Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
28 January 2016
Alabama Woman Sentenced to Prison for Involvement in Stolen Identity Tax Refund Fraud RingRead the Press Release
Montgomery, AL –A Phenix City, Alabama resident was sentenced to serve 51 months in prison, followed by three years of supervised release and ordered to pay $116,636 in restitution for her role in a stolen identity refund fraud (SIRF) scheme, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama announced today.
“Prosecuting stolen identity refund fraud remains a top priority of the department,” said Assistant Attorney General Ciraolo. “Individuals engaged in this criminal conduct not only cause millions of dollars in financial losses to the IRS, but inflict long-term economic and personal consequences on those US taxpayers whose private information is stolen. The Tax Division will continue to work with its federal, state and local law enforcement partners to combat this serious fraud on the American public, and seek lengthy terms of incarceration for those responsible.”
“My office will continue to work with the IRS to vigorously prosecute those people who steal an innocent person’s identity, just to file a false tax return and steal the tax refunds,” said U.S. Attorney Beck. “These criminals need to be punished for the harm they cause to the person whose identity is stolen and the harm they cause to the U.S. taxpayer.”
According to court documents, during 2013, Benita E. Short, conspired with others to defraud the United States by filing false federal income tax returns using stolen identities. Short obtained personal identifiable information, including names, social security numbers, addresses and dates of birth, without the individuals’ authorization. A co-conspirator obtained the stolen personal identifiable information from an individual who had access to Alabama state databases and obtained Electronic Filing Identification Numbers (EFINs) in the names of several tax preparation businesses, and provided this information to Short. Short then used the stolen identities and EFINs to electronically file 326 fraudulent tax returns with the Internal Revenue Service (IRS), causing a tax loss of $456,853. Short also caused income tax refund checks that were issued as a result of the fraudulent tax returns to be cashed at several businesses in Alabama and Georgia. For her role in the conspiracy, Short pleaded guilty in October 2015 to conspiracy to defraud the United States and aggravated identity theft.
In March 2015, one of Short’s co-conspirators, Keshia Lanier, the ringleader of a $24 million SIRF conspiracy, also pleaded guilty to one count of wire fraud and one count of aggravated identity theft. On Sept. 25, 2015, Lanier was sentenced to serve 15 years in prison to be followed by three years of supervised release and ordered to forfeit $5,811,406.
In addition to the prison term, U.S. District Judge Myron H. Thompson of the Middle District of Alabama ordered Short to serve three years of supervised release and pay $116,636 in restitution to the IRS. Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of IRS Criminal Investigation, who investigated the case and Trial Attorneys Michael C. Boteler and Michael P. Hatzimichalis of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at justice.gov/tax.
27 January 2016
Wilmington Man Sentenced for Unlawful Possession of FirearmRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court today Chief United States District Judge James C. Dever, III, sentenced KEVIN ROBINSON, 31, of Wilmington, North Carolina, to 84 months’ imprisonment followed by 3 years’ supervised release.
On July 28, 2015, a Federal Grand Jury returned a Criminal Indictment charging ROBINSON with unlawful possession of a firearm and ammunition by a convicted felon. On October 29, 2015, ROBINSON pled guilty to the charge.
According to the investigation, on April 16, 2015, Wilmington police officers located ROBINSON and executed an arrest warrant for a probation violation. As officers were placing ROBINSON under arrest, ROBINSON told officers he was carrying a gun in the waistband of his clothing. Upon a search, officers found a loaded Ruger P-90 .45 caliber handgun.
The criminal investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Wilmington Police Department. Assistant United States Attorney Jane J. Jackson handled the prosecution on behalf of the Eastern District of North Carolina.
Wichita Massage Parlor Owner Sentenced on Federal Prostitution ChargeRead the Press Release
WICHITA, KAN. - A Wichita massage parlor owner was sentenced Wednesday to time served (10 months) for trying to recruit a Chinese-speaking woman to perform sexual services at a massage parlor in Wichita, U.S. Attorney Barry Grissom said. She also will serve five years on federal supervised release.
Ping Liu, 44, Wichita, Kan., pleaded guilty to one count of attempted coercion and enticement to prostitution. In her plea, she admitted that during a phone conversation conducted in Mandarin Chinese she arranged for a woman posing as a job applicant from New York to come to Wichita to work at Q Massage, 3833 W. 13th in Wichita. Liu told the applicant that the job included providing sexual services to customers. Liu told the applicant she would pick her up at the airport in Wichita.
In her plea, Liu also admitted twice offering to perform sexual services for undercover Wichita police officers who came to the massage parlor posing as customers.
Grissom commended the Wichita Police Department, Homeland Security Investigations (HSI) and Assistant U.S. Attorney Jason Hart for their work on the case.
Veteran York County Police Officer Charged with Federal CorruptionRead 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 has indicted Tyson Baker, a 17 year veteran police officer with the Fairview Township Police Department, on charges related to the theft of drug proceeds and efforts to conceal those thefts.
According to United States Attorney Peter Smith, the indictment alleges that Baker, age 41, Etters, stole several thousand dollars of real and suspected drug proceeds in November and December of 2015. Baker then allegedly caused the preparation of false reports in connection with those two thefts to cover up his conduct and obstruct the investigation. Baker was indicted in two counts of the indictment with taking property to prevent its seizure, two counts of obstruction of justice, three counts pertaining to the filing false reports, and one count of theft of government property.
The indictment alleges that, in November, Baker orchestrated the theft of $2,000 in drug proceeds seized by the Fairview Township Police Department during the search of a residence that had resulted in the seizure of several pounds of marijuana and approximately $15,000. The Federal Bureau of Investigation (FBI) recorded conversations between Baker and a cooperating individual (CI) regarding the theft. The indictment also alleges that Baker discussed with the CI stopping suspected drug traffickers driving through the township to steal their drug proceeds during traffic stops.
The indictment also alleges that on December 16, 2015 the FBI, with the full cooperation of the Fairview Township Police Department, arranged for a vehicle operated by an undercover FBI agent to be stopped. It is alleged that Baker had the vehicle towed from the scene. It is also alleged that, without first obtaining a search warrant and in spite of directions by the FBI not to search the vehicle, Baker searched the vehicle and stole $3,000 that was concealed in the vehicle that Baker believed were drug proceeds. The grand jury also found that false reports were prepared and filed in connection with both theft incidents.
The case was investigated by the FBI, Harrisburg Resident Office, the Pennsylvania State Police, the Pennsylvania Office of Attorney General, and the Fairview Township Police Department.
Prosecution of the case is assigned to Assistant United States Attorney William A. Behe.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years on the 4 counts dealing with obstruction and records tampering charges, 5 years on each of the two counts charging removal of property to prevent its seizure, 5 years on the false reports to federal authorities charge, and 10 years on the theft of government property charge. There is also 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.
# # #
Two Florida Brothers Sentenced to 84 Months in Prison for Bath Salts and Money Laundering Conspiracies in Eastern TennesseeRead the Press Release
GREENEVILLE, Tenn. – Michael Loren Sheaffer, 35, of Pinellas Park, Fla., and Matthew Shawn Sheaffer, 35, of Holiday, Fla., were both sentenced on Jan. 27, 2016, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to each serve 84 months in federal prison. Both Sheaffers were previously convicted of conspiracy to distribute, and possess with the intent to distribute, assorted Schedule I controlled substances and their analogues; and conspiracy to commit money laundering. There is no parole in the federal system.
Beginning in the summer of 2010, the Sheaffers began an elaborate criminal business of procuring, marketing, packaging, and distributing massive amounts of Schedule I controlled substances and corresponding analogues. Collectively, these drugs are commonly referred to as bath salts, spice, and synthetic marijuana. However, those names are misnomers used to lure consumers and avoid criminal liability. In reality, such substances are nothing more than hard drugs masquerading as harmless chemicals.
Utilizing a website and a network of distributors, the Sheaffers sold these drugs throughout the southeastern United States and elsewhere. A large portion of the contraband was distributed from head shops and businesses within the Eastern District of Tennessee. The resulting proceeds were then laundered, funneled back to the Sheaffers and other co-conspirators, and used to further perpetuate their drugs crimes.
A total of five individuals were charged in this case including: Mitchel Lee Chambers, 36, of Magnolia, Tex., who was sentenced to serve 87 months; Niki Lyn Maxwell, 33, of New Port Richey, Fla., who was sentenced to serve 54 months; and, Gretchen Elizabeth Sheaffer, 30, of Pinellas Park, Fla., who was sentenced to serve 54 months.
Acting U.S. Attorney Nancy Stallard Harr said, “Northeast Tennessee has been particularly hard hit by these dangerous, so-called synthetic, drugs. Thanks to the teamwork of our law enforcement partners in the Kingsport Police Department, Sullivan County Sheriff’s office, and Johnson City Police Department, as well as the Drug Enforcement Administration (DEA) and Internal Revenue Service, Criminal Investigation Division (IRS-CI), we were able to react swiftly and decisively to stem the flow of these harmful substances which have no legitimate or legal purpose.”
“The role of Criminal Investigation Division of the Internal Revenue Service in narcotics investigations is to follow the money so we can financially disrupt and dismantle major drug trafficking organizations,” stated Tamera Cantu, Acting Special Agent in Charge, IRS-CI. “This investigation is a great example of how the various law enforcement agencies in this district work together, and these sentences should send a clear message that drug and money laundering violations are serious crimes that will be punished accordingly.”
This investigation was the product of a partnership between the Kingsport, Tennessee Police Department, Sullivan County Sheriff’s Department, Johnson City Police Department, IRS-CI, and DEA. Assistant U.S. Attorneys M. Neil Smith and Nick Regalia represented the United States.
The investigation is a result of the Department of Justice’s Organized Crime and Drug Enforcement Task Force (“OCDETF”) program, the centerpiece of the Department of Justice’s drug supply reduction strategy. OCDETF was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. 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.
###
Twenty-Two Charged with Racketeering Conspiracy and Related Crimes Involving Drug Trafficking, Illegal Gambling and Money LaunderingRead the Press Release
Assistant U. S. Attorneys Andrew Young (619) 546-7981, Mark W. Pletcher (619) 546-9714 or Benjamin Katz (619) 546-9604
NEWS RELEASE SUMMARY – January 27, 2015
SAN DIEGO – A federal grand jury sitting in the Southern District of California has charged 22 people with participating in an international narcotics trafficking and illegal gambling ring led by former University of Southern California athlete Owen Hanson.
Early today, authorities arrested 19 people at locations around San Diego, Orange and Los Angeles counties, as well as in Sacramento, Phoenix, Louisiana, and Virginia. Owen Hanson and Giovanni “Tank” Brandolino were previously arrested; Kenny Hilinski remains a fugitive.
According to court documents, Hanson and his associates conspired to operate “ODOG,” an enterprise engaged in international and domestic drug trafficking, illegal sports gambling and international money laundering. The organization used threats and violence against its gambling and drug customers to force compliance. For example, the organization sent a DVD of a beheading and a photo of an individual’s family gravestone in an effort to collect an alleged $2 million debt.
“Transnational criminal organizations pose a significant threat to our country and our allies throughout the world,” said U.S. Attorney Laura Duffy. “Such criminal organizations are unhindered by national boundaries, and unrestricted in the types of crimes they will commit in the pursuit of illegal profits. Here, we allege that the ODOG enterprise employed illegal gambling, drug trafficking and money laundering to expand its tentacles throughout the world, and its operators regularly used complicated financial transactions and encrypted communications to conceal their criminal activities. Those who mistakenly underestimate the dangers of illegal gambling should take note of the extreme threats of violence employed by the ODOG enterprise to extort payment from their ‘customers.’”
“Today's indictment will begin the process of dismantling a sophisticated international criminal enterprise that used violence and intimidation to advance their criminal objectives," commented FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is appreciative of the assistance from our domestic and international law enforcement partners in this investigation especially the Australian Crime Commission, the New South Wales Police Force and the New South Wales Crime Commission.”
“Utilizing the professional services of a Certified Public Account, the ODOG Enterprise laundered illicit funds through shell companies, phony bank accounts and structured bank deposits in an attempt to avoid detection by law enforcement,” said Erick Martinez, Special Agent in Charge for IRS Criminal Investigation. “This joint investigation continues to demonstrate our efforts to ensure that financial institutions will not be abused by narcotics traffickers and illegal gambling businesses attempting to conceal their ill-gotten gains.”
Here’s how the enterprise operated, according to the indictment:
Gambling Network
ODOG’s network of bookies and runners extended nationally from Virginia to California where various bookies accepted wagers on professional and collegiate football and baseball games. Hanson, who allegedly oversaw the organization, delegated a portion of the responsibility to operate the gambling network to Kenny Hilinksi, an expatriate living in Peru. From Peru, Hilinski maintained various websites used by gamblers to place bets, coordinated the collection of payments from various bookies and gamblers, and directed the organization’s runners to distribute the proceeds through shell companies and cash deliveries.
As indicated above, the ODOG gambling network employed violence and threats of violence to ensure that delinquent bettors paid their gambling debts. Daniel Portley-Hanks, a Los Angeles private investigator also charged in the indictment, allegedly assisted with the collection of debts from gamblers by obtaining personal identification information, locating the individuals, and coordinating the attacks.
Drug Distribution
The ODOG Enterprise distributed narcotics – including cocaine, methamphetamine, heroin, and ecstasy – both domestically and internationally in wholesale and retail quantities. Hanson, who oversaw the organization, shared domestic operations with Giovanni “Tank” Brandolino. Brandolino was arrested in October 2015 by DEA agents in Brooklyn, New York in a separate narcotics trafficking case. Derek Loville, a former professional football player, also distributed drugs for the ODOG Enterprise in Arizona.
Money Laundering
The ODOG Enterprise used sophisticated techniques and employed financial professionals to launder the proceeds of both the gambling and drug trafficking networks. Luke Fairfield, a Certified Public Accountant based in San Diego, set up shell corporations and advised members of the organization on methods to structure bank transactions to avoid detection by bank security and law enforcement. The ODOG Enterprise also used “runners” who collected and distributed the Enterprise’s illegal proceeds in a manner designed to evade detection by law enforcement.
The case stems from of a prior international sports gambling case against the Macho Sports Enterprise (13CR2196-JLS). In Macho Sports, a June 2013 federal grand jury charged 19 defendants with various crimes, including a racketeering conspiracy and running an illegal gambling business. Following the international criminal web identified in the Macho Sports case, the FBI began working with Australia’s New South Wales Police Force (in conjunction with the New South Wales Crime Commission) to uncover this second international sports betting—and drug—conspiracy.
Hanson was initially indicted and arrested on September 9, 2015 after arranging the delivery of five kilograms of cocaine and five kilograms of methamphetamine. This indictment adds additional charges relating to Hanson’s organization. Hanson and co-defendants Luke Fairfield, Kenny Hilinski, Giovanni Brandolino, Daniel Portley-Hanks, Jack Rissell, and Derek Loville are charged with a racketeering conspiracy related to illegal gambling and narcotics trafficking.
The indictment also charges Hanson, Fairfield, Hilinski, Brandolino, Portley-Hanks, Rissell, and fifteen others with operating an illegal gambling business. Of these additional fifteen defendants, thirteen (Charlie D’agostino, Marlyn Villareal, Dylan Anderson, Jim Muse, Jeff Bellandi, Curtis Chen, James Duley, Dee Foxx, Khalid Petras, Rahul Bhagat, David Kipper, Todd Oldham, and Daniel Ortega) were bookies working for Hanson, and two, Marlyn Villareal and Tim Bryan, were runners responsible for transporting gambling and drug trafficking proceeds funds on Hanson’s behalf.
Finally, Hanson, Fairfield, Hilinski, Brandolino, D’Agostino, Villareal, Anderson, Bryan, and Bellandi are charged with laundering the proceeds of the organizations drug and gambling businesses. This money laundering was done by depositing funds into bank accounts opened in the names of fictitious companies but controlled by Hanson and Hilinski. Villareal alone was responsible for the laundering of hundreds of thousands of dollars in drug and gambling proceeds.
In a related matter, Rufus Leon Rhone was also indicted and pled guilty on January 19, 2016 to charges of conspiring to distribute methamphetamine and cocaine. His sentencing is set for April 11, 2016.
DEFENDANT Case Number: 15CR2310-WQH
Owen Hanson Age: 33
Luke Fairfield Age: 39
*Kenny Hilinski Age: 38
Giovanni Brandolino Age: 41
Daniel Portley-Hanks Age: 69
Jack Rissell Age: 49
Derek Loville Age: 47
Chalie D’Agostino Age: 51
Marlyn Villareal Age: 31
Dylan Anderson Age: 33
Tim Bryan Age: 47
Jim Muse Age: 52
Jeff Bellandi aka “Jazzy” Age: 49
Curtis Chen Age: 32
James Duley Age: 40
Dee Foxx Age: 34
Khalid Petras Age: 54
Rahul Bhagat Age: 30
David Kipper Age: 34
Todd Oldham Age: 31
Daniel Ortega Age: 41
*Fugitives
SUMMARY OF CHARGES
Racketeering Conspiracy to Conduct Enterprise Affairs, 18 U.S.C. § 1962(d)
Maximum penalty: Life
Illegal Gambling Business, 18 U.S.C. § 1955
Maximum penalty: Five years
Money Laundering Conspiracy, 18 U.S.C. § 1956(h)
Maximum penalty: Twenty years
Conspiracy to Distribute Narcotics, 21 U.S.C. § 841(a)(1) and 846
Maximum penalty: Life
AGENCY
Federal Bureau of Investigation – San Diego Field Office
Internal Revenue Service – San Diego
Australian Crime Commission
New South Wales Police Force
New South Wales Crime Commission
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Three Senior Executives Sentenced in Manhattan Federal Court for Their Roles in Student Visa and Financial Aid Frauds at For-Profit SchoolsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that SURESH HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA, who were senior executives of privately owned for-profit schools, were sentenced yesterday in Manhattan federal court for their roles in a student financial aid fraud scheme in which they defrauded the United States Department of Education (“Education Department”) of $1,000,000 in education grant funds, and in a student visa fraud scheme that generated $7,440,000 in illegal revenues.
United States District Judge J. Paul Oetken sentenced HIRANANDANEY to one year and one day in prison, LALIT CHABRIA to one year and one day in prison, and ANITA CHABRIA to six months of home confinement. Judge Oetken also ordered these three former executives to forfeit $7,440,000 for the student visa fraud and to pay $1,000,000 in restitution for the student financial aid fraud. These former executives were arrested in May 2014, along with co-defendants Samir Hiranandaney and Seema Shah, following a long-term investigation by the United States Immigration and Customs Enforcement’s Homeland Security Investigations (“ICE-HSI”), the United States Department of State’s Diplomatic Security Service (“DOS-DSS”), and the United States Department of Education’s Office of the Inspector General (“ED-OIG”).
Manhattan U.S. Attorney Bharara stated: “Suresh Hiranandaney, Lalit Chabria, and Anita Chabria exploited our nation’s financial aid and foreign student visa programs, engaging in a long-running fraud scheme that generated millions of dollars. The defendants greedily took advantage of programs meant to help people get a higher education, and in the process, committed federal crimes.”
According to the Complaint and Indictment, sentencing submissions and other publicly filed court documents, and statements made at public court proceedings in this case, including yesterday’s sentencings:
HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA were associated with the Micropower Career Institute (“MCI”), a for-profit school with five campuses in New York and New Jersey, or the Institute for Health Education (“IHE”), a for-profit school located in New Jersey, both of which offered vocational, language, and other classes to, among others, domestic students whose tuition was partially covered by Department of Education Department financial aid, and foreign students who were allowed to stay in this country on student visas requiring that they pursue full courses of study at bona fide educational institutions. Hiranandaney was MCI’s president; his brother-in-law, LALIT CHABRIA, was MCI’s chief executive officer and IHE’s president; and ANITA CHABRIA, the sister of HIRANANDANEY and wife of LALIT CHABRIA, was MCI’s vice president and the director of MCI’s Mineola Campus in Mineola, New York.
HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA defrauded the Education Department of $1,000,000 of educational grant money – funds that the Education Department had paid to MCI for the purpose of covering tuition for domestic students to attend classes at MCI. As part of this fraud, they falsified and manipulated documents to hide MCI’s failure to timely return financial aid money received by MCI for domestic students who had dropped out of MCI.
Similarly, HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA made $7,440,000 in illicit profits by defrauding immigration authorities. In this scheme, they concealed that MCI and IHE were collecting millions of dollars in tuition revenues from foreign students who were not attending courses as required to stay in the United States on student visas. HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and others fraudulently portrayed MCI and IHE to immigration authorities as legitimate institutes of higher learning where foreign students carried full course loads. In reality, the majority of foreign students at MCI and IHE did not attend the required number of classes. HIRANANDANEY, LALIT CHABRIA, and ANITA CHABRIA failed to report this to immigration authorities, as required, while MCI and IHE continued to collect millions of dollars in tuition from foreign students with delinquent attendance. When a campus of MCI came under regulatory scrutiny, HIRANANDANEY, LALIT CHABRIA, ANITA CHABRIA, and others transferred foreign students with delinquent attendance to affiliated schools (such as another MCI campus or IHE) that were not under scrutiny.
* * *
In addition to their prison and home confinement sentences, HIRANANDANEY, 61, of Dix Hills, New York, and LALIT CHABRIA, 54, and ANITA CHABRIA, 50, both of Old Bethpage, New York, were ordered to forfeit $7,440,000 to the United States Government from the proceeds of their student visa fraud, and pay $1,000,000 in restitution to United States Department of Education for losses from their student financial aid fraud.
The remaining defendants, Samir Hiranandaney and Seema Shah, are scheduled to be sentenced later this year before Judge Oetken.
Manhattan U.S. Attorney Bharara praised ICE-HSI, DOS-DSS, and ED-OIG for their work in the investigation of this case.
This case is being prosecuted by the Office’s General Crimes Unit. Assistant U.S. Attorneys Samson Enzer and Margaret Graham are in charge of the prosecution. Assistant U.S. Attorney Andrew Adams is in charge of the forfeiture aspects of the case.
Tenth and Final Defendant from Butte County Methamphetamine Trafficking Organization Sentenced to Federal PrisonRead the Press Release
SACRAMENTO, Calif. — Manuel Garcia Navarro, 33, of Fresno, was sentenced today by United States District Judge Kimberly J. Mueller to two years in prison for conspiring to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Navarro was a methamphetamine courier. On June 29, 2013, Navarro was stopped by the California Highway Patrol for a vehicle code violation. A subsequent search of Navarro’s vehicle resulted in the seizure of four pounds of methamphetamine concealed within the airbag compartment.
Federico Aguilar was the head of this drug trafficking organization that was responsible for distributing pound-quantities of methamphetamine on a weekly basis in Butte County. Over a four-month period in 2013, Aguilar’s organization distributed over 49 pounds of methamphetamine. Aguilar was arrested at his residence in August 2013, where law enforcement officers found 15 cellphones, five guns, and $50,000 in cash concealed within a bathroom air vent.
Navarro is the tenth and final defendant to be sentenced in this case. Nine other defendants have been sentenced this year:
-
On October 14, 2015, Federico Aguilar was sentenced to 17 and a half years in prison.
-
On September 30, 2015, Rafael Medina was sentenced to six years and eight months in prison.
-
On August 19, 2015, David Eleazar was sentenced to six years and eight months in prison.
-
On July 8, 2015, Neng Xiong was sentenced to four years and five months in prison.
-
On February 25, 2015, Alejandro Corona was sentenced to three years and six months in prison.
-
On October 28, 2015, Rickey Xiong was sentenced to three years and six months in prison.
-
On March 25, 2015, Jaime Dominguez was sentenced to two years in prison.
-
On May 20, 2015, Sou Xiong was sentenced to two years in prison.
-
On June 10, 2015, Cindy Hunter was sentenced to one year of supervised release.
This case was the product of an investigation by the Drug Enforcement Administration, the Butte Interagency Narcotics Task Force (BINTF), the Butte County Sheriff’s Office, the Butte County Probation Department, the Butte County District Attorney’s Office, the California Highway Patrol, the California Department of Justice Bureau of Gambling Control, the Chico Police Department, and the United States Marshals Service. Assistant United States Attorney Justin Lee prosecuted the case.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multi-level 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.
-
Swan’s Island Man Sentenced to Seven Years for Illegally Possessing Guns and AmmunitionRead the Press Release
Contact: James M. Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Shaun G. Lemoine, 36, of Swan’s Island, Maine, was sentenced yesterday in U.S. District Court by Judge John A. Woodcock Jr. to seven years in prison and three years of supervised release for illegally possessing firearms and ammunition. Lemoine pleaded guilty on March 17, 2015.
Court records reveal that on January 24, 2014, the Swan’s Island Police Department executed a warrant at Lemoine’s home and seized two firearms and 48 rounds of ammunition. Lemoine was prohibited from possessing these items because of prior federal (gun) and state (burglary and theft) felony convictions.
Prior to this sentencing, the defendant had been jailed over a half dozen times including being sentenced three times in federal court. The defendant also obstructed justice in this case by pressuring a witness to provide false information. In imposing the lengthy sentence, Judge Woodcock said that the defendant’s attempt to cover up his crime and his lengthy criminal history spoke “volumes about [his] utter disrespect for the law” and that “the only answer [was] to place [him] in jail.”The investigation was conducted by the Swan’s Island Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Subway Franchisee and Gas Station Owner Pleads Guilty to Multi-Million Dollar Conspiracy to Defraud the Internal Revenue ServiceRead the Press Release
Defendant Failed to Report More Than $6 Million in Gross Receipts
A Subway franchisee and resident of Alexandria, Virginia pleaded guilty today to conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia.
According to court documents, Obayedul Hoque, 49, owned and operated a gas station in Alexandria called Skyhill Shell and multiple Subway restaurant franchises in Alexandria, Arlington, Virginia and Washington, D.C. Hoque admitted that between 2008 and 2014, he and his co-conspirators, who were managers of some of the Subway franchises and the gas station, conspired to defraud the United States for the purpose of obstructing the Internal Revenue Service (IRS) in the ascertainment and collection of individual and corporate income taxes. Hoque and his co-conspirators did not deposit all of the gas station or the Subway franchises’ gross receipts into the corporate or partnership bank accounts. Instead, Hoque and the managers retained a portion of the gross receipts for their personal benefit and failed to report those funds to the IRS. For the Subway franchises that had no co-conspirator managers, Hoque retained all of the unreported gross receipts for himself.
For the period of 2008 through 2013, point of sales records for the Subway franchises reflected total sales of $20,805,667. However, Hoque and his co-conspirators provided false monthly sales figures to the accounting firm to prepare the Subway entities’ tax returns. As a result, Hoque and his co-conspirators caused false corporate and partnership tax returns to be filed for the Subway franchises, which reported sales of only $14,377,696. Hoque and a co-conspirator also caused false corporate tax returns to be filed on behalf of Skyhill Shell. For some years, some of the entities did not file tax returns with the IRS. Hoque also filed false individual income tax returns with the IRS. Hoque admitted that his conduct caused a tax loss to the IRS of between $1.5 million and $3.5 million.
“As we start the 2016 filing season, this case serves as a reminder that the Justice Department, working with its partners at the IRS, remains committed to identifying, investigating and prosecuting businesses and individual taxpayers who willfully fail to file accurate tax returns and pay the taxes due,” said Acting Assistant Attorney General Ciraolo. “Every taxpayer owes a duty to their fellow citizens to pay their fair share and those who choose not to do so will face the consequences.”
“Today’s plea of Obayedul Hoque for conspiracy to defraud the United States sends a clear message to would-be tax cheats,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “Whether you fail to file and pay your corporate taxes or your personal income taxes, IRS-CI special agents work diligently to uncover all kinds of fraud and hold everyone accountable. U.S. citizens expect and deserve a level playing field when it comes to paying taxes and there are no better financial investigators in the world when it comes to following the money.”
U.S. District Judge Liam O’Grady set sentencing for May 13 at 9:00 a.m. EST. Hoque faces a statutory maximum prison term of five years and a fine of up to $250,000. As part of his plea agreement, Hoque agreed to pay restitution to the IRS for tax liabilities for the years 2008 through 2013.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Boente thanked special agents of IRS-CI, who investigated the case and Assistant U.S. Attorney Uzo Asonye and Assistant Chief Caryn Finley and Trial Attorney Kimberly Shartar of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Subway Franchisee and Gas Station Owner Pleads Guilty to Multi-Million Dollar Conspiracy to Defraud the IRSRead the Press Release
ALEXANDRIA, Va. – Obayedul Hoque, 49, of Alexandria, pleaded guilty today to charges of conspiracy to defraud the United States.
In a statement of facts filed with the plea agreement, Hoque owned and operated a gas station in Alexandria called Skyhill Shell and multiple Subway restaurant franchises in Alexandria, Arlington, and Washington, D.C. Hoque admitted that between 2008 and 2014, he and his co-conspirators, who were managers of some of the Subway franchises and the gas station, conspired to defraud the United States for the purpose of obstructing the IRS in the ascertainment and collection of individual and corporate income taxes. Hoque and his co-conspirators did not deposit all of the gas station or the Subway franchises’ gross receipts into the corporate or partnership bank accounts. Instead, Hoque and the managers retained a portion of the gross receipts for their personal benefit and failed to report those funds to the IRS. For the Subway franchises that had no co-conspirator managers, Hoque retained all of the unreported gross receipts for himself.
For the period of 2008 through 2013, point of sales records for the Subway franchises reflected total sales of $20,805,667. However, Hoque and his co-conspirators provided false monthly sales figures to the accounting firm to prepare the Subway entities’ tax returns. As a result, Hoque and his co-conspirators caused false corporate and partnership tax returns to be filed for the Subway franchises, which reported sales of only $14,377,696. Hoque and a co-conspirator also caused false corporate tax returns to be filed on behalf of Skyhill Shell. For some years, some of the entities did not file tax returns with the IRS. Hoque also filed false individual income tax returns with the IRS. Hoque admitted that his conduct caused a tax loss to the IRS of between $1.5 million and $3.5 million.
Hoque faces a maximum penalty of five years in prison and a fine of $250,000 when sentenced on May 13, 2016. As part of his plea agreement, Hoque agreed to pay restitution to the IRS for tax liabilities for the years 2008 through 2013. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Caroline D. Ciraolo, Acting Assistant Attorney General of the Justice Department’s Tax Division, made the announcement after the plea was accepted by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney Uzo Asonye is prosecuting the case along with Assistant Chief Caryn Finley and Trial Attorney Kimberly Shartar of the Tax Division.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-9.
Stevenson, Alabama, Police Chief Charged with Civil Rights Offenses for Assaulting ArresteeRead the Press Release
The Justice Department announced today that a grand jury in the Northern District of Alabama charged the Chief of Police of Stevenson, Alabama, Daniel Winters, 55, with two counts of deprivation of civil rights under color of law.
The indictment alleges that on or about March 22, 2015, Winters physically assaulted an arrestee, and willfully failed to intervene to stop another person from using unreasonable force during the arrest. The assault caused the arrestee to suffer bodily injuries.
An indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI, with assistance from the Alabama State Bureau of Investigation. The investigation remains ongoing. The matter is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Samantha Trepel of the Civil Rights Division’s Criminal Section and Deputy Chief Laura Hodge of the Northern District of Alabama.
Winters Indictment
Stevenson Police Chief Charged with Civil Rights Offenses for Assaulting ArresteeRead the Press Release
BIRMINGHAM –A federal grand jury today indicted Stevenson Police Chief Daniel Winters, 55, on two counts of deprivation of civil rights under color of law, announced the Justice Department and U.S. Attorney Joyce White Vance.
The indictment alleges that on or about March 22, 2015, Winters physically assaulted an arrestee, and willfully failed to intervene to stop another person from using unreasonable force during the arrest. The assault caused the arrestee to suffer bodily injuries.
An indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI, with assistance from the Alabama State Bureau of Investigation. The investigation remains ongoing. The matter is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Samantha Trepel of the Civil Rights Division’s Criminal Section and Deputy Chief Laura Hodge of the Northern District of Alabama.
Statement by Bill Williams in Regards to the Malheur National Wildlife Refuge Occupation and Related ArrestsRead the Press Release
Statement by Bill Williams
U.S. Attorney
District of Oregon
January 27, 2016
Good Morning. My name is Bill Williams, and I am the U.S. Attorney for Oregon.
I have been coming to Harney County on behalf of the US Attorney's Office for the last 15 years. I am keenly aware of the concerns that are important to this community. I have seen first-hand the passion that folks in this community have for the way of life that is so special. Clearly, this has been disrupted by this armed occupation.
The FBI, the Harney County Sheriff’s Office, OSP, Oregon Sheriff's Association, and numerous law enforcement agencies from around the state have been working very hard to resolve this situation in a peaceful manner, to stop the threats to public safety, and to end the significant disruption this has caused to the people of this county.
We continue working towards resolution, and will do so with the primary goal of restoring normalcy to this community, and highlighting the already existing cooperative efforts of local and federal partners in addressing their own issues.
There are currently eight people in custody - - seven in Oregon and one in Arizona. They will all make an initial appearance before a federal magistrate today. At some time in the future, the defendant in Arizona will come to Oregon for future court proceedings.
As the FBI announced last night, these eight people were arrested for the federal felony offense of “conspiracy to impede officers of the United States from discharging their official duties through the use of force, intimidation, or threats.”
This is an ongoing investigation, and we will not be commenting on the case, instead we will let the publicly filed documents in the case speak for themselves.
In closing, I want to thank the federal, state, local, and tribal law enforcement officers and agents who are working very well together to support this community and this effort.
I also want to again thank the people of Harney County and the Burns Paiute Tribe for their patience…and their passion for returning this community to normalcy.
We will continue working around the clock until this matter is appropriately resolved.
Six Defendants Plead Guilty in Extensive Stolen Identity Tax Refund Fraud Scheme Involving Tens of Thousands of Individuals’ Personal Identifying InformationRead the Press Release
Six defendants pled guilty for their participation in an extensive stolen identity tax refund fraud scheme involving tens of thousands of individuals’ personal identifying information (PII). The defendants used the PII, including names, dates of birth, and Social Security numbers, to file thousands of fraudulent federal income tax returns with the IRS claiming tens of millions of dollars in refunds.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Delany De-Leon Colon, Acting Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations Miami Office (DOL-OIG), Carlos A. Canino, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Dexter Williams, Chief, City of Miramar Police Department, Steve Steinberg, Chief, Aventura Police Department, William Hernandez, Chief, North Miami Beach Police Department (NMBPD), and Franklin Adderley, Chief, Fort Lauderdale Police Department, made the announcement.
Harlan Decoste, a/k/a “Money King,” a/k/a “Moneyking_111,” 27, Kerby Luma, a/k/a "Money Makin Kerb," 26, Frantz Decoste, a/k/a "Gripe_111," 21, Francis Jeudy, a/k/a "Money Makin Rab," a/k/a "Brizzleon111," 26, all of Miramar, and Andy Cherrelus, a/k/a "Risktakers111," 24, of Miami, each pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, one count of conspiracy to possess fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(b)(2), one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(1)(a). Frantz Decoste and Jeudy also pled guilty to one count of possession of stolen mail, in violation of Title 18, United States Code, Section 1708. Chad Davis, a/k/a "Chadillac," a/k/a "Chadillac 305," 29, of Miami, pled guilty to one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3).
According to court documents, while officers from the Miramar Police Department were investigating an armed home invasion that occurred at a home occupied by Harlan Decoste, Frantz Decoste, Luma, and Jeudy, in the Silver Falls Subdivision in Miramar, they discovered evidence of narcotics activity within the home. As a result, officers obtained a state court search warrant for the residence.
While officers were searching the home pursuant to the state court warrant, they found evidence of fraud related activity in various bedrooms and common areas, consisting of approximately 500 debit cards issued in other persons’ names, one ledger/notebook that contained PII, one ledger/notebook that contained information related to tax returns, five United States income tax refund checks in other persons’ names, and various tax return documentation in other persons’ names. In addition, the officers seized approximately 10 computers and 3 USB drives. There were also significant amounts of United States currency, jewelry, expensive shoes and clothing, and other valuable items in the home.
Federal Agents obtained a search warrant to review the electronic and other evidence recovered from the residence. A forensic review of those items revealed that the computers contained PII of tens of thousands of individuals. Some of the PII appeared in photographs of computer screens (screenshots) from a medical center. The screenshots each contained approximately twelve patient names, dates of birth, and Social Security numbers. The PII was also contained in rich text document files. Many of the rich text document files contained the PII from the patient screenshots, along with additional user-inputted information such as the victims’ true addresses, fictitious addresses associated with tax returns, account numbers, IRS filing personal identification numbers, and refund amounts.
Further analysis revealed that the defendants filed and caused to be filed thousands of fraudulent tax returns claiming tens of millions of dollars associated with the PII recovered from the residence. The defendants provided payment instructions on the tax returns, directing the IRS to transfer the tax refunds to various accounts in other persons' names that the defendants and their co-conspirators controlled. The defendants then withdrew the unlawfully obtained tax proceeds for their personal use and to further the fraud scheme.
The defendants each face a maximum of ten years imprisonment for each of the conspiracy to defraud the government and access device charges, a maximum of five years imprisonment for the conspiracy to possess access devices, a maximum of five years imprisonment for possession of stolen mail, and a mandatory term of two years’ imprisonment, consecutive to any other prison term, for the aggravated identity theft charges.
The defendants are scheduled to be sentenced on April 5, 2016, before Judge Dimitrouleas in Fort Lauderdale.
Mr. Ferrer commended the investigative efforts of the IRS-CI, ICE-HSI, USPIS, DOL-OIG, ATF, FBI Miami Cyber Task Force, as well as the Miramar, Aventura, and North Miami Beach Police Departments. The case is being prosecuted by Assistant United States Attorney Brooke Watson.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Schuele Boys Gang Associate Pleads Guilty to Drug ChargeRead 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 Andre Wise, 37, of Buffalo, pleaded guilty to conspiracy to distribute marijuana before U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that between June 2013 and July 2014, Wise conspired with other Schuele Boys associates and gang members to distribute marijuana in the City of Buffalo.
The Schuele Boys Gang, which operated in the Schuele Street area of the East Side of Buffalo, is believed to be responsible for multiple acts of violence and the distribution of illegal narcotics including cocaine, crack cocaine and marijuana.
Wise is one of 28 Schuele Boys Gang members, associates and other individuals arrested in this case. To date, 17 of the defendants have been convicted.
Today’s sentenced and plea are the culmination of an investigation on the part of the FBI's Safe Streets Task Force which includes representatives of the Amherst Police Department; the Buffalo Police Department; U.S. Border Patrol, the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Cheektowaga Police Department; the Erie County Sheriff’s Department; the Hamburg Police Department; the Lancaster Police Department; the Niagara Frontier Transportation Authority Police; the New York State Department of Correctional Services; the New York State Police; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations. Additional assistance was provided by the Drug Enforcement Administration; U.S. Customs and Border Protection, the United States Marshal Service, the Lackawanna Police Department, and the Niagara County Sheriff’s Department.
Wise will be sentenced on May 16, 2016 at 12:30 p.m. before Judge Arcara.
Rochester Radiologist Sentenced for Defrauding Health Insurance ProgramsRead 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 Thomas F. Stephenson, MD, 72, of Rochester, NY, who was convicted of committing health care fraud, was sentenced to one year probation and ordered to perform 200 hours of community service by Chief U.S. District Judge Frank P. Geraci. The defendant was also fined $25,000.
Assistant U.S. Attorney John J. Field, who handled the case, stated that Stephenson, a radiologist, owned and operated Westside Imaging in Rochester. From January 2007 to April 2010, the defendant engaged in a scheme to defraud Excellus Health, MVP Health and Medicare by double-billing certain x-rays. In total, Stephenson fraudulently sought reimbursements of approximately $135,961.77.
The sentencing is the result of an investigation by Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.
Ridgely Woman Pleads Guilty to Stealing over $173,000 in Social Security and Medicaid BenefitsRead the Press Release
Baltimore, Maryland – Debra Kay Schindler, age 59, of Ridgely, Maryland, pleaded guilty today to theft of government property arising from a scheme to steal $173,529 in social security and Medicaid benefits.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Michael McGill of the Social Security Administration - Office of Inspector General, Philadelphia Field Division.
According to her guilty plea, from June 2003 to July 2013, Schindler received Social Security Administration (SSA) Supplemental Security Income (SSI) and Medicaid benefits due to back disorders and diabetes. Schindler reported to SSA that she was married to E.S. but was living alone and had no income or resources. In fact, however, during the entire period that she received SSA and Medicaid benefits, Schindler was living with her husband who worked at Giant Food. Schindler shared a bank account with her husband, and was the co-beneficiary of her husband’s pension. Had SSA been aware of Schindler’s income, resources or living arrangements, Schindler would not have qualified for any benefits.
Schindler fraudulently received a total of $173,529.81 in SSI and Medicaid benefits.
Schindler faces a maximum sentence of 10 years in prison for theft of government property. Schindler has agreed to pay restitution of $173,529.81. U.S. District Judge Richard D. Bennett has scheduled sentencing for April 27, 2016 at 3:00 p.m.
United States Attorney Rod J. Rosenstein commended the Social Security Administration - Office of Inspector General for its work in the investigation and thanked Special Assistant U.S. Attorney Lauren E. Perry, who is prosecuting the case.
Reno Lawyer Indicted on Federal Conspiracy and Tax ChargesRead the Press Release
RENO, Nev. – A Reno lawyer was indicted by the federal grand jury today on charges that he and a business partner concealed and attempted to conceal the true source of funding of their business by structuring cash deposits in order to avoid IRS detection, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
“Federal laws require federally-insured financial institutions to report cash or money orders deposited or withdrawn in amounts of $10,000 or more to provide a means to detect fraud, evasion or other criminal activity,” said U.S. Attorney Bogden. “These transaction reporting laws assist law enforcement in investigations of a variety of criminal offenses and many other types of criminal activity.”
Delmar L. Hardy, 60, of Reno, is charged with one count of conspiracy to structure financial transactions, three counts of filing false tax returns, and one count of corruptly obstructing or impeding due administration of IRS laws. If convicted, he faces not more than five years in prison on the conspiracy charge, not more than three years in prison on each of the other charges, not more than $250,000 in fines per count, and criminal forfeiture in the amount of $574,105. Hardy will be scheduled for an arraignment in Reno in the near future.
According to the indictment and other public information, Hardy is a licensed attorney in Nevada and operates the Hardy Law Group. Hardy was business partners with Antonio Servidio in XYZ Real Estate, LLC. Servidio is charged and has pleaded guilty in a related case filed in U.S. District Court in Reno. The indictment alleges that from about July 2009 to January 2012, Hardy and Servidio concealed and attempted to conceal the true source of XYZ’s funds by purchasing structured money orders and by making structured deposits into XYZ bank accounts in order to avoid the currency transaction reporting requirements of financial institutions, and the record-keeping requirements of domestic financial institutions. Hardy also allegedly filed false tax returns for the years 2008, 2009, and 2010, which significantly understated his true income, including cash he received in his practice, and concealed Servidio’s contributions to, and interests in, XYZ Real Estate, LLC, in 2009 and 2010.
The case is being investigated by IRS Criminal Investigation and prosecuted by First Assistant U.S. Attorney Steven W. Myhre and Assistant U.S. Attorney James E. Keller.
An indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Readout of Attorney General Lynch’s Visit to New OrleansRead the Press Release
Attorney General Loretta E. Lynch spent the day in New Orleans participating in a roundtable on human trafficking with U.S. Attorney for the Eastern District of Louisiana Kenneth A. Polite; attending a roll call meeting with the New Orleans Police Department; and meeting with the family of Jefferson Parish, Louisiana Sheriff's Deputy Steven Arnold, who is being treated for injuries sustained in yesterday’s shooting.
The roundtable discussion on human trafficking was held at Covenant House in New Orleans and included representatives from Covenant House, Eden House, the Department of Homeland Security's Homeland Security Investigations, the Jefferson Parish Sheriff's Office as well as two human trafficking survivors.
Covenant House and the Jefferson Parish Sheriff's Office were the recipients of one of the Enhanced Collaborative Model (ECM) grants that are jointly administered by the Department of Justice's Bureau of Justice Assistance and the Office for Victims of Crime. The ECM grants use a holistic approach to respond to human trafficking by supporting law enforcement entities that partner with victim service providers in order to improve services to human trafficking survivors and bring traffickers to justice through effective partnerships.
The discussion focused on the importance of a victim-focused, trauma-informed response to human trafficking and the importance of partnerships between law enforcement and victim service providers to ensure that survivors are able to effectively build new lives.
Today’s roundtable is one part of the department’s work to raise awareness during National Slavery and Human Trafficking Prevention Month. Earlier this month, the Office for Victims of Crime released a video series and resource guide, The Faces of Human Trafficking, to raise awareness about the many forms of human trafficking in the United States.
Following the roundtable, Attorney General Lynch also attended a roll call meeting at the New Orleans Police Department’s 1st District Police Station with rank and file officers, Police Superintendent Michael Harrison and 1st District Commander Hans Ganthier. The Attorney General expressed her continued support for the department, as well as her appreciation for their hard work in implementing the terms of the NOPD's consent decree agreement with the Justice Department, which she noted will lead to more effective policing in New Orleans.
Attorney General Lynch also met with the family of Jefferson Parish Sheriff's Deputy Steven Arnold at the LSU Medical Center. During the meeting, she shared her best wishes for his swift recovery and her commitment to justice for his shooting.
Raytown Man Charged with Distributing Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Raytown, Mo., man has been charged with distributing child pornography over the Internet.
Cody Lee Davidson, 18, of Raytown, was charged in a criminal complaint filed in the U.S. District Court in Kansas City, Mo., on Tuesday, Jan. 26, 2016. Davidson was arrested yesterday and will have his initial court appearance today.
According to an affidavit filed in support of the federal criminal complaint, Davidson took pornographic photos of a 7-year-old child victim, identified as Jane Doe, and posted those images on a Web site. Davidson also took a video of the child victim, the affidavit says, which federal agents located on his cell phone.
Davidson also took photos of an 8-year-old child victim, identified as Jane Doe 2, and sent those images to another individual via Kik Messenger.
Investigators have found more than 100 images and videos of child pornography on Davidson’s cell phone and camera, the affidavit says, and vast majority of the images and videos of child pornography depict victims from infants to 10 years old. Three videos, according to the affidavit, depict a female child engaged in sexually explicit conduct with an adult male.
The investigation began when federal agents in Boston, Mass., discovered six images of child pornography being distributed over the Internet on Aug. 7, 2015, during an undercover operation. Earlier this month, agents discovered new images from the same Web site, and learned that these images allegedly had been uploaded to another Web site by Davidson. On Tuesday, Jan. 26, 2016, federal agents and Raytown, Mo., police officers executed a search warrant at Davidson’s residence.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney David Luna. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Pottstown Man Indicted on Gun and Drug ChargesRead the Press Release
PHILADELPHIA - Jose Charriez, 35, of Pottstown, Pennsylvania, was charged today by indictment with possession of cocaine with the intent to distribute, possession of a firearm in furtherance of a drug trafficking crime, and possession of a firearm by a convicted felon, announced United States Attorney Zane David Memeger. The indictment alleges that on or about March 18, 2015, Charriez was in possession of the cocaine and a loaded .45 caliber handgun in a home in Pottstown, Pennsylvania.
If convicted the defendant faces a maximum possible sentence of life in prison, a fine of up to $2.5 million, up to six years of supervised release, and $300 special assessment.
The case was investigated by the Federal Bureau of Investigation, the Montgomery County Detective Bureau, and the Pottstown Police Department It is being prosecuted by Assistant United States Attorney Jason P. Bologna.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Postal Worker Sentenced for Theft of MailRead the Press Release
U.S. Attorney Kenneth A. Polite announced that O’NEIL EDWARDS, age 27, of New Orleans, was sentenced yesterday after previously pleading guilty to theft of mail matter by a postal employee.
U.S. District Court Judge Jay C. Zainey sentenced EDWARDS to one year of probation to include three months of home confinement. EDWARDS was also ordered to pay $200 dollars in restitution and a fine of $1000.
According to court records, in or about December 2013, EDWARDS, a United States Postal employee, stole two $100 gift cards from mail sent from Las Vegas, Nevada to Belle Chasse, Louisiana.
U.S. Attorney Polite praised the work of the U.S. Postal Service, Office of Inspector General for investigating this matter. Assistant U.S. Attorney G. Dall Kammer was in charge of the prosecution.
Post Falls Banker Sentenced for Bank FraudRead the Press Release
COEUR D'ALENE - Randy Gard Teall, 67, of Post Falls, Idaho, was sentenced today in United States District Court to 12 months and one day in prison followed by five years of supervised release for bank fraud, U.S. Attorney Wendy J. Olson announced. Senior U.S. District Judge Edward J. Lodge will determine the amount of restitution Teall will be ordered to pay. Teall pleaded guilty to the charge on September 15, 2015.
According to the plea agreement, Teall was an officer at Global Credit Union in Coeur d’Alene, Idaho. In this position, Teall was authorized to make and approve loans up to $300,000 without board approval. During Teall’s employment with Global Credit Union, he executed a scheme to procure loans from Global Credit Union by false promises or statements. Specifically, Teall made false statements to Global Credit Union about the creditworthiness of three borrowers and a business. Teall and one of the borrowers were business partners in a real estate endeavor and Teall was the borrower’s landlord. After providing these false statements, Teall approved loans to these individuals which defrauded Global Credit Union. Teall acted with the intent to defraud Global Credit Union when he made and approved these loans. Global Credit Union was a financial institution whose deposits were federally insured by the National Credit Union Share Insurance Fund. Teall was previously convicted of making false statements on a loan application while he was employed by U.S. Bank in 1997.
The case was investigated by Federal Bureau of Investigation.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
Placer County Man Sentenced to 5 Years in Prison for Receiving Child PornographyRead the Press Release
SACRAMENTO, Calif. — United States District Judge Kimberly J. Mueller sentenced Paul Ross Pacini, 46, of Rocklin, to five years in prison, to be followed by 15 years of supervised release, for receiving child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, an undercover investigation revealed that from June 2013 through August 2013, Pacini used a peer-to-peer file-sharing network to make available more than 300 files of pictures and videos depicting the sexual exploitation of children. A search warrant executed at Pacini’s home revealed that his computers contained more than 2,500 images and more than 900 videos depicting the sexual abuse of children, and that at various times, many of those videos were made available to others over the Internet. The images and videos Pacini possessed involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of prepubescent minors under 12 years old.
This case was the product of an investigation by the Sacramento Internet Crimes Against Children (ICAC) Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant United States Attorney André M. Espinosa prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Pine Ridge Woman and Man Charged with Murder and Accessory to MurderRead the Press Release
United States Attorney Randolph J. Seiler announced that a federal grand jury has indicted a Pine Ridge, South Dakota, woman for First Degree Murder, and a Pine Ridge, South Dakota, man for Accessory to First Degree Murder.
Elizabeth Ann LeBeau, a/k/a Ann LeBeau, age 23, and Fred Quiver, a/k/a Fred Brings Plenty, age, 29, were indicted on January 26, 2016.
The Indictment alleges that on or between January 1, and January 3, 2016, LeBeau murdered Emily Bluebird by strangulation, and that between January 1, and January 21, 2016, Brings Plenty was an accessory to Bluebird’s murder.
The charges are merely an accusation and LeBeau and Quiver are presumed innocent until and unless proven guilty. Their initial appearance has not been scheduled. The defendants are in custody.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen is prosecuting the case.
Peoria Man Pleads Guilty to Distributing Child PornographyRead the Press Release
Peoria, Ill. – Jacob T. Burmood, 24, of the 6800 block of N. Fawndale Drive, Peoria, Ill., pleaded guilty in U.S. District Court on Monday, Jan. 25, to a single count of distribution of child pornography. Burmood, a registered sex offender, entered his plea before U.S. District Judge Michael M. Mihm, pursuant to a plea agreement. The agreement includes a stipulated sentence of 360 months in federal prison, subject to acceptance by the court. Sentencing has been scheduled for May 27, 2016.
The charges are the result of an investigation by the Peoria Police Department, acting in participation with the Illinois Attorney General’s Internet Crimes Against Children (ICAC) taskforce and the National Center for Missing and Exploited Children.
According to court documents, on Oct. 14, 2015, Peoria police officers executed search warrants on Burmood’s person, his residence, and various computers and electronic media. A subsequent forensic analysis of Burmood’s computer showed that he possessed more than 3,000 images and approximately 200 video files of minors engaged in sexually explicit conduct with other minors and adults. The forensic review further revealed that Burmood distributed child pornography to others using an e-mail account.
Burmood is a registered sex offender as a result of a prior conviction for a sex crime in Illinois in 2011. He has remained in the custody of the U.S. Marshals Service since he was arrested on Oct. 16, 2015.
Assistant U.S. Attorney Ron Hanna is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Operation Home of the Brave: Eight Individuals Arraigned for Drug ConspiracyRead the Press Release
The following named individuals have been charged with a federal crime or crimes. A Criminal Complaint does not constitute evidence of guilt. A Criminal Complaint is a method of bringing charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt. United States Sentencing Guidelines may be considered, upon conviction, by the sentencing court. Federal prison sentences are non-paroleable.
"OPERATION HOME OF THE BRAVE"
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that the following individuals were arraigned on January 27, 2016, on charges of Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(1) and 841(b)(1)(A).
CODY McCLENDON, age 35, of Tahlequah, Oklahoma, MICHAEL LINCOLN, age 39, of Tulsa, Oklahoma, AMBER CLAPHAN, age 33, of Stilwell, Oklahoma, DONALD TRAMMEL, age 40, of Tahlequah, Oklahoma, SAMANTHA SMITH, age 21, of Muskogee, Oklahoma, TERESA CHAGOLLA, age 54, of Tahlequah, Oklahoma, JACOB MASTERS, age 54, of Tulsa, Oklahoma and NATHAN GREEN, age 27, of Hulbert, Oklahoma.
The Criminal Complaint filed on January 25, 2016, alleges that from in or about June 2015 and continuing up to and including the time of this Complaint, in the Eastern District of Oklahoma, the defendants, did willfully and knowingly combine, conspire, confederate and agree together, and with other persons known and unknown, to Possess with Intent to Distribute and the Distribution of 500 grams or more of a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II Controlled Substance.
The Investigation revealed that Cody McClendon, an Indian Brotherhood (IBH) gang member, currently an inmate with the Oklahoma Department of Corrections in McAlester, Oklahoma was utilizing a contraband cellular phone that he kept hidden on his person and inside his prison cell to facilitate the sale and distribution of methamphetamine. McClendon was doing this by using the cellular phone to communicate with co-conspirators via audio phone calls, text messages, and by communicating on the social media website Facebook.
The charges arose from a joint investigation by the Oklahoma Bureau of Narcotics, the Tahlequah Police Department, the Muskogee Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the Drug Enforcement Administration. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led, and coordinated by, the Office of the United States Attorney.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearings. All defendants were remanded into the custody of the United States Marshals Service.
The statutory range of punishment for a violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A), is not less than 10 years and not more than life imprisonment up to a $10,000,000.00 fine or both.
Assistant United States Attorney Shannon Henson represented the United States.
New York Man Sentenced to More Than 8 Years in Federal Prison for Kidnapping, Jewelry Store RobberyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CHRISTOPHER GAY, 30, of the Bronx, N.Y., was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 102 months of imprisonment, followed by five years of supervised release, for his role in a violent kidnapping and jewelry store robbery in April 2013.
According to court documents and statements made in court, at approximately 9:00 p.m. on April 11, 2013, GAY, William Davis, Jeffrey Houston and Kasam Hennix, all of whom were wearing masks and gloves and two of whom were armed with handguns, broke into an apartment on Gravel Street in Meriden, Conn., bound four victims with duct tape and covered their heads with pillowcases, towels and jackets. Davis, Houston and Hennix then forced two of the victims into a victim’s vehicle and drove to Lenox Jewelers in Fairfield, Conn., where the two victims worked. A fifth co-defendant followed behind them in a second vehicle. GAY remained in the Meriden apartment to guard the two other victims.
After the perpetrators arrived at the Fairfield store, they stole jewelry, watches and loose diamonds with a total replacement value of more than $3 million. They then fled in the victim’s car, leaving the two victims bound inside the store. One of the defendants called GAY to advise him that they had successfully carried out the robbery and that he should leave the apartment.
On May 22, 2013, GAY was arrested at a hotel in the Bronx. A search of his hotel room revealed approximately $59,000 in cash, two Movado watches, one Breitling watch and several pieces of jewelry that were still bearing price tags, including a pair of diamond earrings concealed inside a cassette case with a $23,800 price tag from Lenox Jewelers.
GAY was ordered to pay restitution of more than $3 million.
GAY has been detained since his arrest. On December 10, 2014, he pleaded guilty to one count of interference with commerce by robbery and one count of use of a firearm during and in relation to a crime of violence.
William Davis of Allentown, Pa., Jeffrey Houston of Allentown, and Kasam Hennix of Easton, Pa., also pleaded guilty to charges stemming from their involvement in this kidnapping and robbery. The fifth co-defendant is awaiting trial. On April 17, 2015, Davis was sentenced to 176 months of imprisonment. Houston and Hennix have not been sentenced.
The defendants also have forfeited gemstones, jewelry, watches, a vehicle, and more than $127,000 in cash seized from them at the time of their arrests.
This matter has been investigated by the U.S. Marshals Service, Federal Bureau of Investigation, Fairfield Police Department and Meriden Police Department. U.S. Attorney Daly also acknowledged the assistance provided by the U.S. Marshals Service and FBI in New York and Pennsylvania; the York, Allentown and Bethlehem Police Departments in Pennsylvania, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
This case is being prosecuted by Assistant U.S. Attorney Tracy Lee Dayton.
New Jersey Man Pleads Guilty to Heroin TraffickingRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 28-year-old New Jersey resident pled guilty today before Senior U.S. District Court Judge James M. Munley in Scranton, to distributing heroin in Luzerne County in October 2014.
According to United States Attorney Peter Smith, the defendant, Shaquan Murphy, admitted to traveling from New Jersey to Luzerne County with a co-defendant to distribute 50 bricks of heroin to sub-distributors on October 11, 2014. Murphy acknowledged distributing a total of between 100 grams and 400 grams of heroin, which is approximately equivalent to between 3,300 bags and 13,200 bags, during August-October 2014.
Murphy was indicted by a federal grand jury in Scranton in October 2014, as a result of an investigation by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Kingston Police, Plymouth Police and the Luzerne County District Attorney’s Office.
Murphy is the sixth defendant connected to the heroin trafficking operation to plead guilty in the case.
Judge Munley ordered a presentence investigation to be completed, and scheduled sentencing for April 28, 2016. Murphy faces up to 20 years in prison and a fine of $1 million. Murphy was ordered to be detained in prison pending sentencing.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
New Haven Man Sentenced to 18 Months in Prison for Tax FraudRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that WILLIE E. McKAY, 41, of New Haven, was sentenced yesterday by Chief U.S. District Judge Janet C. Hall in New Haven to 18 months of imprisonment, followed by three years of supervised release, for assisting in the preparation and filing of false tax returns. McKAY also was ordered to pay a $3,000 fine.
According to court documents and statements made in court, from as early as 2005 through 2008, McKAY was the pastor of The Love Temple Church, Inc., located at 75 Fresh Meadow Road in West Haven. During that time, McKAY provided people, including those in his congregation, with income tax preparation services. In February 2007, McKAY prepared and electronically filed a fraudulent individual U.S. Individual Income Tax Return, Form 1040, for 2006 of a taxpayer who was a member of his congregation. The tax return listed the address of Love Temple Church as the taxpayer’s home address, which was not accurate, and included a fictitious Form W-2 reflecting inflated wages and withholdings. The return also reflected fictitious deductions for state and personal property taxes, which reduced the taxpayer’s taxable income.
The fraudulent tax return that McKAY prepared reported wages of $47,900 from the State of Connecticut, withholdings of $14,952, and Schedule A deductions for state taxes of $4,359 and personal property tax of $852. Based on the false claim, the IRS issued a refund check in the amount of $9,693.
McKAY knew that the taxpayer was a student working at school and was not entitled to the claimed refund. McKAY also did not identify himself as the preparer of the tax return. According to the IRS, the taxpayer was entitled to a federal tax refund of only $363.
Chief Judge Hall ordered McKAY to pay $9,693 in restitution to the IRS.
On April 3, 2015, McKAY, pleaded guilty to one count of making a false claim to the Internal Revenue Service. In pleading guilty, McKAY admitted that he prepared and filed other false tax returns for the 2005 through 2007 tax years.
McKAY’s criminal history includes multiple state larceny convictions, and a federal wire fraud conviction for which he received 10-month prison term in May 2000.
McKAY, who is released on bond, was ordered to report to prison on March 31, 2016.
This matter was investigated by the Internal Revenue Service – Criminal Investigation Division with the assistance of the U.S. Secret Service, U.S. Postal Inspection Service and Hartford Police Department. The case was prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.
Mining Company Owners Plead Guilty to Fraud ChargesRead the Press Release
St. Louis, MO – CRISTOPHER CRISTEA and DAVID COREY TOLLE pled guilty to charges involving the solicitation of investors with promises of large returns from mining activities. Instead, the money was used to pay personal expenses and repay earlier investors. Tolle entered his plea today. Cristea pled last week.
According to court documents, in May 2009, Cristea and Tolle formed Cristol Enterprises, LLC and Charis Minerals, Inc. They solicited investors for Cristol Enterprises, LLC and Charis Minerals, Inc., which purported to be in the business of exploring for and extracting valuable minerals, such as gold, silver, copper, lead and zinc, through mining operations in the western United States, including Arizona and Oregon, and in Western Africa. The investors were told that the money would be used to purchase property and equipment and pay for administration and other expenses involved in the exploration, and they were promised large returns on their investments, often over a short period of time. Instead, a substantial majority of the money was used for personal expenditures and unrelated business expenses. In one instance, Cristea used funds to provide student loans to beauty academy students, and in another instance, funds were used to repay an earlier investor.
In December 2014, after he had previously been arrested on this indictment, Cristopher Cristea applied for a $1 million line of credit at a bank. In the application, he falsely stated that he was not a defendant in any suit or legal action. Additionally, he falsely stated that he had $295,000 cash in checking accounts and had securities – stocks/bonds/mutual funds – in the amount of $13,000,000.
David Corey Tolle, St. Charles, MO, pled guilty today to one felony count of wire fraud. Cristopher Cristea, also of St. Charles, MO, pled guilty last week to one felony count of conspiracy, four felony counts of wire fraud, one felony count of money laundering and one felony count of making a false statement to a financial institution. Both defendants appeared before United States District Judge Carol E. Jackson. Sentencing for Cristea has been set for April 20, 2016. Sentencing for Tolle is set for May 2, 2016.
Each of the conspiracy and fraud charges carry a maximum penalty of 20 years in prison and/or fines up to $250,000; money laundering carries a maximum of 10 years prison and/or fines up to $250,000; false statement to a financial institution carries a maximum of 30 years in prison and/or fines up to $1 million. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Steven Muchnick is handling the case for the U.S. Attorney’s Office.
Milwaukee, Wisconsin, Man Pleads guilty to Sex Trafficking of Children and Milwaukee, Wisconsin, Woman Pleads Guilty to Interstate Travel in Aid of ProstitutionRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on Jan. 26, 2016, Kurtis William Johnson, 26, Milwaukee, Wisconsin, and Tara Malinda Ridley, 26, Milwaukee, Wisconsin, pleaded guilty before U. S. District Judge Ralph R Erickson. Johnson pleaded guilty to two counts of Sex Trafficking of Children and one count of Conspiracy to Commit Sex Trafficking. Ridley pleaded guilty to one count of Interstate Travel in Aid of Prostitution.
The case came to the attention of law enforcement after the North Dakota Highway Patrol pulled over a rental vehicle driven by Kurtis Johnson. Found with Johnson was a woman and a 17-year-old female who Johnson transported from Milwaukee, Wisconsin, to Bismarck, North Dakota, for the purpose of prostitution. A subsequent investigation revealed that Johnson was provided narcotics by Tyrice Akins in exchange for transporting women and one juvenile to various locations throughout the United States, including Florida, Louisiana, and North Dakota, throughout 2014 and 2015 for the purpose of prostitution.
The investigation further revealed that Tara Ridley facilitated Tyrice Akins’ business enterprise involving prostitution by renting vehicles for Akins that were used by Johnson to transport the women to North Dakota and elsewhere.
Tyrice Akins was indicted in May of 2015, and is currently awaiting trial on April 12, 2016.
This case is being investigated by the North Dakota Bureau of Criminal Investigations and the Department of Homeland Security - Homeland Security Investigations.
Assistant U. S. Attorney Jennifer Puhl is prosecuting the case.
This case was prosecuted with the assistance of the North Dakota Human Trafficking Task Force (NDHTTF), which includes regional response teams that consists of federal, state, and local law enforcement and victim service providers working together to identify and rescue human trafficking victims as well as investigate and prosecute human trafficking cases. Led by the U.S. Attorney’s Office, BCI, and the North Dakota Counsel on Abused Women Services (CAWS), the NDHTTF is dedicated to addressing the individualized needs of human trafficking victims and the apprehension, investigation, and prosecution of the perpetrators of human trafficking.
The NDHTTF includes representatives from Youthworks, the Children’s Advocacy Center, the Domestic Violence Crisis Center, Lutheran Social Services, the ND Association of Counties, a Force to End hUman Sexual Exploitation (FUSE), a survivor of human trafficking, First Nations Women’s Alliance (FNWA), and the Department of Homeland Security - Homeland Security Investigations (HSI).
An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
Militia Man Ordered to Federal PrisonRead the Press Release
BROWNSVILLE, Texas – A 46-year-old member of a citizen group known as “Rusty’s Rangers” or “Rusty’s Regulators” has been sentenced for illegal possession of a firearm, announced U.S. Attorney Kenneth Magidson. John Frederick Foerster, of Brownsville, was a convicted felon and pleaded guilty to possession of a 7.62 x 39 mm pistol on March 25, 2015.
Today, U.S. District Judge Andrew S. Hanen ordered Foerster to serve 30 months in federal prison to be immediately followed by three years of supervised release.
According to court records, Rusty’s Rangers consisted of citizens who mounted armed patrols in the Rio Grande area allegedly in search of and to possibly apprehend aliens attempting to enter the U.S. illegally. Foerster was observed in possession of the firearm by Border Patrol (BP) agents on Aug. 29, 2014. On that date, a BP agent thought Foerster was an armed alien smuggler and fired upon him. Foerster was not injured.
The Investigation led to the discovery that Foerster had been twice convicted of burglary and was, therefore, prohibited from possessing a firearm.
Foerster will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation was conducted by the FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives and Cameron County Sheriff’s Office. Assistant U.S. Attorney William Hagen is prosecuting the case.
Mexican National Sentenced for Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAIRO JACIEL JIMENEZ-HERNANDEZ, age 29, a citizen of Mexico, was sentenced today after previously pleading guilty to a one-count indictment for illegal reentry of a removed alien.
U.S. District Judge Carl J. Barbier sentenced JIMENEZ-HERNANDEZ to time served and ordered him to serve one year of supervised release. Additionally, JIMENEZ-HERNANDEZ was ordered to pay a $5,000 fine and a $100 special assessment. JIMENEZ-HERNANDEZ will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, JIMENEZ-HERNANDEZ reentered the United States on or about August 30, 2015 after having been previously deported on May 17, 2012.
U.S. Attorney Polite praised the work of the United States Immigration and Customs Enforcement Agency in investigating this matter. Assistant U. S. Attorney Spiro G. Latsis was in charge of the prosecution.
Mexican National Pleads Guilty to Illegally Possessing a FirearmRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ERIC DE JESUS MENDOZA-MARTINEZ, age 20, a citizen of Mexico, pled guilty today to one count of possession of a firearm by an illegal alien.
According to court documents, MENDOZA-MARTINEZ, an illegal alien from Mexico, was stopped for a traffic violation on November 7, 2015. During the traffic stop, it was discovered that MENDOZA-MARTINEZ had a Taurus .380 caliber pistol in his possession.
If convicted, MENDOZA-MARTINEZ faces a maximum term of imprisonment of ten years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment.
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.
Member of the Jenifer Drug Trafficking Organization Sentenced to 13 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Andre Brewer, age 36, of Jessup, Maryland, today to 13 years in prison followed by five years of supervised release for conspiring to distribute cocaine. Judge Bennett entered an order requiring Brewer to forfeit the proceeds of the drug trafficking, including: cash; five vehicles, including a 2014 Mercedes Benz valued at $100,000; jewelry valued at over $62,000; several bank accounts; and property in Baltimore.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Commissioner Kevin Davis of the Baltimore Police Department; and Chief James W. Johnson of the Baltimore County Police Department.
According to his plea agreement and court documents, from September 2012 until his arrest in October 2014, Kedrick Jenifer was the head of a drug organization (Jenifer DTO) that transported cocaine and cash between Baltimore and Houston, Texas. Brewer assisted Jenifer with the DTO’s operations, including the distribution of cocaine to the organization’s customers. The Jenifer DTO obtained its cocaine from sources of supply in and around Houston. The Jenifer DTO would hide money in secret compartments in “courier vehicles” that were transported from Baltimore to Houston. The cocaine was then transported from Houston to Baltimore hidden in the courier vehicles.
In September 2012, Texas State Police stopped a courier vehicle in Chambers County, Texas. Law enforcement officers discovered approximately 30 kilograms of cocaine hidden in secret compartments within the vehicle. In July 2013, a courier vehicle for the Jenifer DTO loaded on a car-carrier was intercepted in Arkansas. The vehicle contained approximately 23 kilograms of cocaine hidden in a secret compartment, and was destined for Brewer’s residence.
Between August 2013 and October 2014, approximately 30 shipments of cocaine concealed in secret compartments in the courier vehicles were made to the Jenifer DTO. During this time, Brewer was seen meeting with Jenifer and providing Jenifer with money to buy cocaine. Brewer was also seen with the Jenifer DTO’s courier vehicles before and after “drug runs” between Baltimore and Houston, receiving kilogram-quantities of cocaine after the courier vehicles, loaded with cocaine, returned from Houston. Investigating agents also saw the courier vehicles parked at the apartment complex where Brewer resided.
During intercepted phone calls between Jenifer and Brewer, Brewer discussed his purchase of a 2014 Mercedes Benz S63 AMG, a vehicle valued at approximately $100,000. Brewer indicated that the sales application for the vehicle requested his job information, and he told Jenifer that he did not know how to respond. Wage and earning records, as well as tax records, indicated no legitimate income for Brewer.
Brewer admitted that he was responsible for the distribution of at least 450 kilograms of cocaine between August 2013 and October 2014.
Kedrick Arnold Jenifer, a/k/a “Ricky Jenifer,” “James Howard Collier, Jr.” and “Rick,” age 44, of Bowie, Maryland, pleaded guilty to conspiring to distribute cocaine and is scheduled to be sentenced on March 4, 2016. Eight other co-conspirators have pleaded guilty. Brooke Renee Lunn, a/k/a “Brooke Thomas” and “Brooke Renee,” age 49; William Hegie, age 55; Kermit Clark, age 45; and Elroy Johnson, age 49, all of Baltimore; and Tyrone Allen, age 44, of Bowie, Maryland, and Thomas Simmons, age 38, of Hampton, Virginia, were sentenced to between 10 and 16 years in prison. The other three defendants are awaiting sentencing.
United States Attorney Rod J. Rosenstein praised the DEA, IRS Criminal Investigation and Baltimore City and County Police Departments for their work in the investigation, and expressed his appreciation to the United States Attorney’s Offices for the Southern District of Texas and the Southern District of New York for their assistance. Mr. Rosenstein thanked Assistant United States Attorney John W. Sippel, Jr. and Special Assistant United States Attorney Matthew Hoff, a cross-designated Baltimore City Assistant State’s Attorney, who are prosecuting this Organized Crime Drug Enforcement Task Force case.
Malheur National Wildlife Refuge Protestors Appear Before Federal Magistrate on Conspiracy ChargesRead the Press Release
PORTLAND, Ore. – Billy J. Williams, United States Attorney for the District of Oregon, announced that the individuals arrested overnight in the occupation of the Malheur National Wildlife Refuge in Burns, Oregon, appeared in court today for an initial appearance before Magistrate Judge Stacie F. Beckerman. Each defendant is charged in a criminal complaint with one felony count of conspiracy to impede officers of the United States from discharging their official duties through the use of force, intimidation, or threats. The defendants are Ammon Edward Bundy, 40, of Emmett, Idaho; Ryan C. Bundy, 43, of Bunkerville, Nevada; Brian Cavalier, 44, of Bunkerville, Nevada; Shawna Cox, 59, of Kanab, Utah; Ryan Waylen Payne, 32, of Anaconda, Montana; Joseph Donald O'Shaughnessy, 45, of Cottonwood, Arizona; and Peter Santilli, 50, of Cincinnati, Ohio. Each defendant entered a plea of not guilty to the charge.
Judge Beckerman ordered all seven defendants to remain in federal custody pending a detention hearing on Friday, January 29th at 1:30 p.m.
An eighth person, Jon Eric Ritzheimer, 32, of Peoria, Arizona, self-surrendered to police on January 26, 2016, and appeared before a magistrate judge today in Phoenix, Arizona to face a felony charge of conspiracy to impede officers of the United States from discharging their official duties through the use of force, intimidation, or threats. His detention hearing is scheduled for February 2, 2016 in Phoenix, Arizona.
All defendants are presumed innocent until proven guilty. The criminal complaint and affidavit is attached below.
The case is being prosecuted by Assistant U.S. Attorneys Ethan Knight and Geoffrey Barrow.
bundy_et_al_redacted_complaint.pdf (2.83 MB)
Lincoln Resident Sentenced to 1½ Years on Firearms ChargeRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Bruce Smith, 60 of Lincoln, Maine was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 1½ years in prison and three years of supervised release for possessing firearms while being an unlawful user of controlled substances. Smith pled guilty on August 7, 2015.
According to court records, between January and April 2014, the defendant possessed seven firearms at a time when he was regularly using Alpha-PVP. Alpha-PVP is a schedule I controlled substance and is among a group of illegal, street drugs commonly referred to as bath salts. Two of the firearms were seized on March 9, 2014 following a traffic stop and Smith’s arrest by the Lincoln Police Department. Two more were seized on March 11, 2014 in Bradford, Maine and traced back to Smith. Smith possessed three more on April 8, 2014 when he was questioned by federal agents. Smith was a regular user of bath salts during this period of time and had pawned two of the firearms for Alpha-pvp in January 2014.
The case was investigated by the Maine Drug Enforcement Agency; the U.S. Postal Inspection Service; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Lincoln Police Department.Lee County Offenders Convicted and SentencedRead the Press Release
Greensboro, NC - As a result of continued initiatives focused on violent crime in Lee County, the following individuals have recently been sentenced in federal court, announced United States Attorney Ripley Rand.
CASES ADJUDICATED
Shamar Davell Petty, Age 29, of Sanford, NC, was federally indicted in the Middle District of North Carolina on April 27, 2015, for a firearm offense that occurred on March 17, 2015. On July 15, 2015, Petty pleaded guilty to possession of a firearm by a felon. On October 28, 2015, Petty was sentenced to ninety-two (92) months in prison, 3 years supervised release, and a $100.00 special assessment by United States District Court Judge Catherine C. Eagles.
Jaquell Maurice Tysor, Age 29, of Sanford, NC, was federally indicted in the Middle District of North Carolina on April 27, 2015, for a firearm offense that occurred on March 1, 2015. On July 10, 2015, Petty pleaded guilty to possession of a firearm by a felon. On January 26, 2016, Tysor was sentenced to 120 months in prison, 3 years supervised release, and a $100.00 special assessment by United States District Court Judge Catherine C. Eagles.
"We are very pleased to be part of the team fighting gun crime in Lee County," said United States Attorney Ripley Rand. "The effective partnership between Lee County law enforcement and our office will continue to work hard to make our communities safer for all."
The convictions noted above are the result of close cooperation of the Lee County Project Safe Neighborhoods (PSN) coalition. PSN is a nationwide gun and violent crime strategy to create and maintain safer communities. The Lee County PSN coalition is comprised of a number of law enforcement agencies, including Broadway Police Department, Sanford Police Department, Lee County Sheriff’s Office, Department of Public Safety Division of Adult Correction and Juvenile Justice (probation), State Bureau of Investigation, Lee County District Attorney’s Office, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, United States Attorney’s Office, as well as many community partners.
The Sanford Police Department, Lee County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated these cases. Assistant United States Attorney JoAnna McFadden prosecuted the cases for the United States Attorney’s Office.
###
Lebanon Service Man Sentenced to 12 Months in Prison for Conspiracy to Receive Bribes While Serving in AfghanistanRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania, announced that Timothy H. Albright, age 37, of Lebanon, Pennsylvania, was sentenced today to 12 months in prison by United States District Court Judge John E. Jones, III in Harrisburg for conspiracy to receive bribes while serving in the United States Army at Bagram, Afghanistan.
Judge Jones also ordered the forfeiture of $16,000. Albright pled guilty in March 2015 to charges filed in a criminal information on March 13, 2015.
According to U.S. Attorney Peter Smith, Albright, a Specialist with the Pennsylvania National Guard, was assigned to the 53rd Joint Movement Control Battalion, 101st Joint Logistics Command, Combined Joint Task Force, with duties at Bagram Airfield in Afghanistan (Bagram). He served as an E4 (Enlisted Grade 4) in the United States Army at Bagram between January 7, 2008 and October 20, 2008. In his position at Bagram, Albright, who served as a Commercial Vendor Services Specialist, processed invoices resulting from the provision of supplies by Afghan vendors to restock supplies at the Humanitarian Aid Yard at Bagram. Albright was responsible for reviewing invoices submitted by Afghan vendors who had been awarded contracts to replenish the Humanitarian Aid Yard. If the documents were in order, Albright would date-stamp and submit them for payment.
An Afghan vendor had several million-dollar contracts through his company with the Humanitarian Aid Yard through the Army. He began to give cash to Albright as a way of thanking him for expeditiously processing his invoices. As the relationship developed, so did the size of the amounts of cash from the vendor. Ultimately, Albright received at least $25,000 in cash bribes from the Afghan vendor.
Albright sent the money he received from the Afghan vendor to his home in Lebanon. He concealed the money in envelopes inserted in boxes filled with DVDs. Also, Albright told his supervisor at Bagram about the payments and encouraged him to participate in the scheme. The supervisor did so, and Albright and his supervisor would split up stacks of $100 bills provided by the vendor.
The case was investigated by the Special Inspector General for Afghanistan Reconstruction, United States Army’s Criminal Investigation Division, the Defense Criminal Investigative Service, the Federal Bureau of Investigation, and the Air Force Office of Special Investigation. The prosecution is being handled by Assistant U.S. Attorney Chelsea Schinnour and Trial Attorneys Daniel Butler and Bob Doherty of the Criminal Division of the U.S. Department of Justice.
# # #
Las Vegas Man Sentenced to Four Years in Federal Prison for Aggravated Identity Theft and Theft of VA BenefitsRead the Press Release
In Waco today, 44-year-old Lawrence Annon Lee, III, of Las Vegas, NV, was sentenced to four years in federal prison for stealing approximately $43,000 in Department of Veterans Affairs (VA) benefits announced United States Attorney Richard L. Durbin, Jr.
In addition to the prison term, United States Magistrate Judge Jeffrey C. Manske ordered that Lee pay $42,912.78 restitution and be placed on supervised release for a period of three years after completing his prison term.
On December 3, 2015, Lee pleaded guilty to one count of theft of Government property and one count of aggravated identity theft. By pleading guilty, Lee admitted that between October and December in 2014, he used the name and social security number of an unsuspecting Bellmead, TX, resident to collect approximately $5,500 in monthly VA benefits Lee was not entitled to receive. Lee also admitted that in 2011, he fraudulently used his victim’s personal information to apply for and receive outpatient health care, prescriptions and prosthetics from the VA valued at approximately $28,000.
This case resulted from an investigation conducted by the Department of Veterans Affairs Office of Inspector General and the Bellmead Police Department. Assistant United States Attorney Mark Frazier prosecuted this case on behalf of the Government.
Justice Department Announces Final Swiss Bank Program Category 2 Resolution with HSZH Verwaltungs AGRead the Press Release
Department’s Swiss Bank Program Imposed More Than $1.3 Billion in Penalties on 80 Banks, Which Continue to Cooperate with the Department
The Department of Justice announced today that it reached its final non-prosecution agreement under Category 2 of the Swiss Bank Program, with HSZH Verwaltungs AG (HSZH). The department has executed agreements with 80 banks since March 30, 2015, when it announced the first Swiss Bank Program non-prosecution agreement with BSI SA. The department has imposed a total of more than $1.36 billion in Swiss Bank penalties, including more than $49 million in penalties from HSZH. Every bank in the program, including HSZH, is required to cooperate in any related criminal or civil proceedings, and that cooperation continues through 2016 and beyond.
“The Department of Justice is committed to aggressively pursuing tax evasion, and the Swiss Bank Program has been a central component of that effort,” said Attorney General Loretta E. Lynch. “Through this initiative, we have uncovered those who help facilitate evasion schemes and those who hide funds in secret offshore accounts. We have improved our ability to return tax dollars to the United States. And we have pursued investigations into banks and individuals. I would like to thank the Swiss government for their cooperation in this effort, and I look forward to continuing our work together to root out fraud and corruption wherever it is found.”
“The department’s Swiss Bank Program has been a successful, innovative effort to get the financial institutions that facilitated fraud on the American tax system to come forward with information about their wrongdoing – and to ensure that they are held responsible for it,” said Acting Associate Attorney General Stuart F. Delery. “As we have seen over the last year, Swiss banks are paying an appropriate penalty for their misconduct, and the information and continuing cooperation we have required the banks to provide in order to participate in the program is allowing us to systematically attack offshore tax avoidance schemes.”
“The completion of the agreements under Category 2 of the Swiss Bank Program represents a substantial milestone in the department’s ongoing efforts to combat offshore tax evasion, and we remain committed to holding financial institutions, professionals and individual taxpayers accountable for their respective roles in concealing foreign accounts and assets, and evading U.S. tax obligations,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Using the flood of information flowing from various sources, the department is investigating this criminal conduct, referring appropriate matters to the Internal Revenue Service for civil enforcement and pursuing leads in jurisdictions well beyond Switzerland. Individuals and entities engaged in offshore tax evasion are well advised to come forward now, because the window to get to us before we get to you is rapidly closing.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
-
Make a complete disclosure of their cross-border activities;
-
Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
-
Cooperate in treaty requests for account information;
-
Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
-
Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
-
Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
HSZH, the final bank to reach a non-prosecution agreement under Category 2 of the Swiss Bank Program, was previously known as Hyposwiss Privatbank AG. HSZH was founded in 1889 in Solothurn, Switzerland. In 1988, Schweizerische Bankgesellschaft AG, which was later merged into UBS AG, acquired the bank and renamed it Hyposwiss Privatbank AG. Hyposwiss Privatbank AG increasingly focused on private banking activities, servicing both domestic and international clients, and at all times, HSZH solely operated on Swiss territory. In 2002, the bank was acquired from UBS by St. Galler Kantonalbank (SGKB), the state-owned cantonal bank of St. Gallen. In 2014, HSZH unwound its residual banking operations under the supervision of FINMA, the Swiss banking regulator. On Jan. 6, 2014, and in connection with the wind-down, the bank changed its name to HSZH Verwaltungs AG. HSZH returned its banking license, and FINMA released HSZH from its supervision on Nov. 27, 2014.
Until 2013, HSZH conducted a U.S. cross-border banking business that aided and assisted certain of its U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the U.S. government. Through its managers, employees and/or others, HSZH knew or had reason to know that some U.S. taxpayers who opened and maintained accounts at HSZH were not complying with their U.S. income tax and reporting obligations.
HSZH and other banks operating in Switzerland have closely monitored the criminal investigations of UBS and other Swiss banks. In 2008, UBS publicly announced that it was the target of a criminal investigation by the Internal Revenue Service (IRS) and the department and that it would be exiting and no longer accepting certain U.S. clients. In February 2009, the department and UBS filed a deferred prosecution agreement, in which UBS admitted that its cross-border banking business used Swiss privacy law to aid and assist U.S. clients in opening and maintaining undeclared assets and income from the IRS. Since UBS, several other Swiss banks have publicly announced that they were or are the targets of similar criminal investigations and that they would be exiting and not accepting certain U.S. clients.
The senior management of HSZH viewed the exit of U.S. clients by the targeted Swiss banks as a business opportunity to be seized immediately rather than a warning to be heeded. In addition to 83 accounts opened through two pipelines of U.S. clients transferred from UBS, HSZH opened at least 275 accounts for U.S. clients after August 2008. Internal bank notes indicate that in September and October 2008, certain external asset managers with whom HSZH entered into agreements were expected to have “many former UBS clients” and would introduce U.S. clients to HSZH.
The first pipeline of undeclared U.S. clients transferred from UBS was solicited by the CEO of HSZH (CEO #1) from a UBS private banker who was a former colleague of CEO #1. On Aug. 15, 2008, the general counsel of HSZH sent CEO #1 an email containing his views on a new internal bank IRS Form W-9 policy for CEO #1’s review and discussion before sending to SGKB: “In my opinion this policy should be a clarification of the already existing practice in connection with U.S. persons. The actual situation in the US (UBS, Birkenfeld, etc.) has nothing to do with [HSZH] [redacted] or SGKB. . . . Why should we freely throw away a good business opportunity?” Between Sept. 19, 2008, and Jan. 26, 2009, HSZH knowingly opened six undeclared accounts for U.S. clients with an aggregate total of approximately $9.2 million in peak assets under management; all six undeclared U.S. clients had previously been with UBS.
The second pipeline of undeclared U.S. clients predominantly from UBS were all introduced and managed by an external asset management firm in Zurich whose head of private banking was formerly in charge of UBS’s North America International business (EAM #1). In June 2008, the head of HSZH’s EAM Desk provided EAM #1 with HSZH marketing materials, and the Executive Board of HSZH unanimously approved a new business relationship with EAM #1 on Sept. 24, 2008. On Aug. 18, 2009, HSZH opened the last EAM #1 pipeline account. On Aug. 20, 2009, the head of private banking for EAM #1 was indicted by the U.S. Attorney’s Office of the Southern District of Florida.
Meetings between HSZH private bankers and U.S. clients took place in multiple locations within the United States, including in Florida, New York, Pennsylvania, Virginia and Washington, D.C. Some U.S. clients asked for cash on a regular basis, so at times, the HSZH private banker for such clients would personally deliver cash to the clients in the United States in amounts below $10,000 to avoid the reporting requirements.
HSZH private bankers also met with U.S. clients outside of the United States to provide banking services and investment advice related to their accounts, which included undeclared accounts. For example, one U.S. client resided in the United States and had assets of more than $90 million in an account at HSZH held by a Liechtenstein foundation. An HSZH private banker regularly met with this U.S. client in a Swiss hotel, at HSZH or in London. When meeting in London, the HSZH private banker usually delivered cash amounts of 10,000 to 50,000 Swiss francs or U.S. dollars to the U.S. client, who had a preference to receive used U.S. dollar banknotes. The funds were wired to the custodian bank for HSZH in London, where the HSZH private banker would withdraw the cash and personally deliver it to the U.S. client in a London hotel.
HSZH processed significant cash and precious metals withdrawals for U.S.-related accounts at or around the time the clients’ accounts were closed, even though HSZH knew, or had reason to know, that some of the accounts contained undeclared assets. For example, a U.S. couple that owned more than $24 million in assets in an account nominally held by a Liechtenstein foundation, and known by HSZH to be undeclared, regularly withdrew cash amounts between $10,000 and $30,000 – they requested used bank notes – and repeatedly withdrew gold bars. Five instances in 2010 involved 15 kilograms of gold bars. When this U.S. couple closed their HSZH account in 2012, they withdrew large cash amounts totaling more than 19 million Swiss francs, as well as 55 kilograms in gold bars during five visits to HSZH.
HSZH serviced approximately 103 U.S. clients who structured their accounts so that they appeared as if they were held by a non-U.S. legal structure, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their accounts from the IRS. While HSZH did not provide direct structuring services to U.S. clients, HSZH private bankers and members of HSZH’s management suggested the use of structures in some instances for U.S. clients and provided referrals to third-party service providers. In addition, at least two HSZH private bankers served as board members for structures with U.S. beneficial owners maintained at HSZH. Despite the decision in 2009 by HSZH to stop this practice due to the risk of conflicts of interest, one HSZH private banker remained a member of an offshore foundation’s board until 2011. External trust companies created and administered offshore structures incorporated or based in offshore locations such as the British Virgin Islands, Liechtenstein and Panama.
HSZH assisted at least two U.S. taxpayers in further concealing their undeclared funds from the IRS by transferring those funds from UBS in August 2010 through an HSZH account held by a Swiss attorney to an HSZH account held by a sham entity domiciled in Panama that was beneficially owned by the two U.S. taxpayers. In connection with this transfer, HSZH received a revised Form A from the Swiss attorney listing the two U.S. taxpayers as beneficial owners for one transaction only along with instructions from the Swiss attorney to HSZH that his clients’ funds should be transferred from UBS to HSZH through his account, due to the “understandable interests of his clients, that the target account would not be visible.” HSZH’s anti-money laundering documentation dated one day after this August 2010 transfer states: “Since this [sic] are U.S. clients, the transfer was made over the account holder’s account due to understandable reasons. Sender and recipient are identical.”
During the period since Aug. 1, 2008, HSZH held a total of 605 U.S.-related accounts, both declared and undeclared, with an aggregate peak of approximately $1.12 billion in assets under management. HSZH will pay a penalty of $49.757 million.
In accordance with the terms of the Swiss Bank Program, HSZH mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at HSZH who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at HSZH must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today’s resolution with HSZH Verwaltungs AG brings to a close this phase of DOJ’s Swiss Bank Program,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International Division. “The comprehensive success of this program sends a powerful message to those who might think they can evade their tax obligations by going offshore. A whole sector of financial institutions, 80 banks in all, has been held accountable for aiding the use of secret accounts and circumventing U.S. law. In addition to the more than $1.3 billion in penalties from these resolutions, more than 54,000 taxpayers have come forward to the IRS to pay more than $8 billion in taxes, interest and penalties.”
“The bank agreement with HSZH announced today may bring an end to one phase of the Swiss Bank Program, but more importantly it brings us closer to our overall goal of compliance and accountability for financial institutions and U.S. taxpayers,” said Chief Richard Weber of IRS-Criminal Investigation. “The data received from each agreement on the accounts, schemes and linkages is extremely valuable in combating international tax evasion. I could not be more proud of the effort of our special agents who worked tirelessly to make this program a success in coordination with the Department of Justice.”
Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Acting Assistant Attorney General Ciraolo also thanked Kimberle E. Dodd, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
-
Jury Convicts California Man for Money Laundering Scheme to Hide Drug ProceedsRead the Press Release
Rock Island, Ill. – A jury deliberated for less than an hour yesterday before returning guilty verdicts on all counts against Gianco Sheridan, 27, aka “Geo,” of Los Angeles. Sheridan was charged with 32 counts of money laundering to conceal drug proceeds and one count of conspiracy to launder drug proceeds. Sentencing is scheduled on May 26, 2016, in Rock Island, before U.S. District Judge Sara Darrow.
At trial, which began on Monday afternoon, Jan. 25, the government presented evidence that Sheridan laundered money to hide proceeds from a marijuana trafficking operation tied to a sham company, Trust Auto Sales, in Rock Island, Ill. The purported used car sales and repair business, located at 801 11th Street, was owned by Joel McCalebb, aka Omar Mukhtar, a co-defendant in the case. Over the course of the scheme, from August 2013 to June 2014, numerous packages, with fictitious California return addresses, were delivered to Trust Auto Sales. The packages, which contained high grade marijuana from two different medical marijuana dispensaries in Los Angeles, were arranged by another co-defendant, Quisontro Rahman Hart, 35, aka “BJ,” of Los Angeles.
As part of the scheme, evidence showed that McCalebb made cash deposits into bank accounts opened by Sheridan, at the request of Hart, Sheridan’s cousin. The sums of cash were from McCalebb and Hart’s distribution and possession of marijuana with intent to distribute. Between July 2013 and April 2014, the government’s evidence showed that McCalebb made approximately 83 cash deposits to accounts at banks that also have branches in the Los Angeles area. None of the accounts were in McCalebb’s name, but were in the name of Sheridan or a business account held by Sheridan. All of the deposits were under $10,000. Sheridan would withdraw the cash, often on the same day as the deposit, and give the money to Hart. As a result of the scheme, the total amount of money laundered through Sheridan’s accounts was approximately $230,000 from August 2013 to June 2014.
McCalebb, 52, of Rock Island, pled guilty in September 2015, to one count of conspiracy to distribute marijuana and was sentenced on Jan. 7, 2016, to serve two years in federal prison. Co-defendant Hart entered a plea of guilty in August 2015 to one count of conspiracy to distribute marijuana and is scheduled to be sentenced on Mar. 10, 2016. Both men have remained in the custody of the U.S. Marshals Service since their respective arrests.
Following the jury’s return of the guilty verdicts, Judge Darrow allowed Sheridan to remain on release, under conditions of bond, until sentencing.
The statutory penalty for each count of money laundering and for conspiracy to commit money laundering is up to 20 years in prison and a fine of up to $500,000, or twice the value of the property involved in the transaction, whichever is greater.
The case is being prosecuted by Assistant U.S. Attorneys Linda Mott and Don Allegro. The charges were investigated by the U.S. Postal Inspection Service, the Drug Enforcement Administration and the Quad City Metropolitan Enforcement Group.
Joint Federal Human Trafficking Task Forces Meeting Held January 29, 2016 at 9:00 AMRead the Press Release
Montgomery, Alabama - United States Attorney George L. Beck, Jr., will join with members of the Middle District of Alabama Human Trafficking Task Force, the Northern District of Alabama Human Trafficking Task Force, and the Southern District of Alabama Human Trafficking Task Force for a meeting on January 29, 2016. The purpose of the meeting is to unite federal, state, and local law enforcement officials, prosecutors and victim service providers to discuss investigation strategies and victim resources, and to implement a state-wide protocol in an effort to combat human trafficking.
According to the U.S. Department of Health and Human Services, human trafficking is recognized as “a modern-day form of slavery” and “is tied with the illegal arms industry as the second largest criminal industry in the world today.” Human trafficking often takes one of two forms – labor or sex trafficking. Labor trafficking may include forced labor or debt bondage, where a victim continually works to pay off an undefined and seemingly endless debt. Sex trafficking includes forcing victims to perform sexual acts, performances, or prostitution, or subjecting them to sexual abuse or torture. Victims may be subject to inhumane conditions and may be afraid to seek help due to language barriers, immigration status, or fear of the trafficker. Both Federal and Alabama law criminalize human trafficking, with penalties including significant prison time, large fines, and mandatory restitution.
The mission of the Middle District of Alabama Human Trafficking Task Force is “To Find and Free” victims of human trafficking. The Task Force began its work in 2009, initiated by the U.S. Attorney’s Office for the Middle District of Alabama.
The Task Force consists of federal, state, and local partners within the River Region and from the 23 counties which comprise the Middle District of Alabama. In addition to the United States Attorney’s Office for the Middle District of Alabama, the Task Force partners include: the Montgomery County District Attorney’s Office, the Federal Bureau of Investigation, the Homeland Security Investigations of the United States Department of Homeland Security, the Alabama Attorney General’s Office, the Alabama Fusion Center (which is a division of ALEA), the Montgomery Police Department, the Montgomery County Sheriff’s Office, One Place Family Justice Center, Legal Services Alabama, the Family Sunshine Center, the Alabama Coalition Against Domestic Violence, Stella’s Voice, SABRA Sanctuary of Selma, the Alabama Department of Youth Services, the Alabama Department of Child Abuse and Neglect Prevention, the Alabama Department of Education, survivors of human trafficking, college students, and local college chapters of International Justice Mission.
The meeting on Friday will include training by presenters from the Federal Bureau of Investigation and Homeland Security. All members of law enforcement, victim service providers, and service organizations are invited to attend.
For more information, please contact Assistant United States Attorney Hollie Worley at 334-223-7280 or United States Attorney’s Office Victim Witness Specialist Jackie Vickers at 334-223-7280.
To learn more about human trafficking, visit DOJ’s website at www.ovc.ncjrs.gov/humantrafficking/or the HHS website at acf.hhs.gov/opre/topic/human-trafficking
Jacksonville Fugitive Sentenced to Federal Prison for Passing Counterfeit Currency and Failing to Appear for SentencingRead the Press Release
Jacksonville, Florida – United States District Judge Brian J. Davis today sentenced Charles Cornelius Smith (36, Jacksonville) to 30 months in federal prison for passing counterfeit Federal Reserve notes and failing to appear for his sentencing hearing. As part of the sentence, the Court ordered Smith to pay restitution to the various individuals that he defrauded.
According to court documents, in December 2014, Smith was indicted on three counts of uttering counterfeit Federal Reserve notes. He was arrested on January 20, 2015, and was released on bail. Smith pleaded guilty on February 6, 2015, and a sentencing hearing was set for May 27, 2015. On the day of sentencing, however, Smith failed to appear. Approximately four months later, Smith was arrested by deputies from the U.S. Marshals Service in Jacksonville.
This case was investigated by the United States Secret Service, Jacksonville Field Office and the U.S. Marshals Service. It was prosecuted by Assistant United States Attorney Kevin C. Frein.
Iowa Businessmen Indicted for Failing to Pay Employment TaxesRead the Press Release
A grand jury sitting in Cedar Rapids, Iowa returned an indictment on Jan. 21, unsealed yesterday after their initial court appearances, charging two Iowa businessmen with federal employment tax violations, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kevin W. Techau of the Northern District of Iowa announced today.
Randy Less, 48, of Hopkinton, Iowa, and Darrell Smith, 59, of Forest City, Iowa, are each charged with multiple counts of willfully failing to truthfully account for, and pay over federal income, social security and Medicare taxes that were withheld from the wages of the employees of Permeate Refining Inc., which was in the business of ethanol production.
According to the allegations in the indictment, Less was the majority owner, a general partner and the general manager of Permeate Refining Inc. in Hopkinton. In those roles, Less had the responsibility to collect, truthfully account for and pay over to the Internal Revenue Service (IRS) federal income, social security and Medicare taxes withheld from the wages of his employees. From approximately the fourth quarter of 2009 and continuing through the fourth quarter of 2010, Less is alleged to have willfully failed to pay over to the IRS more than $116,000 in withheld taxes.
The indictment further alleges that a company called Algae Energae purchased an ownership interest in Permeate in September 2009. After that purchase, it is alleged that Smith, a corporate officer and manager of Algae Energae, also had the responsibility to collect, truthfully account for and pay over to the IRS taxes withheld from the wages of Permeate’s employees. From approximately the first quarter of 2011 and continuing through the third quarter of 2012, both Less and Smith are alleged to have willfully failed to pay over to the IRS more than $307,000 in withheld taxes.
If convicted, the defendants face a statutory maximum sentence of five years in prison and a $250,000 fine for each count.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Techau thanked special agents of IRS Criminal Investigation, the FBI, the U.S. Postal Inspection Service and the U.S. Environmental Protection Agency, who investigated the case and Assistant U.S. Attorney Tim Vavricek of the Northern District of Iowa and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website
Iowa Businessmen Indicted for Failing to Pay Employment TaxesRead the Press Release
CEDAR RAPIDS, IA – A grand jury sitting in Cedar Rapids, Iowa, returned an indictment on January 21, 2016 charging two Iowa businessmen with federal employment tax violations, announced U.S. Attorney Kevin W. Techau for the Northern District of Iowa and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Randy Less, a resident of Hopkinton, Iowa, and Darrell Smith, a resident of Forest City, Iowa, are each charged with multiple counts of willfully failing to collect, truthfully account for and pay over federal income, Social Security, and Medicare taxes that were withheld from the wages of the employees of Permeate Refining, Inc., which was in the business of ethanol production.
According to the allegations in the indictment, Less was the majority owner, a general partner, and the general manager of Permeate Refining, Inc. in Hopkinton, Iowa. In those roles, Less had the responsibility to collect, truthfully account for, and pay over to the Internal Revenue Service (IRS) federal employment, Social Security, and Medicare taxes withheld from the wages of his employees. From approximately the fourth quarter of 2009 and continuing through the fourth quarter of 2010, Less is alleged to have willfully failed to pay over to the IRS more than $116,000 in withheld taxes.
The indictment further alleges that a company called Algae Energae purchased an ownership interest in Permeate in September 2009. After that purchase, it is alleged that Smith, a corporate officer and manager of Algae Energae, also had the responsibility to collect, truthfully account for, and pay over to the IRS taxes withheld from the wages of Permeate’s employees. From approximately the first quarter of 2011 and continuing through the third quarter of 2012, both Less and Smith are alleged to have willfully failed to pay over to the IRS more than $307,000 in withheld taxes.
If convicted, the defendants face a statutory maximum sentence of 5 years in prison and a $250,000 fine for each count.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Techau thanked special agents of IRS Criminal Investigation, the FBI, the U.S. Postal Inspection Service, and the U.S. Environmental Protection Agency, who investigated the case and Assistant U.S. Attorney Tim Vavricek of the Northern District of Iowa and Trial Attorney Matthew Hoffman of the Tax Division, who are prosecuting the case.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-2002-LRR.
Follow us on Twitter @USAO_NDIA.
Illinois Man Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – JASON CRIPE, Windsor, Illinois, was sentenced to a total of five years in prison for his fraud scheme that spanned two years and two states and ended in a confrontation with federal law enforcement agents.
In October, Cripe pled guilty to wire fraud and to assaulting an officer. His sentence for the fraud charge was 48 months and his sentence for the assault was 12 months, which represents the statutory maximum. United States District Judge Ronnie White, before whom Cripe appeared this morning, ordered those sentences to run consecutively, for a total of 60 months.
According to his plea agreement, Cripe defrauded two victims of $7,800 in February 2015 in connection with the purported sale of construction equipment by taking deposits for equipment he did not own. Subsequent investigation revealed Cripe had engaged in similar conduct on at least eleven different occasions during 2014 and 2015 in Missouri and Illinois. In total, the parties agreed that Cripe collected more than $58,000 through these fraud schemes. After Cripe was charged for this fraud scheme, Cripe remained at large for a time until federal agents tracked him to a St. Louis County gas station. While apprehending Cripe, he assaulted the officers, causing minor injuries, before eventually being taken into custody.
The United States Secret Service investigated the case, which was resolved with the help of prosecutors in Warren County (MO), Monroe County (IL), Fayette County (IL), Christian County (IL) and Shelby County (IL). Assistant United States Attorney Tom Albus handled the case for the U.S. Attorney’s Office.
ISIL-Linked Hacker Arrives in United States to Face Terrorism ChargesRead the Press Release
Ardit Ferizi, 20, a citizen of Kosovo, made his initial appearance this afternoon before U.S. Magistrate Judge Ivan D. Davis of the Eastern District of Virginia on charges alleging that he provided material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and committed computer hacking and identity theft violations in conjunction with the theft and release of personally identifiable information (PII) of U.S. servicemembers and federal employees.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office and Special Agent in Charge Michelle S. Klimt of the FBI’s Jacksonville, Florida, Division made the announcement.
Ferizi, who was detained by Malaysian authorities on a provisional arrest warrant on behalf of the United States, was charged by criminal complaint on Oct. 6, 2015. The criminal complaint was unsealed on Oct. 15, 2015. Ferizi subsequently waived extradition.
If convicted, Ferizi faces a maximum penalty of 35 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors.
The investigation is being conducted by the FBI’s Washington Field Office and Jacksonville Division. The case is being prosecuted by Special Assistant U.S. Attorney Brandon Van Grack of the Eastern District of Virginia and Trial Attorney Gregory Gonzalez of the National Security Division’s Counterterrorism Section. The Malaysian authorities and the Justice Department’s Office of International Affairs also provided significant assistance.