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Tuesday 1 December 2015
Mexican Man Sentenced in Kansas for Laundering $4.7 Million in Drug FundsRead the Press Release
WICHITA, KAN. – A Mexican man was sentenced Tuesday to 70 months in federal prison for laundering more than $4.7 million in drug funds through his bank accounts in Kansas and elsewhere, U.S. Attorney Barry Grissom said. In addition, a money judgment of more than $4.7 million was entered against him.
Franz Wiebe Rempel, 44, Cuauhtemoc, Chihuahua, Mexico, pleaded guilty in U.S. District Court in Wichita to one count of money laundering. In his plea, he admitted that from 2009 through July 30, 2013, he laundered drug funds through bank accounts at the Bank of America in Wichita, as well as accounts at Wells Fargo and J.P. Morgan Chase.
In his plea, he admitted he provided his bank account numbers so that another conspirator could distribute the information to others. Rempel had an understanding with the conspirator that third parties would deposit cash into his bank accounts. The deposits would be less than $10,000 in an attempt to avoid federal currency reporting requirements. Once Rempel received the funds, he would transfer or move the money through the U.S. financial system at the other conspirator’s direction. Rempel crossed the border from his home in Mexico almost on a weekly basis in order to move funds. Ultimately, most of the money wound up in the other conspirator’s hands.
Rempel’s accounts received funds deposited from Kansas City, Kan.; Kansas City, Mo.; Oklahoma City; Des Moines; Amarillo, Texas; El Paso, Texas; Knoxville, Tenn., Nashville, Tenn., Memphis, Tenn.; Charlotte, N.C., Atlanta, Ga., and Albuquerque, N.M. Rempel did not know the identities of the people making the deposits but he knew the funds were being transferred for the purpose of paying for drugs.
Grissom commended the Drug Enforcement Administration and Assistant U.S. Attorney Debra Barnett for their work on the case.
Mexican Citizen Sentenced to 21 Months in Prison for Illegal Re-EntryRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Miguel Salazar-Gomez, age 33, a Mexican citizen, was sentenced to 21 months in prison by United States District Court Judge Sylvia H. Rambo in Harrisburg for illegally re-entering the United States.
According to United States Attorney Peter Smith, Salazar-Gomez pleaded guilty in September 2015. At that time, he admitted to illegally re-entering the United States after having previously been deported in 2004, 2005 and 2014. Salazar was arrested in March of this year in Adams County and taken into the custody of Homeland Security Investigations.
The conviction is a result of an investigation conducted by Homeland Security Investigations and Assistant U.S. Attorney Chelsea Schinnour was assigned to prosecute the case.
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Man Pleads Guilty to Wichita Bank RobberyRead the Press Release
WICHITA, KAN. – A man pleaded guilty Tuesday to robbing a Wichita bank, U.S. Attorney Barry Grissom.
Frederick Aaron Cunningham, 45, Wichita, Kan., pleaded guilty to one count of bank robbery. In his plea, he admitted that on Oct. 28, 2013, he robbed the Intrust Bank branch in the Dillons grocery store at 3211 S. Seneca. He also admitted he robbed the same bank on Oct. 9, 2013.
In the Oct. 28 robbery Cunningham gave the teller a note demanding money and then left the bank with stolen cash. Once outside the bank, he discarded a shirt worn during the robbery. Investigators used the results of DNA testing on the shirt to tie the crime to Cunningham.
Sentencing is set for Feb. 18. Both parties have agreed to recommend 10 years in federal prison.
Grissom commended Wichita Police Detective David Alexander, FBI Special Agent Ryan McDonald and Assistant U.S. Attorney David Lind for their work on the case.
Madison Woman Sentenced to 18 Months in Prison for Fraudulent Income Tax Refund SchemeRead the Press Release
BIRMINGHAM -- A federal judge today sentenced a Madison woman to 18 months in prison for a scheme to obtain fraudulent tax refunds, including one for $558,857, announced U.S. Attorney Joyce White Vance, IRS Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot and FBI Special Agent in Charge Roger C. Stanton.
U.S. District Judge R. David Proctor sentenced ANGELIQUE B. HARRIS, 49, on one count each of theft of government property and money laundering as part of the tax-refund scheme. Harris pleaded guilty to the charges in July. She must pay $658,978 in restitution to the IRS and serve three years of supervised release after completing her prison sentence. Through a related civil action, Harris already has forfeited a 2013 Lexus ES350 luxury automobile worth about $45,000 that she bought with some of the criminal proceeds.
Harris, with the aid of others who were not named in the 2014 indictment against her, stole U.S. Treasury refunds between February 2013 and February 2014, according to her guilty plea. She also admitted to money laundering for using proceeds of a fraudulent October 2013 federal income tax refund of $558,857 to purchase the luxury Lexus from a Huntsville dealership. The IRS paid the refund on a tax return fraudulently filed in the name of a couple, identified in court documents as "P. and A.O." The refund was deposited into an account Harris opened at a Huntsville bank.
The IRS and FBI investigated the case, which Assistant U.S. Attorney Russell E. Penfield prosecuted.
Luzerne County Man Pleads Guilty to Heroin Trafficking ConspiracyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Luzerne County man pleaded guilty today, before Senior U.S. District Court Judge James M. Munley in Scranton, to participating in a heroin trafficking conspiracy that operated in Luzerne County during February through October 2014.
According to United States Attorney Peter Smith, the defendant, Desmond Mercer, age 28, admitted to conspiring with others from Luzerne County, New Jersey, and Alabama, to distribute heroin to customers in the Luzerne County area. Mercer acknowledged distributing more than 700 grams of heroin and playing a leadership role in the conspiracy.
Mercer 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.
Under the terms of the plea agreement, both the government and the defendant will recommend that the court impose a sentence of 14 years in prison. The defendant also agreed to the forfeiture to the United States of $15,887 in cash seized by agents and police during the investigation, and two vehicles. The plea agreement is subject to the approval of the Court.
Mercer is the fifth defendant connected to the conspiracy to plead guilty in the case.
Judge Munley ordered a presentence investigation to be completed, and scheduled sentencing for March 2, 2016. The Judge could sentence Mercer to up to 20 years in prison and a fine of $1 million. Mercer was ordered to be detained in prison pending sentencing.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case, along with Luzerne County Assistant District Attorney Jill Matthews who is a Special Assistant United States Attorney.
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.
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Love and Hip Hop Star Sentenced on Cocaine and Heroin Trafficking Charges; Forfeits Income from Reality Television Show and Other AssetsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Mendeecees Harris, 37, of the Bronx, NY, who pleaded guilty to conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin and 500 grams or more of cocaine, was sentenced to 97 months in prison by Chief U.S. District Judge Frank P. Geraci, Jr.Assistant U.S. Attorney Frank H. Sherman, who handled the case, stated that Harris participated in a conspiracy to distribute heroin and cocaine from 2005 until August 2012. From at least 2006 through 2008, while still in New York City, Harris participated in the distribution of heroin and cocaine with individuals who transported the drugs to the Rochester area and distributed them.
The defendant, who had been appearing as a cast member of the VH-1 reality television show Love and Hip Hop, New York, agreed to forfeit all of his income from that show. That income amounts, so far, to $170,755.20 in cash. In addition, Harris will forfeit a 2011 Audi R8 vehicle valued at $111,000.
The sentencing is the culmination of an investigation on the part of Special Agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, investigators with the Rochester Police Department, under the direction of Chief Michael Ciminelli, and Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office.
Kingsville Man Pleads Guilty to Possessing Child PornographyRead the Press Release
CORPUS CHRISTI, Texas – Robert Wayne Collins, 62, of Kingsville, has pleaded guilty to possession of child pornography, announced U.S. Attorney Kenneth Magidson.
The court heard today that authorities, while using peer-to-peer software, were able to successfully download of various files containing child pornography from an IP address that was associated with Collins.
In January 2015, agents executed a search warrant at Collin’s residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 90 images and approximately 160 videos of child pornography. Collins admitted to using the peer-to-peer software to download child pornography.
U.S. Magistrate Judge Janice B. Ellington accepted the guilty plea today and set sentencing for March 10, 2016, before U.S. District Judge Nelva Gonzales Ramos. At that time, Collins faces up to 10 years in federal prison and a possible $250,000 maximum fine. Upon completion of any prison term imposed, Collins also faces a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the Internet.
Collins was arrested on a bond revocation warrant in November 2015 and has been in custody since that time where he will remain pending his sentencing.
Homeland Security Investigations investigated with the assistance of the Corpus Christi Police Department—Internet Crimes Against Children Task Force.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, 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."
Jacksonville Man Sentenced to 121 Months for Receipt of Child PornographyRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that today in federal court, Chief United States District Judge James C. Dever III sentenced JASON LEE LEVESQUE, 42, of Jacksonville, North Carolina, to 121 months imprisonment, followed by 5 years of supervised release.
JASON LEE LEVESQUE was named in an Indictment filed on March 3, 2015 charging him with receipt and possession of child pornography. On August 31, 2015, LEVESQUE pled guilty to receipt of child pornography.
On January 31, 2014, agents with the FBI Child Exploitation Task Force in Dallas, Texas successfully downloaded over 1,000 images of child pornography using peer to peer file sharing software from the defendant at his IP address. A subsequent search of computers and other devices from the defendant’s Jacksonville, North Carolina home revealed that LEVESQUE had downloaded over 1300 images of child pornography.
Investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Carrie Randa represented the government.
This case was part of the Project Safe Childhood initiative, a national program aimed at ensuring that criminals exploiting children are effectively prosecuted by making full use of all available law enforcement resources at every level. For more information about this important national project, Project Safe Childhood, go to www.projectsafechildhood.gov.
Isleta Pueblo Man Pleads Guilty to Domestic Assault by a Habitual Offender ChargeRead the Press Release
ALBUQUERQUE – Warren Chewiwi, 42, a member of Isleta Pueblo who resides in Bosque Farms, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to a domestic assault by a habitual offender charge. Under the terms of his plea agreement, Chewiwi will be sentenced to 23 in months in federal prison followed by a term of supervised release to be determined by the court.
Chewiwi was arrested on Aug. 12, 2015, on an indictment charging him with domestic assault of an intimate partner by a habitual offender on Sept. 8, 2013, in Indian Country in Valencia County, N.M. According to the indictment, Chewiwi was charged as a habitual offender based on his two prior domestic violence convictions in Isleta Tribal Court. Isleta Tribal Court records reflect the Chewiwi’s prior convictions occurred in 2010 and 2013.
During today’s proceedings, Chewiwi pled guilty to the indictment and admitted that on Sept. 8, 2013, he assaulted the victim, his intimate partner, by grabbing her by the hair, jerking her around the room and hitting her with an open hand while he was under the influence of alcohol. He also acknowledged his two prior tribal court convictions.
Chewiwi remains in federal custody pending his sentencing hearing, which has yet to be scheduled. At sentencing, Chewiwi will receive credit for time served in tribal custody on a related case.
This case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services and the Pueblo of Isleta Tribal Police Department. The case is being prosecuted by Assistant U.S. Attorney David Adams pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Individual Sentenced to 89 Months in Prison for Bank FraudRead the Press Release
SAN JUAN, P.R. – Yesterday evening, Kelvin García-Oquendo was sentenced to 89 months in prison (seven years and five months), $114,000 of restitution and three years of supervised release by United States District Court Chief Judge Aida Delgado-Colón, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico.
On August 28, 2013, García-Oquendo plead guilty of bank fraud, credit card fraud and identity theft. Between February and March of 2015, García-Oquendo, while on bond, was also charged with credit card fraud of approximately $41,111.62. For this case García-Oquendo pleaded guilty on August 17, 2015.
On May 22, 2013, a federal grand jury indicted 42 individuals as a result of an investigation led by the Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HIS), United States Postal Inspection Service (USPIS), the Puerto Rico Police Department (PRPD) and the Puerto Rico Treasury Department. The defendants were charged with conspiracy to commit bank fraud, bank fraud, aggravated identity theft and one count of a forfeiture allegation of $580,089.51. All the defendants pleaded guilty.
The USPIS and ICE-HSI conducted a Bank Fraud investigation involving 42 individuals from the Humacao, Puerto Rico area. Since 2010, the organization headed by named Kelvin García-Oquendo engaged in bank fraud, causing losses to several financial institutions in approximately $580,089.51. The intended loss amounts to approximately $1,205,834.15.
The organization had individuals performing different roles in furtherance of the conspiracy, such as: 1) leaders and organizers; 2) recruiters; 3) facilitators who would either open bank accounts or lend existing bank accounts for the deposit of false and fraudulent checks; 4) purchasers who would use ATM cards of the facilitators to purchase Money Gram Money Orders and Postal Money Orders with the proceeds of the bank fraud scheme; and 5) cashers who would go to different post offices to cash the money orders purchased by others.
“The egregious behavior of those who would exploit our banking system for personal and criminal gain will not be tolerated. We remain committed to investigating and apprehending those who cheat the system,” said US Attorney Rosa Emilia Rodríguez-Vélez. “We are committed to ensuring the integrity of the banking system and to prosecuting those who would undermine it for their personal gain.”
The case was prosecuted by Assistant United States Attorney Héctor Ramírez-Carbó.
Greenville Drug Trafficker SentencedRead the Press Release
RALEIGH - United States Attorney Thomas G. Walker announced that in federal court today, Chief United States District Judge James C. Dever III sentenced ARTKES BENNETT, 36, of Greenville, North Carolina, to 192 months in prison followed by 6 years of supervised release for conspiracy to distribute and possess with the intent to distribute quantities of methamphetamine and heroin, distribution of methamphetamine, and possession with the intent to distribute heroin. BENNETT previously pled guilty to these charges on June 15, 2015.
The Greenville Regional Drug Task Force used an informant to buy methamphetamine from BENNETT on December 30, 2014. BENNETT was arrested on January 13, 2015, after 50 bags of heroin were found in his car. The investigation revealed that between June 2014 and January 2015, BENNETT was responsible for distributing approximately 80 grams of heroin, .95 grams of methamphetamine, and 907 grams of cocaine in Pitt County, North Carolina.
BENNETT faced an enhanced penalty due to his status as a career offender based on two prior convictions for selling cocaine and a prior conviction for possession with the intent to distribute heroin. On July 30, 2014, BENNETT was a participant in the Greenville Regional Offender Watch or “GROW” Up Program. This focused deterrence program is designed to assist repeat offenders in becoming more productive members of their communities by offering education opportunities, work training, and substance abuse treatment. Offenders are provided a notice of prohibited offenses and the severe consequences of committing such offenses.
The investigation of this case was conducted by the Greenville Regional Drug Task Force. The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters. Mr. Perry’s assignment to the United States Attorney’s Office has been made possible by grants funded by the Governor’s Crime Commission.
Government Contractor to Pay $1 Million to Settle Civil Fraud AllegationsRead the Press Release
ALEXANDRIA, Va. – DRS Technical Services, Inc. (DRS TSI), located in Herndon, has agreed to pay $1 million to settle a civil fraud case that claimed their employees engaged in labor mischarging resulting in a loss to the U.S. government of $544,000.
The allegations involved the overcharging of three U.S. Army contracts DRS TSI was working on in Kuwait, where 15 DRS TSI employees were directed to record more time for labor hours than was actually being worked. After discovering the improper conduct through its internal compliance program, DRS TSI made a voluntary disclosure to the U.S. government under the Contractor Business Ethics Compliance Program and Disclosure Rule, also known as the Federal Acquisition Regulations Mandatory Disclosure Rule. DRS TSI took corrective action, including disclosure of the conduct to the Department of Defense Office of Inspector General.
Following an investigation of the disclosure by the government, DRS TSI agreed to pay $1 million to resolve allegations under the civil False Claims Act, and other related civil statutory and common law remedies arising from the conduct. The False Claims Act makes it illegal for any person or entity to present a false or fraudulent claim to the United States for payment and/or to retain overpayments that were improperly received. The civil claims settled by DRS TSI are allegations only; there has been no determination of civil liability.
The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney's Office for the Eastern District of Virginia, the Army’s Criminal Investigation Command, and the Defense Criminal Investigative Service with assistance from the Defense Contract Audit Agency.
The matter was investigated by Assistant U.S. Attorney Richard Sponseller. The civil claims settled by this False Claims Act agreement are allegations only; there has been no determination of civil liability.
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.
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Georgia Man Sentenced to over 2½ Years for Failing to Register as a Sex OffenderRead the Press Release
Contact: Michael J. Conley
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that James Robert Underwood, 43, of Dalton, Georgia, was sentenced today in U.S. District Court by Chief Judge Nancy Torresen to 33 months in prison for failing to register as a sex offender. Underwood pleaded guilty on June 24, 2015.
According to court records, Underwood was convicted in 1999 in Georgia for rape and other charges. He was sentenced to 10 years in prison and was released in 2009. The rape conviction required him to register under the Sex Offender Registration and Notification Act in Georgia and any other state where he established residency. In March 2012, Underwood established residency in Maine, but failed to register as required.
At the sentencing hearing, Judge Torresen noted that this was a particularly serious violation because while Underwood was not registered in Maine, he committed gross sexual assault. He was convicted for this crime in York County Superior Court and was sentenced in April 2013 to eight years in prison, with all but two years suspended.
Following Underwood’s sexual assault conviction, Georgia reclassified him as a "Dangerous Sexual Predator" under its State Sexual Offender Registry which subjects him to electronic monitoring for the rest of his life while residing in Georgia.The investigation was conducted by the U.S. Marshals Service, the Maine Probation and Parole Office and the Maine State Police, State Bureau of Identification.
Former Tax Preparer Sentenced in $20 Million Tax Fraud SchemeRead the Press Release
RICHMOND, Va. – Sean M. Weaver, 34 years old, of Alexandria, was sentenced today to 71 months in prison for mail fraud and money laundering. Weaver was also ordered to pay $20,427,688.03 in restitution to victims of the offense.
Weaver pleaded guilty on Aug. 19, 2015. According to court documents, Weaver was a member of the transaction tax practice group in the Arlington office of Ryan LLC, a tax services firm headquartered in Dallas, Texas. The transaction tax practice group specialized in submitting claims to state and local taxing authorities to obtain refunds of sales and/or use tax overpayments made by Ryan LLC’s corporate clients. Weaver managed a team of 10 to 15 employees and was responsible for submitting claims to the state taxing authorities on behalf of Ryan LLC’s clients. Between October 2011 and December 2014, Weaver submitted and caused to be submitted several false claims for sales and/or use tax refunds to the Virginia Department of Taxation and the Texas Comptroller of Public Accounts on behalf of two of Ryan LLC’s clients. In submitting the false claims, Weaver manipulated client transactional data and falsified invoices and other transactional records to inflate the amount of sales and/or use tax actually paid by the clients during certain transactions. As a result of the scheme, the state taxing authorities issued over $20 million in fraudulent refunds to Ryan LLC clients and Weaver received over $350,000 in personal bonus payments generated by the scheme. As part of the plea agreement, Weaver agreed to forfeit $250,480.09 seized by the United States as property involved in the offense and the value of his account with a peer-to-peer lending company.
Ryan LLC voluntarily reported Weaver’s actions to law enforcement and fully cooperated in the investigation.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division; Thomas M. Jankowski, Special Agent in Charge of IRS-Criminal Investigation’s (IRS-CI) Washington D.C. Field Office; and David Bowers, Acting Inspector in Charge of the Washington Division of the United States Postal Inspection Service (USPIS), made the announcement after sentencing by U.S. District Judge John A. Gibney, Jr. Assistant U.S. Attorneys Dominick S. Gerace and Michael S. Dry prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-139.
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Former President of Guinea Pleads Guilty to Bulk Cash Smuggling and False StatementsRead the Press Release
ALEXANDRIA, Va. – Sekouba Konate, 51, the former President of Guinea in West Africa and current General Commander of the Security Forces of the African Union, pleaded guilty today to charges of bulk cash smuggling and false statements.
In a statement of facts filed with the plea agreement, on June 15, 2013, General Konate arrived at Washington Dulles International Airport from Ethiopia and proceeded through Customs and Immigration illegally carrying thousands of dollars in undeclared cash. General Konate previously had applied for and received a G-4 visa to visit the United States based upon his employment with a foreign government. From in or about January 2010 to December 2010, General Konate served as the transitional President of Guinea following a military coup. From in or about December 2010 to the present, he has served as the General Commander of the Security Forces of the African Union—a military organization of 54 member states.
Upon his arrival at Dulles Airport, General Konate approached Primary Inspection and handed the assigned officer from Customs and Border Protection (CBP), among other things, a signed Customs Declaration form that falsely and willfully represented that he was not carrying over $10,000 in U.S. currency or its equivalent anywhere on his person or in his effects. When asked by the CBP Officer for a verbal confirmation, General Konate falsely and willfully repeated the same representation, even though he knew that he was carrying far in excess of $10,000, which was concealed on his person and in his luggage, in order to evade a currency-reporting requirement.
Following his referral to Secondary Inspection for further investigation, General Konate encountered two other CBP Officers and a Special Agent with Homeland Security Investigations. When he was asked again by the officers whether he was carrying over $10,000, General Konate this time responded that he was and amended his Customs Declaration form to reflect the $14,000 in U.S. currency that he was carrying in his wallet. In truth and in fact, General Konate knew that he was carrying significantly more currency at the time and willfully and materially made a false statement on his Customs Declaration form that misrepresented the actual amount of currency that he had concealed in his luggage. Based upon the inconsistency in his prior responses, CBP Officers conducted a preliminary search of General Konate’s luggage. The search revealed an additional $30,750 in U.S. currency, which was divided into several stacks of money and was concealed in various compartments of General Konate’s luggage.
Subsequent to the discovery of the $30,750, CBP Officers asked General Konate to complete a document, a FinCEN 105 form, that he knew would be filed with the Financial Crimes Enforcement Network of the U.S. Department of Treasury. General Konate completed and signed the FinCEN 105 form in the presence of the officers and represented that he was carrying a total of only $44,750 in currency, which accounted for the $14,000 in his wallet and the $30,750 that had been found during the search. When General Konate signed the FinCEN 105 form, he willfully and materially misrepresented the total amount of money that he had concealed in his luggage.
After General Konate signed the FinCEN 105 form, CBP Officers conducted a second and more thorough search of his luggage. During the search, officers discovered an additional $20,020 in U.S. currency, which again was divided into several stacks of money and was concealed in various compartments of General Konate’s luggage. Following the searches, General Konate was found in possession of a total of $64,770 in U.S. currency, in stark contrast to his initial representation on his Customs Declaration form that he was not carrying over $10,000. During his encounters with officers, General Konate repeatedly made statements that the questioning of him and accompanying searches were improper given his status as the former President of Guinea and current Commanding General of the African Union forces.
General Konate was indicted by a federal grand jury on May 7, 2015, and faces a maximum penalty of five years in prison when sentenced on Feb. 19, 2016. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge of U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, made the announcement after the plea was accepted by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Gene Rossi, Monika L. Moore, and Special Assistant U.S. Attorney Anna G. Kaminska are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-132.
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Former Military Contractor Sentenced to 12 Months in Prison for Paying Bribes to Army Officers during Iraq WarRead the Press Release
The former president of a defense contractor providing services to the U.S. military in Iraq was sentenced today to 12 months and one day in prison for his role in a scheme to pay more than $1.2 million in bribes to U.S. Army contracting personnel in exchange for being awarded lucrative defense contracts, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania.
U.S. District Judge Joel H. Slomsky in the Eastern District of Pennsylvania sentenced Justin W. Lee, 37, of Philadelphia, the former president of Lee Dynamics International (LDI), who pleaded guilty in July 2011 to one count of conspiracy to commit bribery and four substantive counts of bribery.
In connection with his guilty plea, Lee admitted that as the president of LDI and previously as an officer of American Logistics Services (ALS), a Kuwaiti company providing supplies to the U.S. military in Iraq, he paid multiple bribes in the form of cash, airline tickets, trips and hotel stays, among other things, to military contracting personnel in exchange for their agreement to take official action to award lucrative contracts to both LDI and ALS.
Lee’s father and co-defendant, George Lee, who was the CEO of both companies, was sentenced to 54 months in prison in July 2015 for one count of bribery. This marks the end of a long-running investigation, which began in 2006, that led to the conviction of seven other defendants, including several high-ranking contracting officers.
The U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service and the U.S. Department of Homeland Security – Immigration and Customs Enforcement investigated the case, and the Office of the Special Inspector General for Iraq Reconstruction, the FBI and the Internal Revenue Service previously contributed to the investigation. Trial Attorneys Richard B. Evans and John Keller of the Criminal Division’s Public Integrity Section and the U.S. Attorney’s Office of the Eastern District of Pennsylvania prosecuted the case. Mark W. Pletcher and Emily W. Allen of the U.S. Attorney’s Office of the Southern District of California previously provided substantial assistance.
Former East Haven Zoning Official Admits Pocketing Payments from ResidentsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that FRANK BIANCUR, JR., 41, of West Haven, waived his right to indictment and pleaded guilty today before U.S. District Judge Victor A. Bolden in Bridgeport to seeking and receiving illegal payments while employed as a Zoning Enforcement Officer for the Town of East Haven.
According to court documents and statements made in court, BIANCUR was employed as the Town of East Haven’s Planning and Zoning Administrator/Zoning Enforcement Officer. In pleading guilty, BIANCUR admitted that he sought and received payments from at least five individuals in exchange for official acts he rendered as the Zoning Enforcement Officer.
In May 2015, a resident of East Haven contacted the East Haven Police Department and the FBI with information that he/she had been extorted by BIANCUR since approximately October 2012 and, as a result, had made cash payments to BIANCUR. On May 19, 2015, BIANCUR called the victim and informed the victim that BIANCUR had to inspect an addition to the victim’s residence. Although BIANCUR stated that he was “fighting” for the victim, he also required a payment of $200 or he would make the victim tear down the addition. On May 21, 2015, the victim engaged in a consensually-recorded meeting with BIANCUR at BIANCUR’s office in East Haven Town Hall. During the meeting, the victim gave BIANCUR $200 in cash, which BIANCUR put in his pocket.
In pleading guilty, BIANCUR also admitted that he sought and received $500 cash payments from two additional East Haven residents in order to resolve zoning violations.
BIANCUR pleaded guilty to one count of theft of honest services mail fraud, which carries a maximum term of imprisonment of 20 years. A sentencing date has not been scheduled.
BIANCUR has been released on a $20,000 bond since his arrest on May 27, 2015.
Prior to his employment by the Town of East Haven, BIANCUR was employed by the City of West Haven and the City of Bridgeport.
This matter is being investigated by the Connecticut Public Corruption Task Force and the East Haven Police Department. The case is being prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
The Connecticut Public Corruption Task Force includes the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division, U.S. Postal Inspection Service, U.S. Department of Housing and Urban Development – Office of Inspector General and U.S. Department of Health and Human Services – Office of Inspector General. Citizens are encouraged to report corruption to the Task Force by calling 203-238-0505.
Former Chief Financial Officer/Senior Vice President of Paric Construction Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – BRIAN PALUCH, former Chief Financial Officer & Senior Vice President of PARIC Construction, was sentenced late yesterday to 38 months in prison on charges involving his scheme to use the company’s corporate funds to pay his own personal expenses during the period January 2010 through February 2014. In addition to the prison sentence, he was ordered to pay $393,659 restitution to PARIC and a $15,000 fine.
According to testimony presented at trial, Paluch used the PARIC issued American Express card to pay for personal expenses, including personal travel, dining, spa charges, electronics and personal gifts for family and friends. In order to conceal his scheme, Paluch submitted false and altered financial summaries of the monthly American Express statements by deleting and altering his own personal charges. On several occasions, Paluch forged the PARIC President’s signature on these false financial summaries as purported authorization for the payments. Additionally, as part of his employment at PARIC, Paluch was permitted to join the Sunset Country Club, and PARIC paid the monthly membership dues. Paluch, on behalf of PARIC, entered into an agreement with Sunset for the purchase of various types of apparel and golf items containing the PARIC corporate logo. Paluch created sham and inflated Sunset Country Club invoices to pay for personal items at the club unrelated to the legitimate business of PARIC. In his position as CFO, Paluch was responsible for calculating the annual bonuses for PARIC’s employees, including his own. As a further part of his scheme, Paluch inflated his base salary in calculating his own annual bonus for several years. Additionally, during summer, 2011, Paluch directed the payment of $5,000 in PARIC corporate funds to a St. Louis area law firm as an incentive for that law firm to hire his niece as a summer associate.
Paluch, Kirkwood, MO, was convicted of three counts of mail fraud last August. He appeared Monday for sentencing before United States District Judge Richard Webber.
This case was investigated by the Postal Inspection Service, the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation. Assistant United States Attorneys John Ware and Dianna Collins handled the case for the U.S. Attorney’s Office. The victim, PARIC Construction Company, provided assistance in the investigation.
Federal Prostitution Charges Brought Against Three Men in MontgomeryRead the Press Release
Montgomery, Alabama – Three Montgomery residents were indicted by a federal grand jury for their involvement in an interstate prostitution ring being operated out of an apartment in Montgomery, announced U.S. Attorney George Beck from the Middle District of Alabama. The three individuals indicted were: Bernabe Carbajal, 37; Andres Hernandez Gomez, 53; and Saul Garrido Eligio, 34.
According to court documents, Gomez and Eligio were a part of a ring that conspired to transport females across state-lines for the purpose of prostitution. The conspiracy took place from 2014 to October 2015 and included using females who were illegal aliens working as prostitutes at various locations, transporting the females from state to state, harboring the females in apartments being operated as brothels, coordinating meetings between the females and the males who paid for sexual services, and collecting payment for the sexual services provided by the females. Evidence shows that an apartment in Montgomery was maintained as a brothel for the females to stay in and engage in prostitution.
Specifically, it is alleged that on October 26, 2015 Carbajal enticed a female to travel with him to the apartment in Montgomery from Georgia to engage in prostitution.
After arriving at the apartment and while Gomez was supervising the brothel, the female engaged in prostitution and provided services to approximately 44 customers over a three-day period. Gomez’s duties at the brothel included, staying at the apartment, overseeing the operations of the brothel, supervising the prostitutes, screening the customers, collecting money from the customers, and reporting the number of customers.
Eligio participated in the conspiracy by traveling to the brothel to pick up money from Gomez and providing condoms to the females when needed.
If convicted, Carbajal faces a maximum sentence of ten years in prison for the transportation charge, a maximum sentence of twenty years in prison for the enticement charge, and a $250,000 fine for each charge. Gomez and Eligio each face a maximum sentence of five years in prison and a $250,000 fine for the conspiracy charge. All three defendants are in the custody of the United States Marshals Service pending trial.
The case against Gomez and Eligio is scheduled for trial in January 2016 before Chief United States District Judge W. Keith Watkins. Carbajal is presently in Georgia facing charges for conspiracy to engage in sex trafficking of a minor and conspiracy to transport a person in interstate commerce for the purpose of prostitution in the United States District Court for the Middle District of Georgia.
An indictment merely alleges that crimes have been committed and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
This was a joint investigation with the Federal Bureau of Investigation and the Drug Enforcement Administration, with assistance from Homeland Security Investigations (HSI), High Intensity Drug Trafficking Area (HIDTA) Task Force, Alabama Law Enforcement Agency (ALEA), including the State Bureau of Investigations, Department of Public Safety, and the Fusion Center, the Alabama Attorney General’s Office, Montgomery Police Department, Autauga County Sheriff’s Office, Prattville Police Department, Elmore County Sheriff’s Office, Central Alabama Drug Task Force, Auburn Police Department, Millbrook Police Department, Dothan Police Department, Alabama National Guard Counterdrug Program, Albertville Police Department, Marshall County District Attorney’s Office, Marshall County Sheriff’s Office, Marshall County Against Domestic Violence Coalition, and the 19th Circuit District Attorney’s Office. Assistant U.S. Attorneys Jerusha T. Adams and Hollie Worley are prosecuting the case.
Evans Man Indicted for Selling Fentanyl That Resulted in A DeathRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. - U.S. Attorney William J. Hochul Jr. announced today that a federal grand jury has returned a one-count indictment charging John Haak, 34, of Evans, NY, with distribution of fentanyl causing death. The charge carries a mandatory minimum penalty of 20 years in prison, a maximum of life, and a fine of up $1,000,000.
"This case represents another in our ongoing effort to bring the full force of federal law against those drug traffickers who are willingly selling illegal and often deadly commodities," said U.S. Attorney Hochul.Assistant U.S. Attorney Frank T. Pimentel, who is handling the case, stated that on February 28, 2015, a Hamburg man died of a fentanyl overdose at his home. During the ensuing investigation, officers discovered a cellular telephone that belonged to the decedent. Text messages exchanged between the decedent and the defendant, in conjunction with an autopsy performed by the Erie County Medical Examiner, revealed that the decedent received fentanyl from Haak shortly before his body was discovered. The defendant also sent text messages warning the decedent to be careful with the substance that he sold to him.
Haak is in custody and will be arraigned at a later date before U.S. Magistrate Judge Jeremiah J. McCarthy.
The indictment is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Hamburg Police Department, under the direction of Chief Gregory Wickett, and the Evans Police Department, under the direction of Chief Ernest P. Masullo.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Edwin Tollinchi-Rodriguez Sentenced to 450 Months ImprisonmentRead the Press Release
HAMMOND – United States Attorney for the Northern District of Indiana, David Capp, announced that Edwin Tollinchi-Rodriguez, age 30, of East Chicago, Indiana, was sentenced Tuesday, December 1, 2015, in federal court by Judge Rudy Lozano after his guilty plea of transporting a minor across state lines with intent to engage in criminal sexual activity.
Edwin Tollinchi-Rodriguez was sentenced to 450 months imprisonment and 20 years supervised release.
According to documents in the case, defendant Edwin Tollinchi-Rodriquez admitted in his guilty plea that on November 3, 2012, he knowingly transported an 11 year-old minor child, identified in public filings as “Jane Doe,” from the State of Indiana to the State of Illinois with intent that she engage in sexual activity that is prohibited by Illinois law, i.e., Criminal Sexual Assault under Illinois law.
At a hearing held on October 29, 2015, Jane Doe testified that the defendant began sexually abusing her when she was 8 years old and that he threatened to kill her, her family and himself if she disclosed the abuse. Jane Doe explained that she believed Defendant’s threats because he had been violent with her, her mother and her brother on previous occasions.
This case was the result of an investigation by the Federal Bureau of Investigation in coordination with East Chicago, Indiana and the Lansing, Illinois Police Departments. The case was prosecuted by Assistant United States Attorney Jill R. Koster.
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East Lyme Fisherman Pleads Guilty to Federal Tax Evasion ChargeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and William P. Offord, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that PETER TORRES, 47, of East Lyme, Connecticut, waived his right to indictment and pleaded guilty yesterday before Chief U.S. District Judge Janet C. Hall in New Haven to one count of attempted tax evasion.
According to court documents and statements made in court, from 2006 to 2011, TORRES failed to file tax returns and report to the Internal Revenue Service approximately $1.27 million in gross income generated through his work as a commercial fishing boat captain. In pleading guilty, TORRES admitted that he was issued Forms 1099 that documented the income paid to him for each tax year, but he failed to timely file his tax returns as required and report the income and tax due to the IRS. In his plea agreement, TORRES agreed that the tax loss for this period is between $250,000 and $550,000.
TORRES also admitted that, in an effort to conceal his income from the IRS, he negotiated checks he received as payment for his fishing services by depositing them in the bank and, on the same day, withdrawing cash or obtaining bank checks in varying amounts under $10,000.
Judge Hall scheduled sentencing for February 22, 2016, at which time TORRES faces a maximum term of imprisonment of five years and a fine of up to $250,000. As part of his guilty plea, TORRES acknowledged that he attempted to evade the assessment and payment of his taxes for the 2006 through 2011 tax years and has agreed to enter into a payment plan with the IRS to repay the back taxes and applicable penalties and interest.
This case was investigated by the Internal Revenue Service – Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney Anastasia E. King.
Dietary Supplement Manufacturer Pleads Guilty to Criminal Contempt of CourtRead the Press Release
The Department of Justice announced today that a Livingston, Montana resident pleaded guilty to selling dietary supplements in violation of two court orders.
Toby McAdam, 57, pleaded guilty before U.S. District Judge Susan P. Watters in the District of Montana to one count of criminal contempt of court. McAdam was immediately sentenced to four months in prison. He was ordered to pay $80,000 in liquidated damages and $4,936.48 in attorney's fees.
“The Department of Justice will use all available tools to ensure that dietary supplement and drug manufacturers obey court orders,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “As demonstrated by our recently announced dietary supplements sweep, the Consumer Protection Branch will aggressively pursue those who distribute these products in violation of the law.”
The criminal contempt action arose out of a prior civil action the Department filed in 2010 against McAdam, who was the owner and operator of Risingsun Health, based in Livingston. According to court documents, McAdam sold misbranded and adulterated dietary supplements and drugs that made unsupported claims to cure cancer, ADD/ADHD, epilepsy and intestinal parasites, among other things. McAdam agreed to close his business until the U.S. Food and Drug Administration (FDA) authorized him to return to business. No such authorization was given and McAdam was later held in civil contempt for violation of the consent decree. The Ninth Circuit Court of Appeals later upheld the order of civil contempt against McAdam.
The criminal contempt charges against McAdam alleged that he violated a 2010 court order and an order of civil contempt issued in 2013, which prohibit him from selling dietary supplements. McAdam admitted to continuing to sell both supplements and drugs and failed to close down his business and online sites.
Principal Deputy Assistant Attorney General Mizer commended the efforts of the U.S. Postal Inspection Service and FDA for the investigation. The matter was handled by Trial Attorney David Sullivan of the Department’s Consumer Protection Branch.
Day Care Operator Sentenced for Wire Fraud and Obstructing the IRSRead the Press Release
PHILADELPHIA - Deborah Cellucci, 45, of Mullica Hill, New Jersey, was sentenced today to one year and one day in prison for sending a false levy release that hampered the Internal Revenue Service's efforts to collect taxes owed by Cellucci's day care business, announced United States Attorney Zane David Memeger.
In 2013, Cellucci fell behind on her business taxes. An IRS revenue agent worked out a payment plan with Cellucci. Also, as part of its collection efforts, the IRS sent a Notice of Levy to an agency that paid subsidies to Cellucci’s day care under the subsidized child care program. That levy directed that the $28,103.20 subsidy slated for the day care be paid to the IRS. In June 2013, Cellucci faxed a false levy release from her home in New Jersey to the agency, in Philadelphia, in charge of paying the day care subsidy funds. As a result of the false levy release, a check for $28,103.20 that the agency had written to the U.S. Treasury was canceled, and a new check in the same amount was made out to the day care. Cellucci endorsed the check, and deposited the proceeds into her business account.
In addition to the prison term, United States District Judge Berle M. Schiller also ordered the defendant to pay $28,103.20 in restitution, and to serve a three-year period of supervised release.
The case was investigated by the Treasury Inspector General for Tax Administration and was prosecuted by Assistant United States Attorney Elizabeth Abrams.
Current and Former New York City Human Resources Administration Employees Each Charged with Corruption OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Mark G. Peters, Commissioner of the New York City Department of Investigation (“DOI”), Catherine Leahy Scott, Acting Inspector General of the New York State Office of Welfare Inspector General (“State IG”), and Diego Rodriguez, Assistant Director-In-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of criminal charges against CHERISSE WATSON-JACKSON, a/k/a “Reesie,” a current New York City Human Resources Administration (“HRA”) supervisor, along with eleven others, with corruption offenses involving the theft of approximately $1.5 million from two public assistance programs. U.S. Attorney Bharara and Commissioner Peters simultaneously announced separate charges against PETRONILA PERALTA, a/k/a “Petra,” a former HRA employee, in a separate scheme involving the theft of approximately $600,000 more in public funds.
WATSON-JACKSON and PERALTA were arrested this morning in Queens, New York, and the Bronx, New York, respectively, and are scheduled to appear before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court later today. GERARD STOKES, VERNECKA PETERSEN-FOWLER, KEVIN WILLIAMS, BEVERLY LORD, JARON ANNUNZIATA, and BEVERLY FRANKLIN were also arrested this morning, and are scheduled to appear before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court later today. DERRICK WILLIAMS, a/k/a “Blood,” is in state custody on an unrelated charge, and is expected to appear in Manhattan federal court later this week. ISAAC ALLEN is in custody in Vermont on an unrelated charge, and is expected to appear in Manhattan federal court at a later date. COREY BROCK, a/k/a “Cee,” MAURICE CROMWELL, a/k/a “Reece,” and YESENIA DEPENA remain at large.
U.S. Attorney Preet Bharara said: “As alleged, one current and one former HRA employee abused their positions of trust as administrators of public funds to enrich themselves. Cherisse Watson-Jackson and Petronila Peralta allegedly diverted more than $2 million in public funds designed to assist the most needy in our community for their own personal use. I thank our partners in this investigation for their work in rooting out public corruption.”
Commissioner Mark G. Peters said: “During a season when we are reminded about hunger’s prevalence, these defendants are charged with shamelessly stealing the funds that assist in feeding that basic need. Vulnerabilities like those exposed in these arrests and in DOI’s Report breed corruption and must be dealt with swiftly to prevent further fraud of this magnitude from occurring. I thank our law enforcement partners and HRA for their partnership on these important cases.”
New York State Inspector General Catherine Leahy Scott said: “Cherisse Watson-Jackson was entrusted to provide government assistance to New York’s neediest families but instead abused that trust and her authority, steering $1.5 million in public funds to herself and her accomplices. Today’s arrests should send a clear message that my law enforcement partners and I will not tolerate the use of public office and public resources for criminal activity. We will investigate and bring to justice those who corrupt the system, and will continue to work together to find solutions to curtail systemic theft and abuse of public funds.”
FBI Assistant Director-In-Charge Diego Rodriguez said: “Watson-Jackson and Peralta are accused of abusing their positions to commit fraud through theft from a program designed to support the most in need. They not only allegedly took from the needy, but they conspired to defraud the tax-payers. Their actions jeopardized the foundation of the programs set up to help the community. This fraudulent scheme not only profited Watson-Jackson and Peralta, but it also lined the pockets of their co-conspirators. The FBI continues to work alongside our partners in the New York City Department of Investigation and New York State Office of Welfare Inspector General to ensure confidence in the government and its programs.”
According to the allegations contained in the Complaints[1] unsealed today in Manhattan federal court and publicly-available documents:
HRA is an agency of the City of New York responsible for administering various public assistance programs. Among other things, HRA provides temporary help to individuals and families with social service and economic needs to assist them in reaching self-sufficiency. Its services include, among other things, administering the federally-funded Supplemental Nutrition Assistance Program (“SNAP”) (more commonly known as “food stamps”), the federally-funded Temporary Aid to Needy Families Program (“TANF”), and providing rental assistance to low-income families and individuals.
The Watson-Jackson Scheme
Since 1993, WATSON-JACKSON has worked at HRA, most recently as a supervisor in a job center in Queens, New York. In that capacity, she supervised a group of other supervisors who in turn were responsible for teams of employees who review and determine eligibility for public assistance clients. Since at least early 2012, and continuing until at least December 2013, WATSON-JACKSON abused her position by engaging in a scheme to defraud two of the public assistance programs that she was charged to help administer. The first of the two schemes involved WATSON-JACKSON fraudulently loading electronic benefit transfer (“EBT”) cards with funds from SNAP, which funds were then spent by co-conspirators throughout the New York City area, including by ALLEN, DERRICK WILLIAMS, BROCK, STOKES, and ANNUNZIATA. The second scheme involved WATSON-JACKSON fraudulently causing rental assistance checks to be mailed to co-conspirators who posed as “landlords” of low-income tenants. Co-conspirators, including CROMWELL, KEVIN WILLIAMS, ANNUNZIATA, FRANKLIN, and PETERSON cashed and/or assisted others to cash the fraudulently-obtained checks, including with the assistance of DEPENA, a teller at a check-cashing business who knowingly cashed more than 200 fraudulent checks in different names. The two schemes led by WATSON-JACKSON resulted in the loss of more than approximately $1.5 million in public funds.
The Peralta Scheme
Between 2005 and August 2014, PERALTA worked at HRA, most recently as a Job Opportunity Specialist in a different job center in Queens, New York. In that capacity, PERALTA was supposed to provide economic support and employment-related services to persons in need. Starting by approximately 2009, PERALTA abused her position by fraudulently issuing more than approximately 800 supplemental issuances to individuals who were not entitled to such payments. A “supplemental issuance” is a supplemental transmission of funds to a public assistance beneficiary who did not receive the amount of funds he or she was due previously. Between approximately 2009 and May 2011, PERALTA repeatedly issued such funds not to individuals who were entitled to them, but to co-conspirators, and took steps to seek to conceal her conduct, including by using the computer system log-in information of a former employee of HRA, rather than her own. The scheme led by PERALTA resulted in the loss of more than approximately $600,000 in public funds.
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WATSON-JACKSON, 44, of Queens, New York; CROMWELL, 39, of Staten Island, New York; ALLEN, 39, of Brooklyn, New York, DERRICK WILLIAMS, 34, of Queens, New York; BROCK, 35, of Queens, New York; STOKES, 32, of Queens, New York; PETERSEN-FOWLER, 44, of Brooklyn, New York; KEVIN WILLIAMS, 27, of Queens, New York; DEPENA, 24, of Brooklyn, New York; LORD, 53, of Queens, New York; ANNUNZIATA, 35, of Brooklyn, New York; and FRANKLIN, 37, of Queens, New York, are each charged in a complaint with conspiracy to commit mail and wire fraud, which carries a maximum penalty of 20 years in prison. WATSON-JACKSON, CROMWELL, DERRICK WILLIAMS, BROCK, STOKES, KEVIN WILLIAMS, and DEPENA are also each charged with aggravated identity theft, which carries a mandatory penalty of two years in prison, to be served consecutively to any penalty imposed for the mail and wire fraud conspiracy.
PERALTA, 51, of Bronx, New York, is charged in a separate complaint with conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison, and aggravated identity theft, which carries mandatory penalty of two years in prison, to be served consecutively to any penalty imposed for the wire fraud conspiracy.
The maximum potential sentences in these cases are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
U.S. Attorney Bharara praised the work of DOI, the State IG, and the FBI, and noted that both investigations are ongoing.
These cases are being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Daniel C. Richenthal, Andrew D. Beaty, and Shawn G. Crowley are in charge of the prosecutions.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints set forth below constitute only allegations, and every fact described should be treated as an allegation.
Conspirator in Counterfeit Credit Card Ring Sentenced to over 6 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Stanley Downey, age 49, formerly of New York, today to 74 months in prison, followed by five years of supervised release, for bank fraud conspiracy and aggravated identity theft, arising from a scheme to use of stolen credit and debit card information to manufacture counterfeit credit cards used to buy merchandise and services. Judge Quarles also entered an order requiring Downey to pay restitution of $126,318.99.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office; Chief Gary Gardner of the Howard County Police Department; Commissioner Kevin Davis of the Baltimore Police Department; Chief James W. Johnson of the Baltimore County Police Department; Chief Ross C. Buzzuro of the Ocean City Police Department; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Newport News Police Chief Richard W. Myers; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, from at least January 1, 2012, through his arrest in August, 2013, Stanley Downey conspired with his brother William Downey, Michael Crew, Navee Diaz, Jason Evans, and others to manufacture counterfeit debit and credit cards bearing stolen and unauthorized credit and debit card account numbers then use the counterfeit cards to purchase goods and services.
Stanley Downey became involved in the scheme through others who knew the leader, Michael Crew, also known as “Black.” Black had an embossing machine and he made credit cards using altered gift cards and the credit card and debit card numbers of real people. The stolen card numbers were embossed on the gift cards, along with the name or alias of the person who would be using the cards.
Stanley Downey admitted that he primarily purchased counterfeit cards from Black, who provided the cards directly or through others, such as Navee Diaz and William Downey. Stanley Downey purchased a large number of cards and conducted a large number of transactions. For example, on January 2 and January 4, 2012, Stanley Downey and a co-conspirator used a counterfeit credit card to purchase approximately $5,738.70 in merchandise at a business in Baltimore County. Stanley and William Downey sometimes traveled together out of state to conduct transactions with the counterfeit credit cards when things got too “hot” in Maryland. Stanley Downey was traveling with his brother to Pittsburgh when the two of them were stopped by law enforcement outside Cumberland, Maryland on September 12, 2012. Stanley Downey provided a false name and a counterfeit driver’s license in that name to law enforcement. At the time of the stop, both William and Stanley Downey had over 60 counterfeit cards in their possession which were embossed with real account numbers belonging to victims and with the names “S Downey” and “W Downey.”
Stanley Downey also traveled with others to various places to use the counterfeit cards. For example, on October 10, 2012, Stanley Downey and a woman were arrested in Las Vegas and had 48 counterfeit credit cards in their possession, which they had been using to make purchases in Las Vegas and elsewhere. On August 13, 2103, Stanley Downey was arrested in New York for using counterfeit credit cards. He was convicted and began serving his sentence, but was subsequently transferred to Maryland to answer to these charges.
During his participation in the conspiracy, Stanley Downey and his co-conspirators obtained or attempted to obtain extensions of credit from financial institutions of between $400,000 and $1 million, using the financial account numbers of real people. More than 250 individuals and institutions were defrauded by the scheme.
Michael Crew, age 55, of Owings Mills, and Jason Evans, age 32, of Millsboro, Delaware previously pleaded guilty to the same charges and were sentenced to nine years in prison and four years in prison, respectively, and were each ordered to pay restitution of $126,318.99. Navee Diaz, a/k/a India, age 40, of Owings Mills, Maryland was sentenced to 76 months in prison, and was also ordered to pay restitution of $126,318.99. William Downey, age 43, of Gwynn Oak, Maryland, pleaded guilty to his role in the conspiracy and was sentenced to five years in prison.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of 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. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Secret Service; Howard County, Baltimore City, Baltimore County, Howard County, Ocean City and Newport News Police Departments, HSI Baltimore and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine, who prosecuted the case.
Columbia Man Pleads Guilty to Drug-Trafficking ConspiracyRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Columbia, Mo., man pleaded guilty in federal court today to his role in a conspiracy to distribute crack cocaine and powder cocaine in Boone County, Mo.
Malcolm Desean Redmon, also known as “Harp,” 32, of Columbia, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to participating in a conspiracy to distribute crack cocaine and powder cocaine in Boone County from November 2011 to August 2014. The court granted the defense attorney’s motion and ordered today’s plea agreement to be sealed.
Co-conspirators have admitted to distributing multiple kilograms of crack cocaine and powder cocaine, but the exact amount is disputed by Redmon and will be contested and determined at Redmon’s sentencing hearing.
Redmon is the 11th defendant to plead guilty in this case. Kenneth Scott, Sr., 47, and James Thomas Pittman, 42, both of Fulton, Mo.; Carl Douglass Simon, also known as “Lil Carl,” 28, and Teka Lynn Hayes, 51, both of Columbia; Ryan D. Wright, 39, of Springfield, Mo.; Vershawn Dejuan Edwards, 23, of Jefferson City, Mo.; and Guillermo Ortiz Perez, also known as “Youngster,” 25, a citizen of Mexico with no known address, have pleaded guilty and await sentencing. Rodney Wayne Arnold, also known as “Rodney O.,” 31, of Columbia, pleaded guilty and was sentenced to five years in federal prison without parole. William Alexander Hill, also known as “BJ,” 30, of Columbia, pleaded guilty and was sentenced to four years and five months in federal prison without parole. Courtnie Lea Goins, 26, of Springfield, pleaded guilty and was sentenced to four years of probation.
Under federal statutes, Redmon is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of life in federal prison without parole. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Anthony P. Gonzalez. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS-Criminal Investigation, the Columbia, Mo., Police Department, the Boone County, Mo., Sheriff’s Department, the U.S. Marshal’s Service, MUSTANG (the Mid-Missouri Unified Strike Team and Narcotics Group), the Drug Enforcement Administration and the Boone County, Mo., Prosecuting Attorney’s Office.
Chicago Man Sentenced on Fraud and Identity Theft ChargesRead the Press Release
St. Louis, MO – RODNEY TYLER was sentenced to 65 months in prison involving a bank fraud and identity theft scheme. Tyler and his associates used the identification of multiple individuals obtained from stolen credit cards, bank debit cards and state issued driver’s licenses to steal funds held in individual bank accounts.
According to court documents, as part of the scheme, which included fraudulent transactions at bank branches in Missouri, Illinois and Indiana, illegitimate and fraudulent driver’s licenses were created and used, along with stolen bank account information, to make unauthorized withdrawals of funds from identity theft victims’ personal bank accounts. Based out of Chicago, Illinois, Tyler and his associates traveled to bank branches where those individuals had and maintained personal bank accounts and then used the identities of multiple victims to negotiate bank counter withdrawals from the victim bank accounts. Tyler was arrested in Lincoln County, Missouri, on October 8, 2014, after he and another individual executed the scheme at a Troy, Missouri, branch of Bank of America and withdrew over $5,000 from an individual victim’s personal checking and savings accounts. Bank of America employees became suspicious during the course of the transactions and alerted local law enforcement, which led to Tyler’s arrest.
Tyler, Chicago, IL, pled guilty in August to one felony count of bank fraud and one felony count of aggravated identity theft. He appeared today for sentencing before United States District Judge Ronnie L. White.
This case was investigated by the Postal Inspection Service and the Troy, Missouri, Police Department. Assistant United States Attorney Charles Birmingham handled the case for the U.S. Attorney’s Office.
Canadian Citizen Pleads Guilty to Smuggling Turtles from the United StatesRead the Press Release
A Canadian citizen pleaded guilty today to six counts of smuggling turtles, some of which were endangered, from the United States in violation of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, U.S. Attorney Barbara L. McQuade announced. Kai Xu, 27, of Windsor, Ontario pleaded guilty today before United States District Judge John Corbett O’Meara in Ann Arbor. At the plea hearing, Xu admitted that on six occasions in 2014 he entered the United States from Canada and traveled to Fed Ex and UPS facilities in the metro-Detroit area, where he retrieved packages that contained a variety of different species of live turtles. Xu then illegally smuggled the turtles out of the country using three methods. On some instances, Xu repackaged the turtles and shipped them directly to China, concealing the wildlife in snow boots. On one occasion, Xu taped the live turtles to his legs and groin (a total of 51 live turtles) and returned to Canada, smuggling the turtles in his pants to conceal them from customs officials. Finally, on the day of Xu’s arrest, he packaged over 1000 turtles into suitcases that he sent with a runner he had hired to fly directly from Detroit to Shanghai. The turtles were recovered by U.S. Fish and Wildlife special agents. They had been packaged into boots and cereal boxes and concealed within luggage. Each count for which Xu pleaded guilty to carries a maximum sentence of ten years in prison and/or a $250,000 fine. A sentencing date has been set for April 12, 2016 at noon in Ann Arbor, Michigan. This case was investigated by special agents of the U.S. Fish and Wildlife Service and Environment Canada.California Man Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
Nicholas Michael Teausant, 22, of Acampo, California, pleaded guilty today to attempting to provide material support or resources to a foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Benjamin B. Wagner of the Eastern District of California.
According to court documents, on March 17, 2014, Teausant was arrested en route to Canada, near the border, with the intent of continuing to travel to Syria to join the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization. On March 26, 2014, Teausant was indicted on one count of attempting to provide material support or resources to a terrorist organization. He pleaded guilty to the single count in the indictment without a plea agreement.
“Nicholas Michael Teausant attempted to travel overseas to join ISIL and to provide material support to the terrorist organization,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism, and we are committed to stemming the flow of foreign fighters abroad and holding accountable those who attempt to provide material support to designated foreign terrorist organizations.”
“This case, like others in communities across the United States and around the world, is an example of how a young person from any place and any background might make the terrible decision to try and become part of a terrorist organization,” said U.S. Attorney Wagner. “Fortunately, the FBI intervened in this case before any harm could be inflicted upon innocent persons. We hope that this case will be a reminder to us all to stay vigilant and involved in the lives of our youth, and in particular with respect to the dangerous influences they may be subject to on the Internet where these organizations are very active.”
Teausant is scheduled to be sentenced by U.S. District Judge John A. Mendez of the Eastern District of California on March 8, 2016. Teausant faces a maximum statutory penalty of 15 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the federal sentencing guidelines, which take into account a number of variables.
This case was the product of an investigation by the FBI, the Modesto, California, Police Department and the San Joaquin, California, Sheriff’s Office, who are members of the Modesto/Stockton Joint Terrorism Task Force, with significant assistance from U.S. Customs and Border Protection. The case is being prosecuted by Assistant U.S. Attorneys Jean M. Hobler and Jason Hitt of the Eastern District of California and Trial Attorney Andrew Sigler of the National Security Division’s Counterterrorism Section.
Buffalo Man Arrested, Charged with Cocaine ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Dana Washington, 36, of Buffalo, NY, was arrested and charged by criminal complaint with possession with intent to distribute, and distribution of, crack cocaine. The charge carries a maximum of 30 years in prison and a $2,000,000 fine.
Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that according to the complaint, in January 2013, the defendant sold a half ounce of crack cocaine to a confidential source (CS) working with the Drug Enforcement Administration near Kensington and Fillmore Avenues in Buffalo. The complaint further states that Washington sold a second quantity of cocaine to the CS in February of 2013 at William Street and Michigan Avenue in Buffalo.
The defendant made an initial appearance today before U.S. Magistrate Judge Hugh B. Scott. He is being detained pending a detention hearing.
The complaint is the culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division.
Bristol Businessman Sentenced to Serve 24 Months in Prison for Conspiracy to Distribute Synthetic DrugsRead the Press Release
GREENEVILLE, Tenn. – On Nov. 30, 2015, Daniel Guy Bickley, 56, of Bristol, Va., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 24 months in federal prison. Bickley was also ordered to serve three years of supervised release after his prison term and forfeit over $300,000 in assets.
Bickley was indicted in January 2014 and pleaded guilty in September 2014 to conspiracy to distribute controlled substance analogues intended for human consumption and conspiracy to commit money laundering. From approximately September 2010 through June 2012, he trafficked in synthetic drugs to include stimulants (“bath salts”) and cannabimimetic substances (“fake weed” and “incense”). He operated first from locations in southwest Virginia and then through a business called Cloud 9 Emporium in Bristol, Tenn. Bickley subsequently opened additional Cloud 9 locations in Johnson City and Mountain City, Tenn., before the stores were closed as the result of law enforcement action in March 2012. He was also involved in a fourth business, White Cloud Emporium, located in Kingsport, Tenn., and operated by another person. Bickley obtained the synthetic drugs from various sellers, but his primary suppliers were persons in the Largo/Holiday, Fla., area. During the less than two year period, he sold several million dollars’ worth of synthetic drugs and used the proceeds from the drug sales to purchase real and personal property in the names of other persons.
During the period in which Bickley was selling synthetic drugs, the Tri-Cities area experienced a public health crisis from the abuse of such drugs. Emergency rooms experience a surge of users of synthetic drugs, who exhibited extreme paranoia and psychoses; agitated and violent behavior; and elevated heart rates, blood pressure, and body temperatures. While the trafficking in illicit drugs such as cocaine, methamphetamine, and heroin creates substantial risks to the public, trafficking in synthetic drugs brought a uniquely dangerous situation to the community. Medical treatment for the users of such drugs is complicated because there are no available antidotes, such as for opioid overdoses, and physicians often do not know what substance is involved. Synthetic drug products are often targeted at teenagers and young adults with colorful packaging with cartoon characters. A study by the Center for Substance Abuse Research identified synthetic marijuana as the third most reported substance used by U.S. high school students after alcohol and marijuana.
Agencies involved in this investigation included the Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation, Sullivan County Sheriff’s Office, Bristol Tennessee and Virginia Police Departments, Kingsport Police Department, Washington County Sheriff’s Office, Johnson City Police Department, and the First and Second Judicial District Drug Task Forces. Assistant U.S. Attorney Neil Smith represented the United States.
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Baltimore Drug Dealer Exiled to 10 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Hosie Hopkins, age 49, of Baltimore, today to 10 years in prison followed by three years of supervised release for possession with intent to distribute narcotics. Judge Quarles also entered an order that Hopkins forfeit a semi-automatic handgun and ammunition which Hopkins was prohibited from possessing as a result of two previous drug convictions.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore City State’s Attorney Marilyn Mosby; and Baltimore Police Commissioner Kevin Davis.
According to his plea agreement, on April 22, 2014, Baltimore Police detectives saw Hopkins leave a dwelling in Baltimore City, go to another location in Baltimore City, remove a plastic bag from under his shirt/dip area, and place the bag under a wooden deck at a vacant house. Thereafter, officers found the plastic bag under the deck, which contained five gelatin capsules of heroin.
Police arrested Hopkins and executed a search warrant at the house Hopkins had left earlier that day. Police seized packaging material for narcotics including ziplock bags and vials; ziplock bags containing heroin cutting substances; and several gel capsules of heroin.
Additionally, the government stated at sentencing that a firearm was seized by police during the execution of the search warrant. That firearm was the subject of the Court’s forfeiture order.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Michael C. Hanlon, who prosecuted the case.
Albuquerque Man Pleads Guilty to Theft of Medical Products and Firearms Charges Arising Out of Armed Robbery of Retail Pharmacy in June 2013Read the Press Release
ALBUQUERQUE – Eddie Gallegos, 39, of Albuquerque, N.M., pleaded guilty this morning in federal court to theft of medical products and firearms charges arising out of the robbery of an Albuquerque-area retail pharmacy in June 2013. Under the terms of the plea agreement, Gallegos will be sentenced to 84 months in prison followed by a term of supervised release to be determined by the court.
Gallegos was arrested in June 2015, on an indictment charging him with violating the Hobbs Act by robbing a business engaged in interstate commerce, using and carrying a firearm during a crime of violence, violating the Safe Doses Act by stealing medical products, and possession of oxycodone with intent to distribute. The charges against Gallegos arise out of the robbery of Phil’s Pills, a retail pharmacy in Albuquerque, on June 21, 2013.
During today’s proceedings, Gallegos pled guilty to brandishing a firearm in furtherance of a crime of violence and to violating the Safe Doses Act by stealing medical products. In entering his guilty plea, Gallegos admitted that on June 21, 2013, he entered the pharmacy called Phil’s Pills located at 5510 Lomas Blvd. in Albuquerque, pointed his firearm at an employee and the store owner, and demanded they fill his backpack with Oxycodone, OxyContin and Fentanyl. After the store owner complied with his demand, Gallegos fled the scene.
This case was investigated by the Albuquerque office of the FBI, the Tactical Diversion Squad of the DEA in Albuquerque and the Albuquerque Police Department. Assistant U.S. Attorneys Joel R. Meyers and Shaheen P. Torgoley are prosecuting the case.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
The Controlled Substance Registrant Protection Act was enacted in 1984, to combat the theft of prescription drugs from individuals and businesses registered with the DEA. It created penalties for entering a pharmacy’s premises for the purpose of stealing controlled substances, and includes enhanced punishment for using a dangerous weapon. The Safe Doses Act was enacted in Oct. 2012, to fight medical theft and protect patients from unknowingly using stolen and mishandled drugs. It provides for enhanced sentences for those who rob pharmacies of controlled substances; individuals who steal medical products; and “fences” who knowingly obtain stolen medical products for resale in the supply chain.
This case is being prosecuted pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative is a collaborative effort between the U.S. Attorney’s Office and the University of New Mexico Health Sciences Center that is partnering with the Bernalillo County Opioid Accountability Initiative with the overriding goal of reducing the number of opioid-related deaths in the District of New Mexico. The HOPE Initiative comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. The law enforcement component of the HOPE Initiative is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.
2 Sex Offenders Convicted of Online Solicitation ChargesRead the Press Release
CORPUS CHRISTI, Texas – Two men, already convicted sex offenders who resided in Corpus Christi, have both been convicted for online solicitation of a minor in separate but similar cases, announced U.S. Attorney Kenneth Magidson.
James Robert Kirkland, 48, pleaded guilty today before Senior U.S. District Hayden Head, while Taylor Alan Mills, 29, entered his guilty plea before Senior U.S. District Judge Janis Graham Jack yesterday.
At the hearings, each judge heard that in September 2015, FBI, Homeland Security Investigations (HSI) and the Corpus Christi Police Department—Internet Crimes Against Children Task Force (CCPD-ICAC) conducted a joint investigation targeting individuals involved in online solicitation of minors. Mills and Kirkland were both communicating with a person they believed was the mother of two minor female children – ages 14 and 11. In reality, they were actually talking to an undercover officer. Mills and Kirkland each made arrangements to meet and engage in sexual activity with the mother’s minor female children.
Both men were apprehended as they arrived at the designated meeting places. At the time of each man’s arrest, they both had had several condoms with them and admitted to authorities that their intentions were to engage in sexual acts with the minor children.
Mills will be sentenced Feb. 9, 2016, before Judge Jack, while Kirkland is set for Feb. 10, 2016, before Judge Head. At their hearings, Mills and Kirkland face a minimum of 10 years and up to life in federal prison. Upon completion of any prison term imposed, they also face a maximum of life on supervised release during which time the court can impose a number of special conditions designed to protect children and prohibit the use of the Internet.
Both men were arrested on the federal charges in September 2015 and have been in custody since that time where they will remain pending his sentencing hearing.
The cases, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, 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."
Monday 30 November 2015
Williamson County Resident Sentenced for Drug OffenseRead the Press Release
On November 24, 2015, Corinthus Bevely, a/k/a "Rent," 45, of Marion, Illinois was sentenced for a federal drug offense, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Bevely, who had previously pled guilty to a one-count indictment charging conspiracy to distribute cocaine and crack cocaine, was sentenced to 151 months in federal prison, to be followed by 3 years of supervised release, and fined $850.00. The offense occurred between March 2014 and December 2014, in Williamson County. Evidence at the plea and sentencing hearings established that Bevely was involved with others in the distribution of cocaine and crack cocaine. On multiple occasions, Bevely sold cocaine and crack cocaine to confidential sources working for law enforcement. Bevely received an enhanced sentence based on his classification as a Career Offender.
The investigation was conducted by the Southern Illinois Enforcement Group. The Williamson County State’s Attorney’s Office assisted in the investigation.
The case was assigned to Assistant United States Attorney Amanda A. Robertson for prosecution.
Wichita Man Sentenced to 7.5 Years for Bank RobberyRead the Press Release
WICHITA, KAN. - A Wichita man was sentenced Monday to 90 months in federal prison for bank robbery, U.S. Attorney Barry Grissom said.
Myron T. Markham, 31, Wichita, Kan., pleaded guilty to one count of bank robbery. In his plea, he admitted that on March 12, 2014, he robbed the Fidelity Bank at 100 E. English in Wichita. After leaving the bank, he threw away his sweatshirt and hat and caught a bus to his brother’s house.
Grissom commended the Wichita Police Department, the FBI and Assistant U.S. Attorney Jason Hart for their work on the case.
Whitehall Man Indicted on Firearms ChargesRead the Press Release
ALBANY, NEW YORK – A federal grand jury has returned an indictment charging Shane Smith, age 18, of Whitehall, New York, with two counts of illegal possession of a machinegun and one count of possession of an unregistered firearm (silencer), announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge of the Albany Division of the Federal Bureau of Investigation.
Smith was arraigned today before United States Magistrate Judge Christian F. Hummel, and ordered detained pending trial. On each count, Smith faces a maximum of 10 years in prison and up to 3 years of supervised release. He also faces a maximum $250,000 fine on each machinegun possession charge, and a maximum $10,000 fine on the silencer possession charge.
Smith was arrested on August 6, 2015 and charged by complaint after he acquired, from an undercover agent, a Colt M16 model A2, a military-grade assault rifle capable of firing as a machinegun; a Military Armament Corporation “MAC 10” machinegun; a silencer; a Beretta model 92FS handgun; and 120 rounds of “green-tip” ammunition with armor-piercing capability.
The charges and allegations announced today are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI Joint Terrorism Task Force in Albany, and is being prosecuted by Assistant United States Attorneys Sean O’Dowd and Solomon B. Shinerock.
Wheeling man sentenced to 12.5 years in prison for heroin traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Tyrell Askerneese, 37, of Wheeling, was sentenced today to 151 months in prison for heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Askerneese sold heroin in May 2014 in Ohio County, West Virginia. He pled guilty in August 2015 to one count of “Aiding and Abetting the Distribution of Heroin.”
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government. The Marshall County Drug and Violent Crime Task Force, the Ohio Valley Drug and Violent Crime Task Force, both HIDTA-funded initiatives, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Marshals Service, and the Wheeling Police Department investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Victoria Man Heads to Prison for Possessing Child PornographyRead the Press Release
VICTORIA, Texas – A 28-year-old man residing in Victoria has been ordered to federal prison following his conviction of possession of child pornography, announced U.S. Attorney Kenneth Magidson. Sean Patrick Mciver entered a guilty plea Aug. 3, 2015.
Today, Senior U.S. District Judge John D. Rainey handed McIver a 72-month-sentence. McIver was further ordered to serve 10 years of supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
At the time of his plea, the court heard that agents with Homeland Security Investigations (HSI), while using peer-to-peer software, were able to successfully download various files containing child pornography from an IP address that was associated with Mciver. In December 2014, agents executed a search warrant at Mciver’s residence, at which time they seized various electronic devices. Forensic analysis on those devices revealed more than 450 images and 24 videos of child pornography. Mciver admitted to using the peer-to-peer software to download the child pornography.
Mciver was arrested on the federal charges in March 2015 and has been in custody since the time where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI investigated with the assistance of the Corpus Christi Police Department – Internet Crimes Against Children Task Force.
This case, prosecuted by Assistant U.S. Attorney Hugo R. Martinez, 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."
UOG Invites U.S. Attorney to Speak at Public Corruption ConferenceRead the Press Release
ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak at the University of Guam (UOG) School of Business and Public Administration’s Conference on November 25, 2015. The School of Business and Public Administration’s purpose for the conference was to “explore the role of government and business leaders in tackling the challenges of corruption, gaining the trust of the community to preserve confidence in our administration of government, and identifying strategies and courses of action to eliminate corruption.” The conference included sessions on improving public policy, recommending policy solutions and strategically planning for the future.
Two more defendants sentenced for roles in Detroit to Huntington heroin conspiracyRead the Press Release
HUNTINGTON, W.Va. – Two men who participated in a heroin conspiracy between 2012 and 2014 were sentenced today in federal court in Huntington, West Virginia, announced United States Attorney Booth Goodwin. Kenneth E. Baxter, 25, of Detroit, was sentenced to seven years and three months in federal prison after previously pleading guilty to distributing heroin. Coty S. Richardson, 24, of South Point, Ohio, was sentenced to five years and ten months in federal prison after previously pleading guilty to attempting to possess with intent to distribute 100 grams or more of heroin.
From November 2012 to December 8, 2014, Baxter led a conspiracy that involved the transportation of heroin from Detroit to Huntington for distribution. Once in Huntington, Baxter provided heroin to others, including Richardson, for distribution from multiple residences in the Huntington area. Baxter was also personally engaged in the drug deals, and sold heroin to confidential informants on four separate occasions between April and December of 2014.
One of the residences secured by the group was at 403 Homestead Place in Huntington. Richardson arranged for the lease of the residence, and the residence was used to prepare and distribute heroin. On December 6, 2014, a postal inspector with the United States Postal Inspection Service intercepted a package addressed to the residence containing approximately 230 grams of heroin. Agents delivered the package that day and executed a search warrant at the residence after the package was accepted. Upon entering the residence, agents observed Richardson throwing the package from a second floor window. When Richardson was arrested, agents seized heroin, paraphernalia used to package and distribute heroin, and firearms from the residence.
Multiple defendants have been convicted of federal drug charges due to this investigation, including Paul A. Roberts, who pleaded guilty to maintaining a residence for the distribution of heroin in March 2015, Dustin S. Barton, who pleaded guilty to distributing heroin in August 2015, and Sean L. Gist, who pleaded guilty to conspiracy to distribute 100 grams or more of heroin in September 2015. This investigation has also resulted in prison sentences for additional defendants for their roles in this conspiracy, including Ramone L. Wells, who was sentenced to four years in federal prison, and Pricilla Lee Dylan, who was sentenced to two years and nine months in federal prison.
The Huntington FBI Drug Task Force, United States Postal Service, West Virginia State Police, and Huntington Police Department conducted the investigation. Assistant United States Attorney Joseph F. Adams handled the prosecution.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Two Sentenced to Lengthy Federal Prison Sentences for Roles in Methamphetamine Distribution ConspiracyRead the Press Release
FORT WORTH, Texas — U.S. District Judge Reed C. O’Connor sentenced two defendants to lengthy federal prison sentences today for their respective roles in a methamphetamine distribution conspiracy that operated in the Dallas – Fort Worth area since 2013, announced U.S. Attorney John Parker of the Northern District of Texas.
Andres Silva, 36, was sentenced to 210 months and Melissa Slade, 40, was sentenced to 240 months in federal prison. Each pleaded guilty in July 2015 to one count of conspiracy to possess with the intent to distribute methamphetamine.
According to documents filed in the case, since 2013, Silva supplied methamphetamine to various distributors. Slade received quantities of methamphetamine on consignment and in turn distributed it to various customers in the North Richland Hills, Haltom City and Fort Worth areas.
The Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Texas Department of Public Safety investigated. Assistant U.S. Attorney Shawn Smith was in charge of the prosecution.
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Two Sentenced for Obstruction of JusticeRead the Press Release
A man and a woman who attempted to obstruct a federal court proceeding by providing a false document were each sentenced on November 25, 2015, to about two years in federal prison.
Asa Adams, age 26, from Waterloo, Iowa, received the prison term after a June 29, 2015, guilty plea to one count of obstruction of justice.
Nicole Wells, age 36, also from Waterloo, Iowa, received the prison term after a July 6, 2015, guilty plea to one count of obstruction of justice.
In plea agreements, Adams and Wells admitted that they worked together to create a false letter to be presented in federal court in a failed attempt to help Adams evade a revocation of his supervised release. Adams was convicted in 2011 of being a felon in possession of a firearm. After serving a sixteen-month sentence in federal prison, Adams was placed on supervised release on October 2, 2014. One of the conditions imposed on supervised release was that Adams not use controlled substances. On December 24, 2014, Adams submitted a urine sample that tested positive for marijuana. His drug use was tested by random urinalysis. In an attempt to evade having his supervised release revoked and being sent back to prison, Adams recruited his coworker and friend, Nicole Wells, to fabricate a false letter. The letter, purportedly written by a supervisor at the restaurant where Adams and Wells worked, falsely claimed another employee had brought in marijuana-laced brownies to work. The letter was not written by the supervisor and there were no marijuana-laced brownies.
Adams provided the false and fictitious letter to his defense attorney, who unwittingly filed it with the federal court as an exhibit. At a hearing on a petition to revoke Adams’s supervised release, however, the letter was shown to be false when the supervisor and employee who allegedly brought the brownies to work testified to the contrary.
The court found Adams had tested positive for marijuana because he had used marijuana, and sentenced Adams to a year in federal prison for violating the terms of his supervised release.
Adams and Wells were sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Adams was sentenced to 27 months’ imprisonment (to run consecutively to the one-year sentence previously imposed) and Wells was sentenced to 21 months’ imprisonment. A special assessment of $100 was imposed on each of them. Each must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Adams is being held in the United States Marshal’s custody until he can be transported to a federal prison.
Wells was released on the bond previously set and is to surrender to the Bureau of Prisons on a date yet to be set.
The case was prosecuted by Assistant United States Attorney C.J. Williams and investigated by the Federal Bureau of Investigation.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-42-LRR.
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Two L.A. Deputy Sheriffs Sentenced to Federal Prison in Civil Rights Case Stemming from Beating of Visitor at Downtown Los Angeles JailRead the Press Release
LOS ANGELES – Two former Los Angeles Sheriff’s deputies who violated the civil rights of a visitor to the Men’s Central Jail by beating him while he was restrained with handcuffs were sentenced today, each being ordered to serve at least six years in federal prison.
Fernando Luviano, 37, was sentenced to 84 months in prison, and Sussie Ayala, 30, was sentenced to 72 months in prison.
The two defendants, who were each found guilty by a federal jury in June of violating the civil rights of the beating victim and falsifying records about the incident, were sentenced today by United States District Judge George H. King.
Following the imposition of the sentences, Judge King remanded both Luviano and Ayala into custody.
Another deputy sheriff who also was found guilty at trial – former Sergeant Eric Gonzalez – was sentenced earlier this month to eight years in federal prison and also was immediately taken into custody.
The jury that convicted Luviano, Ayala and Gonzalez found that they violated the civil rights of the victim in 2011 when they beat the man and caused serious bodily injury. Ayala and Gonzalez were additionally convicted of conspiring to violate the victim’s civil rights by using unreasonable force.
“As Judge King said today, the lengthy prison sentences imposed in this case send a clear message that no law enforcement officer is above the law,” said United States Attorney Eileen M. Decker. “These two former deputy sheriffs failed to uphold their oaths and abused their positions of power when they beat and pepper sprayed a handcuffed victim. Such conduct undermines the public’s trust in law enforcement and all the good work that peace officers do every day to protect our communities.”
Two other defendants involved in the incident – Pantamitr Zunggeemoge and Noel Womack – previously pleaded guilty and are scheduled to be sentenced by Judge King on January 25.
Last month, a federal grand jury indicted a sixth deputy in relation to the incident at the Visiting Center. Former Deputy Byron Dredd has pleaded not guilty.
The evidence presented at the trial of the three deputies showed that the victim and his girlfriend went to the jail to visit the woman’s incarcerated brother on February 26, 2011. Both visitors were in the possession of cell phones, which is prohibited under jail rules. When the phones were discovered, the victim was handcuffed and brought into an employee break room, where he was beaten and sprayed with pepper spray. The victim was later transferred to the hospital by paramedics.
In court documents that argued Luviano had a reputation of being “heavy-handed” with the violent prisoners he guarded at the jail, prosecutors said that Luviano “initiated the excessive force and used the most force against” the victim. Prosecutors wrote in a brief that his “violent crime and cover-up are serious offenses that harm the specific victim and tarnish the public trust in law enforcement.” Judge King agreed, finding there was “evidence of prior violent behavior toward inmates” by Luviano at Men’s Central Jail.
In papers related to Ayala’s sentencing, prosecutors wrote that “[s]he, like the other defendants in this case, abused her power by participating in a beating of a handcuffed man, lying to cover up her and her partners’ misdeeds, jailing the victim of their abuse, and putting that victim at risk of prosecution and a significant sentence for crimes he did not commit.”
In court today, Judge King said that Ayala’s actions “demonstrates that this really was a practice” of using excessive force against people inside the jail.
This case is the result of an investigation by the FBI, and is one in a series of cases resulting from investigation into corruption and civil rights abuses at county jails in downtown Los Angeles. Fifteen current or former members of the Los Angeles Sheriff’s Department have now been convicted of federal charges.
Tucumcari Man Sentenced for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Alexander Page, 28, of Tucumcari, N.M., was sentenced today in federal court in Albuquerque, N.M., to 27 months in prison followed by three years of supervised release for his methamphetamine trafficking conviction.
Page and his co-defendants, Michael Montoya, 37, Brian Acuna, 24, and Dianna Hernandez-Trujillo, 24, all of Clovis, N.M., were arrested in Nov. 2013, on a six-count indictment charging them with trafficking methamphetamine in three New Mexico counties. The indictment charged all four defendants with conspiracy to distribute methamphetamine in Curry County, N.M., between Oct. 2007 and Nov. 2013. It also charged Montoya with possession of methamphetamine with intent to distribute on Oct. 11, 2011 in Curry County; Montoya and Acuna, and Hernandez-Trujillo with possession of methamphetamine with intent to distribute on March 27, 2012, in Cibola County; and Montoya and Page with possession of methamphetamine with intent to distribute on Nov. 7, 2012, in Socorro County. Montoya was also charged with money laundering for purchasing a residence with money derived from a drug trafficking activity on Sept. 22, 2010, and Acuna was charged with using and carrying a firearm in relation to a drug trafficking crime on March 27, 2012, in Cibola County.
On July 7, 2015, Page pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute. In his plea agreement, Page admitted that he was stopped for driving 85 miles per hour in a 35 mile per hour zone by a deputy of the Socorro County Sheriff’s Office on Nov. 7, 2012, while traveling near Socorro, N.M. During a search of the vehicle driven by Page, the deputy found approximately 1259 grams of methamphetamine in a hidden compartment in the vehicle. At the time, Page was transporting the methamphetamine to Clovis where the drugs were to be sold and where Page was to be paid for transporting the drugs.
On Oct. 1, 2015, Montoya pled guilty to conspiracy to distribute methamphetamine and to money laundering. Montoya admitted arranging for drivers to travel to California in vehicles he provided so that they could transport methamphetamine from his sources of supply. Montoya then distributed the methamphetamine in New Mexico. He also admitted being the owner of the 1.7 kilograms of methamphetamine seized from Acuna on March 27, 2012, and the 1.2 kilograms of methamphetamine seized from Page on Nov. 7, 2012. In entering his guilty plea, Montoya also admitted that on Sept. 22, 2010, he purchased a residence in Clovis with proceeds from his ongoing narcotics activities. Montoya is currently scheduled to be sentenced on Jan. 6, 2016.
Acuna pled guilty on June 26, 2014, to participation in a methamphetamine trafficking conspiracy, possession of methamphetamine with intent to distribute, and using and carrying a firearm in relation to and in furtherance of a drug trafficking crime. In entering his guilty plea, Acuna admitted that on March 27, 2012, he and a co-defendant were stopped by police while transporting methamphetamine from California to Clovis. At the time of the stop, Acuna and the co-defendant knew that a large quantity of methamphetamine was concealed in a secret compartment in the vehicle and that additional methamphetamine was in a backpack in the vehicle. Acuna also admitted that he had a revolver and ammunition in the vehicle for protection. At sentencing, Acuna faces a mandatory minimum of 10 years to a maximum of life imprisonment on the methamphetamine trafficking charges. On the gun charge, Acuna faces a mandatory minimum of five years in prison which must be served consecutive to any sentence imposed on the drug charges. Acuna’s sentencing hearing is currently scheduled for Jan. 12, 2016.
Hernandez-Trujillo has entered a not guilty plea to the indictment and is participating in a judicial pretrial diversion program. Charges in indictments are merely accusation and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Albuquerque office of the FBI and the Socorro County Sheriff’s Office. Assistant U.S. Attorneys Sean J. Sullivan and Jennifer M. Rozzoni are prosecuting this case.
Ten Individuals Convicted and Sentenced in Health Care Fraud SchemeRead the Press Release
NORFOLK, Va. – Ten former employees of Progressive Counseling Services, LLC, a Virginia Beach based counseling business, were convicted and sentenced for their roles in a scheme to defraud the Virginia Medicaid program.
The 10 convicted defendants and their respective sentencing information are listed below:
Name, Age, Hometown
Sentencing Information
David Weaver, 71, of Chesapeake
Sentenced on June 5 to 72 months in prison
Doretha Selby-Diggs, 40, of Portsmouth
Sentenced on Feb. 18 to 60 months in prison
Lisa Barrett, 49, of Norfolk
Sentenced on March 4 to 96 months in prison
Barbara Bing Banks, 34, of Hampton
Sentenced on Oct. 30 to 41 months in prison
Corey Etheridge, 42, of Chesapeake
Sentenced on July 1 to 72 months in prison
Jacqueline Harris, 34, of Portsmouth
Sentenced on March 4 to 60 months in prison
Verline Harris, 48, of Virginia Beach
Sentenced on Oct. 27 to 108 months in prison
Arlette Johnson, 58, of Virginia Beach
Sentenced on Nov. 6 to 96 months in prison
Alfreda Stallion, 52, of Virginia Beach
Sentenced on Nov. 30 to 90 months in prison
Johnny Stallion, 34, of Las Vegas
Sentenced on Nov. 16 to 60 months in prison
According to Court records, the defendants conspired to obtain reimbursement payments from the Virginia Medicaid Assistance Program by submitting false claims for mental health support services in 2011 and 2012. Mental health support services are provided to assist individuals with severe psychiatric limitations to live in the community in the least restrictive environment possible. Nine of the defendants operated as Qualified Mental Health Professionals and claimed to provide mental health support services to Medicaid-eligible clients in the Tidewater area. David Weaver operated as a Licensed Mental Health Professional and was responsible for assessing Progressive patients to ensure they required mental health services. According to Court records, Weaver and Progressive’s owner created fraudulent assessments of Progressive clients to obtain authorization to bill Medicaid for mental health support services. Once Progressive obtained this authorization, false Medicaid reimbursement claims were submitted on behalf of mental health support services purportedly provided by Selby-Diggs, Barrett, Bing Banks, Etheridge, Jacqueline Harris, Verline Harris, Johnson, Alfreda Stallion, and Johnny Stallion. These reimbursement claims were false because most of the counselors were unqualified to serve as mental health professionals, the counseling sessions never occurred, and progress notes used to document the sessions were fabricated.
Weaver, Selby-Diggs, Barrett, Etheridge, and Jacqueline Harris all pleaded guilty to various charges associated with the scheme. Bing Banks, Verline Harris, Arlette Johnson, Alfreda Stallion, and Johnny Stallion were convicted of various charges after a month long jury trial.
Dana J. Boente, United States Attorney for the Eastern District of Virginia; Mark R. Herring, Virginia Attorney General; John S. Adams, Special Agent in Charge of the Federal Bureau of Investigations’ Norfolk Field Office; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C. Field Office; Thomas Jankowski, Special Agent in Charge, Internal Revenue Service-Criminal Investigations, Washington, D.C. Field Office; and Steven Anderson, Special Agent in Charge for the Washington Regional Office of the U.S. Department of Labor’s Office of Inspector General-Office of Labor Racketeering and Fraud Investigations, made the announcement after sentencing by United States Chief District Judge Rebecca Beach Smith. Assistant U.S. Attorneys Joseph L. Kosky and V. Kathleen Dougherty prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14cr137.
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Store Owner Sentenced to 57 Months for Federal Food Stamp FraudRead the Press Release
KANSAS CITY, KAN. – A Kansas City, Kan., store owner was sentenced Monday to 57 months in federal prison for food stamp fraud, U.S. Attorney Barry Grissom said. He also was ordered to pay approximately $227,000 in restitution.
Sajjad S. Chaudhry, 47, Kansas City, Kan., pleaded guilty to one count of conspiracy to defraud the U.S. Department of Agriculture, one count of conspiracy to commit wire fraud and two counts of aggravated identity theft. In his plea, he admitted the crimes occurred while he owned the KC Gas Mart at 2850 State Avenue in Kansas City, Kan. The store participated in a federal food stamp program called the Supplemental Nutrition Assistance Program (SNAP).
The store came under investigation in the summer of 2013 because it reported engaging in thousands of dollars of SNAP benefits transaction, many of which were large purchases. Undercover investigators working with the USDA exchanged SNAP benefits for cash at KC Gas Mart, receiving approximately 50 percent of the value of the SNAP benefits. The rules of the program prohibit approved vendors from trading cash for food stamps, accepting food stamps for ineligible items and accepting food stamps from people who are not authorized to use them.
In addition, Chaudhry admitted he used another person’s electronic benefits card to purchase food items at a Sam’s Club store in Kansas City, Kan.
Grissom commended the USDA-OIG and Special Assistant U.S. Attorney Erin Tomasic for their work on the case.
Statement of Manhattan U.S. Attorney Preet Bharara on the Conviction of Former New York Assembly Speaker Sheldon SilverRead the Press Release
“Today, Sheldon Silver got justice, and at long last, so did the people of New York.”
Skilled Nursing Facility Company Agrees to Pay More Than $3 Million to Resolve Kickback AllegationsRead the Press Release
HOUSTON – Regent Management Services L.P. has agreed to pay approximately $3.199 million to settle allegations that it received kickbacks from various ambulance companies in exchange for rights to Regent’s more lucrative Medicare and Medicaid transport referrals, announced U.S. Attorney Kenneth Magidson and Gregory Demske, Chief Counsel to the Inspector General of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) and Special Agent in Charge CJ Porter, of HHS-OIG, Office of Investigations, Dallas Regional Office.
Regent Management Services L.P. is headquartered in Galveston and manages 12 separately owned and operated nursing facilities including 11 in seven Texas cities.
The settlement is believed to be the first in the nation to hold accountable medical institutions (hospitals and skilled nursing facilities) rather than ambulance companies for these kind of ambulance “swapping” arrangements.
“This resolution is part of the government’s emphasis on combating health care fraud throughout the district and is an example of our determination to hold those accountable for their actions,” said Magidson. “Any type of improper behavior or arrangement in the industry is a serious allegation that we will not take lightly and we will pursue in order to protect the integrity of the health care system.”
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare and Medicaid. The settlement announced today resolves allegations that patients at Regent facilities received free or heavily discounted ambulance transports from various ambulance companies in exchange for Regent’s referral of other lucrative Medicare and Medicaid business to those same companies. If not for this kickback arrangement, Regent would have been financially responsible for the patient transports at significantly higher rates.
“This settlement sends a message to the health care industry that both sides of a swapping arrangement can be held responsible for their improper actions, not just the entity that actually bills Medicare or Medicaid for the services,” said Demske. “Any company or individual considering entering such schemes should understand that their actions may have serious legal and financial consequences.”
Medicaid is funded jointly by the states and the federal government. The state of Texas paid for some of the Medicaid claims at issue and will receive approximately $533,000 of the settlement amount.
In connection with the settlement, Regent has also entered into a corporate integrity agreement (CIA) with HHS-OIG. The corporate integrity agreement obligates Regent to undertake substantial internal compliance reforms for the next five years.
“Swapping arrangements continue to be an area of concern throughout the ambulance industry,” said Porter. “Such improper arrangements among providers have the potential to negatively affect patient care and need to be aggressively pursued in order to protect the integrity of the federal health care programs and their beneficiaries.”
Today’s announcement also marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.
The settlement was the result of a coordinated effort among the U.S. Attorney’s Office, HHS-OIG, HHS-OIG (Office of Counsel to the Inspector General) and the Texas Attorney General’s Office. Assistant U.S. Attorney Kenneth Shaitelman handled the case on behalf of the U.S. Attorney’s Office for the Southern District of Texas.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.