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Friday 27 November 2015
Lafayette man pleads guilty to felon in possession of a firearm chargeRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Lafayette man pleaded guilty Tuesday to possessing a firearm after having previously been convicted of a felony.
Jarrod Ty Foxworthy, 29, of Lafayette, pleaded guilty before U.S. District Judge Richard T. Haik to one count of possession of a firearm by convicted felon. According to the guilty plea, the Lafayette Parish Sheriff’s Office dispatched a deputy to investigate a complaint on April 2, 2013. Someone matching Foxworthy’s description was seen firing a weapon in the front yard of a home on Nyoka Circle in Lafayette. When Foxworthy arrived to be interviewed by the deputy, he was carrying a black Smith & Wesson M&P .40 caliber semi-automatic handgun and was later taken into custody. The defendant had been previously convicted in March of 2007 in North Carolina state court of common law robbery, for which he was sentenced to 12 to 15 months in prison.
Foxworthy faces up to 10 years in prison, three years supervised release and a $10,000 fine. A sentencing date was not set.
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 the Lafayette Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney David C. Joseph is prosecuting the case.
Danville Woman Charged with Misappropriation of Postal FundsRead the Press Release
Harrisburg - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jamie Billman, age 38, of Danville, Pennsylvania, was charged in a one-count Information with Misappropriation of Postal Funds.
According to United States Attorney Peter Smith, between January 2015 and June 19, 2015, Billman, while serving as a postal employee, Billman misappropriated postal funds at the Northumberland, Danville, and Riverside Post Offices, resulting in a loss of $3,500 to the United States Postal Service.
The investigation of this case was conducted by the United States Postal Service. Prosecution is assigned to Assistant United States Attorney John C. Gurganus, Jr.
Billman faces a maximum sentence of 10 years imprisonment and fines totaling $250,000.
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.
Under the Federal Sentencing Guidelines, the Judge is 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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Wednesday 25 November 2015
Worcester Nurse Arrested in Connection with Stealing MorphineRead the Press Release
BOSTON – A charge against a registered nurse was unsealed Monday in U.S. District Court in Worcester in connection with stealing painkiller from the nursing home where she worked, and then attempting to conceal her crime by replacing the medication with saline.
Lea Roberge, 32, of Worcester, was charged with tampering with a consumer product, specifically the Schedule II controlled substance morphine which is used for pain relief. Roberge was charged in a sealed Complaint on Nov. 20, 2015.
The complaint alleges that in March 2015, while working as a Registered Nurse at Holy Trinity Eastern Orthodox Nursing and Rehabilitation Center, Roberge tampered with morphine sulfate contained in emergency narcotic kits. The kits are available for use at the nursing home in case of an emergency when there is not enough time to obtain medication from the pharmacy. Roberge, who had access to these emergency narcotic kits, used a syringe to extract morphine from six vials and one bottle. In an attempt to avoid detection, she replaced the extracted medication with saline, thereby decreasing the potency of the drug.
The maximum sentence under the statute is 10 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.
In an unrelated but similar case, on Tuesday an ambulance paramedic was sentenced to 30 months in prison after she stole Fentanyl by extracting it from vials and replacing it with saline. Teresa Torres was sentenced in Worcester by U.S. District Court Judge Timothy Hillman.
United States Attorney Carmen M. Ortiz; Spencer Morrison, Acting Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations, New York Field Office; and Commissioner Monica Bharel, MD, MPH, of the Massachusetts Department of Public Health, Division of Food and Drugs, Drug Control Program, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Michelle L. Dineen Jerrett of Ortiz’s Worcester Branch Office.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Warren County, Kentucky, Resident Sentenced to 41 Months in Prison for Scheming with Others to File False Tax Returns in Order to Obtain Fraudulent Tax RefundsRead the Press Release
Ordered to pay $731,293.52 restitution
BOWLING GREEN, Ky. – A resident of Bowling Green, Kentucky, was sentenced this week, by U.S. District Judge Greg N. Stivers, to 41 months in prison and ordered to pay restitution in the amount of $731,293.52 for mail fraud and for entering into an agreement to defraud the Internal Revenue Service (IRS) by obtaining the payment of fraudulent claims, announced United States Attorney John E. Kuhn, Jr.
According to the plea agreement, Fernando Diaz Herrera conspired with others between June 23, 2010, and August 8, 2012 to defraud the IRS and U.S. Department of Treasury, by obtaining false claims. Specifically, Herrera paid Mexican Nationals, who lived outside the United States, for their means of identification, including birth certificates, immunization records and voter cards. The defendant and others then used these documents to obtain Individual Taxpayer Identification Numbers (ITIN). Herrera then used the ITINs to prepare and file fraudulent federal income tax returns – which caused federal income tax refunds to be dispersed.
Herrera admitted to cashing the fraudulent refund checks at financial institutions and businesses in Kentucky. Further, for the purposes of executing the scheme, Herrera admitted to mail fraud when he caused a letter providing a falsely obtained ITIN to be sent from the IRS office in Austin, Texas, to an address in Bowling Green.
Herrera was charged by grand jury indictment, along with co-defendants Maria Chavez Salazar and Julio Ramos, on December 10, 2014.
This case was prosecuted by Assistant United States Attorney Amanda Gregory and was investigated by the United States Secret Service.
United States Announces New Round of Compound Pharmacy Settlements Expected to Result in More Than $30 Million in Fines and RepaymentsRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that the United States has settled allegations against several pharmacies and their owners for fraudulently billing TRICARE, the military’s healthcare program. These settlements reflect a wide range of conduct targeting military personnel and the healthcare programs they depend on. The allegations resolved included liability under the False Claims Act. In addition to those detailed below, the United States has also reached settlements with additional individual owners and physicians totaling more than $6 million.
MedMatch Pharmacy, based in Jacksonville, has agreed to pay more than $4.7 million to resolve concerns that it paid kickbacks to marketers, that it filled prescriptions it knew or should have known were not legitimate, and that it sent prescriptions to states in which it did not have a valid license.
Auburndale-based OHM Pharmacy has agreed to pay $4.1 million to resolve allegations that it knew, or should have known, that it was filling prescriptions from a doctor who was writing them outside the ordinary course of practice. The United States contends that OHM knew, or should have known, this because the sheer magnitude and volume of prescriptions exceeded any other provider. In addition, the prescriptions were for the same compounded prescription substance, despite the patient’s age, condition, or health record.
Jacksonville-based WELL Health Pharmacy and its owner have agreed to pay more than $3 million, as well as 50% of its net profits for five years, to resolve concerns that it knowingly filled prescriptions that were written by referral sources that had a financial interest in the prescriptions. While these referring physicians were purportedly participating in a “research study” related to compounded prescriptions, the government contends that this research study was a sham and that the compensation far exceeded fair market value.
Topical Specialists, a pharmacy based in Jacksonville, Florida, has agreed to pay the government more than $2.2 million for its role in submitting prescriptions that were tainted by so-called “research fees,” which was an elaborate guise for paying physicians to write prescriptions. This settlement is directly related, and in addition to, the WELL Health settlement described above.
Durbin Pharmacy, based in Jacksonville, has agreed to pay $2.1 million, plus 50% of its net profits for five years, for submitting prescriptions that were tainted by kickbacks. The government also contends that Durbin knew, or should have known, that the prescriptions it was filling from three local physicians were not legitimate because there was no bona fide patient/physician relationship.North Beaches Pharmacy, also based in Jacksonville, has agreed to pay $10,000, plus 50% of its net profits for five years, for filling compound prescriptions that the government contends were tainted by illegal kickbacks. North Beaches’ top prescriber – a doctor in Fort Wayne, Indiana who wrote more than $600,000 in prescriptions–was paid over $70,000 in speaker’s fees that the government contends were nothing more than kickbacks for prescriptions.
“The United States Attorney’s Office is committed to tackling healthcare fraud and protecting the TRICARE program,” said U.S. Attorney Bentley. “We will use every tool in our arsenal to hold accountable those who seek to profit by taking unfair advantage of military families.”
These settlements involve false claims submitted to the TRICARE program. These cases were developed as part of a broader effort to identify and target unscrupulous compounding pharmacies. The Middle District of Florida has collected more than $40 million in recoveries related to compounded pharmacies since March 2015.
"I applaud the Department of Justice and the U.S. Attorney for the Middle District of Florida's office for holding these pharmacies and physicians accountable for their actions," said Vice Admiral Raquel Bono, director of the Defense Health Agency. "Their egregious actions targeted American service members, veterans and their families, and in many cases offered them products with little or no substantiated evidence that they would improve health outcomes. The Defense Health Agency will continue working closely with the Justice Department and other state and federal agencies to investigate all those who participated in these nefarious, fraudulent practices."
"The Defense Criminal Investigative Service is committed to protecting the integrity of TRICARE, the U.S. military health care program, so that it continues to provide quality medical care to America's Warfighters and their families, while ensuring that health care facilities and providers comply with Federal laws and regulations," said John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service - Southeast Field Office. "Through joint investigations with our law enforcement partners, DCIS will fully pursue both civil remedies to recover taxpayer dollars and criminal prosecutions to bring violators to justice."
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered more than $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs.
These cases were investigated by the Defense Criminal Investigative Service, the Federal Bureau of Investigation, the Department of Health and Human Services - Office of Inspector General, the Office of Personnel Management, and the Department of Veterans Affairs. They were prosecuted by Assistant United States Attorney Jason Mehta.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
U.S. Attorney's Office Settles Americans with Disabilities Act Case with Webster BankRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that the U.S. Attorney’s Office has reached a settlement with Webster Bank to ensure equal access for individuals with disabilities at all Webster Bank locations, pursuant to the Americans with Disabilities Act (“ADA”).
The agreement resolves an ADA complaint filed by an individual who is deaf who alleged that Webster Bank would not do business with him using a video relay service. Since the commencement of the investigation, Webster Bank has worked cooperatively to develop and amend its policies and practices to comply with the ADA and the Department of Justice’s implementing regulations.
“Individuals who have disabilities must not be denied equal access to the services offered by financial institutions,” said U.S. Attorney Daly. “Webster Bank’s cooperation during this investigation reflects the bank’s commitment to equal access and effective communication with all of its customers, including those with disabilities. Our office has also received complaints alleging that other financial institutions have refused to communicate with individuals with disabilities who use relay services to communicate by telephone. As such refusals suggest a discriminatory practice, we have begun a compliance review of banks in Connecticut to ensure that all such banks are complying with their obligations under the ADA.”
The agreement requires Webster Bank to accept video relay calls in all of its branches and to amend its policies, practices and training to ensure the removal of barriers to access at its branches.
Title III of the ADA prohibits discrimination against individuals with disabilities by businesses that serve the public. Among other things, the ADA requires financial institutions, accountants, lawyers, doctors and other businesses to provide auxiliary aids and services that are necessary for effective communication. For individuals who are deaf or hard of hearing, auxiliary aids include qualified sign language or oral interpreters, use of relay services, computer-assisted real time transcription, and, for simple communications, the exchange of written notes.
Individuals who believe that they may have been victims of discrimination can file a complaint with the U.S. Attorney’s Office at 203-821-3700. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Additional information about the ADA can be found at www.ada.gov, or by calling the Department’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).
This matter was handled by Assistant U.S. Attorney Ndidi N. Moses with the assistance of the Disability Rights Section of the U.S. Department of Justice Civil Rights Division.
Two Cape Coral Men Indicted for Credit Card Fraud and Aggravated Identity TheftRead the Press Release
Fort Myers, Florida – United States Attorney A. Lee Bentley, III announces the return by a federal grand jury of indictments charging Edrey Santo Rojas (30) and Henry Alberto Fernandez Gomez (29), both of Cape Coral, with credit card fraud and aggravated identity theft. Rojas is also charged with possession of a credit card skimming device. If convicted on all counts, each faces up to 10 years in federal prison for the credit card fraud and a consecutive term of 2 years for each aggravated identity theft charge. Rojas also faces up to 15 years’ imprisonment for possession of the credit card skimming device.
According to the indictment, on or about May 23, 2014, in Lee County, Rojas possessed, with intent to defraud, a credit card skimmer. The indictment also alleges that between December 9, 2014, and August 8, 2015, he used one or more credit card numbers assigned to another person, without permission, to obtain something of value in excess of $1,000. Rojas also used three counterfeit and unauthorized access devices with account numbers belonging to financial institutions and individuals.
According to a separate indictment, between December 30, 2014, and April 13, 2015, Fernandez Gomez used one or more credit card numbers assigned to another person, without permission, to obtain something of value in excess of $1,000. He also used counterfeit and unauthorized access devices with account numbers belonging to financial institutions and individuals, without lawful authority.
An indictment is merely a formal charge that a defendant has violated one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation, the Lee County Sheriff’s Office and the Cape Coral Police Department, with assistance from the United States Secret Service and the State Attorney’s Office, 20th Judicial Circuit. It will be prosecuted by Assistant United States Attorney David G. Lazarus.
Rochester Woman Pleads Guilty to Bank RobberyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Tiffany Hogan, a.k.a. Michael Hogan, of Rochester, NY, pleaded guilty to robbing the Chase Bank at 2900 Dewey Avenue in Rochester before U.S. District Judge David G. Larimer. The charge carries a maximum possible penalty of 20 years in prison, a fine of $250,000, or both.Assistant U.S. Charles E. Moynihan, who is handling the case, stated that on May 22, 2015, Hogan entered the Chase Bank just after it opened and passed the bank teller a note demanding money. The note also indicated that nobody would be hurt if the teller complied. The teller provided Hogan with a specific amount of United States currency.
The defendant left the bank and entered a white minivan in which co-defendant Maximilion Broadnax was waiting and the two drove away. Hogan and Broadnax were arrested later that day at 17 Second Street in Rochester by Rochester Police officers who were looking for Broadnax in connection with his involvement in stolen vehicles. While taking Broadnax into custody, officers saw that Broadnax’s pants fell down and a large amount of United States currency fell out.
Charges are pending against Maximilion Broadnax. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, as well as the Town of Greece Police Department, under the direction of Chief Patrick Phelan, and the Rochester Police Department, under the direction of Chief Michael Ciminelli.
Sentencing is scheduled for January 19, 2016, at 10:30 a.m. Judge Larimer.Plainfield scout leader facing child pornography chargesRead the Press Release
Indianapolis--United States Attorney Josh J. Minkler, announced today a former Boy Scout leader has been charged by a criminal complaint with distributing and possession child pornography. Thomas M. Franks, 55, Plainfield, was arrested in his home yesterday and had his initial appearance in federal court this afternoon.
“Our children deserve better from the people we place in positions of trust,” said Minkler. “Those who chose to prey on the youngest of our citizens will be held strictly accountable and face the full wrath of federal prosecution.”
On November 2, 2015, detectives from the Indianapolis Metropolitan Police Department received information from the National Center for Missing and Exploited Children (NCMEC) regarding a pornographic image being uploaded to an email account. The images were traced to a computer at Franks’ Plainfield home.
The government alleges that for nearly four years, Franks has been communicating in chat incest rooms. He would portray himself as the father of six and eight year old daughters. Franks then received sexually explicit images and videos of young children from others in the chat room. The majority of these images were of prepubescent girls engaged in sexually explicit conduct. At the time of the search, over 230 images were recovered from a computer and a thumb drive.
Franks was an assistant scout leader with Plainfield Troop 304 when engaged in the conduct described above. He remains in the custody of the United States Marshal’s Service.
Anyone with information on this case is encouraged to contact IMPD Detective Laura Smith at 317-327-3553 or NCMEC at 800-THE LOST (843-5678).
According to Assistant United States Attorneys Kristina Korobov and Steven D. DeBrota who are prosecuting this case for the government, Franks could face up to 20 years on each count if convicted.
A criminal complaint is only a charge and not evidence of guilt. All defendants are presumed innocent until proven guilty in federal court.
OCDETF-Sponsored National Heroin ConferenceRead the Press Release
ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), attended the National Heroin Conference held on November 18-19, 2015, in Atlanta, Georgia. The conference was sponsored by the Organized Crime Drug Enforcement Task Force (OCDETF).
OCDETF is a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. The participants of the OCDETF Program include the 94 U.S. Attorneys’ Offices, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the DEA, the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS), the U.S. Coast Guard, the U.S. Immigration and Customs Enforcement (ICE), the U.S. Marshals Service, the Criminal and Tax Divisions of the U.S. Department of Justice and numerous State and local agencies.
The OCDETF-Sponsored National Heroin Conference was attended by DEA heads, OCDETF Coordinators and U.S. Attorneys from U.S. Attorney’s Offices. The purpose of the conference was to collaborate to combat the growing epidemic of heroin and opioid abuse in the United States.
ND Man Sentenced for Receipt and Possession of Child PornographyRead the Press Release
FARGO - U. S. Attorney Christopher C. Myers announced that on Nov. 24, 2015, Christopher Halligan, 47, Emerado, ND, was sentenced before U. S. District Judge Ralph R Erickson to serve eight years in prison for one count of receipt of materials containing child pornography and three counts of possession of child pornography. Judge Erickson also sentenced Halligan to serve five years of supervised release and pay a $400 special assessment to the Crime Victims Fund. Finally, Halligan was ordered to pay $3000 in restitution to two of the victims depicted in the child pornography.
On Sept. 26, 2014, a ND Bureau of Criminal Investigations Special Agent downloaded child pornography from Halligan’s computer via a peer-to-peer (P2P) network. Law enforcement assigned to the Internet Crimes Against Children Task Force subsequently executed a search warrant on Halligan’s residence in Grand Forks county. A forensic examination of the media eventually revealed more than 28,000 files depicting children engaged in sexually explicit conduct.
This case was investigated by the Department of Homeland security - Homeland Security Investigations and the ND Bureau of Criminal Investigation.
Assistant U. S. Attorney Jennifer Puhl prosecuted the case.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys’ Offices, Project Safe Childhood, in conjunction with the Internet Crimes Against Children (ICAC) Task Force help federal, state, and local law enforcement agencies enhance their investigative responses to offenders who use the Internet, online communications systems, and/or computer technology to sexually exploit children. The ICAC program is a national network of 61 coordinated task forces engaging in proactive investigations, forensic investigations, and criminal prosecutions. Project Safe Childhood also helps to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Montgomery Man Sentenced for Selling Firearms on the Dark WebRead the Press Release
Montgomery, Alabama - Michael Albert Focia, 48, of Montgomery, Alabama was sentenced yesterday to 51 months in prison for dealing in firearms without a license and two counts of selling guns to people who were outside the State of Alabama, announced George L. Beck, Jr., United States Attorney for the Middle District of Alabama.
The evidence at trial and at his sentencing hearing proved that Focia was selling firearms on the non-publicly accessible portions of the internet, commonly referred to as the “dark web” or “deep web.” During the investigation, law enforcement agents determined that Focia had unlawfully sold and shipped at least 32 firearms to people all over the world—including Australia and Sweden. The agents also learned that, in shipping these firearms, Focia had used various ruses to hide his identity, such as placing false return address labels on packages, using aliases to send packages, falsely declaring the contents of the packages he was sending, and packing the guns so that they appeared to be computer hard drives.
“Modern criminals often think that the secrecy provided by the internet gives them freedom to violate the law,” stated U.S. Attorney Beck. “This case proves them wrong and proves that even the most technologically savvy criminal, such as Focia, will be detected, prosecuted, and forced to spend time in prison when he or she uses modern technology to engage in old fashioned crime.”
This case was investigated by the Alcohol, Tobacco, Firearms and Explosives, the United States Postal Inspection Service, with the help of the Montgomery County Sheriff’s Office, Elmore County Sheriff’s Office, and the United States Marshals Service. The case was prosecuted by Assistant United States Attorney Jonathan S. Ross.
Michigan Man, Tyrone Smith, Pleads Guilty to Sex Trafficking Four Victims, Including One MinorRead the Press Release
GRAND RAPIDS, MICHIGAN – Tyrone Smith, 45, of Lansing, Michigan, pled guilty yesterday in federal court to three counts of sex trafficking girls and women and transporting them across state lines for prostitution. He will be sentenced in April 2016 and faces a mandatory minimum of 15 years in federal prison, up to a maximum of 25 years.
After serving 15 years in the Michigan Department of Corrections for second degree murder, Smith began recruiting women in Lansing for his interstate commercial sex operation. A federal grand jury indicted him in July 2015 on seven counts involving four victims, including one minor. The indictment charged Smith with three counts of sex trafficking by force, threats of force, fraud, and coercion; one count of sex trafficking a minor; and three counts of transporting adult women and the minor from Michigan to Illinois for commercial sex. In a written plea agreement, Smith admitted to recruiting the first victim, an adult woman, in about December 2012, providing her with heroin, posting commercial sex ads of her online in lingerie, and arranging for johns to pay for sex with her in Lansing, Chicago, and elsewhere over a two-year period. Smith admitted to being physically violent and threatening towards her throughout this time, knowing that this would cause her to continue to engage in commercial sex acts. Smith also admitted to recruiting a 17-year-old girl and sex trafficking her from December 2014 to June 2015. He arranged for johns to buy sex from her in his Lansing residence and area motels, and he took her to Chicago for several weeks in early 2015. The minor watched Smith assault another woman for her disloyalty to Smith’s prostitution business, and Smith continued to cause the minor to engage in commercial sex acts after that. In June 2015, while Smith and the minor were in a Lansing motel, Smith grabbed her by the neck and threw her on the bed to stop her from leaving with the cell phone he gave her, which had a large amount of information on it about his prostitution business. The minor sought medical attention afterwards for a concussion, a laceration on the bridge of her nose, and bruising on her face and body. Smith admitted that a short time later, he reconnected with the minor and continued arranging commercial sex dates for her.
The conviction resulted from a joint investigation led by the FBI, Ingham County Sheriff’s Office, and East Lansing Police Department, with assistance from the Michigan State Police (MSP). Assistant United States Attorney Tessa K. Hessmiller prosecuted the case. This is the third federal sex trafficking conviction in the Western District of Michigan, following cases against Eddie Jackson and Christopher Bryant. This is the fourth sex trafficking conviction obtained in the past year as a result of the FBI’s joint investigation with the Ingham County Sheriff’s Office and other Lansing area law enforcement partners, who collaborated in the federal Christopher Bryant trial and the related state convictions of Jonathan Purnell and Mariah Haughton in Ingham County.
In announcing the conviction, U.S. Attorney Patrick Miles stated, “Sex trafficking is real and happens in West Michigan. Traffickers target victims by identifying vulnerabilities to exploit, whether through drugs, money, violence, or a false sense of security and affection provided by the trafficker. My office is working hand-in-hand with federal, state, and local law enforcement to identify and prosecute human trafficking, including the sex trafficking of children.”
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
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Manhattan U.S. Attorney Files and Simultaneously Settles False Claims Act Lawsuit Against Defense Contractor and Its President for Multi-Year Fraud Involving Sale of Defective Weapons Sights to U.S. Military and Other AgenciesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Craig Rupert, the Northeast Field Office Special Agent of the Department of Defense-Office of Inspector General (“DoD-OIG”), Andrew Traver, the Director of the Naval Criminal Investigative Service (“NCIS”), and Frank Robey, the Major Procurement Fraud Unit Director of the U.S. Army Criminal Investigation Command (“CID”), announced today that the United States filed and simultaneously settled a civil fraud lawsuit under the False Claims Act and common law against L-3 COMMUNICATIONS EOTECH, INC. (“EOTECH”); its parent company, L-3 COMMUNICATIONS CORPORATION (“L-3”); and EOTECH’s president PAUL MANGANO (“MANGANO”) (collectively, “Defendants”). As alleged in the complaint, for years, EOTECH sold defective holographic weapon sights to the U.S. Department of Defense (“DOD”), the U.S. Department of Homeland Security (“DHS”), and the Federal Bureau of Investigation (“FBI”). These sights were designed to allow users to quickly acquire and hit targets, and to return fire in a range of extreme environmental conditions. Defendants knew that the sights failed to perform as represented in cold temperatures and humid environments, but delayed disclosure of these defects for years. In connection with the settlement, approved today by United States District Judge Richard Sullivan EOTECH and L-3 have agreed to pay the United States $25,600,000, and all three defendants have made admissions of conduct alleged in the complaint.
Manhattan U.S. Attorney Preet Bharara said: “The defendants, L-3, EOTech, and EOTech’s senior executive Paul Mangano, engaged in fraudulent double dealing by selling defective products to the men and women who risk their lives to protect our country. With their own sights focused exclusively on corporate profits, the defendants let our soldiers fight with defective sights on their weapons. We will continue to pursue and hold accountable corporations and their executives who put profits over honesty and fair dealing, particularly when it comes to dealings that affect our service men and women.”
DoD-OIG Northeast Field Office Special Agent in Charge Craig Rupert said: “This settlement illustrates the seriousness of the harm to the Defense Department and other federal agencies from defective products. The safety of our warfighters and law enforcement who depend on these products is paramount in the fight against terror and crime. DCIS remains vigilant for and vigorously pursues all similar complaints in our effort to shield America's investment in our national defense.”
NCIS Director Andrew Traver said: “American service members not only deserve the highest quality equipment, American taxpayers deserve the highest integrity suppliers, who do not take millions of dollars and squander public trust. Holographic Weapons Sights are used in combat; a sight that 'almost works' is not acceptable. It is gratifying that NCIS could be part of the joint investigation to hold EOTECH accountable.”
U.S. Army CID Major Procurement Fraud Unit Director Frank Robey said: “We are pleased with today's settlement; however, there is no monetary substitute great enough for the safety and required tactical advantage that the young men and women serving in our armed forces in harm's way deserve. It is imperative that when someone contracts with the U.S. Army, they provide only their very best with no exceptions.”
According to the complaint filed in Manhattan federal court:
EOTECH has earned tens of millions of dollars through its sales of sights to DOD, DHS, and the FBI. In 2004, and again in 2010, EOTECH contracted with DOD to supply holographic weapon sights for use in close quarter urban combat as well as longer range target acquisition. EOTECH represented to DOD that its sights could operate in temperatures ranging from -40 degrees to 140 degrees Fahrenheit, as well as in humid and other extreme environmental conditions. Those representations were important because EOTECH’s combat optical sights were used by operators in Iraq and Afghanistan, as well as by special operations forces around the world.
By early 2006, Defendants knew that their sights failed to perform as represented. At hot and cold temperatures, the sights experienced a condition known as “thermal drift,” meaning that the sight’s point of aim differed from its point of impact. EOTECH’s own internal tests showed that some models experienced drift of 6 to 12 minutes of angle (“MOA”), i.e., 6 to 12 inches per 100 yards. Even though EOTECH’s contracts with DOD required disclosure of any information concerning the reliability of the sights, EOTECH did not disclose this defect to DOD until 2015, after the FBI discovered the problem and presented its findings to EOTECH.
In 2007, Defendants became aware of a separate performance failure in cold temperature, known internally as “cold weather distortion.” At around 32 degrees Fahrenheit, the sight’s aiming dot became distorted, affecting accuracy by 12 MOA, increasing to 20 MOA at 5 degrees Fahrenheit. Defendants did not disclose this defect from DOD for more than a year, until EOTECH had a fix in place. EOTECH then presented the fix as an upgrade to a product that conformed to specifications, and did not disclose that the entire stock of sights that DOD had purchased since 2004 was defective.
By 2008, Defendants also knew that EOTECH’s sights failed in humid environments, a defect known internally as “moisture incursion.” Although EOTECH represented that the sights passed humidity and other testing, Defendants knew that the seals leaked, allowing moisture to enter the sight, resulting in dimming of the circle and aiming dot necessary for acquiring a target. Over the next several years, EOTECH’s internal tests repeatedly confirmed these leaks. Nevertheless, EOTECH did not notify DOD of the problem until 2013, when it once again presented a fix as an upgrade to a product that conformed to specifications.
MANGANO, as president of EOTECH, was ultimately responsible for disclosing quality issues to customers. MANGANO was apprised of each of the defects with the sights and yet did not recommend disclosing any of the defects until he believed either a fix was in place or that DOD would find out about the defect from another source.
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As part of today’s settlement, EOTECH and L-3 admitted that EOTECH knew that its holographic weapon sights experienced thermal drift, cold weather distortion, and moisture incursion. EOTECH and L-3 also admitted that despite EOTECH’s representations to DOD that the sights performed in hot, cold, and humid conditions, and despite EOTECH’s contractual obligation to disclose to DOD any performance-related data affecting the reliability of the sights, EOTECH continued to sell the sights to the Government for more than one year without disclosing cold weather distortion, and for several years without disclosing thermal drift or moisture incursion. MANGANO, who has been the president of EOTECH since 2006, admitted that he knew that the sights experienced cold weather distortion and moisture incursion, but EOTECH continued to sell the sights to the Government for over one year (in the case of cold weather distortion) or several years (in the case of moisture incursion) without a disclosure.
Mr. Bharara praised the DOD’s Defense Criminal Investigative Service, Naval Criminal Investigative Service, and Army Criminal Investigation Command; DHS Homeland Security Investigations; and the FBI for their investigative efforts and ongoing support and assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Jaimie L. Nawaday and Joseph N. Cordaro are in charge of the case.
Manhattan U.S. Attorney Announces Charges Against Wholesale Distributor of Spice and FlakkaRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Carl J. Kotowski, Special Agent in Charge of the Drug Enforcement Administration’s New Jersey Division (“DEA”), announced today that RICHARD GALIMI, 46, was arrested yesterday and charged in a criminal complaint for his role in distributing bulk quantities of synthetic cannabinoids, commonly known as “Spice,” and synthetic cathinones containing Alpha-PVP, commonly known as “Flakka.” GALIMI arranged for the importation of synthetic controlled substances from China, arranged for them to be processed and packaged, and was responsible for the distribution of packets of Spice for individual use. A search of a Brooklyn warehouse maintained by GALIMI resulted in the seizure of approximately 2,000 packets of pre-packaged Flakka and approximately 2,000 grams of pre-packaged Spice, as well as approximately 25 grams of bulk synthetic chemicals and 200 pounds of leafy substances that are used to manufacture Spice.
GALIMI was arrested in Brooklyn and will be presented in Manhattan federal court today.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Richard Galimi was responsible for the distribution of potentially lethal synthetic cannabinoids and cathinones. Peddlers of these dangerous drugs – marketed as Spice and Flakka – target young people who are lured by the packaging and pricing. But the product is always unsafe and it can be deadly.”
According to the Complaint[1] and publicly available documents:
Beginning in at least 2011, GALIMI made unsolicited phone calls to the owners of smoke shops in order to sell a powerful chemical Spice with the brand name “Hydro” to the smoke shop owners, which was then sold to retail customers. Beginning in early 2015, GALIMI met with individuals cooperating with the DEA (the “CSs”) and began providing Spice and Flakka to the CSs. During the course of the investigation, the DEA purchased approximately $6,500 worth of Spice and Flakka from GALIMI.
In order to manufacture the Spice, GALIMI arranged for leaves in bulk quantities to be brought to a warehouse in Brooklyn. In the warehouse, GALIMI employed at least five individuals who were responsible for packaging the Spice in retail packages. GALIMI also manufactured a synthetic cannabinoid that he marketed as being three times stronger than typical Spice.
In addition, GALIMI used brokers to import capsules of Flakka and packaging materials from China to New York via Hong Kong, using various forms of international mail services. GALIMI was involved in importing approximately 3,000 capsules of Flakka to the United States on a regular basis.
Spice is the street name applied to a synthetic cannabinoid. Spice is popular among teenagers and young adults, and is widely accessible because it is inexpensive and commonly sold at otherwise legitimate retail locations. The colorful logos used on the Spice retail packets and the flavors used, such as lime, strawberry, and blueberry, make Spice attractive to teenagers and young adults. The physical effects of Spice can include agitation, rapid heart rate, confusion, dizziness, nausea and vomiting, paranoia, panic attacks, and acute kidney injury.
Flakka is the street name applied to a synthetic cathinone that is a derivative of the synthetic drug commonly known as “bath salts.” Flakka is intended to mimic the effects of an amphetamine. Flakka can come in a rocky crystalline form and often comes in capsules. Flakka typically contains Alpha-PVP, which is a Schedule I controlled substance. Flakka is frequently sold to consumers in small packets that have colorful logos. A tenth-gram quantity, or one standard dose, of Flakka typically sells for as little as $3.00. The physical effects of Flakka can include aggression, paranoia, and hallucinations.
After the United States Attorney’s Office for the Southern District of New York charged 10 defendants involved in a Spice drug distribution ring in September 2015, Spice-related emergency room visits in New York City for the month of October 2015 were down 36 percent compared to their peak in July 2015, according to the New York City Department of Health and Mental Hygiene.
GALIMI is charged with one count of conspiracy to distribute and possess with intent to distribute a controlled substance, which carries a maximum potential sentence of 20 years in prison. The statutory maximum penalty is prescribed by Congress and is provided her for informational purposes only, as any sentencing of the defendant would be determined by the judge.
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U.S. Attorney Preet Bharara praised the outstanding work of the DEA’s New Jersey Division.
The case is being prosecuted by the Office’s Narcotics Unit. Assistant U.S. Attorney Noah Solowiejczyk is in charge of the prosecution.
The charges contained in the Complaint 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 Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Manchester Man Sentenced to 77 Months on Bank Robbery ChargeRead the Press Release
CONCORD, NEW HAMPSHIRE - Shane Mitchell, 32, of Manchester, New Hampshire, was sentenced in the United States District Court for the District of New Hampshire on one count of bank robbery, announced Acting United States Attorney Donald Feith. The Court imposed a term of 77 months imprisonment, three years of supervised release and full restitution to the victim bank.
Mitchell walked into a TD Bank in Manchester, New Hampshire, on March 7, 2015 and handed the teller a note demanding money. The note, written in pencil on blue-lined paper stated something to the effect of, “Put the cash in the bag and no yelling or screaming. I have a weapon if anyone wants to live.” Mitchell made off with $600 in stolen funds.
That same day, police traced Mitchell to a nearby apartment building where the stolen money and distinctive items of clothing worn during the robbery were found. Police also recovered a pencil and blue-lined notepad consistent with the demand note.
This case was investigated by the Manchester Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Georgiana Konesky.
Leader of Bank Fraud Ring that Stole over $4 Million from Bank of America Corporate Accounts Sentenced to Federal PrisonRead the Press Release
ATLANTA – Alwin Peterson, Jr. and three co-conspirators were sentenced late Tuesday for a bank fraud scheme that targeted over 150 Bank of America accounts and involved over $4 million in fraudulent withdrawals.
“Their criminal actions damaged not only the small businesses they targeted, but also the employees and vendors who depended on timely payments to meet their day-to-day needs,” said U.S. Attorney John Horn. “This case reminds business owners that they need to be vigilant in protecting sensitive personal and bank account information.”
“The U.S. Secret Service and our law enforcement partners work tirelessly to protect consumers and businesses against bank fraud schemes such as this,” said Reginald G. Moore, Special Agent in Charge of the United States Secret Service, Atlanta Field Office. “These sentences are a testament to that collaborative effort.”
According to U.S. Attorney Horn, the charges and other information presented in court: From approximately November 2012 through his arrest in August 2014, Peterson led a bank fraud scheme that targeted over 150 corporate accounts at Bank of America. Peterson first collected personal information about the individuals listed on the accounts, many of which belonged to small businesses. Using that information, he then called Bank of America’s customer service and impersonated the true account holders. In those calls, Peterson obtained additional account information, monitored account balances, and learned about the latest transactions on existing accounts. Peterson also changed the online banking passwords for some of the accounts so that he could access the accounts by computer.
After fraudulently acquiring the account information, Peterson employed a group of “runners” to enter bank branches and withdraw money from the accounts. Using fake identifications, the runners posed as the true account holders and wired money from the victims’ accounts to other accounts Peterson opened. Peterson also used counterfeit checks to steal money from the accounts. Co-defendants Vivienne Bloch, Kori Henegar, and Allen Parham were all runners in the scheme. The defendants traveled to numerous bank branches in different states throughout the country in an attempt to evade detection. Peterson is responsible for over $4 million in fraudulent withdrawals from the targeted accounts.
All of the defendants were convicted of bank fraud conspiracy after pleading guilty, and were sentenced by United States District Judge Steve C. Jones as follows:
- Alwin Peterson, Jr., 38, of Fayetteville, Ga., was sentenced to 12 years, 1 month in prison to be followed by 5 years of supervised release, and ordered to pay $1,019,381.40 in restitution.
- Parham, 46, of Atlanta, Ga., was sentenced to 6 years, 6 months in prison to be followed by 5 years of supervised release, and ordered to pay $85,414.11 in restitution.
- Bloch, 54, of Decatur, Ga., was sentenced to 5 years in prison to be followed by 5 years of supervised release, and ordered to pay $538,383.50 in restitution.
- Henegar, 35, of Spring, Texas was sentenced to 2 years, 9 months in prison to be followed by 5 years of supervised release, and ordered to pay $395,583.87 in restitution.
This case was investigated by Special Agents with the United States Secret Service. Bank of America fraud investigators provided valuable assistance throughout the investigation.
Assistant United States Attorneys Stephen H. McClain and Samir Kaushal prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Junction City Man Sentenced to Life in Cocaine Trafficking CaseRead the Press Release
TOPEKA, KAN. – A Junction City man has been sentenced to life in federal prison for trafficking cocaine in Junction City and Manhattan, U.S. Attorney Barry Grissom said today. Another defendant in the case was sentenced to more than 21 years.
Albert Dwayne Banks, 33, Junction, City, Kan. was sentenced to life. He was convicted on count one (conspiracy to distribute more than 280 grams of crack cocaine), count eight (distributing crack cocaine), count 11 (distribution crack cocaine), count 12 (distributing crack cocaine), count 15 (distributing crack cocaine) count 16 (distributing crack cocaine) and count 17 (distributing crack cocaine).
Martye Madabuti Madkins, III, 34, Junction City, Kan., was sentenced to 262 months in prison. He was convicted on count two (distributing crack cocaine), and count four (distributing crack cocaine within 1000 feet of an elementary school).
Banks and Madkins were convicted in June in a jury trial in Kansas City. During trial, prosecutors presented evidence that in late 2012 and early 2013 agents of Kansas Bureau of Investigation and detectives from the Junction City Police Department investigated a large crack cocaine trafficking organization in Junction City and Manhattan. The organization was led by defendants Albert Banks and co-defendant Anthony Thompson, who acquired drugs from three different suppliers and sold the drugs to distributors who resold them on the streets. The evidence showed that Madkins was a close associate of Banks and Thompson and that he distributed crack cocaine for them.
Co-defendant Anthony Thompson is set for sentencing Dec. 4.
Grissom commended the Kansas Bureau of Investigation, the Junction City Police Department, the Geary County Attorney’s Office and Assistant U.S. Attorney Tony Mattivi for their work on the case.
Jamaican Man Sentenced to Prison for Involvement in International Lottery Fraud SchemeRead the Press Release
BISMARCK – U. S. Attorney Christopher C. Myers announced that on Nov. 24, 2015, a Montego Bay, Jamaica man was sentenced to 20 years in federal prison, and ordered to pay $5,672,561.15 in restitution, after having been convicted at trial in North Dakota on charges of conspiracy to commit wire fraud or mail fraud, conspiracy to commit international money laundering, and 35 counts of wire fraud associated with his participation in the Jamaican lottery fraud.
Sanjay Ashani Williams, 26, was the first Jamaican national tried and convicted in the United States for selling lead lists for use in international cyberfraud. Lead lists consist of the names, telephone numbers, and personal information of potential victims and are sold to lottery scammers. Some lead lists are created by list wholesalers who send out bogus mass mailings purporting to be sweepstakes entries. Consumers, thinking the mailings are legitimate, pay to enter the non-existent sweepstakes. The wholesalers in turn pocket the entry fee then sell the consumers’ contact information to scammers for as much as $5.50 per potential victim.
“The victims who - despite their regret or embarrassment - come forward to tell their stories are heroes,” said U.S. Attorney Christopher C. Myers. “Victims are targeted because their age or personal circumstances make them particularly vulnerable; the resulting harm is financial, psychological, and physical. Until recently, these scammers operated with impunity. We are helping to find them and hold them accountable for their crimes.”
Before getting into the lead list business, Williams personally scammed numerous people, sometimes threatening the safety of his victims and their families. Later, Williams transitioned to selling lead lists, which was more lucrative for him. Williams knowingly sold “lead lists” to co-conspirators Lavrick Willocks and approximately 400 other Jamaican lottery fraud scammers, identifying victim targets for the lottery scammers. These scammers, all of whom were Williams’ co-conspirators, then contacted victims by telephone or mail and falsely told the victims they had won a large sweepstakes prize, such as $3.5 million and a new car. Callers repeatedly instructed victims that in order to claim the prize, the victims had to send money, sometimes thousands of dollars, to the scammers to pay non-existent taxes, fees, insurance and the like. Williams and other scammers deliberately targeted victims over the age of 55. After the victims sent the “fees,” the victims were required to send more and more money; however, the victims did not receive the promised prize.
In this case alone, more than 80 victims of Williams’ conspiracy were identified, with reported losses totaling more than $5.5 million. Individual victims of this conspiracy lost as little as $300 and as much as $850,000 to Williams and his co-conspirators. Nationwide, the number of Jamaican Lottery Fraud victims likely is in the millions, with some estimates of annual losses in excess of $1 billion.
In addition to Williams, 25 other defendants from Jamaica and the United States were charged in the same indictment. Eleven of those defendants have been arrested and pleaded guilty in this case. In separate indictments, four additional co-conspirators have been charged. Of those, two have pleaded guilty and the remaining two are awaiting trial. The investigation is on-going.
Victim after victim in this case testified to the financial devastation and fear caused by the scammers, who frequently threatened victims with violence. Sanjay Williams personally threatened to kill one victim’s sons and rape the victim’s daughters after the victim refused to send additional money. Williams told the victim that he knew where the victim lived. Another victim of the conspiracy was so distraught by her involvement in the scheme that she committed suicide after investigators set up a meeting to speak with her about it.
The lottery scam victims in the United States are not the only victims of Sanjay Williams’ crimes. Top Jamaican law enforcement officials emphasize that lottery scamming has directly led to a dramatic increase in violent crime – including murder, shootings, and extortion - in Jamaica, as rival scammers battle one another over lead lists and profits. Testimony at trial indicated that 1,000 murders in Jamaica can be attributed to scamming activity in the last 10 years. Further, scamming activity creates ripple-effects harming legitimate Jamaican businesses, including tourism and discouraging foreign investment.
The investigation is being conducted by the FBI’s North Dakota office and the U.S. Postal Inspection Service (USPIS) in Florida, with assistance from many other federal and state law enforcement agencies, as well as Jamaican law enforcement.
The case was prosecuted by Assistant U.S. Attorneys Clare Hochhalter, Nick Chase, and James Patrick Thomas, and Trial Attorney Lorinda Laryea of the Department of Justice’s Criminal Division.
Indianapolis man sentenced in identity theft schemeRead the Press Release
Indianapolis--United States Attorney Josh J. Minkler, announced today the sentencing of a man for his role in a fraud scheme where he would use stolen Social Security numbers (SSN) to allow individuals with poor credit histories to purchase new vehicles and other high priced items. David Day, 38, Indianapolis, was sentenced to 92 months (7 years and 8 months) by U. S. District Judge Tanya Walton Pratt for conspiracy to commit wire fraud.
“Identity theft costs our economy billions of dollars and destroys the credit history of legitimate consumers,” said Minkler. “Mr. Day will spend the next seven years in federal prison pondering his mistake.”
Day offered credit repair services to individuals who had poor credit scores for between $2,000-$3,500. The repair service would help those who would not normally qualify for loans to make large purchases using credit. Day would obtain misappropriated SSN’s and referred to them as credit profile numbers (CPNs). His source of supply for CPN’s was from Kimberly Taylor, 39, a resident of California.
Day would identify clients in Indiana and obtain stolen SSN’s from Taylor. Taylor would match the true identity of Day’s customer with the stolen number and provide guidance on how connect the stolen number with the customer’s true name and date of birth. Day would also request supporting fraudulent documents such as utility bills and lease agreements to perpetuate the crime for which he paid Taylor.
Kimberly Taylor was sentenced to 40 months in prison in July, 2014.
According to Assistant United States Attorney Cynthia J Ridgeway who prosecuted this case for the government, Day must repay $679,000 in restitution and serve three years of supervised release after his sentence.
Former Rosemead Resident Sentenced to nearly Five Years in Federal Prison for Trafficking in Counterfeit Marlboro CigarettesRead the Press Release
LOS ANGELES – A former resident of the San Gabriel Valley who was a major distributor of counterfeit cigarettes in the Los Angeles area has been sentenced to nearly five years in federal prison for trafficking in counterfeit goods.
Su Qin Yang, who also used the names “Lily” and “Anita Chang,” was sentenced yesterday to 57 months in prison by United States District Judge Margaret M. Morrow.
Yang, 45, who resided in Rosemead prior to fleeing to China in 2012, pleaded guilty in May to one count of trafficking in counterfeit goods and admitted in her plea agreement that she trafficked in almost 4 million counterfeit Marlboro cigarettes and almost 4,000 counterfeit Viagra pills. The counterfeit products were seized during searches of Yang’s residence and storage locations in the summer of 2012.
Yang “sold an extremely large quantity of counterfeit cigarettes to great profit, and showed no signs of slowing down,” prosecutors wrote in a brief that sought the 57-month sentence. “Indeed, the government is advised that after defendant’s arrest, the illegal sale of counterfeit cigarettes in the Los Angeles area decreased dramatically.”
Yang was named in an indictment returned by a federal grand jury in August 2013. Also charged in the 16-count indictment was Yang’s husband, Antonio Limbeek, who remains a fugitive and is believed to be in Indonesia.
“The black market for counterfeit products poses serious dangers to the community,” said United States Attorney Eileen M. Decker. “Counterfeit products endanger public health because they are not manufactured to the same standards as legitimate products. There is a significant possibility of contaminants in counterfeit items, and the black market makes these products more available to minors.”
After authorities executed the search warrants, but prior to the indictment in the case, Yang and her husband fled the United States. Yang returned to the United States in January.
The investigation into Yang and her husband was conducted by the Los Angeles Sheriff’s Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
“In addition to the health risks, trafficking in counterfeit cigarettes, as well as other trademarked goods, is a multi-billion dollar global industry that robs governments of vital revenues and undermines our economy,” said Joseph Macias, special agent in charge of HSI Los Angeles. “Even more disturbing, the huge profits generated by this illicit industry often go to fund other kinds of criminal enterprise.”
The investigation in this case started after Phillip Morris USA brought information related to the trafficking of counterfeit Marlboro cigarettes to federal authorities. When searches were conducted, authorities seized approximately 27,500 cartons of counterfeit cigarettes and approximately $440,000 in cash, “demonstrating the huge profits that defendant was obtaining through this crime,” prosecutors said in court papers.
While engaged in discussions with prosecutors in 2012 about potentially pleading guilty, Yang and Limbeek “fled the country, leaving their minor children behind,” according to the government’s sentencing memo. “Thereafter, [Yang] arranged for her minor children to be transported to Washington state and then flown to China, attempting to smuggle over $300,000 in additional cash with them.”
In addition to the prison term, Judge Morrow ordered Yang to pay $308,894 in restitution to Phillip Morris USA, which holds the trademark for Marlboro cigarettes.
Phillip Morris has designated The National Law Enforcement Officers Memorial Fund to receive all of the restitution.
Former Johnson County Teacher Sentenced to 14 Years for Sexually Exploiting a MinorRead the Press Release
PIKEVILLE, Ky. — A former high school teacher in Johnson County, Ky., who previously admitted to sexually exploiting a minor student, has been sentenced to 14 years in federal prison.
On Tuesday, U.S. District Judge Danny C. Reeves sentenced 26 year-old Robert Cantrell, of Versailles, Ky., for illegally enticing a minor to engage in sexual activity. Judge Reeves further ordered Cantrell to serve 15 years of supervised release, following his sentence. Under federal law, Cantrell must serve at least 85 percent of his prison sentence.
Earlier this year, Cantrell admitted that, in 2014, he had enticed a minor student to text him sexually explicit images of the student engaging in sexually explicit conduct. Additionally, Cantrell admitted that he had induced the minor student to engage in sex acts with him.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Howard S. Marshall, Special Agent in Charge, Federal Bureau of Investigation; Jack Conway, Kentucky Attorney General; and Dwayne Price, Johnson County Sheriff, jointly made the announcement.
The investigation was conducted by the FBI, the Kentucky Attorney General’s Cyber Crimes Unit; and Johnson County Sheriff’s Office.
Florida Man Pleads Guilty to Heroin Trafficking Conspiracy in Monroe-Wayne Counties Involving Three of His ChildrenRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced that a man who was residing in Kissimme, Florida, at the time of his arrest in September 2014, pleaded guilty yesterday before U.S. Magistrate Judge Karoline Mehalchick in Scranton, to participating in a heroin and cocaine trafficking conspiracy in Monroe and Wayne Counties that involved utilizing three of his children to distribute the drugs to customers.
According to United States Attorney Peter Smith, the defendant, Carlos Ruben Cruz, age 48, who resided in Wayne and Monroe Counties in Pennsylvania throughout much of the drug conspiracy, admitted to conspiring with others, including three of his children, to distribute heroin and cocaine between 2011 and 2014.
Cruz was indicted by a federal grand jury sitting in Scranton in August 2014, as a result of an investigation by agents of the Drug Enforcement Administration, investigators from the Pennsylvania State Police, the Wayne County District Attorney’s Office, and Pocono Mountain Regional Police.
Three of Cruz’s children, Rubie Cruz, age 26, Tiffanyann Cruz, age 21, and Brandon Cruz, age 24, were also charged in the indictment and have previously pleaded guilty to participating in the drug conspiracy. They are all awaiting sentencing.
Carlos Ruben Cruz faces up to 20 years in prison and a fine of $1 million. He will be sentenced at a later date by Senior U.S. District Court Judge Richard P. Conaboy after the completion of a pre-sentence investigation. Cruz remains detained in custody pending sentencing.
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Federal Jury Convicts San Antonio Businessman in Estimated $3.9 Million Tax Fraud SchemeRead the Press Release
A federal jury this morning convicted a former owner of San Antonio-based Gourmet Express, LLC, a skillet meals manufacturing and distributing business, for his role in an estimated $3.9 million tax fraud scheme announced United States Attorney Richard L. Durbin, Jr., and Internal Revenue Service-Criminal Investigation Special Agent in Charge William Cotter.
Jurors found 70–year-old Robert Warren Scully guilty of conspiracy to defraud the United States, conspiracy to commit wire fraud, and three substantive wire fraud counts.
Evidence presented in trial revealed that from April 2001 until July 2009, Scully and others conspired to defraud the Internal Revenue Service by hiding earned taxable income generated by his frozen food business. Testimony revealed that Scully and others used intermediary companies in Thailand to provide shrimp and other ingredients at an inflated cost to Gourmet Express. Scully and others used the proceeds generated as a result of the inflated costs for personal expenses and failed to disclose that income to the Internal Revenue Service.
Scully faces up to five years imprisonment for conspiracy to defraud the U.S. and up to 20 years imprisonment for each of the remaining charges. Sentencing is scheduled for February 22, 2016, before United States District Judge David Ezra in San Antonio.
“Today’s conviction is a victory for the American taxpayer and the entrepreneurial spirit of this great country. Robert Scully should have known better than to try the old ‘shell game’ when it came to hiding income from his business partner and Uncle Sam,” said William Cotter, IRS Criminal Investigation’s Special Agent in Charge, San Antonio Field Office. “IRS Criminal Investigation Special Agents excel at peeling off the superficial shell of complex financial transactions and revealing the fraud hidden inside.”
The case resulted from an investigation by the Internal Revenue Service Criminal Investigation. Assistant United States Attorneys William R. Harris, Jay Hulings and Mary Nelda Valadez are prosecuting this case on behalf of the Government.
Emmetsburg Banker and Co-Schemers Sentenced in Federal CourtRead the Press Release
On Tuesday, November 24, 2015, three men were sentenced for their roles in a scheme to defraud the Iowa Trust and Savings Bank in Emmetsburg, Iowa.
Richard Jones, age 62, a banker from Emmetsburg, Iowa, Michael Manning, age 68 of Milford, Iowa, and Aric Manning, age 37, of Phoenix, Arizona were each convicted of one count of bank fraud, and were sentenced to federal prison for their roles in the scheme. Two others, Russ Salton, age 55, of Ruthven, Iowa, (who pled guilty to bank fraud) and Sue Salton, age 52, of West Des Moines, Iowa, (who pled guilty to False Statement to a Bank), had already been sentenced in federal court.
During the five change of plea hearings and five sentencings in this case, it was revealed that for over six years (from about November 24, 2003 to about March 29, 2010) as Senior Vice-President of Iowa Trust and Savings Bank (“ITSB”), in Emmetsburg, Iowa, Jones used his position of trust to engage in two similar, but wholly separate, criminal schemes with two separate groups of criminals (i.e., the Mannings in one scheme, and the Saltons in another).
Jones side-stepped the safeguards the ITSB and FDIC had established to protect ITSB from making dangerous loans. Jones deceived the bank into thinking third parties were taking out new loans in small amounts, when in fact, Jones was actually directing the bank’s money to the Mannings and the Saltons, both of whom were struggling borrowers with worrisome amounts of debt.
During these schemes, Jones personally forged the signatures of unknowing bank customers, repeatedly lied to and tricked his fellow ITSB bankers, and repeatedly committed aggravated identity theft by stealing the identity of some of his customers to fraudulently direct money to his co-schemers.
The Jones-Salton scheme fraudulently obtained loans worth about $389,284.00 and the Jones-Manning scheme fraudulently obtained loans worth about $86,351.17. None of these fraudulent loans could have been obtained without Jones’s personal involvement in each of the schemes.
Jones and the Mannings were sentenced in Sioux City by United States District Court Judge Mark W. Bennett. Jones was sentenced to 14 months’ imprisonment. A special assessment of $100 was imposed, and he was ordered to pay restitution in the amount of $207,209.17 to ITSB. He must also serve a five-year term of supervised release after the prison during which time he must make presentations warning others of the consequences of engaging in bank fraud. Finally, he was required (by his plea agreement with the United States) to make a public acknowledgment of guilt in several local papers. There is no parole in the federal system.
Aric Manning was sentenced to 12 months’ and 1 day imprisonment. A special assessment of $100 was imposed, and he was ordered to pay restitution in the amount of $58,049.17 to ITSB. He must also serve a 5-year term of supervised release after the prison term.
Mike Manning was sentenced to time served (about a day). A special assessment of $100 was imposed, and he was ordered to pay restitution in the amount of $27,460.00 to ITSB. He must also serve a 3-year term of supervised release after the prison term.
Sue Salton was sentenced in Sioux City on October 23, 2015, by United States District Court Judge Mark W. Bennett. Sue Salton was sentenced to time served (about a day). A special assessment of $100 was imposed and she forfeited $10,000 to the United States. She must also serve a 3-year term of supervised release after the prison term.
Russell Salton was sentenced in Sioux City on November 9, 2015 by United States District Court Judge Mark W. Bennett. Russell Salton was sentenced to 13 months’ imprisonment. A special assessment of $100 was imposed, and he was ordered to pay restitution in the amount of $121,700 to ITSB. A special assessment of $100 was imposed. He must also serve a 5-year term of supervised release after the prison term.
Jones and Aric Manning (like Russell Salton before them) were released on the bond previously set and are to surrender to the Bureau of Prisons on a date yet to be set.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number for Jones is 14-3061. The case file number for Russell Salton is 14-3058 and for Sue Salton is 14-3064. The case file number for Michael Manning and Aric Manning is 14-3057.
The case was investigated by the Federal Deposit Insurance Corporation, Office of Inspector General; The Iowa Department of Criminal Investigations; the Federal Bureau of Investigations; the Small Business Administration, Office of Inspector General; and the Department of Veterans Affairs, Office of Inspector General. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
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East Saint Louis Woman Sentenced on Healthcare Fraud-Related ChargeRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today, that Alfreda E. Perkins, 54, of East Saint Louis, Illinois, pled guilty in federal court to charges that she engaged in a scheme to steal from a health care program. Sentencing has been set for March 22, 2016. Perkins will face up to 10 years in prison, a fine of up to $250,000, and up to 3 years of supervised release.
During her plea hearing, Perkins admitted that she had submitted false and fraudulent bills in relation to her alleged performance of personal assistant services in the Home Services Program, a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. Perkins admitted to falsely billing the program between November 1, 2013 and September 15, 2014, when she purportedly rendered personal assistant services to a customer when, in fact, she had not been with the customer.
This prosecution is part of the fourth wave of the "Operation Home Alone" initiative announced on June 5, 2014, by United States Attorney Stephen R. Wigginton. The investigation was conducted by the U.S. Department of Health and Human Services - Office of Inspector General, the Illinois State Police - Medicaid Fraud Control Bureau, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney William E. Coonan.
If you suspect or know of an individual or company that is not complying with healthcare laws or public aid programs, you may report this activity to the local office of the U.S. Department of Health and Human Services, Office of Inspector General, or you may call 1.800.447.8477.
Danbury Man Convicted of Defrauding InvestorsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that a federal jury in New Haven today found IAN PARKER BICK, 20, of Danbury, guilty of fraud and money laundering offenses stemming from his operation of Ponzi scheme. The trial before U.S. District Judge Jeffrey Alker Meyer began on November 6.
“Mr. Bick repeatedly lied to victim investors, took their money and used it to take trips with friends, on shopping sprees, to purchase jet skis, and also to pay off previous investors who were promised unrealistic returns,” U.S. Attorney Daly said. “I thank the FBI, IRS Criminal Investigation, U.S. Postal Inspection Service, Connecticut Department of Banking and Danbury Police Department for their diligent investigation and prosecution of this matter.”
According to the evidence at trial, BICK was a principal and/or managing member of various Danbury-based entities, including This Is Where It’s At Entertainment, LLC, Planet Youth Entertainment, W&B Wholesale, LLC, and W&B Investments, LLC. Using these entities, BICK solicited investment funds from his friends, former classmates, acquaintances, and their parents by promising high investment returns over relatively short periods of time. BICK falsely represented to victim-investors that he could generate the high investment returns by using their funds to purchase electronics and electronic devices, such as iPhones, tablets and head phones, and by reselling the items for a substantial profit via the Internet. However, the electronic resale business never actually began in earnest and did not return any meaningful profit. BICK also falsely represented to certain victim-investors that he could generate high investment returns by using their funds to organize and promote concerts at various venues in Connecticut and Rhode Island. BICK falsely represented that he had made significant profits organizing and promoting concerts in the past.
BICK failed to invest the funds he received as he had represented and instead used invested funds for unrelated and unsuccessful businesses, and to pay personal expenses, including hotel stays and to purchase jet skis. BICK also used invested funds to issue payments, purportedly as “interest payments” and as “return of principal,” to certain victim-investors.
Through this scheme, BICK defrauded more than 15 investors out of a total of nearly $500,000.
BICK was charged in a 15-count indictment on January 8, 2015. The jury found BICK guilty on six counts of wire fraud, which carry a maximum term of imprisonment of 20 years on each count, and one count of money laundering, which carries a maximum term of imprisonment of 10 years.
The jury found BICK not guilty on two counts of wire fraud and one count of making a false statement to federal law enforcement, and could not reach a verdict on three counts of wire fraud and one count of money laundering. The government dismissed one count of money laundering prior to the trial.
Judge Meyer scheduled sentencing for March 2, 2016. BICK is released on a $250,000 bond.
This matter has been investigated by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation Division and U.S. Postal Inspection Service, with the assistance of the Connecticut Department of Banking and the Danbury Police Department. The case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and Christopher W. Schmeisser.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to [email protected].
Commercial Trash Hauler Convicted in Bribe Scheme and Baltimore City Landfill Employee Pleads Guilty to Selling Scrap MetalRead the Press Release
Baltimore, Maryland – Jarrod Terrell Hazelton, age 32, of Parkville, Maryland, a former employee at the Quarantine Road Landfill (Landfill), pleaded guilty today to conspiracy, and wire fraud, in connection with a scheme to unlawfully sell scrap metal from the Landfill and Northwest Transfer Station (NWTS), while falsely representing to the Baltimore Department of Public Works (DPW) that he was performing his job.
On November 20, 2015, John Howard Brady, age 74, of Glen Burnie, was convicted after a five day trial of conspiracy and two counts of bribery in connection with a scheme in which Brady and other commercial haulers paid Department of Public Works (DPW) employees cash in return for allowing the haulers to deposit trash at the Quarantine Road Landfill (Landfill) without paying the required disposal fees.
The convictions were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
The DPW’s Bureau of Solid Waste is responsible for managing Baltimore City’s waste management services, including overseeing citizen drop-off centers, such as the NWTS and the Landfill. Baltimore City residents can deposit small amounts of trash and/or recyclables in dumpsters located near the main entrance of the Landfill, free of charge. Individuals or companies commercially hauling trash that have registered their vehicles with the City must obtain Landfill permits. Commercial haulers of trash must also pay a waste disposal fee of $67.50 per ton of trash deposited at the Landfill. DPW employees assigned as scale house operators weigh each truck as it enters the Landfill, which is recorded on a computerized point-of-sale system. The scale house operators reweigh each truck as it leaves the Landfill. The net weight of the deposited trash and the required disposal fee is then calculated and printed on a receipt that is handed to the driver.
According to the evidence presented at Brady’s trial, Brady was a commercial trash hauler who owned and operated Brady’s Roll Off Service. From July 2014, through May 1, 2015, Brady agreed to pay bribes to Tamara Washington, one of the DPW scale house operators, in exchange for she and the other scale house operators, not charging Brady a disposal fee for using the Landfill. For example, on March 30, 2015, Brady paid a $2,000 cash bribe to Tamara Washington. The bribes paid to the scale house operators saved Brady thousands of fees each month. Brady either paid the operator through the outbound window at the scale house, or met the operators at an off-site location where he would pay a week’s worth of bribes or more. Evidence at trial established that Brady’s company used the landfill dozens of times a year since 2007, resulting in a loss of approximately $560,000 in disposal fees for the City of Baltimore.
In addition to the revenue generated by the collection of disposal fees, Baltimore City’s waste management system generates revenue by collecting and selling recyclable scrap metal dumped at the City’s trash collection facilities, including household appliances, steel cables, copper wires, car parts, computer parts, door and window frames. The City awards contracts to private salvage companies to purchase and remove such scrap metal from its trash collection facilities. DPW employees at the Landfill and other trash collection sites are required to segregate the recyclable scrap metal from general refuse and place it in separate bins provided by the salvage companies. The companies regularly pick up the scrap metal, weigh it and send a tonnage report to the City. Based on predetermined prices per ton, the City sends an invoice to the companies requesting payment for the value of the scrap metal the companies removed during a given period of time. Salvaging by employees, also referred to as “junking,” was strictly prohibited and employees were put on notice that any salvaging of metal constituted theft of City property.
From 2005 until May 2015, Hazelton, who was employed by DPW at the Landfill, and other DPW employees, including Michael Bennett and supervisor William Nemec, unlawfully collected and sold scrap metal for personal gain during work hours, while representing to DPW that they were doing the jobs for which they were being paid. Hazelton was a leader in the scheme and coordinated the daily collection of scrap metal at the Landfill. Hazelton and other employees used part of the proceeds of the sale of the stolen scrap metal to pay other DPW employees for their help locating, setting aside, collecting and loading the scrap metal onto their trucks. Hazelton, Bennett, and other employees at the Landfill, used their personal cell phones to communicate when and where recyclable scrap metals were being dumped at the Landfill, and to coordinate their arrival at the private salvage yard. Hazelton, Bennett, and others transported the scrap metal, using their personal pick-up trucks, to a private salvage company, frequently making multiple trips during a single, eight-hour work shift. The sale of the stolen scrap metal for their personal benefit resulted in a loss of revenue to the City of at least $400,000.
In order to conceal the junking scheme, Hazelton and Bennett paid cash to Nemec and other supervisors to not report them for collecting and transporting the stolen scrap metal, and to authorize and submit false time and attendance records. Hazelton prepared and submitted false time and attendance records, which claimed he had been working, when he was instead illegally collecting and selling the scrap metal, resulting in wages being paid to Hazelton for work he did not perform.
Hazelton and Brady each face a maximum sentence of five years in prison for the conspiracy. Hazelton also faces a maximum of 20 years in prison for wire fraud, and Brady faces a maximum of 10 years in prison for each of two counts of bribery. U.S. District Judge Marvin J. Garbis has scheduled sentencing for Brady on February 16, 2016 at 10:00 a.m., and for Hazelton on February 17, 2016 at 11:00 a.m.
Former Baltimore City Department of Public Works (DPW) employees Tamara Oliver Washington and William Charles Nemec, Sr., both age 55; and Michael Theodore Bennett, age 47, all of Baltimore, previously pleaded guilty to their roles in the schemes and are awaiting sentencing. Five other commercial trash haulers have also pleaded guilty.
United States Attorney Rod J. Rosenstein praised the FBI, IRS-CI, Baltimore Office of Inspector General, and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Martin J. Clarke and Leo J. Wise, who are prosecuting the case.
Bookkeeper Sentenced to 30 Months in Federal Prison for Tax EvasionRead the Press Release
PHOENIX – On Nov. 23, 2015, Deanna Kay Frader, 66, of Mesa, Ariz., was sentenced by U.S. District Judge Neil V. Wake to 30 months’ imprisonment, followed by three years of supervised release, for evading income tax on nearly $1.7 million she embezzled from Ardent Sound, Inc., where she had been employed as an office manager and bookkeeper. Frader previously pleaded guilty to tax evasion.
“The United States Attorney Office will vigorously prosecute those who commit this type of serious and repeated abuse of financial trust,” said U.S. Attorney John S. Leonardo. “Frader’s actions were harmful to her employer and to taxpayers, and it is hoped that this well-deserved sentence will deter others from similar fraudulent activity.
Frader was the sole office manager and bookkeeper for Mesa-based Ardent Sound for more than 20 years, until April of 2012. Her embezzlement was discovered during an Internal Revenue Service (IRS) audit of Frader Endeavors, LLC, a company that Frader owned with her son and that was the beneficiary of a large portion of the stolen funds. In an effort to hide the embezzlement and evasion during the audit, Frader created a fictitious loan agreement with Ardent Sound and forged the signature of its prior president. In the plea agreement, Frader admitted that she stole funds from Ardent Sound on nearly 400 occasions and then altered the company’s records to conceal the theft. She also admitted that she knew of her obligation to pay taxes on the funds and purposefully did not do so. As part of her sentence, Frader was ordered to pay restitution to Ardent Sound and to the IRS for the full amount of the respective losses.
The investigation in this case was conducted by the IRS-Criminal Investigation. The prosecution was handled by Monica Klapper, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-15-219-PHX-NVW
RELEASE NUMBER: 2015-117_Frader
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
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Blaine Man Sentenced to 282 Months in Prison for Trafficking 18-Year-Old VictimRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of RAHMAD LASHAD GEDDES, a/k/a “Face,” a/k/a “Poo Poo,” 36, to 282 months in federal prison for trafficking an 18-year-old woman from Wisconsin to Duluth, Minn., for the purpose of commercial sex. GEDDES, who was charged in a superseding indictment on April 8, 2015, was convicted on April 27, 2015, following a six-day jury trial.
“This violent defendant preyed on the vulnerabilities of his victim and used force and coercion to sell her for commercial sex,” said Assistant U.S. Attorney Laura Provinzino. “The lengthy sentence handed down by the court underscores the seriousness of these types of crimes, which we will continue to combat through aggressive prosecution.”
St. Louis County Attorney Mark Rubin said: "I want to commend U.S. Attorney Andy Luger for recognizing the tremendous value of combining our offices' efforts. The collaboration between some of our finest prosecutors, as happened in this case, assures justice for a remarkably courageous victim. The work of Assistant United States Attorney Laura Provinzino and Assistant St. Louis County Attorney Jon Holets is an example of the kind of cooperative work we need to help build a safer world. It gives me hope."
As proven at trial, on January 6, 2014, GEDDES recruited the victim from her home in Eau Claire, Wis., for the purpose of trafficking her for commercial sex. The defendant and a friend took the victim to a motel in Duluth, Minn., where they took pictures of her to place an advertisement for commercial sex on backpage.com. GEDDES used an anonymous prepaid credit card to pay for the online advertisement. GEDDES and his friend used the victim’s cell phone to set up several “dates” between the victim and “johns.” On one occasion, after a meeting with a “john,” GEDDES accused the victim of hiding money. The defendant physically assaulted the victim and told her that he hit her because she did not do what she was told.
As proven at trial, on January 9, 2014, GEDDES traded drugs, which he referred to as “rocks,” for two semi-automatic handguns and ammunition. GEDDES has four previous felony convictions in Cook County, Ill., Hennepin County and Sherburne County, Minn., making him an armed career criminal under federal law.
As proven at trial, on January 14, 2014, GEDDES returned the victim to her home. She immediately reported to her pastor that she “had been used for prostitution.”
This case was the result of an investigation conducted by the Federal Bureau of Investigation, Homeland Security Investigations, Duluth Police Department and St. Louis County Sheriff’s Office.
This case was prosecuted by Assistant U.S. Attorney Laura M. Provinzino and Special Assistant U.S. Attorney Jon Holets of the St. Louis County Attorney’s Office.
Defendant Information:
RAHMAD LASHAD GEDDES, a/k/a “Face,” a/k/a “Poo Poo,” 36
Blaine, Minn.
Convicted:
- Sex Trafficking by Force, Fraud, or Coercion, 1 count
- Transportation with Intent to Engage in Prostitution, 1 count
- Armed Career Criminal in Possession of a Firearm, 1 count
Sentenced:
- 282 months in prison
- Lifetime supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Authorities seek to identify customers of Budget Finance Company, Inc.Read the Press Release
WHEELING, WEST VIRGINIA – Federal and state authorities are seeking to identify anyone who suffered a financial loss as a result of dealings with Budget Finance Company, Inc. of New Martinsville, West Virginia, United States Attorney William J. Ihlenfeld, II, announced.
Individuals or businesses who may have suffered losses as a result of financial transactions with Budget Finance Company are asked to file a complaint with the United States Attorney’s Office for the Northern District of West Virginia using a standardized complaint form, available here.A community forum will be hosted by the Wetzel County Prosecuting Attorney’s Office on Tuesday, December 1, at 9:30 a.m. at the New Martinsville Municipal Building on Main Street in New Martinsville. Information will be provided to the public at the forum, and copies of the complaint form will be provided.
Individuals can also report losses directly to the U.S. Attorney’s Office in Wheeling by calling (304) 234-7721 or by sending an email to [email protected].
Atlanta Man Sentenced in Counterfeit Check SchemeRead the Press Release
Edmond Heath, 27, of Atlanta, Georgia, was sentenced today to serve 24 months in prison, followed by 3 years supervised release, on federal fraud charges, announced David Rivera, United States Attorney for the Middle District of Tennessee. Heath was also ordered to pay restitution in the amount of $21,551.85.
Heath pleaded guilty on August 10, 2015, to two counts of bank fraud and one count of conspiring to produce counterfeit checks. During the plea hearing, Heath admitted taking part in a scam in which he and other individuals from Atlanta would travel to Tennessee and other states, in order to steal checks from local businesses, manufacture counterfeit checks using information derived from the stolen checks, and recruit and pay local individuals to cash the counterfeit checks. Heath acknowledged stealing checks from a business located in Murfreesboro, Tennessee, in December 2014 and recruiting an individual to cash counterfeit checks that appeared to be written on the account of the business. Heath also admitted that he instructed the individual on how to cash counterfeited checks at Pinnacle Bank locations in and around Murfreesboro.
Heath was indicted on the present charges on April 15, 2015, along with Horace Freeman, 52, of Decatur, Georgia and Jennifer Kelson, 25, of Atlanta. On November 9, 2015, Kelson pleaded guilty to conspiring to produce counterfeit checks and is awaiting sentencing. Freeman is presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the United States Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney William F. Abely.
Additional Criminal Charges Have Been Filed Against A Cazenovia ManRead the Press Release
SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced today that additional criminal charges have been filed against a Cazenovia man already facing allegations of fraud and money laundering.
JAMES P. GRIFFIN, 70, is the Chief Executive Officer of several companies using a variation of the name 54 Freedom. These 54 Freedom companies are headquartered at 5 Ledyard Avenue, Cazenovia, New York. In July Griffin was indicted on charges that the 54 Freedom companies, marketed a financial product called the 54 Freedom Charitable Gift Annuity. This product purportedly allowed a person to make a gift to charity and still receive income for himself or others. The 54 Freedom Charitable Gift Annuity was represented to be backed by a highly rated major insurance carrier and would provide guaranteed life time income for the investor. It is alleged, however, that the monies invested by clients were not used to purchase annuities from A rated insurance companies, but rather were used by GRIFFIN for his own use and to pay expenses of the various 54 Freedom companies. The indictment charges that over $1.6 million was invested with the defendant to purchase 54 Freedom Charitable Gift Annuities. The investors initially received monthly payments as promised, but these regular payments stopped in approximately January 2013.
GRIFFIN was arrested on July 23, 2015 and appeared for arraignment before United States Magistrate Judge Andrew T. Baxter in Syracuse. He pled not guilty to the charges.
On November 25, 2015 a federal grand jury in Syracuse returned a superseding indictment that charges Griffin with five additional counts of mail fraud. The new charges allege that Griffin fraudulently induced persons to invest in his companies by using funds withdrawn from tax sheltered retirement accounts upon the false promise that the investments would be profitable and the investment funds would be "rolled over" into another tax sheltered account or that Griffin would pay any tax or penalty due on the early distribution of the retirement account monies. The indictment alleges that the investments were not profitable and the funds were not rolled over into tax sheltered accounts, and as a result, the investors did not realize a profit but also suffered an early withdrawal tax penalty on the funds invested. It is alleged that Griffin received at least $370,000 from investors that had come from tax sheltered retirement plans.
GRIFFIN is now charged with ten counts of mail fraud, eight counts of wire fraud, and five counts of money laundering. He faces a maximum term of imprisonment of twenty years on each of the mail and wire fraud counts and ten years on the money laundering counts. Each count carries a maximum fine of $250,000.
The case was investigated by the Internal Revenue Service, Criminal Investigation, and Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Edward R. Broton.
The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.
Tuesday 24 November 2015
‘Pill Mill’ Operators SentencedRead the Press Release
CINCINNATI – Christopher Stegawski, 65, of Cleveland, and John Randy Callihan, 58, of Portsmouth, Ohio, were sentenced in U.S. District Court for running “pill mills.” Stegawski was sentenced yesterday to 160 months in prison and 10 years of supervised release. Callihan was sentenced today to 60 months in prison and five years of supervised release.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Ohio Attorney General Mike DeWine; Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), A.J. Groeber, Executive Director of the State Medical Board of Ohio; and Steven W. Schierholt, Executive Director, Ohio Board of Pharmacy announced the sentences handed down today by U.S. District Judge Michael R. Barrett.
According to court testimony, beginning about November 2009 until May 2012, Stegawski and Callihan owned and/or operated a business initially known as Eastside Medical Specialist in Dayton, Ohio. In February 2010, the business moved to Lucasville, Ohio and the name was changed to Lucasville Medical Specialist. Stegawski took over the ownership of Lucasville Medical Specialist and listed his partner and co-conspirator, Callihan, as an employee.
Stegawski represented himself as a chronic pain management doctor at these clinics and an unnamed clinic located in Southpoint, Ohio. The clinics operated as “pill mills” by selling prescriptions for controlled substances, primarily oxycodone, without a legitimate need for the prescriptions. There was no valid doctor-patient relationship and many of the prescriptions were openly sold and diverted.
Stegawski had a DEA registration number that allowed him to order controlled substances for the clinics. Stegawski received a medical degree in Warsaw, Poland in 1977 and was purportedly trained to specialize in anesthesiology. The Ohio Board of Pharmacy has suspended and is pursuing permanent revocation of Stegawski’s license to practice medicine.
As many as 40 patients would visit the clinics each weekday. In some cases, customers traveled in excess of 200 miles roundtrip to obtain prescriptions from the doctor. Stegawski knowingly prescribed large amounts of prescription drugs to drug abusers and addicts, who were charged $200 cash per visit and received at most a cursory examination.
During the tenure of the pain clinics, many local pharmacies refused to honor any prescriptions written by Stegawski due to the “large quantities of narcotics” and his “catering to customers with prior drug abuse and arrest histories.”
A United States District Court jury convicted Stegawski in February of one count of conspiracy to distribute and dispense prescription drugs, one count of conspiracy to launder money and two counts of maintaining a place for illegal distribution of drugs.
Stegawski and Callihan were charged in an 11-count-indictment by a grand jury on May 16, 2012. Callihan pleaded guilty to conspiracy to distribute and dispense prescription drugs and money laundering.
Stewart commended the cooperative investigation by agents and officers of the agencies named above including IRS Special Agent Robert Mullins, Ohio Board of Pharmacy Agent Jesse Wimberly, the Ohio Bureau of Criminal Investigation in Attorney General DeWine’s Office, the DEA, Lawrence County Sheriff Jeff Lawless and the Sheriff’s Drug Task Force, Scioto County Sheriff Marty Donini, and the Riverside Police Department, as well as Criminal Chief Kenneth L. Parker and Assistant U.S. Attorney Timothy D. Oakley, who prosecuted the case.
ormer Employee of New Mexico Human Services Department Pleads Guilty to Defrauding Federal Food Stamp ProgramRead the Press Release
ALBUQUERQUE – A former employee of the Income Support Division of the New Mexico Human Services Department has entered a guilty plea to defrauding the federal food stamp program. Joseph Martin Padilla, 34, of Albuquerque, N.M., pled guilty in federal court yesterday under a plea agreement that requires him to pay $181,398.76 in restitution to the U.S. Department of Agriculture. At sentencing, which has yet to be scheduled, Padilla faces a statutory maximum penalty of five years in prison.
Padilla is one of six defendants charged with defrauding the Food Stamp Program in a 32-count indictment filed in Aug. 2014. The indictment alleged that between Sept. 2009 to May 2010, Padilla conspired with Justin Quintana, 29, of Rio Rancho, N.M., Wilfredo Lopez, 46, Sergio Escobedo, 36, and Veronica Hernandez, 41, all of Albuquerque, to defraud the United States through the unauthorized use of Food Stamp benefits, which are called Supplemental Nutrition Assistance Program (SNAP) benefits. During this time, Padilla worked as a Family Assistance Analyst for the Income Support Division of the New Mexico Human Services Department where he was responsible for determining applicants’ eligibility and benefit level for SNAP benefits.
According to the indictment, SNAP is funded by the U.S. Department of Agriculture and is administered by the States. The program was created to alleviate hunger and malnutrition, and permits low income households to obtain more nutritious diet by increasing the food purchasing power for eligible households. In New Mexico, individuals qualify to participate in SNAP based on income and need by completing an application with the Income Support Division of the New Mexico Human Services Department. Once an applicant is deemed eligible for SNAP benefits by a Family Assistance Analyst, the Analyst establishes a SNAP account in the applicant’s name and electronic benefit transfers (EBT), which are determined based on income, resources and household size, are deposited into the account on a monthly basis.
The indictment charged Padilla with abusing his position as a Family Assistance Analyst by conspiring with his co-defendants to defraud the United States through the unauthorized use of SNAP benefits. It alleged that Padilla used names and personal identifiers he obtained from his co-defendants to establish fraudulent SNAP accounts, sometimes in exchange for cash or other things of value. It also alleged that Padilla established a fraudulent SNAP account and used the account to fraudulently obtain SNAP benefits for himself, and that he fraudulently established 25 separate SNAP accounts through which the United States was defrauded of SNAP benefits. The indictment further alleged that Padilla, aided and abetted by his co-defendants, fraudulently established SNAP accounts that were used to fraudulently obtain SNAP benefits.
During yesterday’s proceedings, Padilla pled guilty to Count 1 of the Indictment, and admitted that while employed by the Income Support Division of the New Mexico Human Services Department he processed numerous fraudulent applications for SNAP benefits. Padilla admitted conspiring with Moya to arrange for others to receive the fraudulent benefits in return for payment to Padilla and Moya.
On March 9, 2015, Moya pled guilty to Count 31 of the indictment and admitted that he fraudulently obtained SNAP benefits to which he was not entitled. Moya admitted that in early Dec. 2009, Padilla provided him with an application to obtain food stamps. Moya completed the application and returned it to Padilla for processing even though he knew that he was not entitled to SNAP benefits. Moya admitted unlawfully receiving $866.00 in SNAP benefits. Moya also admitted providing another application for SNAP benefits to a family member and that his relative unlawfully received $1,578.00 in SNAP benefits. On May 6, 2015, Moya was sentenced to six months in prison, or time served, followed by three years of supervised release. Moya also was ordered to pay $2,444.00 in restitution to the U.S. Department of Agriculture as the victim of his crime.
On May 18, 2015, Quintana pled guilty to Count 30 of the Indictment, and admitted meeting Padilla through Moya and knowing that Padilla had the ability to register people to receive food stamps. Quintana admitted that he agreed to pay Padilla a fee in exchange for arranging for him to receive food stamps unlawfully. Quintana obtained $486.00 in SNAP benefits through his illegal conduct. He also received a fee for collecting SNAP applications from six other people and delivering the completed applications to Padilla for the purpose of assisting them in obtaining SPA benefits unlawfully. Quintana was sentenced on Aug. 17, 2015, to three years of probation, and was ordered to pay $9,384.00 in restitution to the U.S. Department of Agriculture as the victim of his crime.
On May 19, 2015, Lopez entered a guilty plea to Count 32 of the indictment and admitted completing fraudulent applications for SNAP benefits in his name, another for himself in a pseudonym, and in the names of two other individuals. Lopez paid $100.00 to process each of the applications. He acknowledged that his criminal conduct caused a total monetary loss to the U.S. Department of Agriculture of approximately $8,382.00. Lopez’s sentencing hearing has yet to be scheduled.
Escobedo and Hernandez have entered not guilty pleas to the charges in the indictment. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Office of Inspector General for the U.S. Department of Agriculture and the Office of Inspector General for New Mexico Human Services, and is being prosecuted by Assistant U.S. Attorneys Sean J. Sullivan and Cynthia Weisman.
Wasilla Men Sentenced for 2014 Bank RobberyRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that Jason L. Wood and Lawrence L. Niesen, both of Wasilla, Alaska, were sentenced in federal court for their roles in a bank robbery which occurred on April 23, 2014, at a Key Bank branch in Wasilla. Wood, age 35, and Niesen, age 39, had earlier pleaded guilty to planning and then committing the unarmed robbery. Wood, who actually entered the bank and demanded money from a teller, was sentenced to 36 months in federal prison. Niesen, who acted as a “getaway” driver following the robbery, received 32 months in federal prison for his role. Both men were also ordered to make restitution to Key Bank in the amount of $1,604.00.
In imposing the sentences on the two men, Chief United States District Court Judge Ralph R. Beistline noted that both men had significant heroin addiction problems which appeared to be the impetus for the robbery. Referring to the prevalence of heroin addiction in the Anchorage and Mat-Su Valley areas as a “scourge”, Judge Beistline noted that drug addiction in general appears to be an increasing cause of these types of crimes.
Ms. Loeffler commends the Federal Bureau of Investigation and the Wasilla Police Department for the investigation of this case.
United States Attorney Stephen R. Wigginton Announces ResignationRead the Press Release
Stephen R. Wigginton, the United States Attorney for the Southern District of Illinois, has announced his resignation effective midnight on December 11, 2015. After his resignation, he plans on joining a national law firm based in the St. Louis, Missouri, area.
Mr. Wigginton was sworn into office as the United States Attorney for the Southern District of Illinois on August 27, 2010, after nomination by President Barack Obama and unanimous confirmation by the United States Senate. Mr. Wigginton served on the following subcommittees and working groups of the Attorney General’s Advisory Committee: Violent and Organized Crime, Health Care Fraud, Civil Rights and Controlled Substances/Asset Forfeiture. From December 2012 to the present he has served as Chairman of the Violent and Organized Crime subcommittee. In December 2012 he was appointed as the U.S. Attorney’s representative on the Violent Crime Resource Working Group supporting Vice-President Biden’s Violent Crime Task Force in the wake of the Newtown, Connecticut, school shootings. He is also a member of the Attorney General’s Health Care Fraud Working Group, and, served as the representative for the U.S. Attorney Community on the Nation’s Threat Mitigation Working Group.
"It has been an honor to serve as the United States Attorney for the Southern District of Illinois. Words cannot express the appreciation I have for the opportunity to serve the people of Southern Illinois, granted to me by the efforts of Senator Dick Durbin, the nomination by President Barack Obama and the unanimous support of the Senate. It is truly a privilege to work with the many men and women in law enforcement at the federal, state and local level who risk their lives daily to make our communities safer. The dedicated professionals in this United States Attorney’s office have performed outstanding work over the past five years and will continue to do so in the future. I have been fortunate to work with two great leaders- former Attorney General Eric Holder and current Attorney General Loretta Lynch. The leadership, support and advice of the past and present Attorneys General have allowed our office and the Department of Justice as a whole to perform at the highest levels and achieve extraordinary success not only in the Southern District of Illinois but across this great nation. Having served as the United States Attorney for over five years, I witnessed many challenges and my office met every challenge. We viewed challenges as opportunities to do tough work, make difficult decisions and always, always, seek justice." noted United States Attorney Wigginton.
During his tenure as United States Attorney, Mr. Wigginton directed and oversaw many important law enforcement operations targeting violent crime, public corruption, fraud on government programs, health care fraud and crimes involving the exploitation of children. He took a very aggressive stand targeting prohibited persons from possessing weapons. He worked closely with the St. Clair County and Madison County State’s Attorneys’ offices to combat violent crime and the heroin epidemic which exploded over the Metro-East area in 2011.
Over the past five years, Mr. Wigginton substantially increased the number of prosecutions of public officials and law enforcement officers caught violating the law. This included elected officials, police chiefs, police officers, probation officers, federal correctional officers, water clerks, township officials and mayors.
In March, 2011, he along with the St. Clair County and Madison County State’s Attorneys’ offices formed the Anti-Heroin Task Force and focused not just on the prosecution of heroin dealers but also engaged in a robust educational program at area high schools and middle schools to educate parents and children about the danger of heroin and other opiate based prescription drugs. He has spoken to over 10,000 high school and middle school students throughout Southern Illinois.
The United States Attorney’s Office for the Southern District of Illinois aggressively pursued child exploitation perpetrators and was recognized nationally for the strategic plan they formulated in 2012 showing how an office can increase the number of child exploitation prosecutions during austere times without hiring additional prosecutors.
In September 2013, United States Attorney Wigginton formed the Metro East Armed Robbery Initiative, bringing together local, state and federal law enforcement to address the increase in armed robberies of commercial establishments. This Initiative has been wildly successful in locating, arresting and convicting violent individuals who use guns to rob convenient marts, retail stores, restaurants and banks.
United States Attorney Wigginton oversaw many operations targeting individuals who defrauded federally funded programs such as Medicaid, Social Security, the Railroad Retirement Board and grant programs. He also focused on consumer fraud crimes such telemarketing scams. During his tenure the United States Attorney’s Office for the Southern District of Illinois was one of the nation’s leaders in prosecuting and convicting telemarketing and mass marketing fraudsters. Wigginton’s office obtained over 50 convictions in one telemarketing scam arising out of Florida. His Operation Home Alone program, which pursues individuals who falsely claim to be performing personal assistant services and billing a fund administered by the State of Illinois, and funded by federal tax dollars, has resulted in over 45 convictions so far. His office was also one of the nation’s leaders in prosecuting health care fraud.
United States Attorney Wigginton also aggressively pursued many affirmative civil enforcement actions against individuals and corporations involved in defrauding the government. During the past five years his office has recovered over $450,000,000.00 in monies through the aggressive enforcement of both civil and criminal actions. He, along with his Affirmative Civil Enforcement Assistants, established a Defense Procurement Fraud Task Force targeting those contractors who have defrauded the government during the wars in Afghanistan and Iraq. Last year, in a case involving defense contractors engaged in shipping, United States Attorney Wigginton’s office recovered $32 million from the contractors.
As the Chairman of the Violent and Organized Crime Subcommittee, Mr. Wigginton has been invited to speak at a number of regional as well as national conferences on the issue of gun violence. He has hosted meetings with law enforcement officials in Baltimore, Camden, Chicago, Indianapolis and Philadelphia. He received the "Olympian Award" from the Southern Illinois Police Chiefs Association for his leadership in tackling violent crime. He received the "Extra Effort Award" from the Edwardsville School District for his work in combating heroin related crimes and his participation in Project Drugsmart.
The Southern District of Illinois covers the 38 southern-most counties in Illinois, has a population of approximately 1.25 million people and encompasses a geographical area about the size of Maryland. The United States Attorney’s Office, with staffed offices in East St. Louis, Benton and Fairview Heights, Illinois, has 32 attorneys and is responsible for conducting all criminal and civil litigation in the district on behalf of the United States of America.
U.S. Attorney's Office Provides Update on Investigation into the Shooting Death of Laquan McDonaldRead the Press Release
CHICAGO — On April 13, 2015, this Office announced a joint federal and state investigation into the October 20, 2014, fatal shooting of Laquan McDonald. Both before and since that announcement, the U.S. Attorney’s Office and our law enforcement partners have been conducting a thorough investigation into the circumstances of the shooting.
The federal investigation of the shooting remains active and ongoing.
U.S. Announces Settlement with Illinois Landlord for Failing to Disclose Potentially Dangerous Lead HazardsRead the Press Release
WASHINGTON – The U.S. Department of Housing and Urban Development (HUD), the U.S. Attorney’s Office for the Northern District of Illinois, and the U.S. Environmental Protection Agency (EPA) today announced a settlement with a Rockford, Illinois landlord to resolve a claim he failed to inform tenants, some with young children, that their homes may contain potentially dangerous lead.
The agreement requires Dennis Hardesty to replace windows and clean up lead‑based paint hazards in 50 rental properties containing a total of 52 units (see attached list of properties). In addition to the $308,000 worth of lead abatement work, Hardesty agreed to pay $5,000 in penalties.
According to the federal government, Hardesty violated the Federal Residential Lead-Based Paint Hazard Reduction Act (Residential Lead Act) by failing to inform tenants that their homes may contain potentially dangerous levels of lead. Winnebago County health department officials identified at least seven children with elevated blood lead levels in the properties Hardesty leased. Investigations by the health department identified lead‑based paint and lead-based paint hazards in the units. Going forward, Hardesty will ensure that he will provide information about lead‑based paint to tenants before they are obligated to sign any lease.
The lead abatement work Hardesty will perform as a result of the settlement includes window replacement and abatement of all friction and impact surfaces, and clearance exams to make those units lead safe for families to rent and live in. HUD will provide ongoing monitoring of Hardesty’s implementation of the settlement agreement, and will share the results with its federal partners for possible further action.
“Lead poisoning is entirely preventable but it requires all of us to recognize that we share a responsibility to protect our vulnerable populations, especially young children who are still developing,” said Matt Ammon, Director of HUD’s Office of Lead Hazard Control and Healthy Homes. “Landlords of homes built before 1978 have a legal responsibility to make their tenants aware of lead-based paint and lead-based paint hazards they know about or that may be in their homes so that tenants can protect their families.”
“This settlement will protect children in Rockford from exposure to lead-based paint – and it sends a clear message to landlords and property managers across the country that the Environmental Protection Agency is prioritizing enforcement actions to eliminate elevated blood lead levels in children,” EPA Region 5 Administrator Susan Hedman said.
“This settlement requires Dennis Hardesty to institute a robust program to ensure that his properties are compliant with federal law,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “My office will continue to enforce these important laws to protect tenants from exposure to dangerous lead paint.”
The settlement announced today represents the first joint Residential Lead Act enforcement action in Rockford. It was the result of intensive coordination among local health officials and federal investigators. HUD, EPA and the Department of Justice are continuing similar enforcement efforts around the nation. As a result of enforcement actions taken thus far, landlords have agreed to conduct lead-based paint hazard reduction in more than 187,000 apartments and to pay $1.5 million in civil penalties. In resolving these cases, landlords have committed to expend more than an estimated $31 million to address lead-based paint hazards in the affected units. In addition, over $700,000 has been provided by defendants to community-based projects to reduce lead poisoning.
Background
The Residential Lead Act is one of the primary federal enforcement tools to prevent lead poisoning in young children. The Lead Disclosure Rule requires home sellers and landlords of housing built before 1978 to disclose to purchasers and potential tenants knowledge of lead-based paint or lead-based paint hazards using a disclosure form, signed by both parties, attached to the sales contract or lease containing the required lead warning statement, provide any available records or reports, and provide an EPA-approved “Protect Your Family From Lead in Your Home” information pamphlet. Sellers must also provide purchasers with an opportunity to conduct a lead-based paint inspection and/or risk assessment at the purchaser’s expense. Acceptable lead disclosure forms can be found at www.hud.gov/offices/lead/dislcosurerule and www.epa.gov/lead/pubs/leadbase.htm.
Health Effects of Lead-Based Paint
No safe blood lead level in children has been identified. Lead exposure can affect nearly every system in the body. Lead exposure causes reduced IQ, learning disabilities, developmental delays, reduced height, poorer hearing, and a host of other health problems in young children. Many of these effects are thought to be irreversible. In later years, lead-poisoned children are much more likely to drop out of school, become juvenile delinquents and engage in criminal and other anti-social behavior. Researchers have found that even at low levels, lead exposure in children can significantly impact IQ and might delay puberty in young girls.
At higher levels, lead can damage a child’s kidneys and central nervous system and cause anemia, coma, convulsions and even death. According to the Centers for Disease Control and Prevention (CDC), 4 million households have children living in them that are being exposed to high levels of lead. There are approximately half a million U.S. children ages 1-5 with blood lead levels above 5 micrograms per deciliter, the reference level at which CDC recommends public health actions be initiated.
Eliminating lead-based paint hazards in older low-income housing is essential if childhood lead poisoning is to be eradicated. According to CDC estimates, the percentage of children with elevated blood lead levels has been cut in half since the early 1990’s, although as many as 1 million children are still affected by lead poisoning today. HUD estimates that the number of houses with lead paint has declined from 64 million in 1990 to 37 million in 2006. About 23 million homes still have significant lead-based paint hazards, and about 3.6 million homes with children less than 6 years of age have one or more of these hazards.
Dennis Hardesty Subject Properties
Two Sentenced in Relation to “Butch” Ballow Fraud SchemeRead the Press Release
HOUSTON – A U.S. citizen from Georgetown and a citizen of Nigeria who was residing in Houston have been ordered to federal prison following their convictions related to a fraud scheme directed by Harris Dempsey “Butch” Ballow, announced U.S. Attorney Kenneth Magidson.
Christopher Harless, 62, of Georgetown, pleaded guilty Jan. 13, 2014, admitting he conspired to defraud victims Ballow’s scheme, while Sikiru Olubunmi, 46, entered his plea Nov. 5, 2014, to laundering the proceeds of the fraud scheme.
Today, U.S. District Judge Lee Rosenthal handed Harless a 240-month sentence. Bonojo received 63 month in federal prison. Both have been in federal custody since their arrests in 2010.
Ballow, 72, formerly of Galveston County, pleaded guilty to one count of money laundering in September 2003 and was permitted release pending sentencing. However, he fled to Mexico and remained a fugitive for more than five years. In 2005, while living in Mexico under the alias of “John Gel,” Ballow gained control of E-SOL International Corp. (E-SOL), a Nevada company with shares traded on the over-the-counter securities market under the symbol ESIT. Ballow then carried out a fraudulent scheme to sell stock in E-SOL and interests in a non-existent Mexican vacation resort supposedly developed by E-SOL to unsuspecting investors. The victims included citizens of the United States and Canada who wire transferred money to a bank account in the name of E-SOL at Wells Fargo Bank in Reno, Nevada.
Harless is Ballow’s brother-in-law. As part of his guilty plea, Harless admitted he was aware that Ballow pleaded guilty to the money laundering charges but fled to Mexico instead of appearing at his sentencing. In 2008, Harless began helping Ballow to sell stock and investments in E-SOL. Harless led investors to believe Ballow’s name was John Gel or Tom Brown so they would not learn about his past criminal convictions or the fact that he was a fugitive. In 2009, Harless moved to Puerto Aventuras, Mexico, under the name “Chris Harris” and continued working with Ballow. In July of that year, Ballow fled from Puerto Aventuras and surfaced a few months later in Puerto Vallarta, Mexico, under the name Martin Twinley. However, Harless stayed in Puerto Aventuras and continued to meet with and mislead investors. On April 27, 2010, Harless spoke to an investor over the telephone. Without revealing that Tom Brown was not a real name, that “Tom Brown” had criminal convictions and was permanently barred from promoting securities, Harless attempted to convince the investor to purchase ESIT stock for $5 million.
Bonojo and Ballow met in prison in the fall of 2003 when they were both in custody on unrelated criminal charges. In 2004, after Bonojo’s release from prison, Bonojo helped Ballow obtain fraudulent British passports so Ballow could flee to Mexico. Bonojo also obtained a cell phone under a fake name in order to communicate with Ballow in Mexico. In 2006, Ballow began causing large sums of money to be wire transferred from E-SOL’s bank account at Wells Fargo to accounts controlled by Bonojo at banks in the Houston area, including an account in the name of Guiding Angels EMS Inc. at Trustmark National Bank. Bonojo admitted as part of his guilty plea that he knew the money sent from Wells Fargo was proceeds of some kind of felony, further acknowledging that he withdrew much of the money in cash in order to conceal and disguise its source. Bonojo used a lot of the cash to make payments Ballow directed, including to his grandson who was living in or near Houston.
Three others were also charged in this case - James David Wright, 60, of Corinth; Patrick Lanier, 67, of Austin; and Clarence LaFey Hudgens Jr., 59, of Lebanon, Oregon. Hudgens and Wright each pleaded guilty to conspiracy to commit wire fraud arising from the E-SOL stock sale scheme. Lanier was convicted Feb. 27, 2014, after a lengthy trial on 16 counts to include conspiracy to commit wire fraud, wire fraud, harboring and concealing Ballow from arrest and assisting a federal offender. They are set for sentencing Jan. 26, 2016.
A second, but related, case against Ballow and five others, including Ruben Garza Perez, is pending before Judge Ewing Werlein, Jr. Garza, 55, formerly of Houston, pleaded guilty in that case on July 17, 2015, to conspiracy to commit wire fraud arising from the sale of E-SOL stock. His sentencing is set for Feb. 5, 2016.
Ballow is in custody, while the other four are located in foreign countries. All five are considered innocent unless and until convicted through due process of law.
The cases were investigated by the FBI and Internal Revenue Service – Criminal Investigation with the assistance of the U.S. Marshals Service and U.S. Postal Inspection Service. The governments of Mexico and Canada also provided extensive and valuable assistance.
Assistant U.S. Attorneys John R. Lewis and Belinda Beek are prosecuting the case.
Two Indicted by Federal Grand Jury Following Additional Marijuana Raids in Western ColoradoRead the Press Release
DENVER – A federal grand jury has indicted two individuals who, after investigation, were found tending to a large marijuana grow in western Colorado, U.S. Attorney John Walsh, and DEA Denver Division Special Agent in Charge Barbra Roach announced. The two men charged, Luis Adolfo Garcia, age 33 of Parachute, and Luis Rios-Cortes, age 23, a Mexican National in the country illegally, have made their initial appearance, where they were advised of the pending charges as well as their rights. Both were also arraigned by a U.S. Magistrate Judge. Both defendants were ordered held without bond by a U.S. Magistrate Judge. Approximately 1,720 pounds of marijuana was recovered during the November 13, 2015 raids.
According to court documents, in April of 2015, a Bureau of Land Management (BLM) Ranger noticed two trucks conspicuously but consistently appearing in an area along the Dolores River. Ultimately the BLM found two large marijuana grows on their property, one on September 15th, which resulted in the arrest of four defendants, and a second on September 30, 2015, four miles from the first location, where six people were arrested. After those raids, the DEA, along with the BLM, the Delta County Sheriff and the Seventh Judicial Drug Task Force, continued to investigate potential illegal marijuana grows in the area. The two trucks seen in the area, one a Chevy Silverado, and the other a maroon Ford F-150, were continually seen in the area. Additional investigative techniques were used which resulted in the identification of two addresses.
On Friday, November 13th, the DEA, along with the other investigative partners, executed two search warrants. The first was at a residence in Parachute, and the other was identified as the “San Juan Vista Property”. Evidence of illegal marijuana activity, including the names of some of the defendants arrested in September, was found in the residence. At the San Juan Vista Property, law enforcement found approximately 1,720 pounds of dried marijuana. The property containing the marijuana was owned by Luis Garcia’s sister, Esther Garcia. The residence searched was Esther Garcia’s as well. Luis Garcia was stopped multiple times while driving the Chevy Silverado, which is owned by Esther Garcia. The investigation continues.
Luis Adolfo Garcia and Luis Rios-Cortes each face one count of Conspiracy to manufacture and possess with intent to distribute 100 kilograms or more of marijuana, which carries a penalty of not less than 5 years, and not more than 40 years, and up to a $5,000,000 fine. They also each face one count of Manufacture and possession with intent to distribute 100 kilograms or more of marijuana, which carries the same penalty. In addition, Rios-Cortes faces one count of being an illegal alien in possession of a firearm. That count carries a penalty of not more than 10 years, and up to a $250,000 fine.
“We have seen a notable increase this year in illegal marijuana grows in Western Colorado,” said U.S. Attorney John Walsh. “As we work with the DEA, BLM, and our local law enforcement partners, we are seizing large amounts of marijuana. In addition, we have charged a total of 12 individuals, many here illegally from Mexico, for tending to these marijuana grows.”
“The Drug Enforcement Administration will continue to investigate illegal marijuana cultivation,” stated Barbra Roach, Special Agent in Charge of the DEA’s Denver Field Division. “Criminal Organizations outside the state continue to attempt to use both public and private lands in Colorado to further their illegal activities at the expense of the citizens of our community. These individuals and organizations will be held accountable for their actions.”
“The teamwork between the DEA, BLM and the Delta County Sheriff’s Department and the Seventh Judicial Drug Task Force was outstanding.” stated Delta County Sheriff Fred McKee. “All the agencies worked together to apprehend these felons engaged in the illegal cultivation and distribution of marijuana.”
This investigation is being conducted by the DEA, BLM, the Delta County Sheriff, and the Seventh Judicial Drug Task Force.
The defendants are being prosecuted by Assistant U.S. Attorney Rebecca Weber.
The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
Three Individuals Sentenced for Distributing Synthetic CannabinoidsRead the Press Release
CONCORD, N.H. – Acting United States Attorney Donald Feith announced today that three men who were involved in a scheme that distributed in excess of 1,000 kilograms of illegal synthetic cannabinoid products have been sentenced in federal court.
On November 24, 2015, Chief United States District Judge Joseph Laplante sentenced Robert Costello (71) of Lawrence, Massachusetts to 60 months in prison. Costello had pleaded guilty on February 12, 2015, to guilty to conspiracy to travel in interstate commerce with the intent to commit a drug trafficking crime and to traveling in interstate commerce with the intent to commit a drug trafficking crime.
On November 23, 2015, Judge Laplante sentenced Kyle Hurley (33) of Seabrook, New Hampshire to 114 months in prison. Hurley had pleaded guilty on February 12, 2015, to participation in a conspiracy to distribute, and possess with intent to distribute, controlled substances.
Earlier this month, on November 9, 2015, Judge Laplante sentenced Sean Nolan (33) of Concord, New Hampshire to 21 months in prison. Nolan had pleaded guilty on April 23, 2015, to distributing a controlled substance.
Court documents show that Hurley and Costello were arrested on March 28, 2014, after they arranged to deliver approximately 74 15-kilogram bags of synthetic cannabinoid products to undercover law enforcement officers. The synthetic cannabinoid products contained AB-FUBINACA, an illegal controlled substance.
As described in court documents, Hurley and Costello worked together to manufacture and distribute synthetic cannabinoids that were sold in packages bearing a variety of brand names, including “Scooby Snax,” “Bizarro,” “Toxic Blue Magic,” and “Caution Platinum.” These products, which were then sold in convenience stores and at other locations, contained chemicals that are unlawful controlled substances, including XLR-11 and AB-FUBINACA.
Court documents show that Sean Nolan had assisted Hurley in the distribution of these products. After the arrest of Hurley and Costello, Nolan sold a quantity of AB-FUBINACA to an undercover law enforcement officer.
Two other individuals also have been charged as a result of this investigation.
The resident of the Epping location, Ryan Johnson (32), pleaded guilty on May 26, 2015, to conspiracy to introduce misbranded drugs into interstate commerce. A sentencing date for Johnson has not yet been set.
Tony Aoude (44) of Derry, New Hampshire has been indicted on charges related the distribution of synthetic cannabinoids. The indictment charges Aoude with Distributing a Controlled Substance (AB-FUBINACA), Conspiracy to Violate the Travel Act, and Conspiracy to Receive Misbranded Products, as well as separate violations the federal Travel Act and the federal misbranding statute. According to the Indictment, Aoude sold synthetic cannabinoid products at stores in Londonderry and Hooksett, New Hampshire in 2013 and 2014. Aoude has pleaded not guilty and is scheduled for trial on February 2, 2016.
The charges and allegations contained in an indictment are merely accusations. A defendant is presumed innocent until and unless proven guilty.
Synthetic cannabinoids are green leafy materials that have been sprayed with chemicals. These products (commonly referred to as “spice” or “K2”) are often marketed as incense or potpourri. As in this case, the packaging materials often contain attractive logos that are designed to appeal to young people. Although the products are often identified as “not for human consumption,” the products are smoked in order to obtain a high. The chemicals that are sprayed on the products to produce the high are often illegal controlled substances or analogues of illegal controlled substances. The ingestion of these types of illegal products has caused some users to experience a variety of medical side effects and has led to numerous hospitalizations.
The investigation is continuing.
This case was supported by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The Drug Enforcement Administration’s Tactical Diversion Squad led the investigation in collaboration with the US Postal Inspection Service and Homeland Security Investigations. The investigators also received the invaluable assistance of DEA-NH/HIDTA and DEA’s Air Wing, the New Hampshire and Massachusetts State Police, the U.S. Marshal Service, Portsmouth Police Department, Somersworth Police Department, Kingston Police Department, Dover Police Department, and the York and Kittery, Maine Police Departments. It is being prosecuted by Assistant United States Attorney John J. Farley.
Thirteen Defendants Indicted in State-Wide Drug Trafficking ConspiracyRead the Press Release
OAKLAND – A federal grand jury indicted thirteen defendants for conducting a state-wide conspiracy to possess with the intent to distribute and the distribution of controlled substances, announced Acting United States Attorney Brian J. Stretch, Drug Enforcement Administration (DEA) Special Agent in Charge John J. Martin, and Department of Treasury, Internal Revenue Service (IRS) Acting Special Agent in Charge Thomas P. McMahon. All thirteen defendants are charged with trafficking numerous controlled substances, including cocaine, methamphetamine, and heroin, several defendants are charged with possession of a firearm in furtherance of a drug trafficking crime, and one defendant is changed with money laundering.
The indictment, filed on November 19, 2015, alleges that between December of 2013, and October of 2015, the following individuals were involved in a large-scale drug trafficking organization whose network extended throughout California and into Mexico:
Carlos Olivares Hernandez, 49, of Turlock
Manuel Gonzalez Chavez, 39, of Stockton
Daniel Jimenez, 45, of Ballico
Manuel Lara Andrade, 61, of Delhi
Gabriel Estrada, 39, of Los Angeles
Vanessa Valdez, 29, of Chula Vista
Ruben Franco Lopez, 45, of Turlock;
Carlos Martinez, Jr; 23, of Hayward
Michael Anthony Sherman Sr., 45, of Lathrop
Ismael Mendoza Rodriguez, 35, of Turlock
Elias Dominguez, 43, of Patterson
Jesus Guadalupe Rojas, 29, of Delhi
Jose Armando Mendoza Linares, 39, of TurlockAccording to the indictment, underlying criminal complaints, and public records, a federal investigation revealed that Olivares Hernandez and his co-defendants regularly received large shipments of drugs from couriers transporting the contraband from San Diego area to the Central Valley of California. The defendants are further alleged to have distributed the drugs in the Central Valley and Bay Area of California. The thirteen defendants were charged with conspiracy to possess with intent to distribute and distribution of controlled substances, in violation of 21 U.S.C. §§ 846 and 841. The grand jury also indicted three of the defendants, Andrade, Chavez Gonzalez, and Mendoza Rodriguez, for possession of a firearm in furtherance of a drug trafficking crime, in violation of 18 U.S.C. § 924(c). The grand jury further charged Olivares Hernandez with fifty-six counts of money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i).
"This investigation demonstrates the size and scope of the drug trafficking organizations that we can effectively target through the combined efforts of federal and local law enforcement,” said Acting U.S. Attorney Brian J. Stretch. “These long-term wiretap investigations and resulting charges strike at the heart of sophisticated drug trafficking and will take hundreds of thousands of doses of drugs off our streets."
DEA Special Agent in Charge John J. Martin stated, “No stone was left unturned in this investigation and its success can be attributed to the excellent collaborative effort between federal and local law enforcement. These arrests and seizures have disabled an organization with tentacles operating throughout California. DEA will diligently work with our law enforcement partners to identify and dismantle drug distribution networks at the highest levels.”
IRS Criminal Investigations Acting Special Agent in Charge Thomas McMahon said, “The combined efforts of law enforcement agencies in an investigation of this magnitude produce a formidable force against narcotics trafficking and money laundering. It’s critical to determine where the money comes from and where it goes. Finding and connecting those ‘dots’ is what IRS-CI brings to this cooperative effort.”
According to documents filed in connection with the indictment and public records, the investigation also revealed the defendants used sophisticated means to attempt transporting the drugs without detection from Southern California to the Central Valley. For example, law enforcement stopped Valdez while he was driving a vehicle containing 33 pounds of methamphetamine on September 5, 2015. The drugs were secreted inside an electronically-operated compartment built beneath the front seats and operated via buttons concealed in the center console. The defendants are also alleged to have routinely sent bulk cash payments to Mexico via couriers based in Southern California. For example, law enforcement discovered approximately $399,000 in U.S. currency hidden behind the truck-bed liner of a vehicle driven by Estrada while headed southbound on Highway-99 on October 12, 2015. In sum, searches executed at the conclusion of the investigation resulted in the cumulative seizure of more than $1.3 million in U.S. currency; numerous firearms, including an AK-47 with an extended magazine; pieces of body armor; vehicles containing aftermarket traps; and additional items. Agents also seized suspected drugs in the following quantities: 38 kilograms of cocaine, 58.1 pounds of methamphetamine, and 11.4 pounds of heroin. The drugs are alleged to have an estimated street value of over $4 million.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the drug conspiracy charge, all of the defendants, with the exception of Carlos Olivares Hernandez, face a mandatory 10-year term of imprisonment and maximum sentence of life, and a maximum fine of $10 million for the alleged violations of 21 U.S.C. §§ 846 and 841 (a)(1),(b)(1)(A)(viii). Carlos Olivares Hernandez faces a mandatory 20-year term of imprisonment and maximum of life and a maximum fine of $20 million for the alleged violations of 21 U.S.C. §§ 846 and 841 (a)(1),(b)(1)(A)(viii) based on the Information for Increased Punishment.
If convicted of possession of a firearm in furtherance of a drug trafficking crime, in violation of 18 U.S.C. § 924(c), defendants Daniel Jimenez, Manuel Lara Andrade, Manuel Gonzalez Chavez, and Ismael Mendoza Rodriguez face a consecutive mandatory minimum term of imprisonment of 5 years, 7 years if the firearm was brandished, or 10 years if the firearms was discharged. In addition, if, for any of the three defendants, it is his second conviction under § 924(c), the defendant faces a minimum 25 years’ imprisonment and a maximum lifetime of imprisonment.
If convicted, Carlos Olivares Hernandez also faces a maximum 20 years of imprisonment and maximum fine of $500,000 or twice the value of the property involved in the transactions for the alleged money laundering charges, in violation of 18 U.S.C. § 1956(a)(1)(B)(i).
Any sentences following the defendants’ convictions would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The defendants are scheduled for an initial appearance on the indictment before the Honorable Judge James Donato, U.S. District Court Judge, on December 17, 2015. All of the defendants, with the exception of Carlos Martinez Jr., are in custody.
Assistant U.S. Attorneys Katie Burroughs Medearis, Aaron D. Wegner, and Gregg Lowder are prosecuting the case with the assistance of Michelle Alter and Vanessa Vargas. The prosecution is the result of a multi-year investigation by the DEA, the Concord Police Department, and the IRS Criminal Investigations. The investigation was conducted and funded by the Organized Crime Drug Enforcement Task Force (OCDETF), a multi-agency task force that coordinates long-term narcotics trafficking investigations.
Texas Woman Sentenced for Lying on A Passport ApplicationRead 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 Valerie Christine Hedd-Johnson, 46, of Garland, Texas, who was convicted of making a false statement in an application for a U.S. passport, was sentenced to time served (13 months) by Senior U.S. District Judge William M. Skretny.Assistant U.S. Attorney Elizabeth R. Moellering, who handled the case, stated that the defendant applied for a passport in Buffalo, NY in November 2013. On the application, Johnson indicated that she had never before applied for a U.S. passport. However, in August 2000, the defendant had applied for a passport in Texas. That application was rejected due to indications of fraud.
The sentencing is the result of an investigation by Special Agents from the Department of State, Diplomatic Security Services, under the direction of Special Agent in Charge and the Social Security Administration, Office of the Inspector General, under the direction of Edward J. Ryan, Special Agent in Charge.
Tampa Man Sentenced to Nearly Six Years in Federal Prison for Stolen Identity Refund FraudRead the Press Release
Tampa, Florida – U.S. District Judge Susan C. Bucklew today sentenced Demetrius Wright to 5 years and 10 months in federal prison for conspiracy to commit theft of government funds, aggravated identify theft, wire fraud, filing false claims, and theft of government funds. As part of his sentence, the Court also entered a money judgment in the amount of $165,317, the proceeds of the charged criminal conduct. Wright pleaded guilty on August 6, 2015.
According to court documents, from as early as February 1, 2012, through on or about December 19, 2014, Wright participated in a scheme to defraud the Internal Revenue Service. During a search his home, law enforcement found notebooks containing the personally identifying information (PII) of others, none of who had provided that information to Wright. Also found in Wright’s home were documents from the Tampa Veterans Affairs hospital, which contained additional PII. As part of the scheme, over 500 tax returns were filed from laptops associated with Wright, requesting more than $3.6 million in fraudulent tax refunds.
Donald Bethell was also prosecuted for his role in this scheme. On August 31, 2015, he was sentenced to four months in federal prison for theft of government funds.
This case was investigated by Internal Revenue Service - Criminal Investigation, the Tampa Police Department, and the Department of Veterans Affairs, Office of Inspector General. It was prosecuted by Assistant United States Attorney Adam M. Saltzman.
St. Croix Man Arrested for Unauthorized Possession of Firearm and AmmunitionRead the Press Release
St. Croix, USVI – Dwayne Wesselhoft, 29, of St. Croix, was arrested today on an indictment charging him with possession of a firearm and ammunition by an unlawful user of acontrolled substance, unauthorized possession of a firearm, and unauthorized possession of ammunition, United States Attorney Ronald W. Sharpe announced today. Wesselhoft made his initial appearance before U.S. Magistrate Judge George W. Cannon in District Court and was released to a third-party custodian.
According to the indictment, Wesselhoft possessed a Taurus, model PT 24-77 Pro DS, 9mm Luger pistol, 50 Blazer, 9 mm bullets, and 40 Remington, 9 mm bullets.
If convicted of possession of a firearm and/or ammunition by an unlawful user of a controlled substance, Wesselhoft faces a maximum sentence of 10 years’ imprisonment and a $250,000 fine for each count. If convicted of unauthorized possession of a firearm, Wesselhoft faces a mandatory minimum sentence of one year imprisonment and a maximum sentence of five years’ imprisonment. If convicted of unauthorized possession of ammunition, Wesselhoft faces a maximum sentence of seven years’ imprisonment.
United States Attorney Sharpe reminds the public that a complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless found guilty.
The indictment is the result of investigative work by the U.S. Drug Enforcement Administration and the Virgin Islands Police Department. The case is being prosecuted by Assistant U.S. Attorney Rami. S. Badawy.
Southampton Town Councilman Pleads Guilty to Conspiring to Illegally Distribute OxycodoneRead the Press Release
Bradley Bender, Southampton Town Councilman, pleaded guilty today to conspiring to illegally distribute oxycodone. The plea was entered before U.S. Magistrate Judge Anne Y. Shields at the federal courthouse in Central Islip.
Today’s guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent in Charge, Drug Enforcement Administration (DEA), New York.
According to court filings and statements made in court at the time he entered the guilty plea, between July 2012 and June 2015, Bender received phony prescriptions for oxycodone from a Riverhead physician assistant, Michael Troyan, filled those prescriptions, and illegally exchanged the oxycodone pills for cash and steroids with another co-conspirator. The oxycodone pills were then re-sold to drug abusers. Troyan was arrested on November 4, 2015, pursuant to an indictment which is currently pending before United States District Judge Denis R. Hurley.
The goverenment’s investigation was led by the DEA’s Long Island Tactical Diversion Squad which is comprised of agents and officers of the DEA, Nassau County Police Department, Rockville Centre Police Department, and Port Washington Police Department. The Diversion Squad was also assisted by agents and officers of the Department of Health & Human Services, the Southampton Town Police Department, and the Suffolk County District Attorney’s East End Drug Taskforce.
“Abuse of oxycodone on Long Island has reached epidemic proportions,” stated United States Attorney Capers. “Councilman Bender’s actions in this oxycodone distribution conspiracy victimized the very community he was entrusted to represent. Today’s guilty plea should serve as a reminder that no one is above the law, including those entrusted with passing our laws.” Mr. Capers extended his grateful appreciation to each of the participating law enforcement agencies for their assistance in this case.
DEA Special Agent in Charge Hunt stated, “Diverted prescription pill distributors are a new breed of drug dealer because many hide in plain view. In this case, Southampton Town Councilman Bradley Bender allegedly distributed diverted pain medication behind the backs of his constituents. By allegedly filling fraudulent oxycodone prescriptions for street sales, he was adding fuel to the fire for the opioid problem that is running rampant throughout American cities, unlike other community representatives who are looking for ways to contain it.”
At sentencing, Bender faces a maximum sentence of 20 years of imprisonment and a $1 million fine.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Initiative to mount a comprehensive response to what the United States Department of Health and Human Services Center for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 19 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers. The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.
The government’s case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Allen Bode is in charge of the prosecution.
The Defendant:
Name: BRADLEY BENDER
Age: 52
Residence: Northampton, New YorkE.D.N.Y. Docket No. 15-CR-593(ADS)
South Florida-Based Government Contractor Pleads Guilty to Tax FraudRead the Press Release
A Fort Lauderdale, Florida based government contractor pleaded guilty today in the U.S. District Court for the Southern District of Florida to filing a false income tax return, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
According to court documents, Maxim Silinsky, 44, owned an aircraft-leasing and parts-supply company called Simplex Corporation. Simplex contracted with the federal government to lease Russian aircraft to the U.S. Air Force for training purposes and to supply parts and equipment to U.S. military forces deployed to Afghanistan.
Silinsky used a complex web of domestic and foreign corporate entities and financial accounts to facilitate his underpayment of both corporate and individual income tax for the years 2007 through 2010. Silinsky filed false corporate tax returns for these years that overstated Simplex’s expenses. For the years 2008 through 2010, Silinsky also filed false individual income tax returns on which he understated the amount of income he received from the business. To conceal his fraud from the Internal Revenue Service (IRS), Silinsky transferred approximately $1.7 million from Simplex to nominee bank accounts he controlled and disguised the transfers as costs of goods sold, which led to overstated costs-of-goods-sold expenses on Simplex’s corporate returns. In 2012, during an audit of Simplex’s 2008 corporate return, Silinksy made false statements to the IRS about these expenses. Silinksy also purchased real estate using funds he diverted from the business and titled the property in nominee names to hide his involvement with these purchases. Additionally, a family member served as a nominee shareholder of a shell corporation that Silinsky established to receive income from Simplex on his behalf. While taxes were paid on the funds diverted to the shell corporation, the arrangement allowed Silinsky to pay taxes on this money at a lower rate. In the plea documents, Silinsky also admitted that he was involved in making illicit payments to a government contractor and U.S. military personnel.
At his Feb. 2, 2016 sentencing, Silinsky faces a statutory maximum sentence of three years in prison, a fine of up to $250,000, or twice the loss caused by the offense and restitution to the IRS.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, the U.S. Air Force’s Office of Special Investigations and the U.S. Department of Defense’s Office of the Inspector General, who investigated this case and Trial Attorneys Charles M. Edgar Jr. and Jason H. Poole of the Tax Division, who are prosecuting this case. Ciraolo also thanked the U.S. Attorney’s Office of the Southern District of Florida for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts against stolen identity tax refund fraud may be found on the division’s website.
Savannah Man Sentenced to Life in Prison for Role in Forcing Children to Engage in ProstitutionRead the Press Release
Savannah, GA – Jeremy Grant, 26, from Savannah, was sentenced last Friday by Chief United States District Court Judge Lisa Godbey Wood to life in prison for his role in a conspiracy to engage in the sex trafficking of minors. Grant’s life sentence means that he will spend the remainder of his life in prison; there is no parole in the federal system.
During the guilty plea and sentencing hearings, the evidence showed that between at least June of 2014 and January of 2015, Grant recruited vulnerable and financially destitute minors by offering them food and shelter. Grant then forced the minors to engage in sex acts for money, which he kept. Grant took pictures of the minors, used on-line social media sites to advertise the minors, and transported the minors to various hotels to engage in commercial sex acts. The evidence further showed that Grant physically abused some of the minors, raped them, and threatened to kill their families if they did not engage in prostitution. While sentencing Grant to life in prison, Judge Wood remarked that Grant’s conduct was “soul sapping” and that Grant committed “almost unfathomable actions towards human beings.”
United States Attorney Edward J. Tarver said, “This defendant stole the childhood and innocence from his victims and made their lives a living hell. He turned our most vulnerable and precious citizens into sex slaves and sold them for money, over and over again. Let me be absolutely clear: anyone who abuses children for their depraved sexual and financial enjoyment will be brought to justice and can expect to spend the rest of their life in prison.”
The investigation of this case was conducted by the FBI, the Pooler Police Department and Savannah-Chatham Metropolitan Police Department (SCMPD). Anyone who suspects instances of child sexual exploitation is encouraged to call 1-800-843-5678, which is operated by the National Center for Missing and Exploited Children in partnership with the FBI and other law enforcement agencies.
Assistant United States Attorneys Tania D. Groover and Carlton R. Bourne prosecuted the case on behalf of the United States. For additional questions, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Romanian Citizens Charged in Skimming SchemeRead the Press Release
PHILADELPHIA - Aura Voicu, 24, and Silviu Serban, 30, both of Bucharest, Romania, were charged today by Indictment with conspiracy to commit bank fraud, attempted bank fraud, and aiding and abetting, announced United States Attorney Zane David Memeger.
According to the indictment, between at least May 25, 2015 and mid-June 2015, the defendants engaged in a skimming scheme involving Automated Teller Machines (ATMs) belonging to various banks that the defendants targeted. The defendants allegedly installed devices on various Philadelphia bank ATMs to capture Personal Identification Numbers (PINs) used by bank customers.
If convicted, the defendants face a maximum possible sentence of 35 years in prison, a five year term of supervised release, a possible fine and a $200 special assessment.
The case was investigated by Federal Bureau of Investigation and the Philadelphia Police Department, and is being prosecuted by Assistant United States Attorney Linwood C. Wright, Jr.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.