the United States Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski, the United States Postal Service, Office of the Inspector General, under the direction of Special Agent in Charge Monica Weyler, Eastern Area Field Office, Philadelphia, PA, and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.
Sentencing is scheduled for May 18, 2016, at 11 a.m. before Judge Skretny.
Former Postal Carrier Pleads Guilty to BriberyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Dennis Bernhard, 56, of Derby, N.Y., pleaded guilty to bribery before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 15 years in prison and a $250,000 fine.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that Bernhard was a mail carrier for the United States Postal Service for 16 years, working out of the Eastside Station Post Office for the last 10 years. The Eastside Station covers the east side of the City of Buffalo. The investigation began when law enforcement officials learned that Bernhard had previously been paid by drug dealers to provide addresses of unsuspecting citizens in the City of Buffalo in order to mail boxes of narcotics. These addresses were within the defendant’s mail delivery route, so that when the boxes arrived in Buffalo, Bernhard did not deliver the boxes to the listed recipient address, but held on to the boxes and handed them directly to the drug dealers in exchange for cash payments.
When police approached Bernhard during an undercover operation in 2015, the defendant indicated he was willing to continue the scheme. During one transaction, Bernhard even said that one of the prior drug dealers “treated me pretty good. . . . at the end he was giving me like a hundred. . . .” (referring to $100 per box).
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the United States Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski, the United States Postal Service, Office of the Inspector General, under the direction of Special Agent in Charge Monica Weyler, Eastern Area Field Office, Philadelphia, PA, and Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero.
Sentencing is scheduled for May 18, 2016, at 11 a.m. before Judge Skretny.
Former Pine Lawn Lieutenant Convicted of Federal ChargesRead the Press Release
St. Louis, MO – Former Pine Lawn Lieutenant STEVEN BLAKENEY was convicted of criminal civil rights charges arising from his arrest in 2013 of a candidate for the office of Mayor of the City of Pine Lawn.
According to testimony presented at trial, on March 31, 2013, Blakeney, while a police officer with the City of Pine Lawn Police Department, conspired with others to cause the arrest of a mayoral candidate based on false allegations and without probable cause. Blakeney ordered another person to falsely report that the mayoral candidate had stolen a campaign poster from a local business and then arranged for the candidate to be arrested.
Blakeney was convicted of one felony count of conspiracy against rights, one count of deprivation of rights under color of law and one count of falsification of records. The four-day trial was held before United States District Judge Stephen N. Limbaugh, Jr. Sentencing has been set for May 4, 2016.
These charges carry a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentence, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorneys Reginald Harris and Jennifer Winfield handled the case for the U.S. Attorney’s Office.
Former Hilton Middle School Teacher Sentenced for Attempted Enticement of A MinorRead 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 Charles Kane, 46, of Spencerport, NY, who was convicted of attempted online enticement of minor, was sentenced to 120 months in prison and 240 months of supervised release by U.S. District Court Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Craig R. Gestring, who handled the case, stated that the defendant, a middle school teacher in the Hilton School District, was arrested April 2, 2015 as he attempted to meet with a person he thought was a 14 year old girl.
The investigation determined that in October 2014, the defendant posted an ad on Craigslist which read “daddy/daughter. Love younger women.” A federal law enforcement officer, working in an undercover capacity, posed as the father of a young daughter and conversed with Kane online for the next several months. During these conversations, Kane discussed traveling to meet the undercover and engaging in sexual activity with the undercover’s ten year old daughter.
On January 26, 2015, another undercover officer noticed a different sexually explicit ad on Craigslist which was traced back, once again, to the defendant. The officer responded to the ad in the persona of a 14 year old girl. Kane responded that he was “down with it.” The defendant asked the girl where she lived and said he wanted to meet her. The two remained in contact through March of 2015. During online chats, Kane sent the undercover officer photos of himself, including one he took in the men’s room at the Middle School where he taught, and repeatedly asked for photos of the 14 year old girl. Also during the chats, the defendant repeatedly discussed engaging in sexually explicit activity with the child and traveling to and meeting with the child for sexual purposes. One message read “I could get a room and I could sneak you there.” Kane acknowledged that he could get in “big trouble” and told the girl “this is between you and me.”
Following repeated requests, the girl agreed to meet the defendant at a theatre in Webster on April 2, 2015. The defendant was observed entering a pharmacy just before meeting with the undercover, where they learned that Kane purchased a box of condoms. Kane was arrested as soon as he pulled up to the theatre parking lot. He has been in federal custody since his arrest, and was held following a detention hearing last month.
The sentencing is the culmination of an investigation by the New York State Police, under the direction of Major Craig Hanesworth and the Federal Bureau of Investigation Child Exploitation Task Force, under the direction of Adam S. Cohen. The task force includes the Buffalo Police Department, Cheektowaga Police Department, Niagara County Sheriff’s Office, Monroe County Sheriff’s Office, the Rochester Police Department, and U.S. Immigration and Customs Enforcement-Homeland Security Investigations.
Former Arvest Bank Executive Sentenced to over Eight Years in Federal Prison for Bank FraudRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Henry Dennis Smiley, Jr., age 52, of Rogers, Arkansas, was sentenced to 97 months in federal prison followed by two years supervised release, and ordered to pay over $4,900,000.00 restitution on one count of Bank Fraud. The Honorable P.K. Holmes, III presided over the sentencing hearing in the United States District Court in Fayetteville. Smiley pleaded guilty to the charge on August 25, 2015.
This case was investigated by Federal Bureau of Investigation. Acting United States Attorney Kenneth Elser prosecuted the case for the United States.
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.Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Florida Man Admits Using Bogus Transportation Company to Defraud New Jersey Factoring Business Out of $220,000Read the Press Release
NEWARK, N.J. - A Seminole, Florida, man today admitted using phony invoices from his transportation company to obtain $220,000 from a New Jersey-based factoring business, U.S. Attorney Paul Fishman announced.
Karl Stehlin, a/k/a “Mark Sawyer,” 60, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to Count One of an indictment charging him with wire fraud.
According to documents filed in this case and statements made in Court:
Stehlin admitted that from June 2014 through September 2014, he defrauded a Bergen County, New Jersey, factoring business that purchased accounts receivable in return for short term financing. Stehlin created a bogus Idaho-based company, Sawyer Express Transportation Inc., and emailed accounts receivable invoices to the factoring company for transportation services that were never provided. As a result, Stehlin was able to defraud the factoring company out of $220,000 in advance payment on those invoices.
During his plea hearing, Stehlin also admitted using the same methods to defraud a Glendale, California, factoring business out of $127, 953.34 and a Las Vegas factoring business out of $524,025.28.
The wire fraud charge to which Stehlin pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for May 24, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s plea. He also thanked special agents of the FBI Tampa Division, under the direction of Special Agent in Charge Paul Wysopal, for their assistance.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit and Acting Chief Barbara Ward of the Asset Forfeiture and Money Laundering Unit in Newark.
Defense counsel: Michael Koribanics Esq., Clifton, New Jersey
Federal Jury Convicts Texas Men in Drug ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that a federal jury convicted JORGE PERRALTA, age 33, of Pasadena, Texas, and PAUL NORRIS, age 57, of Houston, Texas, of a drug conspiracy charge, following a four-day trial.
PERRALTA and NORRIS were convicted of conspiracy to distribute and possess with the intent to distribute cocaine and heroin. According to the Indictment, beginning on a date unknown and continuing until on or about March 19, 2015, PERRALTA and NORRIS knowingly combined, conspired, confederated and agreed with persons known and unknown, to possess with the intent to distribute five kilograms or more of cocaine hydrochloride and one kilogram or more of heroin.
The convictions of PERRALTA and NORRIS followed an Organized Crime Drug Enforcement Task Force (“OCDETF”) investigation by the Drug Enforcement Administration and Houston, Texas Police Department of a drug trafficking organization operating from Mexico into several of the United States, including Louisiana.
Both PERRALTA and NORRIS face a minimum term of imprisonment of ten years, a maximum term of life imprisonment, a fine of $10,000,000, a minimum of five years of supervised release after imprisonment, and a $100.00 special assessment. U.S. District Judge Lance M. Africk set sentencing for May 19, 2016.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration in New Orleans and Houston, Texas along with the Houston Police Department in investigating this matter. Assistant United States Attorneys Andre’ Jones, Elizabeth Privitera, and Jeffrey Sandman were in charge of the prosecution.
Federal Criminal Charges Filed Against Two Pharmacists for Adulteration of Drugs in Connection with Alabama-Based Compounding PharmacyRead the Press Release
A criminal Information was filed today in the U.S. District Court for the Northern District of Alabama against David Allen, former pharmacist-in-charge of the now-defunct compounding pharmacy Advanced Specialty Pharmacy doing business as “Meds IV,” and William Timothy Rogers, a pharmacist and the former president of Meds IV, the Department of Justice announced today. Allen and Rogers were charged in connection with the distribution of adulterated drugs, which were compounded at the Meds IV facility and distributed to Birmingham, Alabama-area hospitals in 2011.
“The compounding of sterile drug products requires significant care, and the distribution of contaminated drug products can cause serious harm to patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This criminal case demonstrates the Justice Department’s commitment to protecting consumers and patients, and making sure pharmaceutical drugs are safe and effective.”
Allen, 60, of McCalla, Alabama, and Rogers, 48, of Hoover, Alabama, have signed plea agreements, in which both individuals have agreed to plead guilty to two misdemeanor violations of the federal Food, Drug and Cosmetic Act (FDCA) as charged in the Information. Following today’s filing of the criminal charges; the U.S. District Court will schedule an arraignment, where the defendants will be formally advised of the charges against them. Another hearing will then be set in which the defendants can enter their guilty pleas to the Court.
As alleged in the Information, Meds IV compounded various drugs for human use, including an intravenous drug known as Total Parenteral Nutrition (TPN). TPN is liquid nutrition administered intravenously to patients who cannot or should not receive their nutrition through eating. The information alleges that beginning in or around February 2011, Meds IV compounded its own amino acid solution, which it then mixed with other ingredients to form TPN.
As charged in the information, amino acid used in compounding the TPN was adulterated in the following ways: it consisted in whole or in part of a filthy, putrid, or decomposed substance, namely Serratia marcescens (S. marcescens) and it was prepared, packed, or held under insanitary conditions whereby it may have been contaminated with filth or rendered injurious to health. S. marcescens is gram-negative bacteria that can cause bloodstream infections if introduced into the bloodstream through contaminated medications. These infections can cause serious medical complications, including death, because S. marcescens is resistant to many antibiotics.
“Meds IV was in the business of compounding drugs and IV nutrition that was supposed to help patients heal,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama. “Instead, because of unsanitary procedures in the mixing of liquid nutrition, contaminated IV fluid was sent to Birmingham area hospitals and a number of patients developed serious bloodstream infections. I thank the FDA and its Office of Criminal Investigations for their diligence in helping us prosecute those responsible for the failings at Meds IV which contributed to significant harm.”
According to the charging document, the amino acid was prepared by Meds IV outside a laminar airflow workbench and was kept unrefrigerated, in a room that was not sterile, in a large pot sitting on the floor, sometimes overnight, before it was sterilized and used.
As alleged in the information, between March 5 and 15, 2011, nine patients at various Birmingham-area hospitals who developed bloodstream infections caused by S. marcescens died, and several other hospital patients developed S. marcescens bloodstream infections but survived. According to the charges, all of these patients had been given TPN that was compounded and distributed by Meds IV. As alleged in the information, while a number of the patients who died had underlying conditions which may have contributed to their deaths, medical records of some patients suggest that the S. marcescens bloodstream infections were also a significant factor.
According to the information, Meds IV was notified on March 14, 2011, by a hospital in the Birmingham area, that four patients receiving TPN had tested positive for S. marcescens. The information alleges that the TPN was compounded and distributed by Meds IV and that this notification was the first time Meds IV was informed of a link between its TPN and patients testing positive for S. marcescens. The information alleges that on or around March 16, 2011, Meds IV began notifying some customers that compounding of TPN was suspended until further notice.
As noted in the information, during an inspection at Meds IV starting on March 22, 2011, investigators from the U.S. Centers for Disease Control and Prevention (CDC) found S. marcescens that was indistinguishable to the outbreak strain on a tap-water faucet, in an open container of amino acid powder and on the surface of mixing equipment that had been used to make TPN. According to the charging document, the U.S. Food and Drug Administration (FDA) and CDC investigators linked the S. marcescens to TPN that had been compounded by Meds IV.
“Americans expect and deserve drugs that are safe, effective, and that meet appropriate standards for quality, yet Meds IV contaminated and distributed drug products that resulted in serious harm to patients,” said Acting FDA Commissioner Stephen Ostroff, MD. “Such conduct cannot be tolerated, and the FDA will continue to work with the Department of Justice to pursue aggressive enforcement actions against those who place American patients at risk.”
As alleged in the Information, Allen supervised all compounding at Meds IV, was specifically responsible for reviewing and approving TPN formulations, and was also responsible for filling the individual prescriptions Meds IV received for patient-specific TPN products. The information alleges that Rogers was ultimately responsible for overseeing all of the day-to-day operations of Meds IV. Both defendants have agreed to plead guilty to two misdemeanor counts, representing the two lots of amino acid which were determined to be adulterated in violation of the FDCA. For each count, the defendants face a statutory maximum sentence of up to one year in prison, a fine of up to $250,000, or both, and a term of supervised release after any imprisonment for up to one year.
The case is being prosecuted by Trial Attorney Heide L. Herrmann of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Henry Cornelius of the Northern District of Alabama. They were assisted by Associate Chief Counsel Shannon M. Singleton of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services. The case was investigated by the FDA’s Office of Criminal Investigations.
A criminal Information is merely an allegation and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Federal Criminal Charges Filed Against Two Pharmacists for Adulteration of Drugs in Connection with Alabama-Based Compounding PharmacyRead the Press Release
BIRMINGHAM – A criminal information was filed today in the U.S. District Court for the Northern District of Alabama against David Allen, former pharmacist-in-charge of the now-defunct compounding pharmacy Advanced Specialty Pharmacy doing business as “Meds IV,” and William Timothy Rogers, a pharmacist and the former president of Meds IV, the Department of Justice and U.S. Attorney Joyce White Vance announced. Allen and Rogers were charged in connection with the distribution of adulterated drugs, which were compounded at the Meds IV facility and distributed to Birmingham-area hospitals in 2011.
Allen, 60, of McCalla, and Rogers, 48, of Hoover, have signed plea agreements, in which both individuals have agreed to plead guilty to two misdemeanor violations of the federal Food, Drug and Cosmetic Act (FDCA) as charged in the Information. Following today’s filing of the criminal charges; the U.S. District Court will schedule an arraignment, where the defendants will be formally advised of the charges against them. Another hearing will then be set in which the defendants can enter their guilty pleas to the Court.
“The compounding of sterile drug products requires significant care, and the distribution of contaminated drug products can cause serious harm to patients,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This criminal case demonstrates the Justice Department’s commitment to protecting consumers and patients, and making sure pharmaceutical drugs are safe and effective.”
“Meds IV was in the business of compounding drugs and IV nutrition that was supposed to help patients heal,” Vance said. “Instead, because of unsanitary procedures in the mixing of liquid nutrition, contaminated IV fluid was sent to Birmingham area hospitals and a number of patients developed serious bloodstream infections. I thank the FDA and its Office of Criminal Investigations for their diligence in helping us prosecute those responsible for the failings at Meds IV which contributed to significant harm.”
As alleged in the Information, Meds IV compounded various drugs for human use, including an intravenous drug known as Total Parenteral Nutrition (TPN). TPN is liquid nutrition administered intravenously to patients who cannot or should not receive their nutrition through eating. The information alleges that beginning in or around February 2011, Meds IV compounded its own amino acid solution, which it then mixed with other ingredients to form TPN.
As charged in the information, amino acid used in compounding the TPN was adulterated in the following ways: it consisted in whole or in part of a filthy, putrid, or decomposed substance, namely Serratia marcescens (S. marcescens) and it was prepared, packed, or held under insanitary conditions whereby it may have been contaminated with filth or rendered injurious to health. S. marcescens is gram-negative bacteria that can cause bloodstream infections if introduced into the bloodstream through contaminated medications. These infections can cause serious medical complications, including death, because S. marcescens is resistant to many antibiotics.
According to the charging document, the amino acid was prepared by Meds IV outside a laminar airflow workbench and was kept unrefrigerated, in a room that was not sterile, in a large pot sitting on the floor, sometimes overnight, before it was sterilized and used.
As alleged in the information, between March 5 and 15, 2011, nine patients at various Birmingham-area hospitals who developed bloodstream infections caused by S. marcescens died, and several other hospital patients developed S. marcescens bloodstream infections but survived. According to the charges, all of these patients had been given TPN that was compounded and distributed by Meds IV. As alleged in the information, while a number of the patients who died had underlying conditions which may have contributed to their deaths, medical records of some patients suggest that the S. marcescens bloodstream infections were also a significant factor.
According to the information, Meds IV was notified on March 14, 2011, by a hospital in the Birmingham area, that four patients receiving TPN had tested positive for S. marcescens. The information alleges that the TPN was compounded and distributed by Meds IV and that this notification was the first time Meds IV was informed of a link between its TPN and patients testing positive for S. marcescens. The information alleges that on or around March 16, 2011, Meds IV began notifying some customers that compounding of TPN was suspended until further notice.
As noted in the information, during an inspection at Meds IV starting on March 22, 2011, investigators from the U.S. Centers for Disease Control and Prevention (CDC) found S. marcescens that was indistinguishable to the outbreak strain on a tap-water faucet, in an open container of amino acid powder and on the surface of mixing equipment that had been used to make TPN. According to the charging document, the U.S. Food and Drug Administration (FDA) and CDC investigators linked the S. marcescens to TPN that had been compounded by Meds IV.
“Americans expect and deserve drugs that are safe, effective, and that meet appropriate standards for quality, yet Meds IV contaminated and distributed drug products that resulted in serious harm to patients,” said Acting FDA Commissioner Stephen Ostroff, MD. “Such conduct cannot be tolerated, and the FDA will continue to work with the Department of Justice to pursue aggressive enforcement actions against those who place American patients at risk.”
As alleged in the Information, Allen supervised all compounding at Meds IV, was specifically responsible for reviewing and approving TPN formulations, and was also responsible for filling the individual prescriptions Meds IV received for patient-specific TPN products. The information alleges that Rogers was ultimately responsible for overseeing all of the day-to-day operations of Meds IV. Both defendants have agreed to plead guilty to two misdemeanor counts, representing the two lots of amino acid which were determined to be adulterated in violation of the FDCA. For each count, the defendants face a statutory maximum sentence of up to one year in prison, a fine of up to $250,000, or both, and a term of supervised release after any imprisonment for up to one year.
The case is being prosecuted by Assistant U.S. Attorney Henry Cornelius of the Northern District of Alabama and Trial Attorney Heide L. Herrmann of the Justice Department’s Consumer Protection Branch. They were assisted by Associate Chief Counsel Shannon M. Singleton of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services. The case was investigated by the FDA’s Office of Criminal Investigations.
A criminal Information is merely an allegation and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
information_allen_rogers.pdf (213.59 KB)
Fayetteville Man Sentenced to 12 Years in Federal Prison for Sex Trafficking of a 16 Year OldRead the Press Release
Fayetteville - Kenneth Elser, Acting United States Attorney for the Western District of Arkansas, announced that Gregory Lynnell Gibson, age 23, of Fayetteville, Arkansas, was sentenced to 144 months in prison without the possibility of parole and ten years of supervised release for one count of Sex Trafficking of Children. He was also ordered to pay a $4,900.00 fine. The sentencing took place before the Honorable Timothy L. Brooks in the United States District Court in Fayetteville.
In January, 2014, detectives with the Springdale Police Department were notified that a 16 year old runaway (“Jane Doe”) was at a hotel in Springdale working as a prostitute for Gibson. Officers confirmed that Gibson had rented two rooms there and made contact with a sixteen year old female who confirmed that she was working for Gibson as a prostitute. She told officers that she had known Gibson since the 8th grade and recently reconnected with him via Facebook. She said Gibson had convinced her to quit school and offered to split the proceeds from her prostitution with her 50/50, however, she stated she gave all of her money from her prostitution to Gibson. A search of Gibson’s phone revealed text messages relating to sixteen year old female’s prostitution detailing prices, time limits, and specific sex acts. There were also text messages on the phone relating to prostitution dating back to November, 2013 with other individuals in addition to the sixteen year old female, as well as messages between Gibson and the sixteen year old female discussing the fact that she was under the age of 18. Gibson pled guilty to the charge in August, 2015.
This case was investigated by the Springdale Police Department, the Fort Smith Police Department, and the Federal Bureau of Investigation (FBI). Assistant United States Attorney Aaron Jennen prosecuted the case for the United States.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov