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Monday 30 November 2015
Second Arrest Made in Worcester Armory Theft CaseRead the Press Release
BOSTON – A Dorchester woman was arrested late Friday afternoon for being in possession of an M-4 assault rifle that was stolen from a Worcester armory on Nov. 14, 2015, and for making false statements to federal agents.
Ashley Bigsbee, 26, has been charged with one count of unlawful possession of a machine gun and one count of false statements. Bigsbee was arrested on an outstanding state warrant on Nov. 20, 2015. According to the affidavit, at the time of her arrest on the state warrant, agents recovered her cell phone. A subsequent search of the phone pursuant to a search warrant revealed numerous photographs, including a photograph of Bigsbee with a distinctive hand tattoo, a photograph of what appears to be a stolen Sig Sauer handgun and an M-4 assault rifle. Prior to her arrest on Nov. 20, Bigsbee voluntarily spoke with FBI agents and denied knowing anything about a robbery of the armory and the guns Morales was allegedly trying to sell. She denied any knowledge of the stolen weapons.
According to the affidavit, further investigation revealed that the photographs were taken at 27 Page Street in Dorchester. A search warrant was executed at this location on Nov. 20 where agents observed distinctive items seen in the photographs. However, no weapons were recovered from this location.
In a related development, the final stolen M-4 was recovered by law enforcement agents in Dorchester on the afternoon of Nov. 27.
Bigsbee had an initial appearance today in U.S. District Court in Worcester before Magistrate Judge David Hennessey. She will remain in U.S. Marshal custody until her detention hearing scheduled for Dec. 3.
The maximum sentence under the firearms statute is 10 years in prison to be followed by three years of supervised release and a $250,000 fine. The false statement charge carries a maximum sentence of five years in prison to be followed by three years of supervised release and a $250,000 fine. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
On Nov. 19, 2015, James Morales was arrested and charged in connection with the theft of 16 weapons from a U.S. Army Reserve Center in Worcester, Mass. He was charged with one count of unlawful possession of a machine gun, one count of unlawful possession of stolen firearms and one count of theft of government property. Morales remains in U.S. Marshal custody.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Daniel Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard McKeon, Superintendent of the Massachusetts State Police; Chief Gary Gemme of the Worcester Police Department; and Boston Police Commissioner William Evans made the announcement today.
The case is being prosecuted by Assistant U.S. Attorneys Mark Grady and Cory Flashner of Ortiz’s Worcester Branch Office.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Report Finds Meth Epidemic in Full Force in San Diego CountyRead the Press Release
Contact: Kelly Thornton, 619-546-9726
NEWS RELEASE SUMMARY – November 30, 2015
SAN DIEGO – Methamphetamine continues to be a wrecking ball in San Diego County, as Mexican Super Labs flood the market with the purest and cheapest product ever seen here, creating a perfect storm of health and public-safety consequences.
The latest Methamphetamine Strike Force Report Card, which tracks nine indicators of the meth problem in San Diego County annually, found that the meth epidemic is in full force here, as numbers of meth-related deaths, emergency room visits, arrests and border seizures remain at alarming levels.
According to the report, emergency-room visits throughout San Diego County have increased by thousands of patients – up 141 percent since 2010. Seizures of methamphetamine at the San Diego-Tijuana border have marked a dramatic 129 percent increase from 2010 to 2014. Forty-five percent of adults arrested in 2014 had meth in their systems, compared to 27 percent in 2010.
Adding to law enforcement angst is voter-approved Prop. 47, which last year made meth use and possession a misdemeanor. These offenses used to be felonies, and the courts could require drug treatment for many offenders. That has completely changed. Today, someone can get arrested, released and re-arrested many times for what are considered non-violent meth offenses.
Twenty-five years ago meth was cooked up in the U.S., in small-scale labs in motorhomes, trailers or apartments, and it was maybe 50 percent pure. Today’s meth is being manufactured in huge quantities in Mexican Super Labs supplied by Asian chemical distributors and staffed by university educated chemists and engineers.
The result: U.S. Markets are being flooded with the highest quality and lowest priced meth to date. What was once 50 percent pure is now 95 percent pure. What was $1,800 a kilogram in 2010 is now as low as $400.
“The trend lines are deeply troubling and show that we must continue to wage war against a drug that is tearing families apart,” said county Supervisor Dianne Jacob. “Make no mistake: meth is death, meth breaks lives, and we need to continue to do all we can to stem the tide of this terrible drug into our communities.”
“Meth is a quadruple threat – it’s extremely pure, inexpensive, highly addictive and widely available,” said U.S. Attorney Laura Duffy. “We are tackling this monster problem by intensifying efforts to dismantle the cartels, and by offering prevention and education programs targeting young people and medical professionals.”
“This is a perfect storm for meth addicts and those just encountering the drug for the first time,” said Sheriff Bill Gore. “We can't incarcerate our way out of this problem – it will require education at all levels as to the severe consequences of this drug. This is the essence of public safety – to educate and inform.”
Dr. Danielle Douglass, an emergency physician at Sharp Grossmont Hospital, said that long term use of meth is related to many cardiovascular problems, including cardiomyopathy. “Meth use results in both chronic and acute heart disease,” Douglass said. “A good percentage of these meth-related deaths are people who die of natural disease, where their meth use contributed to an early death. Half of all meth-detected deaths are persons aged 40 to 60 years old.”
Some other trends:
--Meth use and crime are linked. Last year 45 percent of adults arrested and taken to county jails tested positive for methamphetamine. That number comes from both jail surveys and confirmed drug tests. This is a 66 percent increase over five years ago.
-Between fiscal years 2009 and 2014, Customs and Border Protection reported a 300 percent increase in the amount of meth seized at all of California’s ports of entry.
- While this year’s Methamphetamine Strike Force Report Card found meth-related deaths showed a slight 2-percent decrease from 2013 to 2014 –from 267 to 262 – the 2014 death toll is still two-thirds higher than five years ago.
-Meth, in its ever increasing role as “grim-reaper” doesn’t discriminate. In 2014, the youngest methamphetamine-related death reported by San Diego’s Medical Examiner was a 17-year-old female who committed suicide, and the oldest was a 70-year-old woman who died of heart disease with methamphetamine toxicity. This woman was not an anomaly. We have a “Silver Tsunami” of aging meth users whose bodies are less and less able to handle this powerful drug.
-Innovative traffickers will try anything and everything to smuggle their drugs across the border by land, sea or air – in Super Tunnels, on jet skis, superlight aircraft and even drones. They are using youth as mules to walk across the borders.
-Seven to 10 percent of methamphetamine now being smuggled into the U.S. from Mexico is in liquid form, meaning finished methamphetamine that has been dissolved or suspended in a liquid solvent. Once in the United States – the meth is taken to labs at which the liquid meth is converted into crystal meth. This process requires chemicals that are highly flammable and explosive - which presents a whole host of other issues for the communities, generally in the Central Valley, in which such labs are located.
Nick Macchione, director of the county’s Health and Human Services Agency and a chair of the Meth Strike Force, emphasized that treatment works, and is available. The County contracts with residential and outpatient programs in every region in San Diego County. A 2002 California Administrative Office study estimated that every dollar spent on drug treatment avoids seven dollars in criminal justice expenses.
Residents who need treatment referrals or who want to report anonymously suspicious meth-related crime are encouraged to call the Meth Hotline at 1-877-NO-2-METH or to give anonymous reports to www.no2meth.org
Prior Sex Offender from Ohio Pleads Guilty to Federal Child Pornography Charges in New MexicoRead the Press Release
ALBUQUERQUE – Michael Glover, 36, of Canton, Ohio, pleaded guilty this morning to federal child pornography charges in federal court in Albuquerque, N.M. Under the terms of the plea agreement, Glover will be sentenced to a prison term within the range of ten to 15 years followed by a lifetime of supervised release.
Glover was arrested in April 2015, in Ohio on an indictment alleging child pornography charges that was filed in Albuquerque. Thereafter, Glover was transported to the U.S. District Court for the District of New Mexico in Albuquerque to face the charges against him. He has been in federal custody since his arrest.
The six-count indictment charged Glover, a former Albuquerque resident, with three counts of distribution of visual depictions of minors engaged in sexually explicit conduct and three counts of possession of visual depictions of minors engaged in sexually explicit conduct. The three distribution counts alleged that Glover distributed child pornography in Bernalillo County, N.M., on May 27, 2013, Aug. 11, 2013, and Aug. 12, 2013. The three possession counts alleged that Glover possessed child pornography in Bernalillo County during three periods in 2013: from May 24, 2013 to Aug. 19, 2013; from July 18, 2013 to Aug. 19, 2013; and from July 21, 2013 to Aug. 19, 2013. The indictment included forfeiture provisions that seek forfeiture of Glover’s laptop computer and computer media.
During today’s proceedings, Glover entered guilty pleas to Counts 1 and 4 of the indictment charging him with distribution and possession of child pornography. In his plea agreement, Glover admitted that he distributed child pornography in Bernalillo County on May, 27, 2014, Aug. 11, 2014, and Aug. 12, 2014, by using a peer to peer file sharing program. He also admitted possessing child pornography between May 23, 2013 and Aug. 19, 2013, on three devices (a computer, a Kindle and a flash drive).
Glover remains in federal custody pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of Homeland Security Investigations, the New Mexico Office of the Attorney General, the Bernalillo County Sheriff’s Office and the New Mexico Internet Crimes Against Children (ICAC) Task Force. Assistant U.S. Attorney Shammara H. Henderson is prosecuting the case.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 80 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the New Mexico Office of the Attorney General. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Glover, who has a prior sexual assault conviction and a conviction for violating the Sexual Offender Registration and Notification Act, is also being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, under this initiative.
Pleasants County, WV man sentenced for role in manufacturing methamphetamineRead the Press Release
WHEELING, WEST VIRGINIA – Travis Michael Butler, 21, of St. Marys, West Virginia, was sentenced to 30 months in prison for his role in a methamphetamine manufacturing operation based in Pleasants County, West Virginia, United States Attorney William J. Ihlenfeld, II, announced.Butler was among six individuals charged in a 19-count federal indictment in June 2015. He was discovered in Wetzel County, West Virginia in possession of pseudoephedrine, an ingredient commonly used to manufacture methamphetamine.
Butler pled guilty in August 2015 to a criminal Information charging him with one count of “Possession of Material Used in the Manufacture of Methamphetamine.”
Assistant U.S. Attorney Shawn Adkins prosecuted the case on behalf of the government. The West Virginia State Police and the Pleasants Count Sheriff’s Department investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Piedmont Pathology Associates, Inc., and Piedmont Pathology, P.C. Settle False Claims Act Cases for $500,000Read the Press Release
Contact Person: Beth Warren (803) 929-3000
COLUMBIA, South Carolina ---- United States Attorney for the District of South Carolina Bill Nettles announced today that Piedmont Pathology Associates, Inc. and Piedmont Pathology, P.C., a diagnostic anatomic pathology group located in Hickory, North Carolina, has agreed to pay the United States $500,000 to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians.
Mr. Nettles said, “Combatting fraud against the government is a priority in this office; and importantly, holding accountable health care providers who have improper financial relationships with referral sources has been a focus. Financial relationships between physicians for referrals can alter a physicians’ judgment as to what’s necessary and appropriate for a patient. Our goal in this settlement was not only to recover money for improper healthcare claims, but to deter similar conduct and, in turn, promote health care affordability.”
The investigation of Piedmont Pathology was prompted by a whistleblower who filed a lawsuit under the qui tam provision of the False Claims Act. The whistleblower was a former contract salesperson for the practice who witnessed a program where the practice would provide Electronic Medical Record (EMR) software licenses to various physicians’ practices in exchange for referrals. The government found that Piedmont Pathology provided EMR software licenses at little to no cost to nine physicians’ practices close in time to when those practices entered contracts to refer specimens to their pathology lab. This conduct violated the Anti-Kickback Statute. Claims submitted in violation of the Anti-Kickback Statute are considered tainted and are per se violations of the False Claims Act. The False Claim Act allows the government to recover three times the actual damages caused by the improper claims and up to $11,000 in penalties per false claim.
The False Claims Act allows individuals to file lawsuits on behalf of the government with allegations that fraud has been committed against the federal government. Whistleblowers, referred to as “relators” in the False Claims Act, are entitled to share in any recovery received by the government. In this case, the relator will receive 15% of the funds of the settlement, or $75,000. She is also entitled to her costs and attorney fees.
This case was handled by Assistant United States Attorney Beth Warren. The case was investigated by the Office of the Inspector General for the Department of Health and Human Services.
“Paying for referrals, as the government alleged, is little more than a thinly veiled bribe,” said Derrick Jackson, Special Agent in Charge with the Office of Inspector General, U.S. Department of Health and Human Services. “Patients and taxpayers deserve better, and those who would defraud the system should expect to pay for their schemes.”
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected].
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Petoskey Attorney, Michael Aho Kennedy, Pleads Guilty to Mail Fraud Scheme and Filing False Tax ReturnsRead the Press Release
Michael Aho Kennedy Embezzled Over One Million Dollars from Two Elderly Clients
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Michael Aho Kennedy, age 67, formerly a licensed attorney in Petoskey, Michigan, pled guilty to one count of mail fraud and one count of filing a false tax return in conjunction with an indictment filed on October 8, 2015. Kennedy’s sentencing hearing in the United States District Court for the Western District of Michigan will be scheduled in the near future before United States District Judge Janet T. Neff. At that time, Kennedy faces a maximum term of imprisonment of 20 years on the mail fraud conviction and up to 3 years’ imprisonment for filing a false tax return. The plea agreement additionally requires Kennedy to pay restitution to the victims of his mail fraud scheme and to the Internal Revenue Service in conjunction with his false tax filings.
According to the plea agreement, Kennedy drafted a trust for his long-time client and family friend and eventually became her trustee. In his role as trustee, Kennedy defrauded her of over $1,000,000.00 by regularly withdrawing more money from her investment accounts than necessary to pay her expenses, transferring this excess money to his law office’s business account, and then using the money for his own personal and business expenses. Kennedy concealed his fraud from this client by sending her false monthly statements of account that showed that the balance of her account was stable and earning interest, when in fact the balance of her account was rapidly diminishing due to his fraud. When Kennedy exhausted all of her funds, he defrauded an additional elderly client of $114,000.00 that he then used for his own benefit and to pay the continuing expenses of the initial client that he defrauded. Kennedy pled guilty to filing a false federal tax return because he originally filed federal tax returns that included all of the income that he embezzled from his clients, but when the Internal Revenue Service inquired as to why he had not paid his tax liabilities on that income, Kennedy falsely amended his returns claiming that the proceeds of his fraud scheme were loans and working capital that were not subject to income tax.
“Vigorous prosecution of fraud cases, especially those involving professionals who prey upon clients to whom they owe the highest fiduciary duties, remains a priority of this Office,” said United States Attorney Patrick A. Miles, Jr. “Unfortunately, Kennedy used his position of trust to line his own pockets, rather than to protect his clients.”
“Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money, as well as skirt their tax obligations,” said Jarod J. Koopman, IRS Criminal Investigation, Special Agent in Charge. “Mr. Kennedy’s actions not only caused financial harm to his elderly clients, but also the honest taxpayer when he committed significant tax fraud violations as detailed in the indictment. Tax crimes have erroneously been referred to as victimless, but that position could not be more wrong since we all end up paying when someone attempts to dodge our tax system.”
The investigation of this case was handled by the Traverse City office of the Internal Revenue Service-Criminal Investigation Division. Assistant United States Attorney Ronald M. Stella is handling the prosecution.
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Ohio man pleads guilty to Federal gun chargeRead the Press Release
HUNTINGTON, W.Va. – A South Point, Ohio, man, who shot himself in the foot with a firearm while driving on Interstate 64, pleaded guilty today to a federal gun charge, announced United States Attorney Booth Goodwin. Bradney Allen Adkins, 31, pleaded guilty today in federal court in Huntington, West Virginia, to unlawful possession of a firearm by a convicted felon.
On February 5, 2015, Adkins was traveling westbound on Interstate 64 in Barboursville while in possession of two handguns, a Glock 21SF .45 caliber pistol and a Walther PPK/S .380 caliber pistol. While driving, Adkins accidently shot himself in the foot with one of the handguns. Adkins went to Cabell Huntington Hospital to seek treatment for the gunshot wound. Troopers with the West Virginia State Police responded to the hospital, arrested Adkins, and recovered both handguns from the hospital’s dumpster.
Adkins was prohibited from possessing any firearm under federal law because of six previous felony convictions. In 2011, he was convicted in the Court of Common Pleas in Lawrence County, Ohio, of operating a vehicle under the influence, two counts of receiving stolen property, complicity to burglary, and grand theft of an automobile. Additionally, in 2012, Adkins was convicted in the Circuit Court of Delaware County, Indiana, of theft.
Adkins faces up to 10 years in federal prison, and is scheduled to be sentenced in federal court in Huntington on February 29, 2016.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the West Virginia State Police conducted the investigation. Assistant United States Attorney Joseph F. Adams is in charge of the prosecution.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.
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Oil Company Charged with Multiple Felonies Related to Violations of Offshore Oil Production Safety and Environmental RegulationsRead the Press Release
The United States Attorney’s Office for the Eastern District of Louisiana announced that ENERGY RESOURCE TECHNOLOGY GOM, LLC (ERT), was charged with two felony counts of violating the Outer Continental Shelf Lands Act and two felony counts of violating the Clean Water Act related to conduct on its offshore oil production facilities in the Gulf of Mexico.
According to the Bill of Information, on or about November 26, 2012, ERT knowingly and willfully failed to comply with the regulations for hot work on its offshore production platform known as Ship Shoal 225. Specifically, it is alleged that ERT violated Title 30, Code of Federal Regulation, Section 250.113(c)(4), which mandates that welding and associated activities, also known as hot work, on offshore facilities may not take place within 10 feet of a well bay unless production in that area is shut-in.
On or about November 27, 2012, on Ship Shoal 225, ERT is further alleged to have knowingly and willfully failed to comply with the regulations for blowout preventer testing. A blowout preventer system is designed to ensure well control and prevent potential release of oil and gas and possible loss of well control.
ERT is also alleged to have violated the Clean Water Act by tampering with the method of collecting the monthly overboard produced water discharge samples to be tested for oil and grease content pursuant to its NPDES permit. As required by its NPDES Permit, ERT is prohibited from introducing into the Gulf of Mexico produced water in which the oil and grease content exceed a monthly average of 29 mg/l. Produced water is that which is brought up from the hydrocarbon-bearing strata during the extraction of oil and gas, and can include formation water, injection water, oil and any chemicals added downhole or during the oil/water separation process. ERT collects and submits monthly samples of its produced water to a laboratory for testing to determine whether the quantity of oil and grease contained in the produced water exceeds a monthly average of 29 mg/l, as required by its NPDES Permit.
The Bill of Information filed today alleges that beginning at a time unknown, but continuing to on or about March 2014, ERT tampered with the monitoring methods for the collection of the overboard water samples on nine of its offshore facilities in violation of Title 33, United States Code, Section 1319(c)(4). Most recently, on or about June 9, 2015, ERT is alleged to have knowingly discharged and caused a discharge of a pollutant from a point source into the Gulf of Mexico without a permit in violation of Title 33, United States Code, Section 1319(c)(2)(A).
If convicted, ERT faces a maximum term of probation of 5 years per count and/or a maximum fine of $500,000 per count or twice the gross gain or twice the gross loss to any person pursuant to statute.
The case was investigated by the Department of Interior-Office of Inspector General (Energy Investigations Unit) with assistance from the Investigations and Review Unit, Bureau of Safety and Environmental Enforcement and the Environmental Protection Agency-Criminal Investigation Division. The case was prosecuted by Assistant United States Attorney Emily K. Greenfield of the United States Attorney’s Office’s National Security Unit.
O.C. Man who Ran Two-Pronged Ponzi Scheme that Caused over $15 Million in Losses Sentenced to Nearly Five Years in Federal PrisonRead the Press Release
LOS ANGELES – An Orange County man who operated a Ponzi scheme that bilked victims out of more than $15 million with false promises of large returns from investments in debt obligations and distressed real estate was sentenced today to 57 months in federal prison.
William Donnelly Yotty, 69, who lived in Lodi when he was operating the scheme, and was living in Monarch Beach when he was arrested in this case in May 2014, was sentenced this afternoon by United States District Judge Margaret M. Morrow.
“It is important that people who engage in business frauds face substantial sentences,” Judge Morrow said, noting that Yotty’s victims included the elderly, teachers and law enforcement officers, many of whom earned modest salaries or had lost their retirement savings.
The daughter of an elderly couple told the judge this afternoon that her parents lost $250,000 in the fraud, they were forced to move out of their home, and her 71-year-old father could not afford to retire.
Yotty, who has been held without bond since his arrest, pleaded guilty in August to mail fraud and wire fraud charges.
“Yotty raised over $17 million from more than 240 victim-investors based on false representations about – among other things – the safety of the investors’ principal and the guaranteed rate of return on promissory notes and other financial instruments, and the surefire success of investments in a real estate venture,” prosecutors wrote in a sentencing brief filed with the court.
When he pleaded guilty, Yotty admitted that he ran several Lodi-based companies that offered bogus investments in corporate debt obligations and in distressed real estate that he and his salespeople said could be “flipped” for substantial profit.
In the first scheme, Yotty solicited nearly $11 million from investors by offering purportedly safe and lucrative investments in convertible debentures, promissory notes and other financial instruments. Using companies he operated under names such as The Money People, Inc., Yotty solicited money from victims by guaranteeing annual interest rates as high as 25 percent and promising that victims would also recoup their entire initial investments. These claims were false. Yotty started using new investor money to make required payments to prior investors in the spring of 2007 – less than a year after he started offering the investments. Yotty stopped making any payments to investors in the summer of 2009.
In the second investment scheme, which started in the summer of 2007 and was run through at least two programs – one of which he called Fortuno Millionaire Club – Yotty offered victims the opportunity to purchase foreclosed real estate at below-market prices, which would allow them to resell, or “flip,” the properties at two or three times their purchase price. At presentations, according to the sentencing memo, prospective investors were told “Our club member receives the down payment, the monthly payments from the new buyer, and all the proceeds from the sale of the Note! It’s a win…win…win!”
In fact, Yotty himself was flipping properties he purchased – many of which were in Flint, Michigan – to investors at substantial profits for himself. Because Yotty had already extracted any profit to be made from the properties, the investors were left with dilapidated real estate that they could not sell at all, let alone at the substantial profit that Yotty had promised.
As part of the scheme, Yotty concealed from the investors that the price they were paying for the properties was double or triple what Fortuno had paid, and that this inflated price would prevent the victims from realizing any profit of their own. As a further inducement to invest in Fortuno, Yotty and his salespeople also falsely promised victims that the properties were in livable condition and that Fortuno would manage the properties until the promised resale.
According to prosecutors, one victim, who was 79 when she invested in the Fortuno program, received a letter from the City of Flint that one of her two properties was condemned and going to be demolished, and the second property was in such bad shape that it could never be rented out or sold.
“This defendant stole not only his victims’ money, he stole their futures and their security,” said United States Attorney Eileen M. Decker. “This defendant’s fraud scheme has earned him a significant federal prison sentence which should stand as a warning to others that fraud does not pay.”
In addition to the prison term of nearly five years, Judge Morrow ordered Yotty to pay $15,018,822 in restitution to approximately 240 victims.
The investigation into Yotty’s Ponzi scheme was conducted by the Federal Bureau of Investigation, which received assistance from the California Department of Business Oversight, Enforcement Division.
Monroe man sentenced to 60 months in prison for possessing firearm after felony convictionsRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a man from Monroe was sentenced 60 months in prison for possessing a revolver after having been convicted of felonies.
Roderick Johnson, 34, of Monroe, was sentenced by U.S. District Judge Robert G. James on one count of possession of a firearm by a convicted felon. He was also sentenced to three years of supervised release. According to the June 3, 2015 guilty plea, Johnson was found to be in possession of a Rohm model RG38 .38 caliber revolver at his residence on Angela Drive in Monroe, while a Louisiana State Trooper was investigating another matter on October 17, 2014. A records check indicated that Johnson had several felony convictions and was on probation at the time the weapon was found.
This case is part of Project Safe Neighborhoods, which is a Department of Justice initiative designed to reduce firearm crimes by removing dangerous and persistent felons from the community and promote firearm safety.
The ATF and Louisiana State Police conducted the investigation. Assistant U.S. Attorney Robert W. Gillespie Jr. prosecuted the case.
Maryland man convicted of heroin traffickingRead the Press Release
MARTINSBURG, WEST VIRGINIA – John Sanders, 25, of Williamsport, Maryland, was convicted of heroin trafficking today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Sanders sold heroin in June 2014 near Martinsburg, West Virginia. He pled guilty today to a criminal Information charging him with one count of “Aiding and Abetting the Distribution of Heroin.” As a result of his guilty plea, Sanders will be sentenced to 120 months in prison.
Sanders was charged in a one count federal indictment in April 2015. Specifically, the indictment alleged that Sanders sold heroin in June 2014 in Berkeley County, West Virginia which led to the death and serious bodily injury of another individual.
Assistant U.S. Attorney Paul Camilletti prosecuted the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Local Man who Engaged in Sexually Explicit Conversations on Social Media Admits to Receiving Child PornographyRead the Press Release
McALLEN, Texas – A 61-year-old man has been convicted of one count of receipt of child pornography, announced U.S. Attorney Kenneth Magidson. Dennis Ray Frank, of Edcouch, admitted he engaged in inappropriate conversations with a minor female and received a sexually graphic image via email.
On Feb. 7, 2013, FBI agents received information from the National Center for Missing and Exploited Children that indicated a young female, approximately 13 years of age, could be a potential victim of sexual exploitation. Law enforcement soon uncovered the fact that Frank had engaged the minor female child in sexually explicit conversations on Facebook. Upon further investigation, it was determined that Frank had enticed the minor female child to send sexually graphic images of her genitalia to him via email.
Law enforcement executed a search warrant on Frank’s email account, at which time they discovered the image that depicted the minor child’s genitalia. Frank admitted to receiving the child pornography image via his email account on Nov. 5, 2012. He further admitted he had been engaging in those inappropriate conversations and that the young girl had sent him the image.
U.S. District Judge Randy Crane accepted the guilty plea and set sentencing for Feb. 9, 2016. At that time, Frank faces a minimum of five and up to 20 years in federal prison and a possible $250,000 fine. He will remain in custody pending that hearing.
The charges are the result of an investigation conducted by the FBI.
This case, prosecuted by Assistant U.S. Attorneys Alex Benavides and Kimberly Ann Leo, 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."
Knoxville Businessman Pleads Guilty to Operating an Illegal Gambling Operation and Money LaunderingRead the Press Release
KNOXVILLE, Tenn. – On Nov. 30, 2015, George Marcus Hall, 45, of Knoxville, Tenn., pleaded guilty in U.S. District Court to an information charging him with operating an illegal gambling operation and money laundering. He was released under the supervision of the U.S. Probation office pending his sentencing hearing set for 10:00 a.m., on Apr. 20, 2016.
Hall faces up to twenty years in federal prison as well as supervision by the U.S. Probation office upon his release. Additionally, Hall agreed to forfeit his interest in assets collectively valued at over $9 million, which were involved in and/or products of his illegal gambling operation and money laundering conspiracy. These valuable assets consist of: four vehicles, including his 2014 Porsche Panamera; 18 pieces of real property valued at over $3.3 million; over $415,000 in cash and bank accounts and an agreed monetary judgment of $5 million.
The plea agreement on file with U.S. District Court details Hall’s participation in the illegal gambling and money laundering operation. An Agreed Preliminary Order of Forfeiture is also on file with U.S. District Court and describes the assets listed above in detail.
Bill Killian, U.S. Attorney for the Eastern District of Tennessee, said, “In addition to the potential punishments that Hall is facing, as a further deterrent, the government seized and is seeking forfeiture of numerous valuable assets owned by Hall and others involved in these criminal acts, which are either the proceeds of or were purchased with the profits of this unlawful gambling and money laundering business and/or were involved in these criminal violations.” Killian added, “Assets which were retained by Hall and not forfeited were of no value or benefit to the government, including Marc Nelson Denim, LLC.”
This investigation was conducted by the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorneys Jennifer Kolman and Anne-Marie Svolto represented the United States.
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Justice Department Reaches Settlement with Sage Bank to Resolve Allegations of Mortgage Lending DiscriminationRead the Press Release
The Justice Department filed a complaint and proposed consent order today to resolve allegations that Sage Bank, headquartered in Lowell, Massachusetts, violated the Fair Housing Act and the Equal Credit Opportunity Act (ECOA) by engaging in a pattern or practice of discrimination on the basis of race and national origin in the pricing of its residential mortgage loans.
The United States’ complaint alleges that Sage Bank charged African-American and Hispanic borrowers higher prices for home loans than Sage Bank charged to similarly situated white borrowers for reasons unrelated to their creditworthiness. Specifically, under Sage Bank’s pricing policy, each of its loan officers was assigned a “target price,” which was the price a loan officer was required to achieve on each home loan, regardless of a borrower’s creditworthiness. The complaint alleges that those loan officers whom Sage Bank assigned higher target prices disproportionately served African-American and Hispanic borrowers. The complaint also alleges that loan officers had discretion to price loans above their target prices and did so to a greater extent for African-American and Hispanic borrowers than for white borrowers. The result, the complaint alleges, was that the average African-American borrower paid approximately $2,500 more for his/her loan than did a similarly qualified white borrower; the average Hispanic borrower paid approximately $1,400 more.
The consent order, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the District of Massachusetts. Under the consent order, Sage Bank will pay $1,175,000 into a settlement fund to compensate borrowers and applicants who were harmed by Sage Bank’s policies. The consent order also requires Sage Bank to establish a new loan pricing policy and a new loan officer compensation policy, have loan officers and bank employees undergo fair housing and fair lending training, and establish a monitoring program to detect future unlawful disparities in mortgage loan pricing.
“Sage Bank’s loan pricing policies created the risk that borrowers would be treated differently based on impermissible characteristics like race and national origin, and that was in fact the result,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “This settlement ensures that all potential borrowers will be treated equally, regardless of race and national origin, and Sage Bank has agreed to restructure and monitor its lending practices to ensure that it is meeting those obligations.”
“Sage Bank’s discriminatory practices were aimed at some of our most vulnerable neighborhoods and populations,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts. “Homeownership is the foundation of the American dream, and we will continue our work to ensure that all people – regardless of their skin color or the language they speak – have equal access to that dream.”
The lawsuit originated from a referral by the Federal Deposit Insurance Corporation.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
Additional information about fair lending enforcement by the Justice Department can be obtained from the Justice Department’s website at http://www.justice.gov/fairhousing.
Sage Bank Complaint
Sage Bank Consent Order
Hyattsville Man Sentenced to 7 Years in Prison for Carjacking and Illegal Possession of a GunRead the Press Release
Greenbelt, Maryland – U.S. District Judge Deborah K. Chasanow sentenced Marden Gonzalez, age 20, of Hyattsville, Maryland, today to seven years in prison, followed by three years of supervised release, for carjacking and for being a felon in possession of a firearm.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Larry M. Brownlee, Sr. of the Maryland National Capital Park Police, Prince George’s County Division; and Chief Mark A. Magaw of the Prince George’s County Police Department.
According to Gonzalez=s plea agreement, on February 17, 2015, at 1:00 p.m. Gonzalez approached the victim, who was stopped at a red light at the intersection of East-West Highway and Ager Road in Hyattsville. Gonzalez pointed a loaded .380 caliber pistol at the victim and demanded the victim’s car. The victim got out of the car and Gonzalez got in and drove away in the victim’s car.
A few minutes later, a Maryland Park Police officer spotted the stolen car at the intersection of Queens Chapel and Chillum Roads in Hyattsville. Park Police and Prince George’s County Police officers pursued Gonzalez through snowy streets. After sideswiping several parked cars, Gonzalez crashed the victim’s car headfirst into a parked car. The law enforcement vehicles pursuing Gonzalez slid in the snow when they attempted to brake, resulting in a crash. Three officers were injured and one was taken to a hospital. Gonzalez bailed out of the victim’s car and ran away, still carrying the loaded pistol. Officers located and arrested Gonzalez in the semi-enclosed back porch of a nearby house, and recovered the gun.
Gonzalez had previously been convicted of a felony and as a result, was prohibited from possessing a firearm or ammunition.
United States Attorney Rod J. Rosenstein commended the HSI Baltimore, Maryland National Capital Park Police and the Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Lindsay Eyler Kaplan and William D. Moomau, who prosecuted the case.
Huntington man sentenced on Federal oxycodone chargeRead the Press Release
HUNTINGTON, W.Va. - A Huntington man who possessed and sold oxycodone was sentenced today to three years and one month in federal prison, announced United States Attorney Booth Goodwin. Tracey Lee Gibson, 36, previously pleaded guilty in August 2015 in federal court in Huntington, West Virginia, to possession with intent to distribute oxycodone.
On March 26, 2013, agents with the Drug Enforcement Administration executed a search warrant at Gibson’s residence at 1608 Madison Avenue in Huntington. During the search, agents recovered 43 oxycodone pills that Gibson intended to sell. Agents also seized over $10,000 in cash proceeds from Gibson’s drug deals. Prior to the search, Gibson was also involved as a supplier in the sale of oxycodone to a confidential informant on three occasions.
The Drug Enforcement Administration 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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Huntington man pleads guilty to Federal heroin chargeRead the Press Release
HUNTINGTON, W.Va. – A Huntington man who was caught with heroin pleaded guilty today to a federal drug charge, announced United States Attorney Booth Goodwin. Andre Robert Womble, II, 26, pleaded guilty in federal court in Huntington, West Virginia, to possession with intent to distribute heroin.
On December 11, 2014, officers with the Huntington Police Department responded to a complaint on the 300 block of Marcum Terrace in Huntington. An officer observed Womble and noted that he matched the description of the suspect in the complaint. When the officer attempted to approach, Womble began running from the police. The officer chased Womble and observed him throw a cigarette box on top of the Olive Street Market. The cigarette box was found by law enforcement to contain approximately 53 grams of heroin. Officers caught and arrested Womble, at which point they found an additional 20 bags of heroin in his pocket. Womble admitted that he intended to distribute all of the heroin.
Womble faces up to 20 years in federal prison, and is schedule to be sentenced in federal court in Huntington on February 29, 2016.
The Huntington FBI Drug Task Force and Huntington Police Department conducted the investigation. Assistant United States Attorney Joseph F. Adams is in charge of the prosecution.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Gastonia Woman Sentenced to 40 Months in Prison for Embezzling More Than $590,000 from Former EmployerRead the Press Release
CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney today sentenced Jennifer Ann Champagne, 40, of Gastonia, N.C. to 40 months in prison, for stealing more than $590,000 from her former employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Judge Whitney also ordered Champagne to serve one year of supervised release and to pay restitution in the amount of $594,208.01. Champagne pleaded guilty in July 2015 to making and possessing forged and counterfeit securities, wire fraud and access device fraud.
U.S. Attorney Rose is joined in making today’s announcement by Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division.
According to filed court documents and today’s sentencing hearing, from 2006 to 2013, Champagne worked as an office manager and bookkeeper at a Charlotte-based company specializing in the construction and repair of tennis courts and running tracks. In that capacity, Champagne had access to the company’s safe, computer accounting programs, online bank accounts, security passwords and other confidential information, but was not authorized to sign company checks, or use the company’s bank accounts or credit card accounts outside of the normal course of business.
According to court records, Champagne stole money from her former employer by signing the company’s President’s name on forged checks and then altering the company’s books and records to hide the theft. Among other things, court records show that Champagne embezzled over $260,000 by forging 100 company checks in her name and her husband’s landscaping business. She also used the company’s credit card to make more than 400 unauthorized charges totaling over $40,000. In total, court records show that Champagne’s scheme caused the company a loss of more than $590,000.
In handing down Champagne’s sentence, Judge Whitney said that in the interest of general deterrence he gave the defendant a tough sentence because he did not want “people taking the risk of embezzling over one-half million dollars and thinking they’re only going to do a small amount of time in prison.” Judge Whitney also noted that that a sentence involving breach of trust should reflect the amount of money taken and the length of time involved in the fraudulent scheme, in Champagne’s case, seven years.
Champagne will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by the U.S. Secret Service. The prosecution for the government was handled by Assistant U.S. Attorney Kenneth Smith of the U.S. Attorney’s Office in Charlotte.
Garden City Man Sentenced for Possession of 16,000 Child Porn ImagesRead the Press Release
TOPEKA, KAN. - A Garden City man was sentenced Monday to 78 months in federal prison for possessing more than 16,000 images of child pornography, U.S. Attorney Barry Grissom said.
James E. McGary, 43, Garden City, Kan., pleaded guilty to one count of possession of child pornography. In his plea, he admitted that in October 2012 an investigator with the Ford County Sheriff’s Office working online identified a computer sharing pornography on a file sharing network. When investigators served a search warrant at McGary’s home, they found a laptop computer containing approximately 16,000 images of child pornography.
Grissom commended the Garden City Sheriff’s Office, Homeland Security Investigations and Assistant U.S. Attorney Christine Kenney for their work on the case.
Former Wesleyan Student Admits Distributing Synthetic Drug That Caused Multiple OverdosesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ERIC LONERGAN, 23, of Rio de Janeiro, Brazil, pleaded guilty today in New Haven federal court to one count of conspiracy to possess with the intent to distribute, and to distribute, MDMA (“Molly”). The charge stems from an investigation into the distribution of controlled substances that caused multiple Wesleyan University students to overdose earlier this year.
“This defendant trafficked in a drug that caused multiple overdoses and nearly took the life of one Wesleyan student,” said U.S. Attorney Daly. “As evidenced by this investigation and prosecution, Molly and other synthetic drugs are clearly not innocuous party drugs. Students who use synthetic drugs can never be certain what they are ingesting. Wesleyan students who bought these drugs from this dorm-room chemist literally risked their lives by relying on his purported expertise. We thank the DEA, the Middlesex State’s Attorney’s Office and the Middletown Police Department for their collaboration and diligent work in this investigation.”
According to court documents and statements made in court, LONERGAN and Zachary Kramer were students at Wesleyan in Middletown, Connecticut. Beginning in approximately November 2013, LONERGAN began selling a substance he referred to as both “Molly” and MDMA to students on or in the vicinity of the Wesleyan campus. LONERGAN regularly sold Molly from his dorm room, charging approximately $20 per .1 gram, or $200 per gram, LONERGAN also counseled students on how to ingest Molly and other psychedelic drugs. At one point in 2014, after the administration at Wesleyan sent out a campus-wide communication warning of the dangers of ingesting controlled substances like Molly, LONERGAN responded by distributing a pamphlet instructing students on the use of psychedelic drugs.
In approximately September 2014, Kramer began purchasing what he believed to be Molly from LONERGAN and distributed it to students at Wesleyan. At times, LONERGAN used a chemical test on the substance he sold Kramer to prove to him that he was selling Kramer high-quality MDMA.
In September 2014, LONERGAN was the source of Molly for several students who were planning a “rolling” party at Wesleyan, which is a party where guests ingest Molly. He provided several grams of a substance he represented to be MDMA, in bulk, and another student then distributed it to students in .1 gram capsules. At this party, which occurred on September 13, 2014, several students became ill, some seriously, after ingesting the substance provided by LONERGAN. Two of these students were transported to the hospital. After these overdoses, LONERGAN sent electronic communications to several students assuring them that the substance he provided to them was indeed MDMA. One of the students who became ill at the party saved one of the capsules she had purchased and turned it over to the Middletown Police in February 2015. A lab test on the contents of that capsule revealed that it did not contain MDMA, but contained two other controlled substances: AB Fubinaca, a Schedule I controlled substance, and 6-MAPB, an analogue of MDMA.
In approximately December 2014, Kramer became the primary supplier of MDMA at Wesleyan. Kramer typically would sell the MDMA in .1 gram quantities for $20 each or he would sell it in 5-gram and 10-gram quantities for a discount, charging $100 or more, depending on the customer and the quantity. During this time period, LONERGAN still supplied Kramer with bulk quantities of MDMA. In approximately January 2015, Kramer purchased approximately 45 grams of MDMA from LONERGAN. Kramer broke that quantity into 5 and 10-gram bags and distributed those bags to other students who planned to break down the MDMA into .1 gram capsules, sell those capsules to other Wesleyan students, and pay Kramer for the quantity of the drug he had provided to them.
On February 21, 2015, 11 individuals, including 10 Wesleyan students, overdosed on a substance they believed was MDMA, and many were transported to the hospital. Two of the students were in critical condition, and one of the students had to be revived after his heart stopped. All of these students obtained the purported MDMA through individual distributers who were supplied directly by Kramer.
Although Kramer and some of his distributers destroyed the substance identified as Molly that they had in their possession, one of the distributers did not, and that substance was seized by law enforcement officers and sent to the toxicology laboratory for testing. Laboratory analysis confirmed that the powdered substance contained AB Fubinaca.
The charge of conspiracy to possess with the intent to distribute, and to distribute, MDMA carries a maximum term of imprisonment of 20 years and a maximum fine of $1 million. LONERGAN is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on February 25, 2016, in Hartford. He has been released on bond since his federal arrest on May 22, 2015.
On November 12, 2015, Kramer pleaded guilty to the same charge. He is scheduled to be sentenced by Judge Bryant on February 11, 2016.
This matter is being investigated by the Drug Enforcement Administration and the Middletown Police Department, with the assistance of the State of Connecticut’s Forensic Science Laboratory.
U.S. Attorney Daly acknowledged the support and assistance of the Middlesex State’s Attorney’s Office, which is prosecuting several state cases stemming from these overdose events.
The federal case is being prosecuted by Assistant U.S. Attorney Robert M. Spector and Senior Assistant State’s Attorney Eugene Calistro, who has been cross-designated as a Special Assistant U.S. Attorney in this matter.
Former Teamster Pleads Guilty to Fraud and Theft ChargesRead the Press Release
BOSTON – A former member of Boston Teamster Local 82 pleaded guilty today in connection with receiving more than $40,000 of unemployment benefits to which he was not entitled.
James Deamicis, 52, of Quincy, pleaded guilty to three counts of mail fraud and one count of theft of government property. Earlier this month, Deamicis was convicted by a federal jury of three counts of extorting businesses in Boston. U.S. District Court Judge Denise J. Casper scheduled sentencing for all seven counts on March 23, 2016.
From 2008 to 2011, Deamicis received $41,391 in unemployment insurance benefits that he was not entitled to receive because he was collecting a paycheck while working as a member of Local 82. Deamicis’s bank records as well as employment and unemployment insurance records revealed that he failed to report his weekly earnings or significantly under-reported his earnings so that it appeared to the Massachusetts Department of Unemployment Insurance that he was eligible to receive full or at least partial unemployment insurance when, in fact, he was employed nearly full-time and was not eligible.
Deamicis made several misrepresentations in the course of the three-year scheme. First, Deamicis applied for benefits over a recorded automated telephone system and in doing so, affirmed that he was not working. In reality, over that three-year period, Deamicis was working for Local 82 and earned $126,423. During the same time period, he also falsely reported to the Department of Unemployment Insurance that he earned only $22,249. Second, Deamicis certified under penalties of perjury that he had no earnings for work during the time period in which he was receiving benefits. Although Deamicis was employed, he endorsed each of the 73 unemployment insurance checks he received and thereby falsely certified that he had no earnings except as reported in his benefit claim certification.
The charge of mail fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 on each count. The charge of theft of government property provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Scott S. Dahl, Inspector General of the U.S. Department of Labor, Office of Inspector General; Jonathan Russo, District Director of the U.S. Department of Labor, Office of Labor-Management Standards; and Susan A. Hensley, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Laura J. Kaplan of Ortiz’s Organized Crime and Gang Unit.
Former Stockbroker Charged in Fraud SchemeRead the Press Release
BOSTON – A previously convicted former stockbroker was charged yesterday in U.S. District Court in Springfield in connection with an investment scheme which defrauded victims of more than $600,000.
Jeffrey Eldred Gallagher, 72, of Bradenton Beach, Fla., was charged in an Information with one count of wire fraud, three counts of engaging in an illegal monetary transaction and two counts of tax evasion. As alleged in the Information, in 1989, Gallagher was convicted of one count of mail fraud and three counts of interstate transportation of stolen property in connection with illegal options trading while he was a stockbroker at Paine Webber, Inc. Gallagher is scheduled to plead guilty to the current charges on Dec. 14, 2015 before U.S. District Court Judge Mark G. Mastroianni.
According to court documents, it is alleged that from at least 2008 through approximately early 2012, Gallagher persuaded friends and associates to pay him money to invest on their behalf, and made promises that the investments would yield guaranteed returns of 10 to 15 percent. Gallagher then commingled investor funds with his own personal funds, and paid some investors with monies given to him by other investors. When investors asked Gallagher for the return of their investments, Gallagher allegedly provided numerous false explanations concerning his attempts to repay them. In a similar effort to stall for time, Gallagher wrote investors more than 40bad checks totaling $1,783,375. In sum, 23 investors lost a total of approximately $617,475.
As part of the scheme, in 2009 and 2010, Gallagher allegedly used approximately $249,703 of investor monies for his personal benefit, but did not report any of this income on his federal income tax returns for those years.
The charges of wire fraud and engaging in an illegal monetary transaction provide for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. The charge of tax evasion provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000 on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Steven H. Breslow of Ortiz's Springfield Branch Office.
Former Mount Vernon Commissioner and Her Associate Found Guilty in White Plains Federal Court on Fraud ChargesRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced that Constance Post, former Commissioner of the Mount Vernon Department of Planning and Community Development as well as Executive Director of the Mount Vernon Urban Renewal Agency (“MVURA”), and Wayne Charles were found guilty today in White Plains federal court on charges stemming from their diversion of more than $1.2 million in federal funds from the U.S. Department of Housing and Urban Development (“HUD”) that were administered by the MVURA.
U.S. Attorney Preet Bharara said: “As the jury unanimously found, Constance Post abused her position of public trust to conspire with Wayne Charles to enrich themselves. Their corruption victimized the citizens of Mount Vernon, HUD, and U.S. taxpayers. Now, the defendants await sentencing for their crimes.”
As established by the evidence at trial:
Post and Charles, who had a romantic relationship, arranged to steer a computer services contract to a company secretly owned by Charles. Using the name of a defunct computer services company that a friend had operated, Charles concealed from the City of Mount Vernon that he had no computer expertise, no employees, and no ability to perform under the contract. Post hired and directed people to work for Charles’s company, which enriched Charles, between 1998 and 2002, but ultimately cost the City and HUD more than twice what it would have paid if the employees had worked directly for the City. Post also disregarded the monetary restrictions placed upon her by the MVURA board that approved the computer services contract, and she steered hundreds of thousands of dollars to Charles beyond her authorization.
Separately, in connection with a $500,000 loan of HUD funds awarded by the MVURA Board to renovate property in Mt. Vernon, Charles, with the approval of Post, falsely stated that he had not used any other names, and falsely certified that he had no other business with the City of Mount Vernon and the MVURA. In fact, Charles used several false names with the approval and assistance of Post in order to conceal his involvement with the computer services contract. Then, after renovations were complete on the property in 2003, another lender, in accordance with the terms of the MVURA=s loan, repaid $250,000 of the loan, leaving an unpaid balance of $250,000. Post took steps to conceal the existence of the loan and the fact that Charles still owed the MVURA the $250,000, ensuring that Charles was not required to repay the loan to Mount Vernon. In 2005, when federal investigators were examining the MVURA=s financial records, Post retroactively recorded the unpaid balance of the Charles loan on the books of the MVURA. Shortly thereafter, Charles made a few payments on the loan, which otherwise remains unpaid.
The evidence also established that, during the course of their scheme, Charles paid Post $30,000.
Post and Charles were each convicted of one count of conspiracy to commit mail fraud and one count of mail fraud. Charles was also previously convicted at an earlier trial of making false statements to federal agents who interviewed him in 2006 about the subject matter of this case.
Sentencing is scheduled for March 1, 2016, before United States District Judge Kenneth M. Karas. Post and Charles each face up to 20 years in prison on the conspiracy charge and up to 20 years in prison on the mail fraud charge of the Indictment. Charles also faces up to five years in prison on the false statement charge. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the joint efforts of the United States Department of Housing and Urban Development - Inspector General and the Federal Bureau of Investigation.
The prosecution is being handled by the Office's White Plains Division. Assistant U.S. Attorneys Andrew Dember and Daniel Filor are in charge of the prosecution.
Former Carnival Worker Pleads Guilty to Felony Murder for Role in Burglary Which Led to Death of Medina Comic Book Collector; Conviction Brings to A Close First of Its Kind Racketeering ProsectuionRead 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 Albert Parsons, 46, of Rochester, NY, pleaded guilty to committing a violent crime, an assault resulting in serious bodily injury, in aid of a racketeering enterprise, before U.S. District Judge Richard J. Arcara.“Similar to operations of old, the defendants in this case employed various street level criminals to steal,” said U.S. Attorney Hochul. Unlike past criminal organizations, however, Rico Vendetti and his cohorts used the power and anonymity of the internet to thereafter dispose of their ill-gotten gains, in effect creating a high-tech fencing operation in which unwitting purchasers could be located anywhere in the world. As this case – the first of its kind in the District - demonstrates, the federal racketeering laws are more than capable of dismantling both old fashioned, and modern day criminal operations.”
Assistant U.S. Attorney’s Anthony M. Bruce and Scott S. Allen, Jr., who are handling the case, said that in the early morning hours of July 5, 2010 the defendant and co-defendants Donald Griffin and Juan Javier burglarized the Medina, NY home of 78 year old Homer Marciniak. The three men were hired by Rico Vendetti and Arlene Combs to steal Marciniak’s valuable comic book collection. During the course of the burglary, Marciniak, who had a serious heart condition, awoke and confronted the burglars. Griffin struck Marciniak and then, along with Javier, tied him up. Marciniak was also repeatedly threatened by Javier. Parsons, Griffin and Javier ultimately located the comic book collection along with several strong boxes containing cash, coins and other valuables.
After Parsons, Griffin and Javier fled the scene, Marciniak freed himself and was taken to Medina Memorial Hospital for treatment of the facial injuries he suffered when struck by Griffin. However, after Marciniak was treated and released, he suffered a heart attack and died shortly after being re-admitted to the hospital. Medical evidence that the Government was prepared to offer at trial demonstrated that the blow Griffin struck, as well as the emotional trauma caused by the burglary, directly contributed to Marciniak’s cardiac arrest and resulting death.
Parsons, Griffin and Javier gave the comic books to Combs who, along with another co-defendant, Terry Stewart, took the comic books to Vendetti later in the day on July 5. However, once Vendetti learned that the burglary resulted in Marciniak’s death, Vendetti disposed of the comic books.
The burglary grew out of an organized shoplifting ring that stole millions of dollars in merchandise from big box stores such as Walmart, Sears, Home Depot, JoAnn Fabrics, Tops and Wegmans. The merchandise was sold to Rico Vendetti for 25¢ on the dollar. The merchandise was then sold by Vendetti on eBay for about half of its retail value, primarily to out-of-state customers.
Parsons is the last of seven defendants to be convicted federally in this case. He will be sentenced on April 1, 2016 at 12:30 p.m. before Judge Arcara.
Donald Griffin will be sentenced on February 3, 2016. Juan Javier, who was 17 at the time of the burglary of Marciniak’s home, was prosecuted as an adult in Orleans County and sentenced to seven years in state prison.
Also convicted in connection with this case:• Rico Vendetti was convicted of racketeering and will be sentenced on January 22, 2016.
• Brandon Meade was convicted of conspiring to traffic in stolen goods across state lines and is scheduled to be sentenced on January 21, 2016.
• Terry Stewart was convicted of racketeering and was sentenced to 55 months in federal prison.
• Dayon Shaver was convicted of conspiring to traffic in stolen goods across state lines and will be sentenced on March 21, 2016.
• Arlene Combs was convicted of racketeering and will be sentenced on February 24, 2016.Today’s plea is the result of an investigation on the part of Special Agents from the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the New York State Police, under the direction of Major Craig Hanesworth, the Orleans County Sheriff’s Department, under the direction of Sheriff Scott Hess, the Monroe County Sheriff’s Office, under the direction of Sheriff Patrick O’Flynn, the Medina Police Department, under the direction of Chief Jose Avila and Officers from the Rochester Police Department, under the direction of Chief Michael Ciminelli. Special assistance was provided by Orleans County District Attorney Joseph Cardone.
Florida Man Sentenced to Probation for Failure to Pay Child SupportRead the Press Release
Contact: Benjamin M. Block
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Glen S. Caristinos, 49, of Safety Harbor, Florida, was sentenced today in U.S. District Court by Chief Judge Nancy Torresen to five years of probation for failure to pay child support. He was also ordered to pay $117,601.38 in restitution. Caristinos pled guilty on July 3, 2015.
According to court documents, on October 31, 2001, the Maine Department of Health and Human Services ordered Caristinos to pay his ex-wife $248.16 per week toward the support of their minor child. That support order was increased to $303.20 per week on October 10, 2003. The court ordered that such payments continue until the minor reached the age of 18. The defendant made inconsistent payments between 2001 and 2005. In December 2005, he moved to Florida and virtually ceased making payments. The court-ordered restitution amount represents his total arrearage to date.
The conditions of Caristinos' probation include that he pay his restitution obligation and his court-ordered child support. In explaining the sentence, Chief Judge Torresen observed that Caristinos had obtained full-time employment enabling him to make his payments through a wage garnishment and explained that the statutory purposes of criminal punishment include getting defendants to pay restitution and getting parents to pay child support.
The case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General and the Maine State Department of Health and Human Services, Child Support Enforcement Unit.
El Departamento de Justicia Realiza un Acuerdo Conciliatorio con Sage Bank en Resolución de Alegatos de Discriminación en el Otorgamiento de Préstamos HipotecariosRead the Press Release
WASHINGTON – Hoy, el Departamento de Justicia entabló una demanda y una orden de consentimiento propuesta en resolución de alegatos de que Sage Bank, con sede en Lowell, Massachusetts, violó la Ley de Vivienda Justa y la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)] al exhibir un patrón o práctica discriminatoria debido a raza y origen nacional en el precio de sus préstamos hipotecarios residenciales.
La demanda de los Estados Unidos alega que Sage Bank le cobró a prestatarios afroestadounidenses e hispanos precios más altos por préstamos hipotecarios residenciales que los que Sage Bank cobraba a prestatarios de raza blanca en situación similar por motivos no relacionados con su solvencia. Específicamente, de acuerdo con la política de precios de Sage Bank, se le asignó a cada uno de sus agentes de préstamos un “precio objetivo”, que era el precio que el agente de préstamos debía lograr en cada hipoteca residencial, independientemente de la solvencia del prestatario. La demanda alega que los agentes de préstamos a quienes Sage Bank asignó precios objetivos más altos atendían desproporcionalmente a prestatarios afroestadounidenses e hispanos. La demanda también alega que los agentes de préstamos podían, a su criterio, establecer precios de préstamos superiores a su precio objetivo y que, efectivamente, lo hacían en mayor medida para prestatarios afroestadounidenses e hispanos que para los prestatarios blancos. El resultado, alega la demanda, fue que el prestatario afroestadounidense medio pagó alrededor de $2.500 más por su préstamo que un prestatario blanco con calificaciones similares; el prestatario medio hispano pagó alrededor de $1.400 más.
La orden por consentimiento, que está sujeta a aprobación del tribunal, fue presentada junto con la demanda del Departamento de Justicia en el Tribunal Federal de Distrito del Distrito de Massachusetts. Bajo la orden por consentimiento, Sage Bank pagará $1.175.000 a un fondo de acuerdo conciliatorio para indemnizar a prestatarios y solicitantes perjudicados por las políticas de Sage Bank. La orden por consentimiento también exige que Sage Bank establezca una nueva política de precios de préstamos y una nueva política de remuneración de agentes de préstamos, que los agentes de préstamos y empleados bancarios reciban capacitación en vivienda justa y otorgamiento justo de préstamos, y que Sage Bank establezca un programa de monitoreo para detectar futuras disparidades ilícitas en el establecimiento de precios de préstamos hipotecarios.
“Las políticas de precios de préstamos de Sage Bank crearon el riesgo de que los prestatarios recibieran tratamiento distinto con base en características no permitidas, tales como raza y origen nacional, y, de hecho, fue lo ocurrió,” dijo Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta, líder de la División de Derechos Civiles. “Este acuerdo conciliatorio asegura que todos los potenciales prestatarios serán tratados de manera igualitaria, independientemente de su raza y origen nacional, y Sage Bank ha acordado restructurar y monitorizar sus prácticas de otorgamiento de préstamos de modo a asegurar el cumplimiento de sus obligaciones”.
“Las prácticas de Sage Bank estuvieron dirigidas a algunos de nuestros vecindarios y poblaciones más vulnerables”, dijo la Fiscal Federal Carmen M. Ortiz del Distrito de Massachusetts. “La vivienda propia es la base del sueño estadounidense, y seguiremos trabajando para asegurar que todas las personas, independientemente del color de su piel o del idioma que hablen, tengan acceso igualitario a dicho sueño”.
La demanda surgió de una remisión de la Federal Deposit Insurance Corporation.
La coacción asociada a las leyes de otorgamiento justo de préstamos y de la Ley de Reparación Judicial Civil para los Miembros de las Fuerzas Armadas [Servicemembers Civil Relief Act (SCRA)] es llevada a cabo por la Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles. Desde 2010, la División de Derechos Civiles ha provisto alrededor de $1,3 mil millones en reparación monetaria para prestatarios individuales y comunidades afectadas al hacer valer la Ley de Vivienda Justa, la ECOA y la SCRA. Los informes anuales del Secretario de Justicia de EE.UU. al Congreso sobre la acción coactiva asociada a la ECOA destacan los logros del Departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications/.
Para obtener información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del Departamento de Justicia en http://www.justice.gov/fairhousing.
Domestic Violence Offender in Washington Park Sentenced for Firearm OffenseRead the Press Release
Mario B. Taylor, 42, of Washington Park, Illinois, was sentenced in federal district court on November 19, 2015, to 117 months in prison, to be followed by three years of supervised release, a $750 fine, and a $100 special assessment, for unlawful possession of a firearm by a previously convicted felon, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
Facts presented in court revealed that on February 22, 2015, the Washington Park Police Department received a domestic battery report stemming from an argument between Taylor and his girlfriend at their residence in Washington Park, where he threatened her with a knife and gun, and family members who escorted her with a gun, as she tried to retrieve her belongings from the home. When officers escorted the girlfriend to the home to gather her things, they could hear the two arguing loudly and heard the girlfriend say "don’t touch me" and "get off me." Officers then entered the residence, observing the girlfriend pinned up against a doorway. A search of the home uncovered a total of 10 guns located in various places inside the residence. Taylor was previously sentenced for Aggravated Battery on May 25, 2000, in St. Clair County, Illinois.
This investigation was conducted by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Jonathan Drucker.
Des Moines Woman Sentenced to Prison for Filing a False Tax ReturnRead the Press Release
DES MOINES, IA – Julilath Kouangvan, 46, of Des Moines, Iowa, was sentenced by Chief Judge John A. Jarvey on November 23, 2015, to 14 months’ in federal prison for filing a false tax return, announced Acting United States Attorney Kevin E. VanderSchel. Kouangvan also was ordered to serve one year of supervised release following her term of incarceration.
According to the Indictment, from approximately 2006 until at least 2009, Kouangvan solicited investment funds from individuals by promising a high rate of return. Unbeknownst to the individuals, the money was not invested by Kouangvan. Kouangvan admitted in her plea agreement that she failed to account in her 2009 tax return for the funds provided to Kouangvan. As part of her sentence, Kouangvan was also ordered to pay restitution in the amounts of $522,233.34 to the victims and $199,042 to the Internal Revenue Service.
This case was investigated by the Internal Revenue Service – Criminal Investigation, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa
Defendant Sentenced to 18 Months in Prison for Credit Card FraudRead the Press Release
BOISE - Irving Gonzalez-Bocanegra, 25, of Sonora, Mexico, was sentenced today to 18 months in prison for wire fraud and possession of fifteen or more unauthorized access devices, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Gonzalez-Bocanegra to pay restitution in the amount of $13,301.64. Gonzalez-Bocanegra pleaded guilty on August 6, 2015.
According to the plea agreement, Gonzalez-Bocanegra admitted that in March 2015, he and two co-defendants traveled together from Mexico, through Montana, to Idaho in a vehicle rented in Sonora, Mexico, for the purpose of using counterfeit credit cards to make fraudulent purchases of merchandise and gift cards. In Montana, each defendant engaged in a number of transactions, using credit cards that the defendants knew to be counterfeit, at stores such as Auto Zone, TJ Maxx, Home Depot, Ulta, and others. The defendants jointly and fraudulently obtained merchandise valued at approximately $8,184.01 in Montana. In Boise, the defendants again engaged in a number of transactions, using credit cards the defendants knew to be counterfeit, at stores such as Lowe’s, Sports Authority, Barnes and Noble, Nordstrom Rack, JC Penney, and others. The defendants fraudulently obtained merchandise valued at approximately $5,117.63 in Boise. The defendants were arrested in possession of approximately 84 counterfeit credit cards embossed with their names, but encoded with victims’ credit card numbers, as well as merchandise purchased with the counterfeit credit cards, including GoPro Hero 4 Cameras, Samsung Galaxy Nooks, and video game systems.
The case was investigated by the United States Secret Service and the Boise Police Department.
Convicted Felon Sentenced to 7 Years in Prison on Firearm ChargeRead the Press Release
PROVIDENCE, R.I. – Momoh Fahnbulleh, 38, of Providence, was sentenced today to 84 months in federal prison for being a felon in possession of a firearm, announced United States Attorney Peter F. Neronha and Providence Police Chief Colonel Hugh T. Clements, Jr.
At sentencing, U. S. District Court Chief Judge William E. Smith also ordered Fahnbulleh to serve three years supervised release upon completion of his prison term. Fahnbulleh pleaded guilty on March 2, 2015, to a single-count indictment charging him with being a felon in possession of a firearm.
According to court records and information presented to the court, in October 2013, as a result of information developed during an investigation into Fahnbulleh’s alleged drug trafficking activities, Providence Police sought and executed a court authorized search warrant at Fahnbulleh’s residence. During the search, detectives and officers seized a loaded 9mm semi-automatic handgun. There were 15 rounds of ammunition in the magazine and one in the pistol’s firing chamber.
Additionally, law enforcement seized numerous items used in the packaging and distribution of cocaine.
Fahnbulleh has been detained since his arrest on October 3, 2013.
According to court records, Fahnbulleh was previously convicted in Rhode Island state court on multiple felony charges, including drug trafficking and firearm charges.
The case was prosecuted by Assistant U.S. Attorney Milind M. Shah.
Agents from ATF assisted Providence Police in the investigation of this matter.
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Convicted Felon Pleads Guilty to Elaborate Tax Fraud SchemeRead the Press Release
RICHMOND, Va. – David Solomon, aka David Chityal, 39, of Budapest, Hungary, pleaded guilty today to charges of conspiracy to commit mail and wire fraud for his role in an elaborate tax fraud scheme he designed with a co-conspirator while in prison.
In a statement of facts filed with the plea agreement, Solomon admitted that he was incarcerated in a federal correctional facility with an individual identified as Conspirator 1 from approximately September 2009 and March 8, 2010. Conspirator 1 previously was convicted in the Eastern District of Virginia of a $126 million fraud scheme and sentenced to 100 years of imprisonment. Conspirator 1 also was ordered to pay approximately $128 million in restitution to victims of his fraud. Conspirator 1 previously had conveyed certain assets to his Bankruptcy Estate for this restitution, including approximately $2 million in tax refunds. When Solomon was released from prison and deported to his native Canada, he remained in touch with Conspirator 1. Together they engaged in a scheme to obtain these approximately $2 million in tax refunds so that Conspirator 1 could obtain a particular New York attorney for his criminal appeal. Using this attorney, Solomon and Conspirator 1 changed the Internal Revenue Service (IRS) power of attorney forms so that the tax refund checks would be sent to the New York attorney, not Conspirator 1’s Bankruptcy Estate for his victims. In September 2010, the IRS sent the $2 million tax refund checks to the New York attorney, who in turn sent the checks to an attorney in Canada. The Canadian attorney flew to the federal correctional facility in which Conspirator 1 was incarcerated and Conspirator 1 endorsed the checks. The Canadian attorney then flew with the negotiated checks to the Turks and Caicos Islands to deposit them in a trust account. He was within hours of depositing the checks when the lawyer for Conspirator 1’s Bankruptcy Estate trustee learned what had happened and contacted the Canadian attorney. The tax refunds were returned to the Bankruptcy Estate and paid to Conspirator 1’s fraud victims.
Solomon was indicted by a federal grand jury on March 20, 2012, and was extradited from Hungary on Oct. 26, 2015. Solomon faces an agreed-upon maximum penalty of five years in prison when sentenced on Feb. 8, 2016. The maximum statutory sentence 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, made the announcement after the plea was accepted by Senior U.S. District Judge Robert E. Payne. Assistant U.S. Attorneys Thomas A. Garnett and Jessica D. Aber 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. 3:12-cr-44.
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Cleveland man sentenced to 55 years in prison for armed robberiesRead the Press Release
A Cleveland man was sentenced to 55 years in prison for committing three armed robberies, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI's Cleveland Office.
Eric Gooch, 24, was convicted by a jury this summer on multiple counts, including conspiracy to commit Hobbs Act robbery, use of a firearm during commission of a felony, armed bank robbery and Hobbs Act robbery.
Gooch conspired with others to rob Rose's Discount Store in Cleveland, Ohio. On January 21, 2013, Gooch and others entered and robbed the Rose's Discount Store, and during the robbery, a firearm was brandished. Gooch robbed the PNC Bank at 16614 Harvard Avenue in Cleveland on Feb. 22, 2013, and the PNC Bank at 2771 South Moreland Boulevard in Cleveland on March 13, 2013. A firearm was brandished during each bank robbery, according to trial testimony.
The case was prosecuted by Assistant United States Attorneys Michelle M. Baeppler and M. Kendra Klump following an investigation by the FBI and Cleveland Division of Police.
City Hall Officials in Allentown and Reading Plead Guilty in Public Corruption CaseRead the Press Release
PHILADELPHIA – Dale Wiles, 48, of Allentown, PA and Eron Lloyd, 35, of Reading, PA, both pleaded guilty today to conspiracy charges, announced United States Attorney Zane David Memeger. At the time of their respective offenses and until earlier this month, Wiles and Lloyd were public officials in Allentown and Reading, respectively.
During his guilty plea hearing, defendant Dale Wiles admitted the following:
Wiles was an attorney and an Assistant City Solicitor for the City of Allentown whose duties included the coordinating of certain Allentown municipal projects to attorneys in the private sector. One of these projects was the City of Allentown’s 2014 contract for the collection of delinquent real estate taxes and municipal claims (“the revenue collection”). Wiles was tasked with recommending a law firm to the City of Allentown’s Purchasing Agent. Wiles then formed a committee, comprised of himself and two other officials (“the revenue committee”).
In response to a request for proposals (RFP) created by the revenue committee, several competitors submitted proposals for the revenue collection contract, including entities identified here as Law Firm #1, Law Firm #2, and a partnership between a revenue collection company and Law Firm #3 (“the Partnership”). Wiles and the other revenue committee members graded each of these proposals using pre-established criteria which were consistent with the representations in the RFP and memorialized these scores on preprinted government forms (“the score sheets”). The original three score sheets reflected that the committee members had given the highest aggregate scores to Law Firm #2 and Law Firm #1, and that none of the committee members had concluded that the Partnership’s proposal would be the most advantageous to the City. The committee members discussed the proposal and agreed that Law Firm #2’s proposal would be the most advantageous to the City.
Before the committee could recommend Law Firm #2’s proposal to the Purchasing Agent, however, another Allentown official, identified here as Public Official #4, intervened in order to steer the contract to the Partnership so that the Partnership and its affiliates would then provide money, including campaign contributions, to Public Official #3 and his campaign operatives. Public Official #3 was an elected official in Allentown who had authority over Public Official #4 and Wiles. Wiles learned from Public Official #4 that the contracting process was being corruptly manipulated in order to steer the 2014 revenue collection contract to the Partnership. Wiles understood that Public Official #4 was acting with the approval of, and for the benefit of, Public Official #3, and that Wiles was expected to help create the false impression that the Partnership had won the contract on the merits. Thus, rather than quit or risk termination, Wiles joined and assisted the conspiracy, taking certain overt acts to help achieve its objectives.
For example, to help Public Official #4 create the false impression that the Partnership’s proposal was advancing on the merits, Wiles created a new version of the score sheet on which he had documented his actual evaluation of the proposals submitted in response to the RFP. The false score sheet contained, among other things, artificially inflated scores for the Partnership which did not reflect Wiles’ actual evaluation but were created to help the corrupted award process withstand future scrutiny. And like other members of the conspiracy, Wiles engaged in repeated acts of obstruction of justice in order to help conceal the conspiracy. In 2014, and then again in 2015, Wiles concealed certain score sheets and other records from a federal grand jury after learning that these documents would be responsive to federal grand jury subpoenas. Wiles also lied to FBI agents in order to conceal material facts about the award of the revenue collection contract to the Partnership, including the steps that he and Public Official #4 took to ensure that the Partnership was awarded the 2014 revenue collection contract.
During his guilty plea hearing, defendant Eron Lloyd admitted the following:
Public Official #1 was a Reading public official who had the power to sign into law ordinances that had been passed by City Council. Public Official #1 was also a candidate in the Democratic Party’s primary election, scheduled for May 19, 2015. Lloyd reported to Public Official #1, as both a public official and as a member of Public Official #1’s campaign team.
On numerous occasions, Public Official #1 solicited, demanded, and received campaign contributions from parties who sought to receive or had previously received, favorable official action, including the awarding of contracts, from the City of Reading (“the vendors”). Public Official #1, directly and through Lloyd and others, communicated to certain vendors that they were expected to provide him with campaign contributions in return for past or prospective official action by the City of Reading. Public Official #1 caused and attempted to cause certain municipal staff, including Lloyd, to take official action favorable to certain vendors who had provided, or were expected to provide, campaign contributions benefiting Public Official #1.
To limit the influence of money on candidates seeking public office, Section 1012 of Reading’s Code of Ethics established limits on campaign contributions to, and certain reporting requirements for, certain political candidates. To limit the influence of money on public officials in Reading, Section 1006(H) of the Code of Ethics prohibits the awarding of “no-bid contracts” to donors who have given campaign contributions in excess of those limits. Prior to the 2015 Democratic primary, Public Official #1 believed that he had received contributions which were prohibited by the Code of Ethics, and that his best chance of winning re-election would require keeping these contributions and raising additional funds which would also be prohibited by the Code of Ethics. Public Official #1 decided to engineer a repeal of the relevant sections of the Code by bribing the President of City Council, Francisco Acosta, in violation of federal criminal law. Lloyd assisted Public Official #1 with this scheme and helped devise and implement it.
Public Official #1 and Lloyd decided to offer Acosta an $1,800 “loan” to the campaign committee of Acosta’s ally ( “Public Official #2”), which would be “forgiven” upon Acosta successfully orchestrating a repeal of Sections 1012 and 1006(H). Acosta accepted the payment on April 10, 2015 and then, three days later, introduced legislation to eliminate certain restrictions in the Code of Ethics in accordance with Public Official #1’s wishes (“the repeal bill”). As agreed to by Public Official #1, Acosta, and Lloyd, the repeal bill would have repealed Section 1012 in its entirety, thereby eliminating the restrictions on campaign contributions and nullifying Section 1006(H)’s prohibition on awarding “no-bid contracts” to certain donors.
To conceal his participation in the scheme, Public Official #1 sought to finance any campaign contributions to Public Official #2 with funding from third parties. Public Official #1 also sought to offer Acosta additional funding for the campaign committee of Public Official #2 as a reward for Acosta successfully orchestrating the passage of the repeal bill, although only a single payment – an $1,800 check payable to the campaign of Public Official #2 (“the bribe check”) – was ever provided to Acosta. When Acosta took possession of the bribe check, he agreed that, in order to avoid scrutiny of his agreement with Public Official #1 and Lloyd, neither Acosta nor Public Official #2 would deposit the bribe check until a later date. Acosta then attempted to persuade other members of City Council to pass the repeal bill before the primary election by falsely asserting that he was motivated solely by the best financial interests of Reading and by concealing that he had received the bribe check.
After the FBI confronted Acosta, Acosta withdrew from the conspiracy and absented himself from the vote on the repeal bill. The repeal bill was unanimously defeated and Public Official #1 was defeated in the Democratic primary election. After the election, Public Official #1 believed that his best chance of retiring his campaign debt was to obtain additional campaign contributions from parties who sought favorable official action, including the awarding of contracts, from the City of Reading before the expiration of Public Official #1’s term in office. Public Official #1 and Lloyd conspired to retire Public Official #1’s campaign debt by causing city contracts, collectively worth millions of dollars, to be awarded to vendors who would be willing to provide Public Official #1 with sufficiently large campaign contributions, all in violation of federal criminal law. Lloyd took numerous steps to help Public Official #1 accomplish this goal.
After accepting the guilty pleas, United States District Judge Juan R. Sanchez scheduled a sentencing hearing on March 2, 2016 for Wiles, and on March 3, 2016 for Lloyd. Wiles faces a maximum possible sentence of 20 years in prison, a fine, three years of supervised release, and a $100 special assessment. Lloyd faces a maximum possible sentence of five years in prison, a fine, three years of supervised release, and a $100 special assessment. For his role in conspiring with Public Official #1 to repeal the Code of Ethics, Acosta pleaded guilty on August 5, 2015 and is awaiting sentencing.
These cases are being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Pennsylvania State Police. They are being prosecuted by Assistant United States Attorneys Joe Khan and Nancy Beam Winter.
Chicago Man Charged with Posting Online Threat of Gun Violence at University of ChicagoRead the Press Release
CHICAGO — A Chicago man was arrested today for allegedly threatening to murder students and staff at the University of Chicago.
JABARI R. DEAN, 21, of Chicago, is charged with transmitting a threat in interstate commerce. He is scheduled to make an initial appearance today at 3:00 p.m. before U.S. Magistrate Judge Susan E. Cox.
Dean was arrested without incident this morning. In a Thanksgiving weekend posting on a social media website, Dean stated that he would execute approximately sixteen students or staff members on the campus quad of the University of Chicago on Nov. 30, 2015, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. Dean also stated in the posting that he would die “killing any number of white policemen that I can in the process,” according to the complaint.
Federal authorities identified Dean and confronted him prior to the 10:00 a.m. deadline referenced in the threat.
The arrest and charge were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Chicago Police Superintendent Garry F. McCarthy; and the University of Chicago Police Department.
The charge carries a maximum sentence of five years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorneys Tobara S. Richardson and Bethany Biesenthal.
Cedar Rapids Man Pleads Guilty to Being Unlawful Drug User in Possession of FirearmsRead the Press Release
A man who was found in possession of two firearms during a traffic stop pled guilty today in federal court in Cedar Rapids.
Tyshawn Bush, age 20, from Cedar Rapids, Iowa, was convicted of one count of being an unlawful user of marijuana in possession of firearms.
In a plea agreement, Bush admitted that, on June 27, 2015, he purchased a Savage Arms, 12 gauge shotgun in Cedar Rapids, Iowa. In purchasing the firearm, Bush falsely denied using illegal controlled substances. In truth, at the time Bush purchased the shotgun, he was a regular unlawful user of marijuana. On July 16, 2015, Cedar Rapids police officers made a vehicle traffic stop on the southwest side of Cedar Rapids. Bush was a passenger in the vehicle. On the floor of the back seat, where Bush was sitting, officers found a loaded Lorcin .25 caliber pistol, with an obliterated serial number. In the trunk, officers found a Westernfield 16 gauge shotgun which Bush admitted was his.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Bush remains in custody of the United States Marshal. Bush faces a possible maximum sentence of ten years’ imprisonment, a $250,000 fine, $100 in special assessments, and three years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney C.J. Williams and was investigated by the Cedar Rapids Police Department and the Federal Bureau of Investigation as part of the Safe Streets Task Force.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-0086-LRR.
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Carthage Man Sentenced for Selling MarijuanaRead the Press Release
TYLER, Texas – A 43 year old Carthage, Texas man has been sentenced to federal prison for conspiring to distribute over 50 kilograms of marijuana that was stolen from the Tenaha City Marshal’s Office in 2010 announced U.S. Attorney John M. Bales todayU.S. Attorney John M. Bales today.
Roderrete Dewrayne McClure (McClure) pleaded guilty on March 6, 2015, to Conspiracy to Distribute Marijuana and was sentenced to 56 months in federal prison today by U.S. District Judge Michael H. Schneider. According to information presented in court, sometime before August 22, 2010, McClure and a confederate removed over fifty (50) kilograms of marijuana from the Tenaha City Marshal’s Office evidence room. Fire starter logs were substituted to cover the taking of the marijuana. On August 17 and 19, 2010, McClure took digital images of the stolen marijuana and transmitted them to person identified only as (T.F.) in order to facilitate the sale of the drugs in the Dallas area. In July 2010, McClure provided some of the stolen marijuana to another person, identified as K.M., to sell in the area of Shreveport, Louisiana. McClure admitted that he received payments in exchange for the marijuana.
This case was investigated by the F.B.I. Tyler Office and the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives, Tyler Office and prosecuted by Assistant U.S. Attorney Jim Noble.
Carbondale Man Charged with Receiving Child PornographyRead the Press Release
SCRANTON-The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Criminal Information was filed on November 25, 2015 charging a 25-year-old Carbondale man with receiving child pornography.
According to United States Attorney Peter Smith, the Information alleges that Edward Jeter used a computer to download images of child pornography during November 2014 through August 2015.
The charge stems from an investigation by agents of the Federal Bureau of Investigation.
If convicted, Jeter faces a mandatory minimum sentence of five years in prison and a potential maximum sentence of 20 years in prison.
This case was brought as part of Project Safe Childhood, a nationwide initiative
launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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California Man Sentenced for Operating $1.6 Million Internet FraudRead the Press Release
KANSAS CITY, KAN. – A California man was sentenced in federal court in Kansas Monday to a year and a day in prison for operating an Internet fraud scheme that cost more than 200 victims a total of more than $1.6 million, U.S. Attorney Barry Grissom said. The defendant was ordered to pay more than $1.6 million in restitution to the victims.
Anthony Renfrow, 57, Folsom, Calif., pleaded guilty to one count of conspiracy to commit wire fraud. In his plea, he admitted he made fraudulent claims to entice people to pay to become “autosurf investors” with 14DailyPlus.com. The business was promoted to buyers in the Kansas City metro area.
Investors paid a membership fee and were promised a 14 percent daily return on their money for clicking on advertisers’ Web sites for a certain period of time each day. To achieve that rate of return, 14DailyPlus.com purportedly pooled the capital investments of members and purchased advertising units on the Internet with Fortune-500 type companies.
Renfrow held regularly scheduled conference calls with investors via telephone and Internet to lull them into believing the program was legitimate and returns on investments were being paid as promised. In truth, there was no investment vehicle and the promise of a 14 percent daily return was completely unrealistic.
Grissom commended the Internal Revenue Service – Criminal Investigation, the U.S. Postal Inspection Service, the Johnson County District Attorney’s Office, the California Attorney General’s Office and Assistant U.S. Attorney Scott Rask for their work on the case.
California Firearms Trafficker Sentenced to 8½ Years in PrisonRead the Press Release
LAS VEGAS, Nev. – A northern California man who lied on federal gun forms to unlawfully purchase approximately 90 firearms in Nevada, was sentenced today to 8½ years in federal prison and three years of supervised release, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and Special Agent in Charge Jill A. Snyder of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) San Francisco Field Division.
Edward Jameson Purry, II, 30, of Oakland, Calif., was sentenced by U.S. District Judge Jennifer A. Dorsey. Purry was convicted by a federal jury in Las Vegas in March 2015 of four counts of illegal acquisition of a firearm.
“This case is of significance because the firearms Purry purchased ended up in the hands of criminals,” said U.S. Attorney Bogden. “The defendant’s conduct was incredibly reckless and irresponsible and has placed the community in danger for years to come.”
“Today’s sentencing represents an example of ATF using its multitude of resources to investigate firearms trafficking,” said Special Agent in Charge Snyder. “Purry purchased about 90 guns, which he sold for a profit of about $100,000. Seventeen of those firearms have been recovered by local law enforcement and were directly related to criminal activity. ATF will continue to pursue firearms trafficking investigations, as they are the primary source and supply of arming violent criminals in our communities.”
According to the court records and evidence submitted at trial, between about June 2013 and September 2013, Purry made false statements on ATF forms to purchase approximately 90 handguns from licensed gun dealers in Las Vegas and Reno. Purry represented on the forms that he was a resident of Nevada when in fact he was a resident of California. Purry sold the majority of the firearms for double their price on the streets of Oakland, including to an individual who he believed was transporting the firearms to Mexico.
This case was investigated by ATF and the United States Postal Inspection Service, and prosecuted by Assistant U.S. Attorney Phillip N. Smith, Jr.
Bronx Man Indicted for Sexual Exploitation, Enticement, and Child Pornography CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriquez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the indictment of DAVID KEITH, a/k/a “David Wright,” a/k/a “David Lee Keith,” for four counts stemming from his sexual exploitation and enticement of minors and his receipt of child pornography.
Manhattan U.S. Attorney Preet Bharara said: “David Keith is charged with preying on some of the most vulnerable members of our community in the way parents fear most. He allegedly approached young girls under the guise of working in modeling, and then coerced and tricked the victims into engaging in sexually explicit conduct with him, capturing it on video. Together with our partners at the FBI, we are committed to protecting children from those who seek to sexually exploit them.”
FBI Assistant Director-in-Charge Diego Rodriquez said: “As alleged, David Keith targeted young girls as they walked in public. He preyed on their vulnerabilities, giving them praise and attention. With twisted tongue, he allegedly told them he could make them models, tricking them into sexually explicit conduct with him, captured on video. He then allegedly threatened them if they revealed the truth. The FBI continues to work on this, and other similar cases, to stop predatory activity that steals the innocence of childhood and threatens our community.”
According to the Indictment[1]:
On October 13, 2013, KEITH, who lives in the vicinity of the University Heights, Morris Heights, Mount Hope, and Mount Eden neighborhoods in the Bronx, New York, approached three girls, approximately 12 to 14 years old, on the street, presented himself as part of the modeling industry, and encouraged the girls to model for him. KEITH induced one of the girls to enter his vehicle, a gray Yukon Denali, where he video recorded, among other things, himself engaging in forcible sexual conduct with her. KEITH threatened the victim not to tell anyone and told her that he had been watching her.
On or about October 12, 2013, KEITH, also in his gray Yukon Denali, video recorded the exposed genitals of a second victim, approximately 8 to 9 years of age.
In addition, KEITH’s computer contained images and videos of child pornography downloaded from the Internet.
KEITH is scheduled to be arraigned before Judge Alison J. Nathan, on December 4, 2015, at 2:00 p.m.
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KEITH, 38, of the Bronx, New York, was arrested on November 17, 2015, in the Bronx, New York, and has been in Federal custody since. KEITH is charged with two counts of sexual exploitation of a child, each of which carries a maximum sentence of 50 years in prison; one count of receipt of child pornography, which carries a maximum sentence of 40 years in prison; and one count of possession of child pornography, which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Any individuals who believe they have information concerning DAVID KEITH that may be relevant to the investigation should contact the Federal Bureau of Investigation at 1-212-384-1000 or https://tips.fbi.gov/.
Mr. Bharara praised the efforts of the FBI in this investigation. He added that the investigation is continuing.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Matthew Podolsky is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment forth herein constitute only allegations, and every fact described should be treated as an allegation.
Braymer Man Pleads Guilty to $300,000 Cattle FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Braymer, Mo., man pleaded guilty in federal court today to a cattle fraud scheme that the government contends resulted in losses of nearly $300,000 to his victims.
Garland Joseph “Joey” Nelson, 21, of Braymer, waived his right to a grand jury and pleaded guilty before U.S. District Judge Howard F. Sachs to a federal information that charges him with fraud using property mortgaged or pledged to farm credit agencies.
According to the government, Nelson engaged in a three-part fraud scheme that caused a combined loss of at least $293,772.
Loan Fraud: $138,452
By pleading guilty today, Nelson admitted that he engaged in a scheme to sell at least 114 mortgaged head of cattle that were pledged to the Farm Service Agency (FSA), without notifying FSA of the sales, from April 1, 2013, through June 2014. He did not instruct purchasers to address proceeds checks to the FSA as well as to him, and he did not remit the bulk of the sale proceeds to FSA, as was required by the terms of his loans. Instead, Nelson admitted that he kept the funds for his personal use.
Nelson received two livestock operating loans in April 2013 totaling $158,000 for the limited purpose of buying and raising cattle. In violation of the express terms of his loans, and with fraudulent intent, Nelson conducted livestock sales from April 2013 to July 2014 under the name “Joey Nelson” to avoid detection. He conducted other sales in the name of a friend to further obfuscate his involvement. His friend then transferred the proceeds to Nelson.
Nelson ceased making repayments on his FSA loans as of Jan. 12, 2015. His outstanding principal balance is $138,452, plus applicable interest and penalties. Nelson filed for Chapter 7 bankruptcy on June 25, 2015.
Livestock Sales: $124,000
According to the government, Nelson also schemed to remove identification from cattle that was owned by others but placed in his care to graze. The government contends that Nelson removed identification tags from 646 head of cattle that belongs to others, and commingled these cattle with his own and with those owned by his neighbor and landlord, in order to sell livestock undetected. The government will present evidence at Nelson’s sentencing hearing that he sold those cattle for his own benefit, for a total loss to three victims of $124,000.
Insurance Fraud: $31,320
According to the government, Nelson also made false statements to Farm Bureau Insurance for the purpose of collecting insurance proceeds on cattle he had insured. Nelson did not disclose to Farm Bureau Insurance that the FSA had first lien on all of his chattel. From Dec. 15, 2013 through March 30, 2014, according to the government, Nelson made fraudulent statements to Farm Bureau Insurance by falsely indicating his livestock had drowned or been stolen. In fact, he had not lost the livestock in the manners claimed, and he was selling numerous cows and calves to various auction houses. Nelson filed four loss claims to Farm Bureau Insurance, resulting in a loss of $31,320.
Under federal statutes, Nelson is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $1,000 and an order of restitution. 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 Daniel M. Nelson. It was investigated by the U.S. Department of Agriculture, Office of Inspector General.
Boyd County Couple Sentenced to Prison for Defrauding Social Security Administration of Benefit PaymentsRead the Press Release
ASHLAND — An Ashland, Ky., couple, previously convicted of devising a scheme to defraud the Social Security Administration (SSA) and the Kentucky Medicaid Program, out of hundreds of thousands of dollars in benefit payments, has been sentenced to federal prison.
U.S. District Court Judge David L. Bunning sentenced Diana Lynn Ball, 59, to 36 months in federal prison for Supplemental Security Income (SSI) fraud, Medicaid fraud, theft of government property and making a false statement. Her husband, Lawrence Ball, 59, received 24 months for making a false statement. Judge Bunning has also ordered the couple to pay restitution, equal to the amount of the improper benefits received.
Both defendants were tried and convicted in July. Evidence at the trial established that, from 1996 until December of 2013, Diana Ball intentionally concealed her true living arrangement from the SSA, in order to fraudulently collect SSI and Medicaid benefits.
According to testimony, Ball repeatedly told the SSA she had separated from her husband and was not sharing living expenses. In reality, Ball had been living with her husband and was receiving financial support from him. Had the SSA been aware of the true living arrangement, Ball would not have been eligible to receive the benefit payments.
SSI is an income assistance program designed to provide financial assistance to elderly and disabled individuals who meet the program’s eligibility requirements. Kentuckians who are eligible for SSI also qualify for benefits under the Kentucky Medicaid Program.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky, and Guy P. Fallen, Special Agent in Charge, Social Security Administration, Office of Inspector General, jointly made the announcement today.
The investigation was conducted by the SSA, Office of Inspector General. Assistant U.S. Attorney Laura K. Voorhees prosecuted this case on behalf of the federal government.
Bastrop resident sentenced to 27 months in prison for sex offender registration violationRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a Bastrop resident was sentenced to 27 months in prison for not updating his sex offender registration.
Solomon Lewis Devoil, 50, of Bastrop, La., was sentenced by U.S. District Judge Robert G. James on one count of failure to register as a sex offender. He was also sentenced to five years of supervised release. According to evidence presented at the August 10, 2015, guilty plea, Devoil knowingly failed to register as a sex offender in Louisiana and traveled in and out of the Western District of Louisiana without registering as a sex offender in the State of Louisiana.
In December 1997, Devoil pleaded guilty in San Bernadino Superior Court in California to lewd act upon a child. The victim was 14, and Devoil was 32. He is required to register as a sex offender for life in the State of California as well as Louisiana. Bastrop Police arrested him for failure to appear in court in January 2014 and in February of 2014 for simple burglary. On May 12 and 14, 2015, Devoil failed to appear in court for hearings related to the simple burglary charge, and a warrant for his arrest was issued. Devoil was arrested on June 15, 2015 on a federal arrest warrant at an elementary school in Oklahoma where he was working and transported back to Louisiana to face charges.
The U.S. Marshals Service conducted the investigation. Assistant U.S. Attorney Michael O’Mara prosecuted the case.
Allegany County Man Sentenced to 30 Years in Prison for Production and Possession of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles sentenced Richard Alan Blank, Jr., age 44, of LaVale, Maryland, today to 30 years in prison, followed by lifetime supervised release, for two counts of sexually abusing a minor to produce child pornography, and for possession of child pornography. A federal jury convicted Blank on July 2, 2015.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and by Allegany County State’s Attorney Michael O. Twigg, Colonel William M. Pallozzi, Superintendent of the Maryland State Police, Allegany County Sheriff Craig Robertson, Cumberland Police Chief Charles H. Hinnant, Frostburg Police Chief Royce C. Douty, Frostburg University Chief of Police Cindy R. Smith, as part of the Allegany County Combined Criminal Investigations Task Force (C3I).
According to evidence presented at Blank’s four-day trial, on May 30, 2014, Blank used a minor to engage in sexually explicit conduct in order to produce images documenting the sexual abuse of the minor. A search conducted by law enforcement on June 2, 2014 revealed that Blank possessed images documenting the sexual abuse of the minor female on his cellular phone.
As a result of his conviction, Blank will be required to register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
Blank has been detained since his arrest.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and the Allegany County Combined Criminal Investigations Task Force (C3I), comprised of the Maryland State Police, Cumberland Police Department, Allegany County Sheriff’s Office, Frostburg Police Department, Frostburg University Police Department and Allegany County State’s Attorney’s Office, for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorneys Judson T. Mihok and Aaron S. J. Zelinsky, who prosecuted the case.
***media Advisory***Read the Press Release
CHARLESTON, W.Va. – United States Attorney Booth Goodwin will launch public service announcements (PSAs) to highlight additional resources in the fight against drug addiction in West Virginia. Goodwin will also introduce a new smartphone app to assist in quickly connecting individuals with local services focused on substance abuse treatment.
The launch of these PSAs and the smartphone app will take place at a press conference in the U.S. Marshal’s Office, located in the Robert C. Byrd United States Courthouse in Charleston, on Tuesday, December 1, 2015, at 12:30 p.m.
WHO:
- United States Attorney Booth Goodwin
WHAT:
- Press conference to launch PSAs and introduce a new smartphone app in the fight against drug addiction
WHERE:
- Robert C. Byrd United States Courthouse
- U.S. Marshal’s Office – Suite 3600
- 300 Virginia Street, East
- Charleston, WV 25301
WHEN:
- Tuesday, December 1, 2015, at 12:30 p.m.
Follow us on Twitter: SDWVNews
Saturday 28 November 2015
Statement by Colorado U.S. Attorney John Walsh Regarding Colorado Springs Mass ShootingRead the Press Release
DENVER – Colorado U.S. Attorney John Walsh issued the following statement today regarding the mass shooting in Colorado Springs:
"Our thoughts today are with the victims of this terrible crime, their families, and also with the City of Colorado Springs, the University of Colorado at Colorado Springs Police Department and Planned Parenthood, all of whom were victims of this senseless violence. Selfless acts of great courage and determination by law enforcement officers prevented far greater bloodshed. One of those officers gave his life, and others were wounded as they fought to confront the threat and protect others. They deserve our undying gratitude.
"The United States Attorney's Office and federal law enforcement have been working throughout in close support of Colorado Springs, El Paso County, and State of Colorado law enforcement, as well as Fourth Judicial District Attorney Dan May. We also have been in close contact with both the National Security Division and Civil Rights Division of the Department of Justice. The federal investigation is ongoing and focused."
John Walsh, United States Attorney, District of Colorado
Attorney General Loretta E. Lynch Statement on Yesterday's Attack in ColoradoRead the Press Release
Attorney General Loretta E. Lynch released the following statement on yesterday’s attack in Colorado Springs, Colorado:
“This unconscionable attack was not only a crime against the Colorado Springs community, but a crime against women receiving healthcare services at Planned Parenthood, law enforcement seeking to protect and serve, and other innocent people. It was also an assault on the rule of law, and an attack on all Americans' right to safety and security. Justice Department attorneys, the FBI, and the ATF are on the scene to offer assistance and review the situation.
“We stand ready to offer any and all assistance to the District Attorney and state and local law enforcement as they move forward with their investigation. And in the days ahead, our thoughts and prayers will be with the victims of this horrific attack – including Officer Garrett Swasey, who gave his life in order to keep others safe. We wish a speedy recovery for those who were injured, and peace and strength for the loved ones of the fallen.”
Friday 27 November 2015
Tioga County Man Sentenced to Prison for Environmental CrimeRead the Press Release
SYRACUSE, NEW YORK – Brian Davis 46, of Owego, New York, was sentenced to serve one year and one day in federal prison after pleading guilty earlier this year to one felony count of treating, storing, and disposing of hazardous waste without a permit, in violation of the Resource Conservation and Recovery Act, announced United States Attorney Richard S. Hartunian, Vernesa D. Jones-Allen, Special Agent in Charge, New York Area Office, Criminal Investigation Division, U.S. Environmental Protection Agency ("EPA CID") and Basil Seggos, Acting Commissioner, New York State Department of Environmental Conservation ("DEC"). In addition to the prison sentence, Davis was sentenced to pay a $5,000 fine and to serve a three-year term of supervised release after release from prison.
In June 2013, Davis, the owner of Large Car LLC, a company in Owego that installs and removes old industrial plating equipment for re-use or recycling, agreed to remove various hazardous chemicals, including arsenic, chromium, lead, and selenium, from a bankrupt waste generator facility in New Hampshire. Davis did not have a permit or environmental license to remove these chemicals, but nevertheless transported them to the Large Car LLC facility in Owego, New York, where he treated, stored, and disposed of them over the course of nearly a year. Davis stored the hazardous waste without labeling, and failed to properly isolate incompatible materials, or protect them from the elements. Davis also treated and disposed of much of this waste by igniting and evaporating it, mixing it with other materials, and shipping it to offsite locations without listing it on manifests, as required.
United States Attorney Richard S. Hartunian said: "The illegal disposal of hazardous chemicals contaminates the environment and endangers public health. The defendant’s disregard of the statutory requirements that protect people and natural resources risked great harm. Prosecution of such conduct is a high priority."
"Industrial waste can pose serious threats to human health and the environment, so it’s imperative that companies dispose of their waste properly in order to protect local communities," said Special Agent in Charge Vernesa Jones-Allen, who oversees EPA’s criminal enforcement program in New York. "Today’s sentence demonstrates that when individuals refuse to comply with the law and put the public at serious risk, they will be held accountable for their actions." DEC Acting Commissioner Basil Seggos stated, "Violations of New York State’s environmental laws and regulations are serious offenses with serious consequences. This sentencing is the result
of the collaborative efforts of local, state and federal partners working together to accomplish a shared mission to protect our citizens and communities and should send a strong message that New York State has zero tolerance for those who shirk environmental policies and procedures put in place as protections."
This case was investigated by special agents and criminal investigators with EPA CID and DEC, and it was prosecuted by Assistant United States Attorney Michael F. Perry.
Secretary Pleads Guilty to Tax FraudRead the Press Release
PITTSBURGH - A resident of Washington County, Pennsylvania pleaded guilty in federal court to a charge of conspiracy to defraud the Internal Revenue Service, United States Attorney David J. Hickton announced today.
Ann E. Harris, 53, pleaded guilty to one felony count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that during the period from January 2006 through April 15, 2013, Harris knowingly and willfully conspired with another individual to defraud the IRS by impairing the IRS in its assessment and collection of income taxes. As a result of the conspiracy, the tax loss to the IRS was $4,044,946.
Harris was the personal assistant, bookkeeper and secretary to the co-conspirator and performed numerous duties as an employee of the co-conspirator and the co-conspirator’s businesses, including bookkeeping, payroll, accounts receivable and accounts payable. During the period from 2006 through 2013, Harris received wages and bonuses totaling over$1,000,000 and a vehicle for her personal use.
Harris and the co-conspirator used companies owned and controlled by the co-conspirator to fraudulently pay for and unlawfully deduct as business expenses, millions of dollars in personal expenses of the co-conspirator. Harris fraudulently classified personal bills of the co-conspirator as business expenses in the accounting software of the businesses and issued checks drawn on business bank accounts for payment of purely personal expenses of the co-conspirator. Harris entered fabricated account categories for her false entries in the accounting software of the businesses so that they appeared as legitimate business expenses.
The businesses involved in the scheme included Automated Health Systems, Inc.; Automated Health Systems Delaware; Nocito Enterprises, Inc.; Automated Health Services, LLC.; Management Financial Services, Inc.; Golden Triangle Leasing Co., Inc.; Donotti Properties, Inc.; Palace Development Company, Inc.; Northland Properties; and Jonolley Properties. These business entities had offices and addresses in the Western District of Pennsylvania and were effectively controlled or owned by the co-conspirator.
Harris fraudulently classified as business expenses over $27,000,000 in personal expenditures for the co-conspirator’s residential mansion and other personal expenses. The expenditures related to the construction, furnishing and landscaping of the co-conspirator’s multi-million dollar residential mansion, as well as salaries for the co-conspirator’s butler and personal cook. Harris also falsely characterized as business expenses expenditures for the co-conspirator’s exotic automobile collection which included a Mercedes, a Maserati and a Bentley; expenses for the co-conspirator’s country club membership; expenses related to the co-conspirator’s wife’s Jaguar; expenses for private school tuition; and expenses for personal residences for the co-conspirator’s family members.
Judge Hornak scheduled sentencing for April 19, 2016 at 9:30 a.m. The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.Pending sentence, the court released Harris on bond.
Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.
The United States Internal Revenue Service - Criminal Investigation, conducted the investigation leading to the Information in this case.
Milwaukee Man Sentenced to 18 Years ImprisonmentRead the Press Release
Acting United States Attorney Gregory J. Haanstad announced today that Milwaukee resident Drayon Wren (age: 38), was sentenced to 18 years imprisonment followed by 5 years of supervised release for federal sex trafficking charges involving three minor victims and one adult victim.
On July 16, 2015, Wren plead guilty to three counts of sex trafficking of a child and one count of sex trafficking an adult by use of force, fraud or coercion. Wren recruited the three minors girls and an adult female in Milwaukee and transported them to Elk Grove, Illinois to engage in prostitution.
In his sentencing remarks, the Honorable J.P. Stadtmueller, emphasized the depravity of Wren’s conduct, “on our young people, our most important resource.”The judge further stated that “the public at large deserves protection from this terrible, terrible business” of sex trafficking.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys= Offices and the Criminal Division=s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
This case was investigated by law enforcement officers from the Human Trafficking Task Force, including those from the Wisconsin Department of Justice Division of Criminal Investigation, the Federal Bureau of Investigation, and the Milwaukee Police Department. The case was prosecuted by Assistant United States Attorneys Penelope Coblentz and Joseph R. Wall.
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