Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Tuesday 24 November 2015
President of North Carolina Board of Funeral Service and Business Partner Plead Guilty to Conspiracy to Defraud the United StatesRead the Press Release
Two North Carolina businessmen pleaded guilty in the U.S. District Court in the Middle District of North Carolina to conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Ripley Rand of the Middle District of North Carolina.
Kenneth Dale Stainback, 61, of Burlington, North Carolina, pleaded guilty on Nov. 24 and Stephen Ray Smith, 60, of Mebane, North Carolina pleaded guilty on November 23. According to court documents and statements in court, Stainback and Smith conspired to defraud the United States by filing false corporate tax returns for McClure Funeral Service (McClure). Stainback, Smith and another co-conspirator bought McClure in 2004 and began diverting gross receipts from the business and omitting that income from the corporation’s tax returns. The co-conspirators opened a checking account at Mid-Carolina Bank for the purpose of diverting funds from McClure, including commission checks from insurance providers and checks from clients for payment of services. The co-conspirators wrote checks to themselves from this account, with Stainback and Smith receiving the vast majority of the diverted funds. Stainback also opened another bank account at SunTrust Bank, which he used to divert additional funds from McClure without the knowledge of his co-conspirators. Finally, the co-conspirators also pocketed cash payments from clients of McClure. In order to conceal discovery of their scheme, the co-conspirators deleted and altered invoices in the business’s accounting system. Stainback and Smith also closed their bank account at Mid-Carolina bank after being contacted by the Internal Revenue Service (IRS) regarding the corporate tax returns.
During the 2009 through 2012 fiscal years, Stainback, Smith and the other co-conspirator diverted more than $419,000 from McClure. These diverted funds were not reported on McClure’s corporate tax returns, which resulted in a corporate tax loss of $158,530.11. Stainback and Smith also failed to report the diverted funds on their individual income tax returns.
In addition to owning McClure, Stainback also serves as the President of the North Carolina Board of Funeral Service.
Stainback and Smith each face a statutory maximum sentence of five years in prison, a $250,000 fine and restitution to the IRS. The court set sentencing for Smith and Stainback on March 24, 2016.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS – Criminal Investigation who investigated the case and Assistant U.S. Attorney Clifton T. Barrett of the Middle District of North Carolina and Trial Attorney Kathryn A. Kimball of the Justice Department’s Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
President of North Carolina Board of Funeral Service and Business Partner Plead Guilty to Cospiracy to Defraud the United StatesRead the Press Release
WASHINGTON — Two North Carolina businessmen pleaded guilty in the U.S. District Court in the Middle District of North Carolina to conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Ripley Rand of the Middle District of North Carolina.
Kenneth Dale Stainback, 61, of Burlington, North Carolina, pleaded guilty on Nov. 24 and Stephen Ray Smith, 60, of Mebane, North Carolina pleaded guilty on November 23. According to court documents and statements in court, Stainback and Smith conspired to defraud the United States by filing false corporate tax returns for McClure Funeral Service (McClure). Stainback, Smith and another co-conspirator bought McClure in 2004 and began diverting gross receipts from the business and omitting that income from the corporation’s tax returns. The co-conspirators opened a checking account at Mid-Carolina Bank for the purpose of diverting funds from McClure, including commission checks from insurance providers and checks from clients for payment of services. The co-conspirators wrote checks to themselves from this account, with Stainback and Smith receiving the vast majority of the diverted funds. Stainback also opened another bank account at SunTrust Bank, which he used to divert additional funds from McClure without the knowledge of his co-conspirators. Finally, the co-conspirators also pocketed cash payments from clients of McClure. In order to conceal discovery of their scheme, the co-conspirators deleted and altered invoices in the business’s accounting system. Stainback and Smith also closed their bank account at Mid-Carolina bank after being contacted by the Internal Revenue Service (IRS) regarding the corporate tax returns.
During the 2009 through 2012 fiscal years, Stainback, Smith and the other co-conspirator diverted more than $419,000 from McClure. These diverted funds were not reported on McClure’s corporate tax returns, which resulted in a corporate tax loss of $158,530.11. Stainback and Smith also failed to report the diverted funds on their individual income tax returns.
In addition to owning McClure, Stainback also serves as the President of the North Carolina Board of Funeral Service.
Stainback and Smith each face a statutory maximum sentence of five years in prison, a $250,000 fine and restitution to the IRS. The court set sentencing for Smith and Stainback on March 24, 2016.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS – Criminal Investigation who investigated the case and Assistant U.S. Attorney Clifton T. Barrett of the Middle District of North Carolina and Trial Attorney Kathryn A. Kimball of the Justice Department’s Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
# # #
Philadelphia Man Charged in Fraud Scheme Involving Counterfeit Credit CardsRead the Press Release
PHILADELPHIA - Christopher Castillo, 22, of Philadelphia, was charged in an Indictment with producing and selling counterfeit credit cards, possessing credit card making equipment, and aggravated identity theft of a Scotiabank credit card account holder, announced United States Attorney Zane David Memeger. According to the indictment, among the items found in Castillo’s possession were over 150 white plastic credit card templates, multiple partially manufactured credit cards, multiple sheets of holographic stickers resembling the holograms found on Visa and MasterCard cards, documents containing personally identifiable information, and a desktop credit card printer.
If convicted the defendant faces a mandatory minimum sentence of two years in prison with a maximum possible sentence of 35 years in prison, three years supervised release, a fine, and a $400 special assessment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Anita Eve.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Parker County Man Sentenced to 20 Years in Federal Prison for Role in Methamphetamine Distribution ConspiracyRead the Press Release
FORT WORTH, Texas — Gary Howard, 35, most recently of Weatherford, Texas, was sentenced by U.S. District Judge Reed C. O’Connor to 240 months in federal prison, announced U.S. Attorney John Parker of the Northern District of Texas.
Howard pleaded guilty in July 2015 to one count of conspiracy to possess with intent to distribute at least 50 grams of methamphetamine.
According to documents filed in the case, since 2014, Howard and other co-defendants received multi-ounce and pound quantities of methamphetamine on consignment. In turn, Howard distributed the methamphetamine to various customers in the Dallas, Fort Worth and North Richland Hills, Texas areas, returning to his supplier for additional methamphetamine to distribute.
The Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Texas Department of Public Safety and the Fort Worth Police Department investigated the case. Assistant U.S. Attorney Shawn Smith was in charge of the prosecution.
# # #
Palmer Man Sentenced for Being A felon in Possession of Loaded GunRead the Press Release
Anchorage, Alaska-U.S. Attorney Karen L. Loeffler announced today that a Palmer man has been sentenced by United States District Court Judge Timothy M. Burgess to serve 16 months in prison for possessing a gun as a convicted felon.
Jason Scott Freeland, 37, of Palmer, Alaska, previously pled guilty to possessing a loaded .45 caliber/.410 gauge Derringer pistol. At the time that he possessed the firearm, Freeland had already amassed a felony record, including four convictions in 2001 for assault and misconduct involving a weapon. He was therefore prohibited from possessing firearms at the time he was stopped by police. Upon being released from prison, Freeland will be on supervised release for three years.
According to Assistant U.S. Attorney Stephanie C. Courter, who prosecuted the case along with Special Assistant United States Attorney Erin Bennett, Freeland was first encountered by police officers in the early morning hours of April 24, 2015. At the time, Freeland was slumped over inside an SUV and appeared noticeably incoherent. He had trouble locating the door handle of his vehicle, had difficulty producing his driver’s license, had slurred speech, and found it difficult to walk.
When officers searched Freeland, they found a loaded pistol in his pants pocket along with a small amount of methamphetamine. They also found a set of brass knuckles in another pants pocket. Later blood tests revealed that Freeland was high on marijuana and methamphetamine.
During the sentencing hearing, Judge Burgess raised concerns about Freeland’s past, calling the defendant dangerous and noting that he had to craft a sentence that protected the public from Freeland’s potentially violent behavior. He also noted the seriousness of the offense and need for deterrence. Freeland’s previous felony convictions stem from a 2001 incident in which Freeland fired a .45 caliber semi-automatic pistol at both a house and a vehicle that he knew had people inside.
In announcing the sentence, Ms. Loeffler commended the work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Anchorage Police Department (APD), who investigated the case.
Pain doctor indicted on Federal drug chargesRead the Press Release
BECKLEY, W.Va. – United States Attorney Booth Goodwin announced today that Dr. Jose Jorge Abbud Gordinho, M.D., was indicted on multiple federal drug charges by a Grand Jury sitting in Beckley, West Virginia. Gordinho was arrested on November 12, 2015, at which time the West Virginia State Police and the Federal Bureau of Investigation executed a search warrant at his medical office on George Street in Beckley. Gordinho has been held in custody in the Southern Regional Jail since the date of his arrest.
The 21 count indictment includes allegations that Gordinho conspired to distribute pain medications such as oxycodone and morphine, not for legitimate medical purposes in the usual course of medical practice and beyond the bounds of medical practice. The indictment further alleges multiple counts of distribution of oxycodone, oxymorphone, hydrocodone, and morphine not for legitimate medical purposes in the usual course of medical practice and beyond the bounds of medical practice, as well as two counts of distributing controlled substances not within Gordinho’s capacity as a medical doctor.
Each of the 21 counts carries a maximum sentence of up to 20 years in federal prison and a $1 million fine. Gordinho is scheduled to be arraigned on the indictment on November 30, 2015, in federal court in Beckley. At that time, the court will also consider a motion filed by the United States to detain Gordinho pending his trial.
The charges are merely accusations. The defendant is presumed innocent until and unless proven guilty.
The case against Gordinho was investigated by the West Virginia State Police and the Federal Bureau of Investigation.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
-
Follow us on Twitter: SDWVNews
-
Oregon Man Sentenced for Possession and Distribution of Meth and for Unlawful Possession of a FirearmRead the Press Release
BOISE – Robert Iracheta, 27, of Vale, Oregon, was sentenced today to180 months in prison for possession and distribution of methamphetamine, and for unlawful possession of a firearm, U.S. Attorney Wendy J. Olson announced. Senior U.S. District Judge Edward J. Lodge also ordered Iracheta to serve five years of supervised release following his release from prison. Iracheta pleaded guilty on August 27, 2015.
According to court proceedings, Iracheta was arrested in Payette, Idaho, on March 18, 2015. When the officers searched the home he shared with his girlfriend and infant child they found a locked safe containing seven plastic baggies with 148.58 grams of actual methamphetamine, a Lorcin .22 caliber pistol, and $2,760 in cash, as well as paraphernalia. Iracheta admitted he possessed the methamphetamine with intent to distribute it. These items were forfeited by Iracheta as part of his sentence.
“Severe federal prison sentences are reserved for those who traffic in addictive illegal drugs and use firearms to further their unlawful conduct,” said Olson. “With our state and federal law enforcement partners, we will vigilantly pursue those who pose this specific danger to our communities.”
The case was investigated by the High Desert Task Force and the Bureau of Alcohol, Tobacco and Firearms.
Omaha Man Sentenced for Commercial RobberyRead the Press Release
United States Attorney Deborah R. Gilg announced that Liban Hassan, age 23 of Omaha, Nebraska, was sentenced to two years, nine months imprisonment by the Honorable Laurie Smith Camp, for Interference With Commerce By Threats or Violence. On August 13, 2015, a federal jury found him guilty of robbing the Kum & Go at 13149 Fort Street, Omaha. He was also ordered to serve a three-year term of supervised release and pay $455.53 in restitution.
On May 18, 2014, at approximately 4:15 a.m., four men entered the store and demanded money. One of the four acted as if he had a gun under his shirt. Two other suspects came behind the counter, grabbed the clerk asking where the cigarettes were. Hassan acted as a lookout both inside the store and then outside while the robbery was continuing inside. The four men left with $158.50 and approximately 5-6 cartons of cigarettes.
Yusuf Xasan was previously convicted in connection with the robbery and received 13 months in prison. The two other suspects remain at large.
The case was investigated by the Omaha Police Department and Federal Bureau of Investigation.
Nurse Practitioner Pleads Guilty to Illegally Prescribing OxycodoneRead the Press Release
ABINGDON, VIRGINIA – A Richlands, Va., nurse practitioner, who illegally prescribed over three thousand oxycodone pills, pled guilty today in the United States District Court for the Western District of Virginia in Abingdon.
Gloria W. “Faye” Kennedy, 51, waived her right to be indicted and pled guilty this afternoon to a two count felony Information charging her with one count of conspiring to illegally distribute controlled substances and one count of making false statements to federal law enforcement agents.
Kennedy, a licensed family nurse practitioner, illegally prescribed 3,780 (three thousand seven hundred eighty) pills of 15 mg oxycodone to her husband and others for them to redistribute and illegally use. Her husband, Darrell Lynn Wells, pled guilty, on November 12, 2015 to conspiring to illegally distribute controlled substances.
United States District Judge James P. Jones scheduled Ms. Kennedy’s sentencing hearing for March 22, 2016. Wells’ sentencing hearing is scheduled for February 8, 2016. At sentencing, Kennedy faces up to 25 years in prison. Wells faces up to 20 years in prison.
The investigation of the case was conducted by the United States Drug Enforcement Agency Tactical Diversion Squad, with the assistance of the Virginia Medicaid Fraud Control Unit, Virginia State Police, and Tazewell Regional Drug Task Force. Special Assistant United States Attorney Brian Patton and Assistant United States Attorney Randy Ramseyer are prosecuting the case for the United States.
Newnan Man Charged with Assaulting Customs Officer at Hartsfield-Jackson AirportRead the Press Release
ATLANTA - Jemel Broussard Harris has been indicted by a federal grand jury on charges of assaulting and injuring a Customs and Border Protection officer while at Hartsfield-Jackson International Airport.
“Tragic events across the world remind us that security at airport inspection areas is critical, and customs officers need to fulfill this mission without attacks and assaults as alleged in this case,” said U.S. Attorney John Horn. “These kinds of disruptions create safety issues for both the officers and other travelers.”
“This assault illustrates the inherent danger that law enforcement officers face every day while helping to keep our communities safe,” said Stephen Kremer, CBP Port Director for the Port of Atlanta. “The safety and security of our officers and of our travelers remains of paramount concern for Customs and Border Protection.”
According to United States Attorney Horn, the charges, and other information presented in court: Harris returned to the United States from the Dominican Republic on November 15, 2015. He allegedly became verbally abusive as he passed through the Customs inspection area of Hartsfield-Jackson International Airport. When Customs and Border Protection officers (CBP) told Harris that he could collect his belongings and go home, he continued his profane tirade, and threw a can of deodorant at a CBP officer. When an officer approached Harris and asked him to collect his belongings and go home, Harris surprised the officer by striking him. In the struggle that ensued, Harris allegedly pulled the officer across an inspection platform before he was subdued and arrested. The officer who Harris struck suffered a cut on his head and suffered other bodily injuries.
The grand jury issued the single-count indictment charging Jemel Broussard Harris, 38, of Newnan, Ga., on Monday, November 23, 2015.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Assistant United States Attorney William Traynor is prosecuting 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.
Neenah Woman Sentenced to 12 Years in Federal Prison for Role in Fatal Heroin OverdoseRead the Press Release
Acting United States Attorney Gregory J. Haanstad for the Eastern District of Wisconsin, announced that today, Brandi Kniebes-Larsen (age: 37) of Neenah, Wisconsin, was sentenced to 12 years in federal prison followed by 10 years of supervised release by Chief United States District Judge William C. Griesbach. Kniebes-Larsen previously entered a guilty plea for her role in a conspiracy to deliver 100 grams or more of heroin in violation of Title 21, United States Code, Sections 841(a)(1), (b)(1)(B), and 851. According to the plea agreement and other documents filed with the court, Kniebes-Larsen procured and dealt the heroin which ultimately led to the overdose death of Frederick J. Schnettler (age: 24) also of Neenah.
In pronouncing the sentence, Chief Judge Griesbach noted the extreme nature of the offense which resulted in the death of Mr. Schnettler, as well as the lengthy criminal history of Ms. Kniebes-Larsen involving numerous drug convictions. The sentence also included the forfeiture of the defendant’s residence, from which she had distributed controlled substances in the past.
The case was investigated by the Winnebago County Sheriff’s Department, the Lake Winnebago Area MEG Unit, and the City and Town of Menasha Police Departments. The case was prosecuted by Assistant United States Attorney Daniel R. Humble.
# # # # #
Navajo Man Pleads Guilty to Federal Voluntary Manslaughter and Assault ChargesRead the Press Release
ALBUQUERQUE – Roderick Talk, 43, an enrolled member of the Navajo Nation who resides in Sanostee, N.M., pleaded guilty this morning in federal court in Albuquerque, N.M., to voluntary manslaughter and assault charges under a plea agreement with the U.S. Attorney’s Office.
Talk was arrested in June 2015, and charged in a criminal complaint with killing a man in Indian Country in San Juan County, N.M., on May 30, 2015. The crime occurred during an argument between Talk, the victim and the victim’s nephew, while Talk and the victim were drinking alcoholic beverages. Talk was subsequently indicted on June 24, 2015.
During today’s proceedings, Talk pled guilty to a felony information charging him with voluntary manslaughter and assault with a dangerous weapon. In entering his guilty plea, Talk admitted that on May 30, 2015, while in the heat of passion or a sudden quarrel, he killed a man and assaulted another man with a dangerous weapon, a pickup truck, with intent to do bodily harm. Talk admitted that the crimes took place on the Navajo Indian Reservation.
At sentencing, Talk faces a statutory maximum penalty of 15 years in federal prison. Maximum potential sentences are prescribed by Congress and are provided for information purposes only. The sentence on Talk will be determined by the court. A sentencing hearing has yet to be scheduled.
This case was investigated by the Farmington office of the FBI, the New Mexico State Police and the Shiprock office of the Navajo Nation Department of Public Safety. Assistant U.S. Attorney Kyle T. Nayback is prosecuting the case.
Nanny Pleads Guilty to Forging Dozens of Checks from Employers’ Bank AccountRead the Press Release
BOSTON – A Randolph woman who was employed as a nanny pleaded guilty today in U.S. District Court in Boston in connection with forging 65 checks totaling over $280,000 from her employers’ bank account.
Stephanie L. Fox, 30, pleaded guilty to three counts of bank fraud after being arrested and charged in October 2015. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Feb. 18, 2016, at 2:30 p.m.
Fox was employed as a nanny from about February 2013 until August 2015 when her employers discovered that for more than a year, Fox had been writing checks on one of their bank accounts and forging one of their signatures on the checks. Fox avoided detection by destroying the bank account statements when they arrived at her employers’ home. In total, Fox forged 65 checks totaling $281,917. She used the money to purchase jewelry, including a diamond pendant necklace and three Movado watches, as well as for travel to places such as the Bahamas, Aruba, Hawaii, Newport, Disney, and Cape Cod.
The charging statute provides for a sentence of no greater than 30 years in prison, five years of supervised release, a fine of $1 million, restitution and forfeiture. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Commissioner William Evans of the Boston Police Department, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
Multiple Defendants Plead Guilty in Heroin Ring Based Near Former Thunderguards ClubhouseRead the Press Release
WILMINGTON, Del. – Charles M. Oberly III, United States Attorney for the District of Delaware, today announced multiple guilty pleas to conspiracy to distribute heroin from within B&D Detailing, an auto detailing shop adjacent to the now-shuttered Thunderguards Clubhouse on Northeast Boulevard in Wilmington.
Daywine Hunter, 32, of Wilmington, pled guilty on November 18, 2015 to participating in the aforementioned conspiracy, in violation of Title 21 United States Code Section 841(a)(1), (b)(1)(B) and 846. The investigation focused on Hunter, a member of the Thunderguards Motorcycle Club and the owner of B&D Detailing. Hunter and his father, Victor Williams, both sold heroin from B&D Detailing during the investigation.
Victor Williams, 54, Brian Teat, 53, Prince Seward, 51, Jaquanda Lewis-Davis, 22, all of Wilmington, and Yanthonic Herrera, 23, of Philadelphia, were also arrested as part of the heroin conspiracy. Williams, Teat, and Seward have also pled guilty to their participation in the heroin distribution ring, headed by Hunter.
Pursuant to federal wiretap orders, Drug Enforcement Administration agents intercepted Hunter’s telephone calls. Agents also covertly installed and monitored video and audio surveillance equipment, commonly referred to as “bugs”, from inside B&D Detailing. This electronic surveillance continued until the defendants’ arrests on April 22, 2015.
According to statements made by the government during court hearings in this case, Hunter used Williams and his co-defendants Teat, Seward, and Lewis-Davis as drug couriers. Hunter ordered the couriers to travel to Philadelphia in vehicles equipped with hidden compartments to pick up in excess of 100 grams of heroin per trip from Hunter’s heroin source of supply. These trips occurred weekly.
On April 22, 2015, the day after the couriers made a trip to Philadelphia, video surveillance caught a Lincoln Aviator with a hidden compartment as it backed into B&D Detailing. Hunter was then seen removing a shopping bag from the Navigator. Officers executed a search warrant at B&D Detailing and recovered the bag, which was found to contain in excess of 100 grams of heroin packaged for distribution.
United States Attorney Charles M. Oberly, III, said, “This case is the result of a tremendous partnership fostered by the New Castle County High Intensity Drug Trafficking Area (“HIDTA”). Virtually every law enforcement agency in the region contributed to the takedown of a significant heroin drug trafficking group. We will continue to use every resource available to fight heroin trafficking here in Delaware.”
"Investigations where the DEA works with its partners from other law enforcement agencies to dismantle a heroin drug trafficking organization like this are a top priority for my office and the DEA across the country," said Gary Tuggle, the Special Agent in Charge of the DEA's Philadelphia Field Division, which encompasses Delaware. "Heroin abuse is destroying numerous lives and families across our region. The DEA will remain vigilant in using all of its technological resources to aggressively target heroin traffickers as was done here."
This case is the result of an investigation conducted by the Wilmington Resident Office of the Drug Enforcement Administration, HIDTA Group 41, the Delaware State Police, the Wilmington Police Department, the Newark Police Department, New Castle County Police Department, Delaware Probation and Parole, and the Department of Homeland Security, Homeland Security Investigations. The prosecution is being handled by Assistant United States Attorney Jennifer K. Welsh.
Monroe County Man Pleads Guilty to Heroin and Sex Trafficking Conspiracies; Six Others ChargedRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Monroe County man pleaded guilty today before U.S. District Court Judge Malachy E. Mannion in Scranton, to participating in a heroin trafficking conspiracy that stretched from Stroudsburg to New York to the state of Maine, and a sex trafficking conspiracy in which young women were forced or coerced into engaging in prostitution in northeastern Pennsylvania.
According to United States Attorney Peter Smith, the defendant, Sirvonn Taylor, age 33, of Pocono Summit, admitted to conspiring with others to commit drug trafficking and sex trafficking crimes between 2012 and 2014.
Taylor was indicted along with six other people by a federal grand jury sitting in Scranton in September 2015, as a result of an investigation by agents of the Federal Bureau of Investigation, investigators from the Pennsylvania State Police, Maine State Police, the Monroe County District Attorney’s Office, and local police in Monroe County.
The indictment alleges that Taylor and his co-defendants formed, joined and participated in a street gang known as the Black P-Stones; that male gang members were “beaten-in” to the gang and female members were “sexed-in” to the gang. The indictment further alleges that Taylor and his co-conspirators obtained heroin in New York and distributed the heroin in Stroudsburg and locations in the state of Maine. According to the indictment, couriers were used to transport heroin from New York to Maine.
The indictment alleges that females were “sexed-in” to the gang by being forced to engage in sex with male gang members; recruited and coerced to engage in prostitution; advertised as adult escorts on a website; provided with heroin and other drugs; and placed in various area hotels/motels to work as prostitutes. It is alleged that the sex trafficking defendants used threats, force, and intimidation to coerce females to engage in prostitution.
In today’s proceeding, Taylor pleaded guilty to conspiracy to distribute in excess of one kilogram of heroin, and conspiracy to commit sex trafficking by force or coercion. He faces a mandatory minimum 10-year prison sentence for the drug conspiracy charge, and a mandatory minimum 15-year prison sentence for the sex trafficking charge. He faces a potential maximum sentence of life in prison for each charge.
Others charged in the indictment are:
Jose Velazquez, age 25, of Tobyhanna: conspiracy to distribute more than one kilogram of heroin and conspiracy to commit sex trafficking by force and coercion;
Selena Bayer-Davis, age 21, of St. Matthews, South Carolina: conspiracy to commit sex trafficking by force and coercion;
Ricquell Lindo, age 21, of Augusta, Maine: conspiracy to distribute more than one kilogram of heroin;
Stephon Davis, age 19, of Augusta, Maine: conspiracy to distribute more than one kilogram of heroin;
Sean Griffin, age 21, of East Stroudsburg: conspiracy to distribute more than one kilogram of heroin;
Brianni Gomez, age 19, of Paterson, NJ: conspiracy to distribute more than one kilogram of heroin.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Monitor Finds Seattle Police Department’s Force Review Board in Initial Compliance with Consent Decree RequirementsRead the Press Release
SEATTLE – The formal assessment of Seattle Police Department’s (SPD) Force Review Board (FRB), the high-level internal accountability body established during the reform process to review and analyze significant uses of force, has found SPD to be in initial compliance with specific provisions of the court-ordered agreement with the Department of Justice. Federal Monitor Merrick Bobb filed the fifth of 15 systemic assessments with the U.S. District Court today and concluded that the FRB is “functioning well and, in a great majority of instances, as the Department’s hub of internal accountability, analysis, and continual improvement with respect to force.”
“Critical to lasting reform is having internal systems and structures in place that provide consistent oversight and accountability, and real-time feedback to help a police department continually improve. That is what SPD now has with the Force Review Board,” said Annette L. Hayes, U.S. Attorney for the Western District of Washington. “This assessment shows SPD has made commendable progress in critically analyzing the most significant uses of force and providing ongoing supervision. This is a major step forward.”
As part of the court-ordered reform process, SPD established a tiered force reporting system that requires increased supervision and review of more significant uses of force, including for intermediate (Type II) and the most serious (Type III) uses of force. FRB has two distinct roles in SPD’s enhanced internal accountability and supervisory structure.
The first is to review the investigation of significant force events to determine whether the force used was contrary to SPD policy, such that an internal, administrative investigation by the civilian-led Office of Professional Accountability (OPA) should be initiated. Its secondary role is to review the force incident as a whole for “best practices” to further systemic learning, including analyzing tactics, training, policies, and procedures, to improve officers’ performance in future encounters. Some of the leading police departments in the nation successfully have used this type of accountability system for many years.
The Monitor concluded that FRB serves as the “key forum for ‘internal innovation and critical analysis’ of force.” Specifically, the assessment found that of cases reviewed by FRB between June 2 and August 25, 2015:
-
Eighty-five percent of the cases were handled by the FRB in a manner that was consistent with, or above the expectations, of the consent decree.
-
In nearly every instance (96 percent of cases), the FRB appropriately evaluated the legal basis for the searches, detentions, and arrests involved in or implicated by the force incident.
-
In 87 percent of FRB deliberations, the group’s discussion was based solely on facts in evidence, without speculation.
-
In 93 percent of cases, the FRB sufficiently evaluated the objective reasonableness of the force used, the proportionality of force used, and the necessity of force used.
-
In instances where equipment issues were implicated, FRB’s discussion adequately addressed those issues in nearly 91 percent of cases.
-
Where there were issues involving the adequacy of SPD’s training, policy, or adherence to best practices, the FRB adequately discussed them in 92 percent of cases.
The assessment also found that, in nearly 13 percent of cases, FRB determined that an officer may have violated SPD’s use of force policy and referred the matter to OPA. This is noteworthy given that, between 2009 and 2011, only 0.04 percent of cases received any significant chain of command scrutiny whatsoever. The Department of Justice’s investigation of SPD in 2011 found that during the multi-year time period that the DOJ reviewed, only 5 of 1,230 use of force files reviewed “were referred at any level for further review” up the chain of command. DOJ concluded that the “chain of command does not properly investigate, analyze, or demand accountability from its subordinate officers for their uses of force.” Specifically, SPD’s “secondary review process” for force was “little more than a formality that provides no substantive oversight or accountability”—typically serving as nothing more than “a rubber stamp of the first-line supervisor’s conclusion” that officer force was consistent with policy.
The consent decree requires that the FRB conduct timely, comprehensive, and reliable reviews of Type II and Type III force incidents. It specifies that the Board consist of an Assistant Chief or designee to chair the Board; representatives of the Training Section; a representative of each involved precinct, selected by a precinct captain; and a representative from the Department’s Professional Standards Section that is responsible for drafting SPD policy. A representative of the civilian-led OPA attends each FRB meeting and is permitted to “self-refer” matters he deems concerning.
Board members receive a minimum of eight hours of training on an annual basis on force review. Its mission is to review each use of force packet to determine whether the findings from the chain of command and FIT regarding whether the force used is consistent with law and policy, whether the investigation is thorough and complete, and whether there are tactical, equipment, or policy considerations that need to be addressed.
In September, the Monitor filed the first four assessments relating to the reporting and review of force up to, but not including, the FRB. Those assessments concluded that SPD was in initial compliance in three of the first four areas, including Type I force reporting, Type II and III force reporting and Force Investigation Team investigations for Type III uses of force. Chain of command investigations of Type II uses of force were not found to be in initial compliance. Information about the first round of assessments can be found here: http://www.justice.gov/usao-wdwa/pr/monitor-finds-seattle-police-initial-compliance-requirements-relating-reporting.
Additional assessments, including the quality of Office of Professional Accountability investigations, SPD supervision, stops and detentions, crisis intervention and officer use of force generally will be filed over the next four months. Collectively, these assessments cover every area of the consent decree and will evaluate “whether [SPD] has the systems, policies, structures and culture in place” that the consent decree requires.
-
Mitchell Lee Chambers Sentenced to Serve 87 Months in Prison for Conspiracy to Distribute Synthetic DrugsRead the Press Release
GREENEVILLE, Tenn. – Mitchell Lee Chambers, 36, of Magnolia, Tex., formerly of Clearwater, Fla., was sentenced on Nov. 23, 2015, by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 87 months in federal prison. He was also ordered to forfeit approximately $500,000 in assets and serve three years of supervised release following his term in prison.
Chambers pleaded guilty in August 2015 to charges in a December 2014 indictment including conspiracy to distribute controlled substance analogues intended for human consumption and conspiracy to commit money laundering. He, along with Clearwater area residents Michael Sheaffer and Matthew Sheaffer, and their wives Gretchen Sheaffer and Niki Maxwell, conspired to distribute controlled substance analogues intended for human consumption as well as conduct financial transactions in the proceeds of the drug trafficking to promote the distribution of the synthetic drugs.
Chambers became involved in the sale of smokable synthetic cannabinoid products while residing in Atlanta in 2010. He formed a business called “Satchel Services” to market “incense” and “fake weed” products. The products consisted of a smokable plant material, often the plant damiana, on which synthetic cannabinoids had been sprayed. Chambers sold the products to the Sheaffers, who in turn re-sold the products to retail distributors in upper east Tennessee and elsewhere. The products contained cannabimimetic agents commonly referred to as bath salts. These chemicals were classified as Schedule I controlled substances in March 2011. Chambers ordered the raw chemicals in bulk from sources in China, Europe, and elsewhere.
In approximately August 2011, Chambers moved from Atlanta to the Clearwater area to join the Sheaffers in their activities. Michael Sheaffer, Matthew Sheaffer and Chambers agreed to form a business called “Zombie International.” Zombie International continued to use the Internet, phone calls and text messages to receive orders for controlled substance analogues intended for human consumption. In addition to products which were labeled “Zombie” and “Zombie Killa,” Zombie International also sold a product in early 2012 labeled “Zombie Dust” which contained the controlled substance analogue ά-PVP (also known as “gravel” or “flakka”). Chambers and the Sheaffers agreed to use funds obtained from the sale of controlled substance analogues intended for human consumption to purchase additional analogues from sources in China and Europe.
While many believed that synthetic marijuana products were less harmful than other drugs, such products have been shown to result in extreme paranoia and psychoses; agitated and violent behavior; and elevated heart rates, blood pressure, and body temperatures. Other adverse effects include excited delirium, acute kidney injury, seizures, psychosis, hallucinations, cardiotoxic effects, coma, and death. Medical treatment for the users of such drugs is complicated because there are no available antidotes, such as for opioid overdoses, and physicians often do not know what substance is involved. Synthetic marijuana products are often targeted at teenagers and young adults with colorful packaging with cartoon characters. A study by the Center for Substance Abuse Research identified synthetic marijuana as the third most reported substance used by U.S. high school students after alcohol and marijuana.
Agencies involved in this investigation included the Drug Enforcement Administration, Internal Revenue Service-Criminal Investigation, Sullivan County Sheriff’s Office, Bristol Tennessee and Virginia Police Departments, Kingsport Police Department, Washington County Sheriff’s Office, Johnson City Police Department, the First and Second Judicial District Drug Task Forces, and the Clearwater, Florida Police Department. Assistant U.S. Attorney Neil Smith represented the United States.
###
Miami-Dade County Resident Sentenced in Connection with Aircraft Parts Ponzi SchemeRead the Press Release
A Miami-Dade County resident was sentenced by United States District Judge Marcia G. Cooke in Miami to 38 months imprisonment, to be followed by 3 years of supervised release, for organizing and engaging in a fraudulent investment scheme in South Florida.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), and J.D. Patterson, Director, Miami-Dade Police Department (MDPD), made the announcement.
On August 7, 2015, Anthony Lazaro Saumell, 45, of Doral, was convicted by a jury of seven counts of wire fraud.
According to documents and statements made in court, Saumell organized and engaged in a complex fraudulent investment scheme to defraud investors in South Florida. Saumell deceived victims into investing approximately $3.9 million dollars into his company, Gear Management Corporation. Victims were told their investment would be used to purchase aircraft parts which would then be sold for a profit. Saumell guaranteed victims a ten percent profit within thirty days but subsequently used the incoming investments to pay other investors or on his personal expenses, such as jewelry, dining, alimony, private school and art galleries. By October 2013, Saumell had spent all of the investors' funds and Gear Management Corporation became insolvent. Investors suffered approximately $1 million dollars in losses.
Mr. Ferrer commended the investigative efforts of ICE-HSI and MDPD. The case was prosecuted by Assistant U.S. Attorneys Gera Peoples and AUSA Daya Nathan.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mesquite Woman Sentenced to 132 Months in Federal Prison and Ordered to Pay $2,294,442 in Restitution in Stolen-Identity Tax Refund CaseRead the Press Release
DALLAS — Yolanda Lavell Kaiser was sentenced today by U.S. District Judge Barbara M. G. Lynn to 132 months in federal prison and ordered to pay $2,294,442 in restitution to the Internal Revenue Service (IRS) following her guilty plea in April 2015 to one count of wire fraud stemming from a stolen-identity tax refund scheme she ran. At sentencing today, Judge Lynn noted Kaiser’s lengthy criminal history as one of the reasons for the sentencing, pointing specifically to Kaiser’s 2004 federal conviction in the Northern District of Texas for aiding or assisting in the preparation of false tax returns. Judge Lynn also found Kaiser’s offense caused substantial financial hardship to many of the more than 1,300 identity-theft victims in the case. U.S. Attorney John Parker of the Northern District of Texas made the announcement today.
According to factual resume filed in the case, from approximately September 2013 through August 2014, Kaiser prepared and electronically filed, over interstate wires, fraudulent tax returns using the name, Social Security Number, and other means of identification of actual persons, without lawful authority, to fraudulently obtain U.S. federal tax refunds. She prepared and filed tax returns through a tax preparation business known as Right 1 Tax Services, which was located on North Galloway in Mesquite and later on Estate Lane in Dallas.
Kaiser obtained and possessed, according to the factual resume, means of identification of other individuals, without their knowledge or consent, and obtained prepaid debit cards issued in the names of those other individuals. Using others’ identification, she filed and caused to be filed false federal income tax returns to requesting tax refund and directing those refunds be deposited on prepaid debit cards associated with unique account numbers. Kaiser made cash withdrawals of refunds deposited into accounts, including making withdrawals with prepaid debit cards.
As an example, in February 2014, Kaiser electronically filed a false federal tax return in the name of W.F. and obtained a $5,098 refund, according to the factual resume. The return was false and fraudulent because Kaiser did not have authorization to file a return on behalf of W.F. and because the information contained on the return was materially false, including false information about W.F.’s W-2 wages. Because of the fraudulent return, the IRS deposited a $5,098 refund onto an Advent Financial Instant Issue Debit Card that Kaiser then used to make cash withdrawals from ATMs.
IRS Criminal Investigation, with assistance from the Mesquite Police Department and the Dallas County District Attorney’s Office, investigated. Assistant U.S. Attorney J. Nicholas Bunch prosecuted.
# # #
Massachusetts Man Convicted of Heroin and Crack Cocaine TraffickingRead the Press Release
Contact: David B. Joyce
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Jean Valbrun, 27, of Mattapan, Massachusetts, was found guilty by a jury today in U.S. District Court of possession with intent to distribute heroin and cocaine base, commonly known as, crack cocaine.
According to court records, on March 16, 2014, law enforcement officers seized 225 grams of heroin and 106 grams of crack cocaine from a vehicle driven by Valbrun. The seizure occurred at a gas station in Auburn, Maine.
Valbrun faces up to 20 years in prison and a $1,000,000 fine. He will be sentenced after the preparation of a presentence investigation report by the U.S. Probation Office.
This case was investigated by the U.S. Drug Enforcement Administration and the Auburn and Lewiston Police Departments. This investigation is part of the ongoing effort of the Organized Crime Drug Enforcement Task Forces (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Mass. Resident Detained in R.I. on Stolen Firearms, Bank Fraud ChargesRead the Press Release
PROVIDENCE, R.I. – Edwin William Rosa, 45, of Peabody, Mass., was ordered detained in federal custody today by U.S. District Court Magistrate Judge Lincoln D. Almond following an initial appearance in federal court in Providence on charges that he allegedly purchased eight guns from firearms dealers in Massachusetts using bogus bank checks, and that he allegedly sold the stolen guns to firearms dealers in Rhode Island.
Rosa is charged by way of a federal criminal complaint with possession of stolen firearms and bank fraud. The charges are announced by United States Attorney Peter F. Neronha and Daniel J. Kumor, Special Agent in Charge of the Boston Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
It is alleged in court documents that between September 8 and September 30, 2015, Rosa used personal checks from closed bank accounts to purchase eight firearms from registered firearms dealers in Massachusetts, and that he then sold the firearms to registered firearms dealers in Rhode Island for immediate payment in cash or by check.
According to an affidavit in support of an arrest warrant and criminal complaint in this matter, Rosa’s alleged possession of stolen firearms arises from his theft of the firearms as well as his possession of those stolen firearms up to the point of sale to other firearms dealers. Rosa’s alleged bank fraud arises from his alleged scheme to defraud banks through the issuance of “bad” checks designed to draw funds from financial institutions.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney Milind M. Shah.
The matter was investigated by ATF, with the assistance of the Smithfield, R.I., and Seekonk, Fall River and Somerset, Mass., Police Departments.
###
Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Maryland Owner of Loan Brokerage Firms Sentenced to Four Years in Prison for Fraud and Obstruction of JusticeRead the Press Release
Baltimore, Maryland – U.S. District Judge William D. Quarles, Jr. sentenced Jeong Joon Moon, a/k/a Patrick Moon, age 47, of Germantown, Maryland, today to four years in prison followed by five years of supervised release for conspiring to commit bank fraud, bank fraud and destroying records in a federal investigation, arising from a scheme to defraud financial institutions who loaned money to small businesses. Judge Quarles also entered an order that Moon forfeit $2,270,590.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; U.S. Small Business Administration (SBA) Inspector General Peggy E. Gustafson; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; Assistant Director in Charge Paul M. Abbate of the Federal Bureau of Investigation - Washington Field Office; and Matthew Alessandrino, Assistant Inspector General for Investigations, Federal Deposit Insurance Corporation.
Moon owned and operated JM Capital Solutions, Inc. and RNB Consulting, Inc., which were loan brokerage firms with offices located in Annandale and Springfield, Virginia. These firms specialized in securing loans for individuals to purchase or refinance small businesses in Maryland, Virginia, the District of Columbia and elsewhere.
Moon encouraged prospective borrowers to apply for business loans through the SBA’s Section 7(a) program, which authorizes SBA to help small businesses obtain financing by guaranteeing 75 to 90 percent of qualified loans made by commercial lenders. Small business owners are required to invest a certain amount of their own money into the business before they can qualify for the loan. Moon compiled and submitted to lenders the documentation necessary to substantiate the borrowers’ equity injection and ability to repay loans guaranteed by SBA, as well as documentation needed for other commercial loans.
From 2006 to April 2014, Moon and others defrauded financial institutions by submitting false copies of the borrowers’ monthly bank statements to reflect more money than was actually in the borrowers’ bank accounts. Moon and others also prepared and submitted false tax returns for the borrowers which inflated the borrowers’ income. The financial institutions relied on the false information to lend funds to the borrowers, which resulted in loan broker commissions being paid to JM Capital and RNB Consulting.
On July 12 and 15, 2013, Moon altered, destroyed or concealed documents relating to six loans guaranteed by SBA for six small businesses, intending to impede the federal investigation of such loans.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the SBA - OIG, U.S. Postal Inspection Service, FBI and FDIC - OIG for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Leo J. Wise and Marty Clarke, who prosecuted the case.
Manhattan U.S. Attorney Announces Agreement with Westchester County Jail to Establish Corrective Measures and Appoint an Independent MonitorRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced an agreement with Westchester County that resolves the United States’ long-running investigation into Westchester County Jail (the “Jail”) under the Civil Rights of Institutionalized Persons Act (“CRIPA”). This agreement, approved today by the Westchester County Board of Acquisition and Contract, implements a resolution of the Government’s findings regarding the Jail’s use of force against inmates, its use of isolation as a method of discipline for minors incarcerated at the jail, and its provision of inadequate medical and mental health care to inmates. The agreement requires the appointment of an independent monitor to ensure that the Jail complies with the agreement. The agreement will last for three years, or until the time that the Jail has achieved substantial compliance with its terms.
The Jail, located in Valhalla, New York, houses pretrial detainees and sentenced inmates. The Jail also houses minors awaiting transfer to a juvenile detention facility and minors adjudicated as adults.
Manhattan U.S. Attorney Preet Bharara said: “As I have emphasized many times before, within the walls of a correctional facility does not mean outside the protection of the Constitution. Jails have a constitutional obligation to take reasonable steps to protect the safety of inmates and to provide humane conditions of confinement. This agreement, and the commitment on the part of the County to comply with its terms, are important steps toward ensuring that inmates at Westchester County Jail are treated in a manner consistent with the Constitution.”
The agreement between the United States and the Jail resolves a long-running investigation into the Jail. In 2009, the United States issued a letter setting forth the Government’s findings regarding constitutional violations at the Jail. Key findings included that the Jail had failed to adequately protect inmates from physical harm caused by inappropriate and excessive force used by staff and failed to provide adequate medical and mental health care, particularly with respect to minors housed in isolation in the punitive segregation unit of the Jail, all resulting in unconstitutional living conditions.
Since the Government issued its findings letter and during the ongoing investigation, the Jail has made progress in addressing various problematic conditions and has now agreed to implement all the corrective measures set forth in the parties’ agreement to ensure the Jail’s compliance with constitutional requirements.
With respect to minors, the agreement requires that the Jail cease its practice of placing minors under 18 years old in isolation or punitive segregation, and that it develop systems to address disciplinary issues in a manner that is consistent with minors’ needs and that does not deprive them of access to certain programs and services. The agreement also requires the development and implementation of alternative approaches to discipline for 18-year-old inmates. The Jail has agreed to measures designed to ensure that its use of force is not excessive and is consistent with the law, and has agreed to implement appropriate policies and practices concerning review of all uses of force, training of staff, and supervision of inmates. The agreement also puts in place requirements concerning the provision of medical and mental health care for both minors and adults.
Finally, the agreement mandates the appointment of an independent monitor to assist the County in achieving compliance with the provisions of the agreement, to make reports concerning the status and progress of compliance, and to provide the County with technical assistance to comply with the provisions of the agreement. The United States and the monitor will have full access to the Jail and its records, staff, and inmates for the life of the agreement. The agreement will terminate in three years if the United States agrees that the County is in substantial compliance with all provisions and has maintained substantial compliance with all provisions for 24 months.
The case is being handled by the Office’s Civil Rights Unit. Assistant U.S. Attorneys Rebecca C. Martin and Tara M. La Morte are in charge of the case.
Man from Alexandria sentenced to 54 months in prison for selling methamphetamineRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that an Alexandria man was sentenced Monday to 54 months in prison for selling methamphetamine.
Franklin Drake Smith, 25, of Alexandria, La., was sentenced by U.S. District Judge Dee D. Drell on one count of distribution of methamphetamine. He was also sentenced to three years of supervised release. According to the August 19, 2015 guilty plea, agents conducted controlled buys of methamphetamine from Smith on February 2, 2015 and February 11, 2015 at different locations in Alexandria. The total weight of the methamphetamine sold exceeded 50 grams. Smith was held accountable for the distribution of approximately 680 grams of methamphetamine based on further investigation.
The FBI Central Louisiana Safe Streets Task Force with assistance from the Louisiana State Police conducted the investigation. Assistant U.S. Attorney Allison D. Bushnell prosecuted the case.
Man Sentenced to 84 Months in Prison for Carjacking at St. Croix Educational ComplexRead the Press Release
St. Croix, USVI –District Court Chief Judge Wilma A. Lewis today sentenced James Cruz, 20, to 84 months in prison for using a firearm during a crime of violence, United States Attorney Ronald W. Sharpe announced. Cruz also was ordered to serve three years of supervised release and pay a $500 fine.
On July 28, 2015, Cruz pleaded guilty to using a firearm during a crime of violence. As part of his plea, Cruz admitted that on February 21, 2015 at St. Croix Educational Complex, he and an accomplice ordered two people to the ground at gun point and then drove off with their pick-up truck. According to court records, Virgin Islands Police Department (VIPD) officers located and pursued the accomplices, who abandoned the truck and fled on foot in the Longpoint area. VIPD officers were able to capture the accomplices.
The accomplice is a juvenile, and his case has been adjudicated through the Office of the Attorney General of the Virgin Islands.
This case was investigated by the VIPD and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Christian H. Stringer.
Man Sentenced for Fraudulent Employment Visa SchemeRead the Press Release
CONCORD, N.H. – Jae Won Lee, 38, of Rockville, Maryland, was sentenced to three years’ probation for a visa fraud scheme in which he caused others to make false statements on visa applications filed with the National Visa Center in Portsmouth, New Hampshire, reports Acting United States Attorney Donald Feith.
Under the employment-based visa program, U.S. employers who cannot fill jobs with U.S. based workers are able to fill those positions with qualified immigrants. The U.S. employers who sponsor immigrants seeking employment-based visas must have jobs available when the immigrants arrive in the United States.
Lee worked with an emigration company in Seoul, South Korea, that charged South Koreans as much as $35,000 to obtain employment-based visas to immigrate to the United States. From in and around March 2008, through in and around December 2014, Lee recruited various U.S. employers, including Wallace Enterprises, Inc. d/b/a The Cleaning Authority, a company in Falls Church, Virginia, to file various documents falsely representing to the United States government that they would hire certain visa applicants if the applicants received employment-based visas, when, in actuality, no positions were available for the applicants. Lee told some employers they were not required to hire the applicants and he paid or offered to pay some employers for filing false documents.
Lee also falsely informed visa applicants that Wallace or other employers would hire them if they were granted visas. That caused the applicants to unwittingly file Applications for Immigrant Visa and Alien Registration with the National Visa Center that contained materially false information identifying Wallace and other companies as the U.S. employers who would hire them if they were issued visas. Lee’s actions resulted in applicants receiving employment-based visas when there was no job waiting for them in the United States.
U.S. Department of State, Assistant Inspector General for Investigations, Geoffrey Cherrington, said, “When an immigrant is issued a fraudulent employment-based visa and does not work for the employer who submits the petition, it deprives another immigrant of the ability to legitimately immigrate, deprives other U.S. employers of opportunities to fill vacant positions, and takes away employment opportunities that could have been afforded to U.S. citizens.”
“Jae Won Lee’s criminal actions deprived law abiding immigrants and U.S. citizens from filling positions available within the United States,” stated Special Agent in Charge Steven D. Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
The United States Attorney’s Office sought a sentence of 15 months incarceration in the case.
This case was the result of an investigation conducted by the U.S. Department of State, Office of Inspector General; the U.S. Department of Labor, Office of Inspector General; and the U.S. Department of Homeland Security, Homeland Security Investigations, in coordination with the United States Citizenship and Immigration Services. It was prosecuted by Assistant United States Attorney Mark S. Zuckerman.
Lockport Man Arrested on Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that Joseph Thompson, 58, of Lockport, NY, was arrested and charged by criminal complaint with possession with intent to distribute heroin, crack cocaine and fentanyl. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.Assistant U.S. Attorney Meghan A. Tokash, who is handling the case, stated that according to the complaint, the defendant is accused of selling heroin and fentanyl at his residence on Elmwood Avenue in Lockport. A search warrant executed at the residence recovered two digital scales, cash, baggies, as well as heroin, crack cocaine and fentanyl.
The defendant was ordered detained following a detention hearing today before U.S. Magistrate Judge Leslie G. Foschio.
The complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Lockport Police Department, under the direction of Chief Lawrence Eggert and the Niagara County Drug Task Force, under the direction of Sheriff James Voutour.
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.
Las Cruces Man Sentenced to Twenty Years in Prison for Conviction on Federal Conspiracy and Firearms ChargesRead the Press Release
ALBUQUERQUE – Conrad Vasquez Salazar 43, of Las Cruces, N.M., was sentenced today in federal court to 20 years in prison followed by three years of supervised release for his conviction on conspiracy and firearms charges. Salazar also was ordered to pay $111,018.05 in restitution to the victim of his criminal conduct.
Salazar’s sentence was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI, and Las Cruces Police Chief Jaime Montoya.
Conrad Vazquez Salazar (Salazar) and co-defendants Clifford Raymond Salas, 38, and Andres Linares-Baca, 32, both of Las Cruces, and Thomas Vazquez Salazar (Vazquez Salazar), 39, of Odessa, Tex., were charged in a series of complaints and indictments, the first of which was filed in Sept. 2012, with violating the federal conspiracy, explosives and narcotics laws. Salas, Salazar and Vazquez Salazar were charged with conspiracy and explosives charges that arose out of the firebombing of a tattoo parlor in Las Cruces on Aug. 31, 2012.
On Aug. 17, 2015, Salazar pled guilty to conspiracy and being a felon in possession of a firearm and ammunition. In entering the guilty plea, Salazar admitted that on Aug. 31, 2012, he conspired with other individuals to firebomb a tattoo parlor in Las Cruces. Salazar also admitted producing two Molotov cocktails at his residence and instructing two co-conspirators on how to use them to set fire to the tattoo parlor. Salazar also admitted that on Sept. 22, 2012, he possessed a handgun and ammunition even though he previously had been convicted of residential burglary, conspiracy to commit first degree murder and aggravated battery on a peace officer and was thus prohibited from possessing firearms or ammunition.
In Sept. 2013, Linares-Baca pled guilty to conspiracy to distribute heroin and a heroin distribution charge and was sentenced on Jan. 22, 2014, to 15 months in federal prison followed by three years of supervised release. Although Vazquez Salazar entered a guilty plea to the conspiracy and an explosives charge in Sept. 2013, further proceedings against him were delayed by competency proceedings. In Oct. 2014, the court found Vazquez Salazar to be incompetent to stand trial and committed him to hospitalization to determine whether he can be restored to competency.
On March 9, 2015, Salas proceeded to trial on a superseding indictment charging him with participating in a conspiracy between July 15, 2012 and Aug. 31, 2012, to commit arson by maliciously damaging and destroying a tattoo parlor located at 2245 South Main Street in Las Cruces. The indictment also charged Salas with maliciously damaging and destroying the tattoo parlor on Aug. 31, 2012, by throwing at least one Molotov cocktail into the building, using a destructive device in furtherance of an act of violence; and being a felon in possession of an explosive. Trial against Salas concluded on March 11, 2015, when the jury returned a verdict of guilty on all four counts of the superseding indictment. He remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the FBI and the Las Cruces Police Department. Assistant U.S. Attorneys Aaron O. Jordan and Marisa A. Lizarraga of the U.S. Attorney’s Las Cruces Branch Office are prosecuting the case.
L.A. Man Pleads Guilty in $2.6 Million Federal Tax Refund SchemeRead the Press Release
LOS ANGELES – A Los Angeles man pleaded guilty late yesterday afternoon to conspiring to use stolen identities to file fraudulent tax returns with the Internal Revenue Service that sought more than $2.6 million in false tax refunds.
Heber Cotton, 39, of Los Angeles, pleaded guilty to one count of conspiracy to defraud the United States by obtaining the payment of false claims, namely tax refunds.
According to a plea agreement filed in the case, beginning in December 2008 and continuing through March 2010, Heber Cotton and his co-defendant caused at least 275 fraudulent income tax returns to be filed with the IRS, which sought income tax refunds of over $2.6 million.
The co-defendant – Adel Cotton, 63, a Hacienda Heights resident who is currently in federal prison after pleading guilty in another case involving fraudulent tax refunds – is pending trial.
In relation to the tax fraud scheme, the indictment in the case alleges that Adel Cotton obtained the names and Social Security numbers of individuals without their knowledge and consent. Adel Cotton and others not named in the indictment allegedly prepared false Forms W-2 (IRS Wage and Tax Statements) in the names of the identity theft victims that reported false employment and income information, as well as false tax withholding amounts. Using the falsified information reported on the Forms W-2, Adel Cotton and others allegedly prepared fraudulent individual income tax returns claiming false tax refunds that were filed without the knowledge or consent of the identity theft victims.
In his plea agreement, Heber Cotton admitted that he and Adel Cotton directed the Internal Revenue Service to mail the fraudulent refunds to addresses that he and Adel Cotton controlled. Heber Cotton also admitted that he gave personal information associated with identity theft victims to a co-conspirator who managed a bank, which the co-conspirator used to open bank accounts and cash the fraudulent refunds. Heber Cotton further admitted that, toward the end of the conspiracy, he paid the co-conspirator bank manager approximately 20 percent of each tax refund check that he bank manager cashed.
Heber Cotton pleaded guilty before United States District Court Judge Michael W. Fitzgerald, who is scheduled to sentence the defendant on March 7, 2016. At that time, Heber Cotton will face a statutory maximum sentence of 10 years in federal prison and a fine of $250,000.
Adel Cotton was indicted along with Heber Cotton in September 2015 and is charged with one count of conspiracy to defraud the United States with respect to claims. Adel Cotton is scheduled to go on trial before Judge Fitzgerald on March 8, 2016.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The investigation into Heber Cotton and Adel Cotton was conducted by IRS Criminal Investigation and the Federal Bureau of Investigation.
KC Woman Pleads Guilty to Tax Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., woman pleaded guilty in federal court today to her role in a fraudulent tax return scheme that claimed $433,365 in fraudulent income tax refunds.
Marquita R. Murray, 37, of Kansas City, pleaded guilty before U.S. District Judge Beth Phillips to her role in a conspiracy to defraud the government and to making false claims.
By pleading guilty today, Murray admitted that she participated in a conspiracy to defraud the United States by submitting false claims for income tax refunds from January 2009 to February 2012. The tax refund scheme involved the creation of false and fraudulent W-2 forms that reported fictitious employer information, fictitious income, and fictitious income tax withholdings. Conspirators solicited friends and acquaintances to file their tax returns using false W-2 information. These “taxpayers” had little to no legitimate income and would not otherwise have to file tax returns.
The tax refund scheme involved claims against the United States in the approximate amount of $433,365, and resulted in an actual loss of at least $329,000.
Murray provided tax filers with the false W-2 forms, transported tax filers to legitimate tax preparers to electronically file the fraudulent tax returns and transported tax filers to banks and check cashing businesses to obtain cash from the tax returns. Murray also assisted co-conspirators in electronically filing others’ false returns from their home computers.
Murray is the fourth defendant to plead guilty to charges related to the fraud scheme. Demichael A. Johnson, 37, of Kansas City, Mo., was sentenced to two years in federal prison without parole, to be served consecutively to the seven-year sentence Johnson is currently serving in federal prison for drug trafficking. The court also ordered Johnson to pay $67,281 in restitution to the government. Mika Francis, 40, of Lee’s Summit, Mo., and Lashan Brown, 41, of Kansas City, Mo., have pleaded guilty and await sentencing.
Under federal statutes, Murray is subject to a sentence of up to 15 years in federal prison without parole, plus a fine up to $500,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Senior Litigation Counsel Gregg Coonrod. It was investigated by IRS-Criminal Investigation.
Justice Department Sues to Shut Down Abusive Tax Scheme Involving Improper Deductions for Donating TimesharesRead the Press Release
The United States filed a civil injunction suit seeking to bar James Tarpey, a Montana-based attorney, Project Philanthropy, Inc. (a District of Columbia corporation which does business as Donate for a Cause) and Timeshare Closings, Inc. (a Colorado corporation which does business as Resort Closings, Inc.) from promoting an allegedly abusive timeshare donation scheme, the Justice Department announced today. The United States also filed suit against three of Tarpey’s associates – Ron Broyles of California, Curt Thor of Washington and Suzanne Crowson of Montana – all of whom, according to the complaint, assisted Tarpey in facilitating the timeshare donation scheme.
According to the complaint, which was filed in the U.S. District Court for the District of Montana, the timeshare donation scheme encourages timeshare owners to donate their unwanted timeshares to Donate for a Cause, a tax-exempt entity organized and operated by Tarpey. The complaint states that customers are falsely promised “generous” tax savings and that the defendants purportedly determine the “fair market value” of the timeshare by selecting an independent, third-party appraiser. The United States further alleged that Tarpey’s customers (the timeshare owners) pay significant processing fees to Resort Closings, Inc. to transfer the timeshares to Donate for a Cause. According to the complaint, Tarpey, Broyles, Thor and Crowson appraise the customers’ timeshares in a manner which does not comply with the law and which significantly overvalues the timeshares. According to the complaint, the appraisals fail to comply with regulations governing appraisals submitted with federal tax returns, contain substantive errors and omissions, fail to comply with generally accepted appraisal standards and grossly overvalue the timeshares. In addition, Tarpey, Broyles, Thor and Crowson are legally prohibited from appraising the timeshares for which their customers claimed federal tax deductions because they are too closely affiliated with Donate for a Cause, the complaint alleges.
Finally, as stated in the complaint, Tarpey’s customers then claim improper and grossly inflated charitable contribution deductions on their tax returns for both the overvalued timeshares and the processing fees paid to Resort Closings, Inc. The complaint alleges that Donate for a Cause is simply used as a conduit to briefly hold title to timeshares before they are sold for a fraction of the appraised amount. For example, the complaint alleges that one customer transferred a timeshare to Donate for a Cause that had originally been purchased for $10,597.50. Donate for a Cause used eBay’s charity platform to sell that timeshare to a third party for only $81, yet Tarpey appraised that timeshare for $8,740, the complaint states.
According to the complaint, the timeshare donation scheme was aggressively marketed via the Internet and through national and local media outlets, including ABC 7 News in Los Angeles, California; Fox 10 News in Phoenix, Arizona; the TODAY Show and Fox 4 News in Kansas City, Missouri. Clips of these news-based promotions are posted on the front page of the Donate for a Cause website.
In the past decade, the Tax Division has obtained injunctions against hundreds of tax return preparer and tax fraud promoters. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Announces Privatbank IHAG Zürich AG Reaches Resolution Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Privatbank IHAG Zürich AG (IHAG) reached a resolution under the department’s Swiss Bank Program. IHAG will pay a penalty of more than $7 million.
“Through the information provided by IHAG and other Swiss banks in the Program, the department has unraveled the various schemes and identified the foreign jurisdictions used by U.S. taxpayers to conceal their foreign accounts,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Foreign financial institutions and other entities that facilitated U.S. tax evasion should come forward and cooperate now, before time runs out.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
-
Make a complete disclosure of their cross-border activities;
-
Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
-
Cooperate in treaty requests for account information;
-
Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
- Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
- Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, IHAG agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a penalty in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.
IHAG, a private bank established in 1949 and based in Zurich, Switzerland, is part of a privately-owned and diversified group of companies of which the top holding company is IHAG Holding AG (IHAG Holding). IHAG formerly maintained a branch office in Lugano, Switzerland, which closed in 2009.
Despite understanding that U.S. taxpayers had a legal duty to report to the Internal Revenue Service (IRS) and pay taxes on the basis of all their income, including income earned in accounts maintained at IHAG, IHAG intentionally opened and maintained accounts that were undeclared with the knowledge that, by doing so, IHAG was helping these U.S. taxpayers violate their legal duties.
In a few instances, IHAG assisted certain recalcitrant U.S. persons in further concealing undisclosed accounts by moving the funds to another jurisdiction and returning the funds to IHAG in a different name in order to conceal the U.S. persons’ ownership of the assets and enable the recalcitrant accountholders to continue to maintain undeclared accounts at IHAG. For example, a family of U.S. persons held assets at IHAG in the name of a Liechtenstein foundation, and another unrelated U.S. person held funds in the name of a Panama foundation. These foundation structures were designed to conceal the true beneficial ownership of the assets. In the case of the Panama foundation, IHAG assisted the U.S. person in creating the foundation. The value of the assets in the two accounts together totaled approximately $63 million.
To assist these U.S. clients in further concealing their assets and evading U.S. taxes, in order to maintain these recalcitrant individuals as IHAG clients, IHAG personnel – with the assistance of an unaffiliated fiduciary services firm in Zurich and with the knowledge and approval of bank management – moved assets from the two foundation accounts to an unaffiliated bank in Hong Kong. The funds then returned to IHAG under the name of a Singapore entity wholly owned by IHAG’s parent company, IHAG Holding, so that the accounts would bear no trace of the U.S. persons’ beneficial interest in the assets held in the accounts. The multi-step scheme also involved an entity in Hong Kong in which IHAG Holding owned a minority interest.
This scheme enabled the assets to be stripped of any indicia of U.S. ownership. In effectuating this scheme, IHAG took advantage of Swiss law, which allowed IHAG in these circumstances to treat the accounts as if know-your-customer review of the accounts had occurred in Singapore. Accordingly, IHAG did not apply Swiss know-your-customer requirements when the accounts returned to IHAG under a different name. IHAG’s files for the accounts deliberately did not contain any documentation of the U.S. persons’ interest in the assets in the accounts. IHAG knowingly and willfully committed tax fraud with respect to those accounts.
In a few other instances, IHAG assisted clients in establishing foundations used to hold their assets at IHAG. The U.S. persons who were the beneficial owners of the foundation accounts were properly identified as beneficial owners of the foundations on certain forms pursuant to Swiss know-your-customer rules. However, the foundations were identified as the beneficial owner on IRS Forms W-8BEN, thereby masking the true beneficial ownership of the accounts by U.S. persons.
For example, in 2006, an account held in the name of a Panama company was opened. In connection with the opening of the account, bank documents identified a U.S. person as the beneficial owner of the assets. However, a Form W-8BEN signed by two Swiss citizens and a citizen of Liechtenstein falsely declared that the Panama company was the beneficial owner. The U.S. person instructed IHAG not to communicate with him by phone and insisted on using code names when communicating with IHAG.
IHAG also offered a variety of traditional Swiss banking services that it knew could assist, and that did assist, U.S. taxpayers in concealing assets and income from the IRS. These services included hold mail, as well as accounts opened in the name of pseudonyms.
Since Aug. 1, 2008, IHAG held a total of 182 U.S.-related accounts with a high value of approximately $791 million. IHAG will pay a penalty of $7.453 million.
In accordance with the terms of the Swiss Bank Program, IHAG mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at IHAG who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at IHAG must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“The signing of these agreements is not only significant for the banks and for IRS-Criminal Investigation, but also for the thousands of accountholders who used these banks to hide their money offshore to criminally defraud the United States tax system,” said Chief Richard Weber of IRS-Criminal Investigation. “As we delve into the details provided by these agreements, we learn more about who they are and how they hid their money from the government. Those who circumvent offshore disclosure laws no longer have room to hide.”
Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Acting Assistant Attorney General Ciraolo also thanked Kathleen E. Lyon, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
-
Justice Department Announces Deutsche Bank (Suisse) SA Reaches Resolution under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Deutsche Bank (Suisse) SA (Deutsche Bank Suisse) reached a resolution under the department’s Swiss Bank Program. Deutsche Bank Suisse will pay a penalty of more than $31 million.
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
-
Make a complete disclosure of their cross-border activities;
-
Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
-
Cooperate in treaty requests for account information;
-
Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
-
Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
- Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, Deutsche Bank Suisse agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a penalty in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.
Deutsche Bank Suisse is headquartered in Geneva, Switzerland, with additional offices in Zurich and Lugano, Switzerland and is part of the Deutsche Bank Group. From at least August 2008 through August 2013, Deutsche Bank Suisse enabled some U.S. taxpayers to evade their U.S. tax and filing obligations, resulting in the filing of false income tax returns with the Internal Revenue Service (IRS) and allowing U.S. taxpayers to hide offshore assets from the IRS.
Deutsche Bank Suisse offered a variety of services and permitted some practices that it knew could and did assist U.S. taxpayers in concealing assets and income from the IRS. Deutsche Bank Suisse offered hold mail services, and notes written by Deutsche Bank Suisse employees on some hold mail forms explained that the client’s mail was not delivered or picked up because the client resided in the United States and his or her account was “not declared.” Deutsche Bank Suisse also provided U.S. beneficial owners with debit cards linked to accounts held at Deutsche Bank Suisse or credit cards whose balances the U.S. beneficial owners instructed Deutsche Bank Suisse to pay from accounts held at the bank. Use of these cards by U.S. taxpayers facilitated their access to or use of undeclared funds on deposit at Deutsche Bank Suisse. Deutsche Bank Suisse processed standing orders for checks in amounts less than $10,000 to be sent on a monthly basis into the United States, and in at least two instances those checks were issued to the U.S. beneficial owners from accounts held in the name of Liechtenstein foundations.
In 2001, Deutsche Bank Suisse entered into a Qualified Intermediary (QI) Agreement with the IRS. Under a QI Agreement, if an accountholder wished to trade in U.S. securities without being subjected to mandatory U.S. tax withholding, the accountholder’s bank was required to obtain the consent of the accountholder to disclose his or her identity to the IRS. However, after signing its QI Agreement, Deutsche Bank Suisse continued to service certain U.S. customers without disclosing their identity to the IRS and without regard for the impact of U.S. criminal law on that decision.
Prior to October 2008, Deutsche Bank Suisse’s position was that it could service a U.S. client without reporting the U.S. taxpayer’s interest in the account to the IRS so long as it prohibited the accountholder from trading in U.S. securities or the account was an account nominally structured in the name of a non-U.S. entity accompanied by an IRS Form W-8BEN or equivalent bank document. In the latter circumstances, U.S. clients, with the assistance of their external advisors, would create an entity, such as a Liechtenstein foundation, Panamanian corporation or British Virgin Islands corporation, and pay a fee to third parties to act as corporate directors. Those third parties, at the direction of the U.S. client, would then open a bank account at Deutsche Bank Suisse in the name of the entity or transfer funds from a pre- existing account from another bank. Deutsche Bank Suisse employees provided prospective U.S. clients with referrals to external advisors who could assist with the creation and management of such an entity. In some instances, Deutsche Bank Suisse made insufficient efforts to determine whether such an entity was valid for U.S. tax purposes.
Deutsche Bank Suisse maintained and serviced accounts beneficially owned by U.S. taxpayers that were held by entities created in countries such as Liechtenstein, Liberia, Panama and the British Virgin Islands, some of which were operated by the U.S. beneficial owners in violation of corporate governance provisions. In certain cases involving a non-U.S. entity, Deutsche Bank Suisse was aware that a U.S. client was the true beneficial owner of the account. Despite this, Deutsche Bank Suisse would sometimes obtain from the entity’s directors a Form W-8BEN or equivalent bank document that falsely declared that the beneficial owner was not a U.S. taxpayer. In some of these cases, Deutsche Bank Suisse permitted the accounts to trade in U.S. securities without reporting account earnings or transmitting withholding taxes to the IRS, as required by the QI Agreement.
Deutsche Bank Suisse has cooperated fully with the department during its participation in the Swiss Bank Program. Deutsche Bank Suisse conducted an internal investigation that included interviews of relationship managers and members of management; review of account files; review of emails; and review of applicable policies, procedures and compliance training materials. Deutsche Bank Suisse provided a comprehensive and detailed in-person presentation to the department, with accompanying documentation, regarding the findings of its internal investigation and how it structured, operated and supervised its cross-border business. Deutsche Bank Suisse assisted and agreed to continue to assist U.S. authorities in preparing treaty requests to the Swiss competent authority for account records of U.S. clients, including by identifying accounts that may meet the standard for information exchange under an applicable treaty. On a rolling basis and prior to the execution of its non-prosecution agreement, Deutsche Bank Suisse also provided aggregate and account-level information regarding U.S.-related accounts that were closed since Aug. 1, 2008.
Since Aug. 1, 2008, Deutsche Bank Suisse had 1,072 U.S.-related accounts with an aggregate maximum value of approximately $7.65 billion. Deutsche Bank Suisse will pay a penalty of $31.026 million.
In accordance with the terms of the Swiss Bank Program, Deutsche Bank Suisse mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at Deutsche Bank Suisse who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at Deutsche Bank Suisse must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanked the IRS and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Acting Assistant Attorney General Ciraolo also thanked John E. Sullivan and Thomas G. Voracek, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
-
Jury Convicts Sapulpa Businessman for Committing Mail Fraud, Money Laundering and Bankruptcy FraudRead the Press Release
TULSA, Okla.—Following a five-day jury trial, a Sapulpa businessman was convicted late Monday for mail fraud, money laundering, and bankruptcy fraud resulting in a $133,500 loss to the Frank and Barbara Broyles Legacy Foundation, a charitable organization and affiliate of the University of Arkansas Foundation. Frank Broyles is the noted former athletic director and football coach of the University of Arkansas.
United States Attorney Danny C. Williams Sr. of the Northern District of Oklahoma; Special Agent in Charge Scott Cruse of the FBI’s Oklahoma City Field Office; and Special Agent in Charge Damon Rowe of the IRS-Criminal Investigations Dallas division made the announcement.
Kelly Verd Nichols, 47, was charged by a superseding indictment on September 10, 2015, with two-counts of mail fraud; four-counts of unlawful monetary transactions and money laundering; and four-counts of bankruptcy fraud. At the time of the crimes, Nichols and his wife owned International Marketing Consultants, LLC, and International Marketing Consultants, Inc.
United States District Chief Judge Gregory K. Frizzell presided over the jury trial and will sentence Nichols on March 8, 2016.
According to evidence presented at trial, in 2007, Nichols convinced the Broyles Foundation that International Marketing Consultants could produce a booklet developed by Frank Broyles entitled “Coach Broyles’ Playbook for Alzheimer’s Caregivers,” commonly referred to as “the Playbook.”
From 2007 to 2009, the Broyles Foundation ordered and paid for approximately 1,100,000 copies of the Playbook which was distributed nationally. In 2009, an additional 500,000 copies were ordered and distributed.
The jury found that in May 2010, Nichols submitted a fraudulent invoice for shipping of the Playbooks to the Broyles Foundation when in fact the Playbooks were not printed or shipped as Nichols claimed. As a result, the Broyles Foundation and UofA Foundation sent payment to Nichols totaling $133,500.
At the time of sentencing, Nichols faces up to 20 years in prison. As part of his sentence, a criminal forfeiture money judgment will be entered in the amount of $133,500 representing proceeds obtained as a result of the mail fraud scheme.
The case was investigated by the FBI and IRS-CI; and prosecuted by Assistant U.S. Attorneys Kevin C. Leitch, Clemon D. Ashley, and Catherine Depew on behalf of the United States.
###
Jerome Gang Member Sentenced to Twelve Years in Prison for Firearms OffensesRead the Press Release
BOISE –Vicente Rene Ramirez, Jr., also known as Little Gangster, 33, of Jerome, Idaho, was sentenced today to 144 months in prison for unlawful possession of a handgun and possession of a sawed-off shotgun in furtherance of a drug trafficking crime, U.S. Attorney Wendy J. Olson announced. Senior U.S. District Judge Edward J. Lodge also ordered Ramirez to serve five years of supervised release following his release from prison. Ramirez pleaded guilty on August 27, 2015.
According to court proceedings, Ramirez was found to be in possession of a sawed-off shotgun and a .22 revolver on February 11, 2015, in Jerome County. Ramirez, who had previously been convicted of possession of a controlled substance with the intent to deliver, was prohibited from possessing any firearm. When questioned by law enforcement, Ramirez stated that he was a proud Norteno gang member who always carried a sawed-off shotgun. Ramirez admitted that he worked as “muscle” for a local drug dealer.
The case was investigated by the Jerome County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Jamaican man convicted in international lottery scamRead the Press Release
CLARKSBURG, WEST VIRGINIA – Davel Godfrey Young, 52, of Montego Bay, Jamaica, was convicted of wire fraud today in federal court, United States Attorney William J. Ihlenfeld, II, announced.
Young, along with other individuals, made a series of unsolicited phone calls and sent unsolicited emails to a variety of United States citizens. Young informed these individuals that they had won a multi-million dollar lottery prize and a new Mercedes Benz or BMW vehicle. Young then informed the purported lottery winners that in order to receive their lottery prizes, they needed to pay taxes and processing fees by wiring finds to Jamaica and various locations within the United States.Young further sent fraudulent documentation that misleadingly appeared to be official government forms and unlawfully portrayed the names and symbols of the Internal Revenue Service, Department of Treasury, and Federal Reserve Board. Young also transmitted electronic images of forged multi-million dollar cashier’s checks.
Young pled guilty today to one count of “Conspiracy to Commit Wire Fraud.” He faces up to 20 years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offensebis and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Andrew Cogar prosecuted the case on behalf of the government. The Treasury Inspector General for Tax Administration investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Hunting Show Host, Four Hunters, Production Company Plead Guilty in Noatak National Preserve Poaching Investigation-Aircraft ForfeitedRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a cable TV hunting show host and four other individuals charged in the investigation have pleaded guilty and have been sentenced in Anchorage United States District Court for their participation in a multi-year poaching operation on the Noatak National Preserve.
On November 23, 2015, Syndicate TV show host Clark W. Dixon, 41, of Hazlehurst, Mississippi, pleaded guilty before the Hon. Ralph R. Beistline, Chief United States District Court Judge, to two felony violations of the Lacey Act for his role in the illegal take of a brown bear. The take involved a number of violations of hunting laws including same day airborne, hunting without proper non-resident tags and permits, and the illegal transporting and outfitting of non-resident hunters. The charges involved actions from 2008 through 2014 in the Noatak National Preserve.
Along with the agreement to plead guilty, Clark Dixon has also agreed to a sentence of 18 months in prison, a fine of $75,000, and forfeiture of 17 trophies including grizzly bear, Dall sheep and caribou, along with bows and several rifles used in the illegal take of game in Alaska. As part of his plea of guilty, Clark Dixon agreed that in 2009 he assisted Clarence Michael Osborne in the illegal take of a grizzly bear, by hunting same day airborne, without a guide or proper permits. The agreement also states that Clark Dixon falsified a hunt record claiming the bear was killed by his father, Charles Dixon. The plea agreement also covers the allegation that at the time the violations were committed, Clark Dixon illegally claimed Alaska residency status while being a resident of the state of Mississippi. The charges against Clark Dixon reflect that he lied about his residency status in order to take advantage of Alaska resident hunting privileges, thus nullifying all of his Alaska hunts which resulted in the forfeiture of the 17 trophies and firearms. Clark Dixon also agreed not to contest the forfeiture of a STOL Quest SQ-4 aircraft used by his father, Charles Dixon, which was instrumental in assisting Clark Dixon in transporting and outfitting non-resident hunters in the illegal take of game. Clark Dixon’s sentencing has been set for February 12, 2016, in Anchorage.
Following Clark Dixon’s change of plea, his father, Charles W. Dixon, 70, also pleaded guilty to two violations of the Lacey Act for illegally flying a non-resident hunter, Clarence Michael Osborne, into their camp on the Noatak National Preserve to hunt grizzly bear, caribou and moose. During the hunt, Osborne killed a grizzly bear without a guide and without the appropriate non-resident permits. After the hunt, Charles Dixon claimed to have killed Osborne’s bear as his own on state hunt records. As part of his plea and sentence imposed by the court, Charles Dixon was sentenced to pay a fine of $15,000 and to pay $10,000 in restitution to the Noatak Preserve with those funds directed toward the removal of their illegal camp materials from the Preserve. In addition, Charles Dixon has forfeited his STOL Quest SQ-4 to the government as the aircraft was used to transport hunters, and illegally taken game in and out of the Preserve.
In other related cases, and on November 13, 2015, Clarence Michael Osborne, 53, of Madison, Mississippi, pleaded guilty to a violation of the Lacey Act for killing a grizzly bear in the Preserve while hunting with and on a hunt arranged by Clark Dixon. Osborne killed the grizzly bear without the proper permits, or tags, and the same day he was airborne. Osborne also pleaded guilty to killing a bull moose without a permit from the Preserve. As part of his plea and sentence, Osborne was sentenced to five years of probation, with a condition that he not hunt anywhere in the world. Osborne was sentenced by Judge Beistline under a plea agreement and was sentenced to pay a fine of $65,000, and to pay restitution to the Noatak Preserve for the illegally taken game in the amount of $16,000. Osborne was also required to forfeit a grizzly bear mount, bull moose mount, three caribou mounts and a .375 H and H rifle and scope used to commit the crimes. Osborne is also required to issue a public service announcement to various hunting publications about his illegal acts.
Fulton Wold, 41, of Nashville, Tennessee, also pleaded guilty and was sentenced pursuant to a plea agreement on November 13, 2015. As part of this agreement and sentence, Wold agreed to plead guilty to the illegal take of a caribou on a hunt orchestrated by Clark Dixon in September 2009 in which Wold did not have the proper permits or non-resident tags. As part of his sentence, Wold received a sentence of two years probation, a fine of $7,500, and was ordered to pay $1,000 in restitution to the Noatak Preserve. Wold was also required to forfeit a bull moose and caribou mount as both were killed illegally.
On November 6, 2015, Terry Goza, 71, of Hazlehurst, Mississippi, pleaded guilty to taking a Dall sheep ram, same day airborne, in the Noatak preserve while hunting with Clark Dixon and others. Goza was sentenced to a term of probation and the payment of a $7,500 fine.
Footage from Osborne, Wold’s and Goza’s hunts were shown on Clark Dixon’s cable TV hunting show “The Syndicate.”
Citations from the National Park Service for conducting filming operations on the Noatak Preserve without a permit were also issued to The Outdoor Syndicate, LLC, in Reno, Nevada, its owner Michael P. Dianda, and an editing studio, Zap Lab, Ltd, in Reno, Nevada. The citations were issued due to the failure of Clark Dixon and another professional videographer to acquire footage for and used on The Syndicate without first obtaining a permit to commercially film on the Preserve. All have paid their fines in connection with the case. Defendants Shannon Dale Hooks, 54, of Mendenhall, Mississippi, and Lance David Walker, 37, of Baton Rouge, Louisiana, have changes of plea set for December 3, 2015. Defendant Randall Goza, 48, of Wasilla, Alaska, has entered a plea of not guilty and his case is set for trial.
Robert Viner has been cited in Mississippi by the investigation for the illegal transport of an unlawfully taken brown bear. Viner has admitted guilt in connection with the charges, and has paid a $3250 fine.
Ms. Loeffler commends the work of the United States Fish and Wildlife Service, Division of Law Enforcement and the National Park Service who jointly investigated this case in Alaska and elsewhere.
Granite Construction to Pay More Than $8 Million in Forfeiture and Penalties for Engaging in A Scheme to Fraudulently Claim Credit for Work Performed by A Minority Owned BusinessRead the Press Release
Granite Construction, Incorporated (Granite), a nationwide construction and public works company that is publicly traded on the New York Stock Exchange, has entered into a non-prosecution agreement and agreed to pay more than $8 million to the federal government and the Metropolitan Transportation Authority Office of Inspector General (MTA-IG) to resolve a criminal investigation into a disadvantaged business enterprise (DBE) fraud scheme perpetrated by Granite’s wholly-owned subsidiary, Granite Construction Northeast, Incorporated (GCN), previously known as Granite Halmar Construction Company, Incorporated. In addition, Granite will provide continuing cooperation to the government and maintain far-reaching corporate reforms.
The resolution was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Doug Shoemaker, Regional Special Agent-in-Charge, U.S. Department of Transportation, Office of Inspector General; Barry Kluger, Inspector General, Metropolitan Transportation Authority; Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation; and Cheryl Garcia, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in New York. U.S. Attorney Capers also thanked the Federal Transit Administration, a division of the U.S. Department of Transportation, for its assistance.
Pursuant to the non-prosecution agreement signed today, Granite acknowledged and accepted responsibility for a DBE fraud scheme related to GCN’s work on a contract for the MTA that involved the construction of a bus depot in Maspeth, Queens, NY (the Project). The Project was largely federally funded.
The investigation revealed that GCN served as the prime contractor on the Project after being awarded the prime contract for the job by the MTA, a contract for which GCN was ultimately paid approximately $222 million. The contract required GCN to comply with the Disadvantaged Business Enterprise Program (the DBE program). Pursuant to that program, as the prime contractor, GCN was obligated to make good faith efforts to subcontract a specified percentage of work on the prime contract to certain disadvantaged business enterprises (DBE companies).
GCN, certain other non-DBE companies (the actual companies), and a DBE company that acted solely as a front company in connection with the Project (the front company) conspired to arrange the following scheme to avoid compliance with the DBE program:
(a) the front company would be awarded a subcontract worth approximately $22 million, to perform certain construction work (the specified work) on the Project;
(b) the actual companies would perform the specified work, but payroll would be “run through” the front fompany, with paperwork arranged to make it appear as if the front company was performing the specified work; and
(c) GCN would pay the front company a $500,000 “DBE fee,” although the front company would not perform a “commercially useful function” on the specified work, as required by state and federal regulations.
As the front companies performed the specified work, GCN submitted to officials from the MTA, as required, periodic progress reports that purported to represent the percentage of work performed by DBE companies on the prime contract. From 2004 through approximately 2008, GCN falsely represented in those reports that the front company had performed a “commercially useful function” in performing the specified work, when in fact, the specified work had actually been performed by the actual companies, and the front company had not performed any such commercially useful function.[1] As a result, GCN deprived the MTA of its rights under the prime contract and deprived legitimate DBE companies of the opportunity to perform the specified work and be paid for it.
In light of a comprehensive internal investigation conducted by Granite, Granite’s complete acceptance of responsibility for GCN’s unlawful conduct, Granite’s cooperation with the government, the fact that the GCN employees most responsible for GCN’s unlawful conduct were separated from GCN and Granite years before the government’s investigation began, and Granite’s far-reaching remedial measures, including site visits by compliance program staff and mandatory training for appropriate Granite managers and employees, the government has agreed not to prosecute Granite or GCN for GCN’s criminal conduct provided that Granite complies for two years with all the terms of the agreement executed today. Significantly, this agreement also secures civil forfeiture to the federal government of $7.25 million in connection with this fraud, as well as a payment of $1 million to the MTA-IG.
“GCN defrauded the MTA by falsely claiming that millions of dollars worth of construction work was performed by a DBE company. Today’s resolution marks a significant step in our continued effort to eliminate DBE fraud in New York’s construction industry and also recognizes Granite’s decision to timely accept full responsibility, provide complete cooperation, and take remedial measures to enforce best industry practices,” stated U.S. Attorney Capers. Mr. Capers thanked the investigative agencies for their outstanding commitment and dedication over the course of this investigation.
“As evidenced by the non-prosecution agreement entered into by Granite Construction, Inc., we remain steadfast in our commitment to maintaining the integrity of the U.S. Department of Transportation’s (USDOT) Disadvantaged Business Enterprise program,” said Regional Special Agent-in-Charge Shoemaker, USDOT Office of Inspector General. “Working with the Secretary of Transportation and other DOT leaders, and our law enforcement and prosecutorial colleagues, we will continue to protect the taxpayers’ investment in our nation’s infrastructure from fraud, waste, abuse, and violations of law.”
“This investigation uncovered a scheme that exploited a program designed to encourage disadvantaged businesses to participate in Metropolitan Transportation Authority projects,” stated IRS-Criminal Investigation Special Agent-in-Charge Kitchen. “IRS-Criminal Investigation is proud to be part of the collective law enforcement effort on this investigation; it demonstrates the government’s resolve to protect public funds and its commitment to ensure the public’s trust. The fact that GCN has entered into an agreement with the government will further serve and protect the public’s best interest.”
“Today’s announcement clearly reflects the firm commitment by our Office and our investigative and prosecutorial partners to utilize all avenues to ensure compliance with DBE requirements and to create and maintain a level playing field on which all qualified DBEs have a fair and equal opportunity to bid for and participate in all MTA projects. We will continue to direct our energies and share of settlement proceeds to support the MTA Small Business Development Program and other productive efforts to expand opportunities for disadvantaged business enterprises,” stated Inspector General Kluger.
“Reporting that work was performed by a DBE company involved manipulating American workers and processing their pay through a front company in order to conceal the fraud. We will continue to work with our law enforcement partners to protect contract opportunities for legitimate disadvantaged businesses,” stated Special Agent-in-Charge Garcia of the New York Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Paul Tuchmann and Burton Ryan are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of the funds.
[1] In August 2013, one of the actual companies, A.J. McNulty & Company, also entered into a non-prosecution agreement with the United States Attorney’s Office for the Eastern District of New York to resolve a criminal investigation into the same scheme. Under the terms of that agreement, A.J. McNulty agreed to forfeit $850,000 to the federal government and pay $100,000 to the MTA-IG.
Grady County Residents Convicted of Burning Houses for InsuranceRead the Press Release
United States Attorney for the Middle District of Georgia, Michael J. Moore, today announced the convictions on Friday of three individuals in an insurance fraud scheme in federal court in Albany, Georgia, following a three and a half week long trial.
Elbert Walker, Jr. a/k/a “Shula”, of Cairo, Georgia, was convicted of conspiracy to commit arson and mail, wire, bank and bankruptcy fraud and false declarations to a court as well as several firearms offenses. Darryl Burk, of Cairo, Georgia, was convicted of conspiracy to commit mail fraud. Shirley Burk, of Cairo, Georgia, was convicted of conspiracy to commit arson, mail fraud and false declarations to a court. The jury deliberated just over one day before returning the verdicts. Senior United States District Court Judge W. Louis Sands presided over the trial.
The evidence presented at trial showed that between 1996 and 2006, Elbert Walker, Jr. was the owner and operator of Southside Grocery in Camilla, Georgia; Northside Home Remodeling in Cairo and Moultrie, Georgia; J and J Hauling, Roofing and Construction in Cairo, Georgia; North Broad Mini Market in Thomasville, Georgia; Rainbow Club located in Pelham, Georgia; Chickasaw Club in Cairo, Georgia; and Zock Rock Publishing and Promotions, Inc. located in Cairo, Georgia. Co-defendants Darryl Burk and Shirley Denise Burk were residents of Grady County, Georgia and relatives of Elbert Walker, Jr.
The three defendants conspired to destroy residential dwellings in the Grady, Mitchell, Thomas and Colquitt County areas by intentionally setting fire to them. They then defrauded insurance providers by falsely claiming that proceeds of insurance policies should be paid to them. In addition, the trio defrauded lending institutions in order to obtain financing for residential mortgage loans for the properties and presented counterfeit and forged checks associated with the proceeds of said insurance policies. Finally, Mr. Walker and Mrs. Burk defrauded the United States Bankruptcy Court and United States District Court.
The properties involved in the conspiracy were located at 1097 Bondvilla Drive in Cairo, Georgia; 410 Oak Street in Thomasville, Georgia; 555 Baggs Ferry Road in Camilla, Georgia; 605 S. Harney Street in Camilla, Georgia; and 608 Oak Circle in Moultrie, Georgia.
The evidence showed that Mr. Walker was previously convicted of Welfare Fraud Conspiracy in New Jersey. In 2007 and 2011, agents executed search warrants at his residence in Cairo, Georgia and located multiple firearms in his possession. Some of these firearms also had obliterated serial numbers.
U.S. Attorney Michael Moore said, “This scheme had been ongoing for several years and I commend the dedicated effort of the investigators and prosecutors who brought this long-running criminal activity to a conclusion. This is an outstanding example of how cooperation between local, state and federal authorities can bring about justice that would not be achieved by any one entity acting alone.”
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; United States Secret Service, Georgia State Fire Marshal’s Office, Grady County Sheriff’s Office, Pelham Police Department, and Moultrie Fire Department. Assistant U.S. Attorney Leah McEwen and Special Assistant U.S. Attorney Harry Foster prosecuted the case for the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Gila River Man Sentenced to 12 Years in Prison for StabbingRead the Press Release
PHOENIX – Yesterday, Jeremy Lee Thompson, 33, of Sacaton, Ariz., a member of the Gila River Indian Community, was sentenced by U.S. District Judge Susan R Bolton to 144 months in prison after previously pleading guilty to assault resulting in serious bodily injury.
On Feb. 28, 2015, Thompson confronted another member of the Gila River Indian Community and slashed him across the face with a knife. Thompson obstructed the investigation by encouraging his friends to threaten witnesses in the case, and the Court took that into account in imposing the sentence. Thompson was on federal supervised release at the time of the stabbing
The investigation in this case was conducted by the Gila River Police Department. The prosecution was handled by Raynette Logan and Christina Covault, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-15-00297-PHX-SRB
RELEASE NUMBER: 2015-116_Thompson
# # #
For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Fourth Conspirator Pleads Guilty in Bank Fraud SchemeRead the Press Release
Greenbelt, Maryland – Bertrand Awah Essem, age 27, of Beltsville, Maryland pleaded guilty today to conspiring to commit bank fraud.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge David G. Bowers of the U.S. Postal Inspection Service - Washington Division; and John L. Phillips, Assistant Inspector General for Investigations, U.S. Department of the Treasury - Office of Inspector General.
According to his plea, from October 2010 to July 2012, Essem recruited college students at the University of Maryland Eastern Shore, promising that they could make some easy money. Essem told the recruits, to open a bank account, obtain a debit card and PIN number associated with that debit card, and provide that information to Essem. Essem told the recruits that money would be transferred into these accounts from The Home Depot. The recruit would be required to withdraw the majority of the money and give that to Essem. The recruit could keep a portion, in some cases as much as $300.
After the recruits, including Stanley Nmesirionye and Dosis Feludu, opened the bank accounts, Essem collected the debit cards and PIN numbers and provided them to another co-conspirator.
In furtherance of the scheme, a conspirator would order materials with Home Depot stores, supplying a victim’s stolen credit card number that was obtained through other means. Within a few days, a conspirator canceled the order and requested that the refund be placed on the co-conspirator’s debit card, including the debit card numbers of co-conspirators recruited by Essem,
During the course of the fraud scheme, Essem collected $264,757.29 from the co-conspirators he recruited. From December 13, 2010, to March 2011, a total of 69 refunds from The Home Depot were credited to bank accounts of individuals recruited by Essem.
Co-defendants Godfred Obeng, age 38, of Glen Allen, Virginia; Stanley Nmesirionye, age 24, of Owings Mills, Maryland, and Dosis Feludu, age 25, of Salisbury, Maryland, previously pleaded guilty to their participation in the fraud scheme and await sentencing.
Essem faces a maximum sentence of 30 years in prison and a fine of $1 million. U.S. District Judge George J. Hazel scheduled his sentencing for February 5, 2016, at 9:00 a.m.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Inspection Service and U.S. Department of the Treasury – OIG for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Bryan E. Foreman, who is prosecuting the case.
Four New York Men Each Sentenced to More Than Eight Years in Prison for Armed Robberies of New York and New Jersey StoresRead the Press Release
TRENTON, N.J. – Four New York men were sentenced to prison for participating in the armed robberies of New York and New Jersey electronics stores, U.S. Attorney Paul J. Fishman announced.
Carl Williams, 32, of Brooklyn, New York, and Leonard Arrington, 29, of Roslyn Heights, New York, were sentenced today to 168 months and 102 months in prison, respectively. Terrell McQueen, 31, and Kajuan Crawley, 28, both of Brooklyn, were sentenced yesterday to 168 and 150 months in prison, respectively. U.S. District Judge Anne Thompson imposed all four sentences in Trenton federal court.
Carl Williams previously pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding indictment charging him with conspiracy to commit Hobbs Act robberies and brandishing a firearm in furtherance of a crime of violence. Arrington pleaded guilty before Judge Pisano to an information containing the same charges. McQueen and Crawley pleaded guilty before Judge Joel Pisano to separate superseding informations charging them each with one count of conspiracy to commit Hobbs Act robberies.
According to documents filed in this case and statements made in court:
From May 30, 2012, through Jan. 16, 2013, Carl Williams, Arrington, McQueen, Crawley and others conspired to commit a series of gunpoint electronic store robberies in New Jersey and New York. McQueen provided the firearms used in the New Jersey robberies, coordinated the resale of the stolen merchandise and distributed the profits from the robberies to the other perpetrators. During each robbery, conspirators would assign “look-outs” to remain outside while the rest of the group, armed with a gun, entered the store, locked the front doors, and tied-up employees and customers with zip ties.
Following the June 21, 2012, armed robbery of a Radio Shack in Rockville Center, New York, several conspirators, including Crawley, were apprehended by officers with the Nassau County Police Department, but Carl Williams, Arrington and others managed to escape. Afterwards, Carl Williams and Arrington robbed electronics stores in New Jersey.
On Sept. 20, 2012, Arrington, brandishing a firearm, walked into a T-Mobile store in Linden, New Jersey, with Carl Williams. Crawley, out on bail after his arrest following the June 21, 2012 robbery, served as a look-out. Arrington and Williams tied up the employees in the back of the store, stole approximately 50 to 60 cell phones and fled in a Land Rover. McQueen, Eric Williams, 34, of Brooklyn, and others then delivered the stolen phones to a cell phone store in Brooklyn.
On Oct. 2, 2012, Arrington, brandishing a firearm, entered a T-Mobile store in Woodbridge, New Jersey, with another man. After locking the front door, the men tied up the employees in the back of the store and stole approximately 40 cell phones. One of the robbers then called the getaway driver, who drove them away in a Land Rover. Afterwards, McQueen, Eric Williams and others delivered the stolen phones to the same Brooklyn store.
In addition to the prison terms, Judge Thompson sentenced Arrington to serve five years of supervised release. Carl Williams, McQueen and Crawley were each sentenced to three years of supervised release.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation. He also thanked the Linden and Woodbridge Police Departments in New Jersey, as well as the New York City and Nassau County Police Departments and the Kings County District Attorney’s Office in New York for their work in this case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division.
Defense counsel:
Williams: Mark Berman Esq., River Edge, New Jersey
Arrington: Dennis Cleary Esq., Newark, New Jersey
McQueen: Anthony J. Pope Esq., Newark
Crawley: Maria Noto Esq., Matawan, New Jersey
Former Worcester Paramedic Sentenced for Stealing Fentanyl from AmbulanceRead the Press Release
BOSTON – A former paramedic was sentenced today in U.S. District Court in Worcester in connection with stealing Fentanyl, a Schedule II controlled substance, and then attempting to conceal her crime by replacing the Fentanyl with saline solution.
Teresa Torres, 42, who moved from Worcester to Sebring, Fla. after the offense, was sentenced by U.S. District Court Judge Timothy S. Hillman to 30 months in prison and three years of supervised release. In May 2015, Torres pleaded guilty to tampering with a consumer product, specifically vials containing the Schedule II controlled substance Fentanyl.
From November 2012 until February 2013, Torres worked as a paramedic for Vital Emergency Services in Worcester. Beginning around Nov. 19, 2012, and continuing through Jan. 26, 2013, Torres tampered with vials of Fentanyl by removing the narcotic from vials kept in the ambulances used by Vital Emergency Services and replacing it with another liquid. In total, Torres tampered with approximately 25 vials of Fentanyl. Fentanyl is commonly administered for pain relief. Torres was initially suspended from her paramedic job after it was discovered that she diverted morphine from ambulance supplies. The Fentanyl theft was discovered after she had been suspended.
The theft of a powerful opiate from an ambulance is plainly criminal, but what makes this tampering case particularly egregious is that patients in critical need of pain medication in emergencies are given saline instead of the necessary medication.
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, Boston Resident 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.
Former SSA Security Guard Admits to Stealing Electronics Worth over $74,000Read the Press Release
Baltimore, Maryland – Heath Unkart, age 26, of Hanover, Pennsylvania pleaded guilty today to theft of government property.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Michael McGill of the Social Security Administration (SSA) - Office of Inspector General, Philadelphia Field Division.
From August 2014 to July 2015, Unkart was a security guard at SSA headquarters in Woodlawn, Maryland. According to his agreement to plead guilty to the information, and had the case gone to trial, the government would have proven that Unkart stole electronic equipment, including Polycom audio/video units, an external hard drive, a projector, a camera and other items, from SSA headquarters while he was on duty. Unkart transported the equipment to his home and then placed many of the stolen items for sale on eBay.
For example, on March 30, 2015, Unkart sold three sets of stolen Polycom video conferencing equipment on eBay for $7,500 and on April 16, 2015, he sold an additional two sets of Polycom video conferencing equipment on eBay for $3,000.
On July 17, 2015, law enforcement agents executed a search warrant at Unkart’s home. They seized numerous items, including two external hard drives, a projector, a Polycom camera, and three additional sets of Polycom conferencing units, all of which were missing from the SSA headquarters campus. In total, approximately $74,296.40 in stolen SSA equipment was recovered.
Unkart faces a maximum sentence of 10 years in prison. U.S. District Judge J. Frederick Motz has scheduled sentencing for March 4, 2016 at 2:15 p.m.
United States Attorney Rod J. Rosenstein commended the SSA – OIG for its work in the investigation and thanked Special Assistant United States Attorney Lauren E. Perry, on detail from the Social Security Administration, who is prosecuting the case.
Former New York State Senator Thomas W. Libous Sentenced in White Plains Federal Court for Making False Statements to the FBIRead the Press Release
Preet Bharara, United States Attorney for the Southern District of New York, announced today that New York State Senator THOMAS W. LIBOUS was sentenced to six months of house arrest for making false statements to the Federal Bureau of Investigation (“FBI”). LIBOUS was convicted on July 22, 2015, following a seven-day trial in White Plains federal court before the Hon. Vincent L. Briccetti, United States District Judge, who also imposed today’s sentence.
The evidence at trial proved that a federal grand jury in White Plains was investigating allegations that THOMAS LIBOUS had obtained a job for a his son Matthew Libous at a Westchester law firm (“the Law Firm”) in exchange for a promise to refer business to the firm, and had arranged for an Albany lobbying firm that regularly lobbied him to secretly pay the law firm $50,000 per year to defray the cost of Matthew Libous's salary and lease of a Range Rover. The lobbying firm specialized in transportation issues and THOMAS LIBOUS served as the Chairman of the Senate's Transportation Committee at the time. The evidence also showed that THOMAS LIBOUS told a partner of the Law Firm that the firm would have to “build a new wing” to accommodate the business he would refer to it if it hired the member of his family.
Special Agents of the FBI interviewed THOMAS LIBOUS on June 24, 2010, as part of the grand jury's investigation. The evidence at trial showed THOMAS LIBOUS made the following false statements to the agents during the interview:
-
he could not recall how Matthew Libous began to work at the Law Firm;
-
no deals were made to get Matthew Libous the job at the Law Firm;
-
he was not aware that the lobbying firm had paid any part of Matthew Libous's salary at the Law Firm;
-
he never promised to refer work to the Law Firm;
-
he was not involved in Matthew Libous's decision to work at the Law Firm;
-
he had no business or personal relationship with the Law Firm; and
-
he did know of any relationship between the lobbying firm and the Law Firm.
* * *
In imposing sentence, Judge Briccetti said LIBOUS’s conduct in lying to the FBI was “disgraceful” and took note of LIBOUS’s “total lack of remorse.” He called the monthly payments totaling $50,000 from the lobbying firm to the Law Firm the “elephant in the room” that LIBOUS had not explained. Judge Briccetti said that ordinarily he would have imposed a sentence of six months in prison but he declined to send LIBOUS to prison given his terminal medical condition.
In addition to the sentence of home confinement, LIBOUS, 62, of Binghamton, New York, was also sentenced to two years of supervised release and ordered to pay a fine of $50,000.
Mr. Bharara praised the investigative work of the FBI.
The prosecution is being handled by the Office's White Plains Division. Assistant U.S. Attorneys Benjamin R. Allee and James McMahon are in charge of the prosecution.
-
Former Employee of the Scottsville Baptist Church Pleads Guilty to Embezzling More Than $270,000 to Pay for Personal ExpensesRead the Press Release
BOWLING GREEN, Ky. – United States Attorney John E. Kuhn, Jr. announced the guilty plea of an Allen County, Kentucky woman before U.S. Magistrate Judge H. Brent Brennenstuhl, yesterday, to three counts of wire fraud, for embezzling $274,846 from her former employer, the Scottsville Baptist Church.
According to the plea agreement, Patricia Barlow, age 49, was a secretary at the Scottsville Baptist Church (SBC), located at 301 East Main Street, in Scottsville, Kentucky, and on numerous occasions made unauthorized wire transfers to pay for personal expenses using SBC funds. The scheme to defraud SBC began in January of 2011, and lasted until SBC discovered the fraud in the spring of 2015. Three of the alleged wire transfers were made on January 1, 2007, in the amount of $512.29; January 14, 2011, in the amount of $1,400; and a wire transfer of $425.00 on January 28, 2015.
According to the plea agreement, at sentencing, Barlow will pay $274,846 in restitution, is liable to the court for a special assessment in the amount of $300 and the United States has agreed to recommend a sentence of imprisonment at the lowest end of the applicable guideline range.
Sentencing is scheduled before U.S. District Judge Greg N. Stivers on February 22, 2016, at 10:00am, in Bowling Green.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the United States Secret Service and Scottsville (Kentucky) Police Department.
Former Connecticut Resident Who Operated Investment Schemes Sentenced to 27 Months in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSEPH T. MORRIS, 52, of Fort Lauderdale, Fla., formerly of Connecticut, was sentenced today by U.S. District Judge Jeffrey Alker Meyer in New Haven to 27 months of imprisonment, followed by three years of supervised release, for operating two investment schemes that defrauded individuals out of more than $200,000.
According to court documents and statements made in court, MORRIS and two other individuals formed a company in October 2011 to develop business opportunities in Iraq. The company’s initial focus was on establishing a pizza restaurant at the U.S. Consulate compound in Erbil, Iraq, and establishing a business to distribute and install specialty window film on vehicles and at hotels, residences, and government buildings, which would protect windows and windshields from blast and breakage, and provide heat retention, ultra-violet shielding, and privacy. MORRIS was the company’s in-country manager in Iraq.
MORRIS made numerous fraudulent representations to his co-founders regarding the restaurant and the window film business, knowing that the representations would be communicated to potential investors to induce them to invest in the company. Through the use of fraudulent emails and photographs, MORRIS falsely represented that a lease had been signed to establish a pizzeria on the U.S. consulate compound in Erbil, that renovations were underway, and that progress was being made toward completing renovations and opening the restaurant. MORRIS also falsely represented that the company had an exclusive arrangement with a specialty window film manufacturer to distribute and install the window film in all of Iraq. Based on these misrepresentations, MORRIS caused approximately a dozen investors, most of whom were U.S. military veterans, to invest approximately $175,000 in the company. Instead of using the money from investors to pay for legitimate business expenses, MORRIS diverted large sums of money for his own personal use.
The scheme was revealed in late April to early May 2012 when one of the co-founders discovered that the company did not have a lease or agreement to open and operate a pizza restaurant at the U.S. consulate compound in Erbil and that the company did not have an exclusive arrangement with a window film manufacturer to distribute and install specialty window film in Iraq.
Between May 2012 and December 2012, MORRIS also defrauded two individuals out of a total of approximately $20,000 in start-up money that they provided to MORRIS as part of a plan to create an air cargo company based in Ghana. Instead of using the funds for business expenses, MORRIS diverted large sums of money for his personal use.
As part of his sentence, MORRIS was ordered to pay restitution in the amount of $205,849.
MORRIS pleaded guilty to one count of wire fraud on June 9, 2015, and has been released on bond. He was ordered to report to prison on January 15, 2016.
This matter was investigated by the U.S. Secret Service, the Wilton Police Department and the Connecticut Financial Crimes Task Force, which includes federal, state and local law enforcement agencies. The case was prosecuted by Assistant U.S. Attorney Neeraj N. Patel.
Former California Attorney Pleads Guilty in International Investment Fraud SchemeRead the Press Release
A Las Vegas man pleaded guilty today to conspiracy for his role in an investment fraud scheme that promoted fraudulent investment opportunities and caused more than $5 million in losses to investors.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Field Office made the announcement.
Joseph Micelli, 62, pleaded guilty before U.S. District Judge Kent J. Dawson of the District of Nevada to conspiracy to commit wire fraud and securities fraud. His sentencing is scheduled for Feb. 23, 2016.
As part of his plea, Micelli admitted that he conspired with others in the United States and Switzerland to promote investments and loan instruments that he knew to be fraudulent. The conspirators told victims that, for an up-front payment, a Swiss company known as the Malom Group A.G. would provide access to lucrative investment opportunities and substantial cash loans. In connection with his plea, Micelli admitted that he held himself out to investors as an attorney, when in fact he had lost his license to practice law. In addition, as part of an effort to defraud an investor who held an equity stake in a corporation that had filed for bankruptcy, Micelli submitted a sworn affidavit to the U.S. Bankruptcy Court for the District of New Hampshire, in which he made false statements about the Malom Group’s ability to provide financing to the debtors.
Five other defendants have been charged in the case and are awaiting trial or extradition.
The FBI’s Las Vegas Field Office investigated this case. Assistant Chief Brian R. Young and Trial Attorneys Melissa Aoyagi and Anna G. Kaminska of the Criminal Division’s Fraud Section prosecuted this case with assistance from the Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the District of Nevada. The U.S. Securities and Exchange Commission’s Enforcement Division, which referred the matter to the Department of Justice and is conducting a parallel civil enforcement investigation, also provided valuable assistance.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Former Bricklayer’s Union Employee Pleads Guilty to Embezzling over $160,000 of Training FundsRead the Press Release
Oklahoma City, Oklahoma – Today, LAURA ANNE ROSS, 42, from Oklahoma City, pled guilty to embezzling over $160,000 from her employer, the Bricklayer’s International Union, Local 5, an Oklahoma City labor union that represents bricklayers and trowel trade workers from Oklahoma, Arkansas, and Texas, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
Ross was indicted on September 15, 2015. Today, she changed her plea to guilty and admitted to Chief United States District Judge Vicki Miles-LaGrange that between April 17, 2012 and October 28, 2013, while employed by the Union, she improperly took $160,927.34 from a Joint Apprenticeship Trust Fund account that was used to train future Union members.
At sentencing, Ross faces up to five years in prison and a $250,000 fine. A sentencing hearing will be set by the court in approximately 90 days.
This case was investigated by the United States Department of Labor-Office of the Inspector General and was prosecuted by Assistant U.S. Attorneys Jessica Cardenas Jarvis and Mark A. Yancey.
Reference is made to court filings for further information.
Former Bank Employees Plea to Making False EntriesRead the Press Release
RALEIGH – United States Attorney Thomas G. Walker announced that yesterday in federal court, before Chief United States District Judge James C. Dever III, APRIL LYNN LOCKLEAR, 35, of Rowland, North Carolina and CHONA KAY OXENDINE, 32, of Shannon, North Carolina pleaded guilty to conspiracy to make false entries in bank records. The charge carries a maximum penalty of 5 years’ imprisonment, and a fine of $250,000.00.
On March 24, 2015, LOCKLEAR and OXENDINE were indicted by a federal grand jury on 16 counts related to crimes committed while they were employed by the Lumbee Guaranty Bank headquartered in Pembroke, North Carolina. During the course of an investigation into a bank robbery that occurred at the Lumbee Guaranty Bank branch in Red Springs, North Carolina on April 9, 2010, it was discovered that $500,000.00 was missing from the bank in addition to the money stolen during the robbery. The investigation quickly focused on LOCKLEAR and OXENDINE. When questioned by investigators, LOCKLEAR and OXENDINE claimed that they were robbed of $500,000.00 while working alone in the branch in 2009, but did not report the incident due to concerns for their safety. They admitted to falsifying a cash out ticket for the missing funds. A cash out/in ticket is a document that is created to post money into or out of an account, teller drawer or the vault so that it is electronically accounted for.
Investigation revealed that beginning in August 2009, LOCKLEAR and OXENDINE falsified bank entries, reports, and transactions by creating false tickets ranging from $150,000.00 to $500,000.00. These false tickets were created to throw off any audit that would have uncovered the missing money to make it look like money had left the bank. These false entries gave the appearance during an audit that the books were in balance, when in fact they were not.
Additional investigation into LOCKLEAR’S and OXENDINE’S personal bank accounts showed a high volume of unaccounted for cash deposits over several years.
Chief Judge Dever scheduled sentencing for the Court’s February 22, 2016 term of court.
The investigation of this case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Felice M. Corpening represents the government.